GREEN BAY, Wis.--(BUSINESS WIRE)--
Associated Banc-Corp (NASDAQ: ASBC):
-- Net loss to common shareholders of $24.7 million for the second quarter
compared to net income of $35.4 million for the first quarter of 2009
-- Net income available to common shareholders of $10.7 million for the six
months ended June 30, 2009
-- Provision for loan losses of $155.0 million exceeded net charge offs of
$61.1 million by $93.9 million, increasing the allowance for loan losses
to 2.66% of loans at June 30, 2009, up from 1.97% at March 31, 2009
-- FDIC special assessment expense of $11.3 million was recorded during the
quarter
-- Total deposits grew by 7.7% to $16.3 billion at June 30, 2009 compared
to $15.2 billion at December 31, 2008 and were up 22.0% from $13.4
billion at June 30, 2008
-- Tangible common equity ratio of 6.09% compared to 6.10% at March 31,
2009
Associated Banc-Corp (NASDAQ: ASBC) today reported a 2009 second quarter
net loss to common shareholders of $24.7 million, or $0.19 per common
share after including a $7.3 million dividend to preferred shareholders.
This compares to net income of $35.4 million, or $0.28 per common share
for the first quarter of 2009, and net income of $47.4 million, or $0.37
per common share, for the second quarter of 2008.
Net income available to common shareholders was $10.7 million, or $0.08
per common share, for the six months ended June 30, 2009, compared to
net income of $113.8 million, or $0.89 per common share, for the first
half of 2008.
The provision for loan losses for the quarter was $155.0 million
compared to $105.4 million for the first quarter of 2009, and $59.0
million for the same period one year ago. Net charge offs for the
quarter were $61.1 million compared to $57.6 million for the first
quarter of 2009, and $37.0 million for the second quarter of 2008.
Nonperforming loans were $733.4 million at June 30, 2009 compared to
$452.2 million at March 31, 2009. The higher provision is primarily due
to further deterioration of existing construction and commercial real
estate credits and declining commercial real estate collateral values.
"The higher than anticipated provision is a result of the continued
weakness in the economy and related stress on our customers," said
Associated Chairman and CEO Paul S. Beideman. "While we believe loan
loss provisions and charge offs will remain elevated, we expect the pace
of deterioration to moderate in future quarters."
Net interest income for the quarter was $179.1 million compared to
$189.3 million for the first quarter of 2009 and $172.7 million for the
same quarter a year ago. The company's net interest margin was 3.40%
compared to 3.59% at March 31, 2009 and 3.65% at June 30, 2008. The
challenging economic climate had a negative impact on the company's net
interest margin during the quarter. Specifically, the lower net interest
margin was due to an increase in the level of nonperforming loans along
with lower loan balances and higher investment securities prepayments
which were reinvested at lower spreads. These factors were partially
offset by improved deposit pricing and higher spreads on new and renewed
loans.
On average, loans were $16.1 billion for the second quarter of 2009
compared to $16.4 billion for the first quarter of 2009 as the company
continues to experience declines in both commercial and retail balances.
Deposits, on average, were $16.1 billion for the second quarter of 2009,
up $1.1 billion compared to first quarter 2009 and up $2.6 billion for
the same period one year ago.
Mortgage loans originated for sale during the second quarter continued
to be strong at $1.3 billion, an increase of $255.4 million from the
first quarter of 2009 and up $903.4 million from the second quarter of
2008. For the second quarter 2009, net mortgage banking income was $28.3
million compared to $4.3 million for the first quarter of 2009. Second
quarter mortgage banking results included a $9.6 million valuation
recovery related to mortgage servicing rights, compared to a $12.3
million valuation charge in the first quarter of 2009.
Core fee-based revenue was $64.9 million for the second quarter of 2009
compared to $61.4 million for the first quarter of 2009 and $68.5
million in second quarter 2008. Year-over-year reductions occurred in
consumer fee-based revenue due to weaker consumer activity, and equity
market declines resulted in lower asset management and brokerage revenue.
Total noninterest expenses were $170.0 million, up $28.8 million from
$141.3 million in the first quarter 2009. Second quarter 2009
noninterest expenses were higher in several categories, including FDIC
insurance costs which increased $12.3 million largely due to an $11.3
million special assessment imposed by the Federal Deposit Insurance
Corporation (FDIC). Other significant increases include foreclosure and
OREO expenses, up $8.6 million primarily due to a $7 million write-down
on a foreclosed property, and a $1.3 million increase in legal expenses
due to an increased level of loan work outs. The efficiency ratio
increased to 58.65% in the second quarter of 2009, up from 51.31% in the
previous quarter and 50.75% in the second quarter 2008.
Total income tax benefit was $26.6 million for the second quarter of
2009, an increase of $15.5 million from the $11.1 million benefit in the
first quarter of 2009. The increase in income tax benefit is primarily
due to the level of pretax income (loss) between quarters. In addition,
the company recorded a $17.0 million net decrease in the valuation
allowance on and changes to State deferred tax assets in the first
quarter of 2009. In the second quarter, the company recorded a $5
million decrease in the valuation allowance on deferred tax assets.
Associated Banc-Corp (NASDAQ: ASBC) will host a conference call for
investors and analysts at 3 p.m. Central Time (CT) Thursday, July 16,
2009. The toll-free dial-in number for the live call is 800-762-8779.
The number for international callers is 480-248-5081. Participants
should ask the operator for the Associated Banc-Corp second quarter 2009
earnings call, or for call ID number 4102400. A replay of the call will
be available starting at 6 p.m. CT on July 16, 2009 through 12:00
midnight CT on August 16, 2009 by calling 800-406-7325 (toll-free)
domestically or 303-590-3030 internationally. The call ID number (replay
pin number), 4102400, is required to access the replay.
Associated Banc-Corp, headquartered in Green Bay, Wis., is a diversified
bank holding company with total assets of $24 billion. Associated has
approximately 300 banking offices serving approximately 160 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 Jun09 vs Jun09 vs
Banc-Corp Dec08 Jun08
June 30, December 31, June 30,
(in thousands) 2009 2008 % Change 2008 % Change
Assets
Cash and due from $ 463,477 $ 533,338 (13.1 %) $ 600,972 (22.9 %)
banks
Interest-bearing
deposits in other 12,910 12,649 2.1 % 24,448 (47.2 %)
financial
institutions
Federal funds sold
and securities
purchased under 34,679 24,741 40.2 % 35,852 (3.3 %)
agreements to
resell
Securities
available for sale, 6,000,491 5,349,417 12.2 % 3,574,373 67.9 %
at fair value
Loans held for sale 424,833 87,084 387.8 % 52,058 716.1 %
Loans 15,310,107 16,283,908 (6.0 %) 16,149,327 (5.2 %)
Allowance for loan (407,167 ) (265,378 ) 53.4 % (229,605 ) 77.3 %
losses
Loans, net 14,902,940 16,018,530 (7.0 %) 15,919,722 (6.4 %)
Premises and 185,794 190,942 (2.7 %) 191,634 (3.0 %)
equipment, net
Goodwill 929,168 929,168 0.0 % 929,168 0.0 %
Other intangible 91,588 80,165 14.2 % 92,621 (1.1 %)
assets, net
Other assets 967,687 966,033 0.2 % 881,856 9.7 %
Total assets $ $ (0.7 %) $ 7.7 %
24,013,567 24,192,067 22,302,704
Liabilities and
Stockholders'
Equity
Noninterest-bearing $ $ 1.2 % $ 9.4 %
deposits 2,846,570 2,814,079 2,602,026
Interest-bearing
deposits, excluding 12,543,239 11,551,181 8.6 % 10,378,285 20.9 %
Brokered CDs
Brokered CDs 930,582 789,536 17.9 % 398,423 133.6 %
Total deposits 16,320,391 15,154,796 7.7 % 13,378,734 22.0 %
Short-term 2,712,962 3,703,936 (26.8 %) 4,923,462 (44.9 %)
borrowings
Long-term funding 1,761,580 1,861,647 (5.4 %) 1,436,349 22.6 %
Accrued expenses
and other 344,866 595,185 (42.1 %) 210,277 64.0 %
liabilities
Total liabilities 21,139,799 21,315,564 (0.8 %) 19,948,822 6.0 %
Stockholders'
Equity
Preferred equity 509,535 508,008 0.3 % - N/M
Common stock 1,284 1,281 0.2 % 1,279 0.4 %
Surplus 1,078,633 1,073,218 0.5 % 1,048,158 2.9 %
Retained earnings 1,262,047 1,293,941 (2.5 %) 1,324,476 (4.7 %)
Accumulated other
comprehensive 23,352 55 N/M (20,031 ) (216.6 %)
income (loss)
Treasury stock (1,083 ) - N/M - N/M
Total stockholders' 2,873,768 2,876,503 (0.1 %) 2,353,882 22.1 %
equity
Total liabilities $ $ $
and stockholders' 24,013,567 24,192,067 (0.7 %) 22,302,704 7.7 %
equity
N/M = Not
meaningful.
Consolidated Statements of Income (Unaudited)
Associated Banc-Corp
For The Three Months For The Six Months
Ended Ended,
June 30, Quarter June 30, Year-to-Date
(in thousands,
except per share 2009 2008 % Change 2009 2008 % Change
amounts)
Interest Income
Interest and $ $ (18.2 %) $ $ (19.6 %)
fees on loans 194,352 237,727 396,377 492,780
Interest and
dividends on
investment
securities
and deposits in
other financial
institutions:
Taxable 46,688 31,878 46.5 % 97,591 63,230 54.3 %
Tax-exempt 8,819 9,776 (9.8 %) 18,313 20,035 (8.6 %)
Interest on
federal funds
sold and
securities
purchased under
agreements to 51 213 (76.1 %) 114 419 (72.8 %)
resell
Total interest 249,910 279,594 (10.6 %) 512,395 576,464 (11.1 %)
income
Interest Expense
Interest on 44,993 63,655 (29.3 %) 91,592 145,161 (36.9 %)
deposits
Interest on
short-term 5,088 24,363 (79.1 %) 10,242 52,536 (80.5 %)
borrowings
Interest on
long-term 20,691 18,844 9.8 % 42,145 40,918 3.0 %
funding
Total interest 70,772 106,862 (33.8 %) 143,979 238,615 (39.7 %)
expense
Net Interest 179,138 172,732 3.7 % 368,416 337,849 9.0 %
Income
Provision for 155,022 59,001 162.7 % 260,446 82,003 217.6 %
loan losses
Net interest
income after 24,116 113,731 (78.8 %) 107,970 255,846 (57.8 %)
provision for
loan losses
Noninterest
Income
Trust service 8,569 10,078 (15.0 %) 17,046 20,152 (15.4 %)
fees
Service charges
on deposit 29,671 30,129 (1.5 %) 56,876 53,813 5.7 %
accounts
Card-based and
other nondeposit 11,858 12,301 (3.6 %) 22,032 23,726 (7.1 %)
fees
Retail 14,829 16,004 (7.3 %) 30,341 32,119 (5.5 %)
commissions
Mortgage 28,297 5,395 424.5 % 32,564 12,340 163.9 %
banking, net
Treasury
management fees, 2,393 3,502 (31.7 %) 5,019 5,488 (8.5 %)
net
Bank owned life 3,161 4,997 (36.7 %) 8,933 9,858 (9.4 %)
insurance income
Asset sale (1,287 ) (731 ) 76.1 % (2,394 ) (1,187 ) 101.7 %
(losses), net
Investment
securities gains (1,385 ) (718 ) 92.9 % 9,211 (3,658 ) N/M
(losses), net
Other 5,835 5,668 2.9 % 11,290 16,602 (32.0 %)
Total
noninterest 101,941 86,625 17.7 % 190,918 169,253 12.8 %
income
Noninterest
Expense
Personnel 81,171 78,066 4.0 % 158,269 153,709 3.0 %
expense
Occupancy 12,341 12,026 2.6 % 25,222 25,290 (0.3 %)
Equipment 4,670 4,653 0.4 % 9,259 9,250 0.1 %
Data processing 8,126 8,250 (1.5 %) 15,723 15,371 2.3 %
Business
development and 4,943 5,137 (3.8 %) 9,680 10,178 (4.9 %)
advertising
Other intangible 1,385 1,568 (11.7 %) 2,771 3,137 (11.7 %)
amortization
Legal and
professional 5,586 2,944 89.7 % 9,827 5,717 71.9 %
fees
Foreclosure/OREO 13,576 2,573 427.6 % 18,589 4,542 309.3 %
expense
FDIC expense 18,090 397 N/M 23,865 803 N/M
Other 20,143 20,207 (0.3 %) 38,090 44,136 (13.7 %)
Total
noninterest 170,031 135,821 25.2 % 311,295 272,133 14.4 %
expense
Income (loss)
before income (43,974 ) 64,535 (168.1 %) (12,407 ) 152,966 (108.1 %)
taxes
Income tax
expense (26,633 ) 17,176 (255.1 %) (37,791 ) 39,142 (196.5 %)
(benefit)
Net income (17,341 ) 47,359 (136.6 %) $ $ (77.7 %)
(loss) 25,384 113,824
Preferred stock
dividends and 7,331 - N/M 14,652 - N/M
discount
Net income $ $ $ $
(loss) available (24,672 ) 47,359 (152.1 %) 10,732 113,824 (90.6 %)
to common equity
Earnings (Loss)
Per Common
Share:
Basic $ (0.19 ) $ 0.37 (151.4 %) $ 0.08 $ 0.89 (91.0 %)
Diluted $ (0.19 ) $ 0.37 (151.4 %) $ 0.08 $ 0.89 (91.0 %)
Average Common
Shares
Outstanding:
Basic 127,861 127,433 0.3 % 127,850 127,365 0.4 %
Diluted 127,861 127,909 (0.0 %) 127,856 127,849 0.0 %
N/M = Not
meaningful.
Consolidated Statements of Income (Unaudited) - Quarterly Trend
Associated Banc-Corp
(in thousands,
except per share 2Q09 1Q09 4Q08 3Q08 2Q08
amounts)
Interest Income
Interest and $ $ 202,025 $ 230,872 $ 229,001 $ 237,727
fees on loans 194,352
Interest and
dividends on
investment
securities
and deposits in
other financial
institutions:
Taxable 46,688 50,903 38,032 32,209 31,878
Tax-exempt 8,819 9,494 9,811 9,887 9,776
Interest on
federal funds
sold and
securities 51 63 154 279 213
purchased under
agreements to
resell
Total interest 249,910 262,485 278,869 271,376 279,594
income
Interest Expense
Interest on 44,993 46,599 56,402 61,743 63,655
deposits
Interest on
short-term 5,088 5,154 10,090 23,958 24,363
borrowings
Interest on
long-term 20,691 21,454 20,595 19,158 18,844
funding
Total interest 70,772 73,207 87,087 104,859 106,862
expense
Net Interest 179,138 189,278 191,782 166,517 172,732
Income
Provision for 155,022 105,424 65,044 55,011 59,001
loan losses
Net interest
income after 24,116 83,854 126,738 111,506 113,731
provision for
loan losses
Noninterest
Income
Trust service 8,569 8,477 8,248 10,020 10,078
fees
Service charges
on deposit 29,671 27,205 30,946 33,609 30,129
accounts
Card-based and
other nondeposit 11,858 10,174 12,297 12,517 12,301
fees
Retail 14,829 15,512 15,541 14,928 16,004
commissions
Total core
fee-based 64,927 61,368 67,032 71,074 68,512
revenue
Mortgage 28,297 4,267 (1,227 ) 3,571 5,395
banking, net
Treasury
management fees, 2,393 2,626 (33 ) 1,935 3,502
net
Bank owned life 3,161 5,772 4,711 5,235 4,997
insurance income
Asset sale gains (1,287 ) (1,107 ) (1,054 ) 573 (731 )
(losses), net
Investment
securities gains (1,385 ) 10,596 (35,298 ) (13,585 ) (718 )
(losses), net
Other 5,835 5,455 6,943 6,520 5,668
Total
noninterest 101,941 88,977 41,074 75,323 86,625
income
Noninterest
Expense
Personnel 81,171 77,098 77,374 78,395 78,066
expense
Occupancy 12,341 12,881 13,134 12,037 12,026
Equipment 4,670 4,589 4,785 5,088 4,653
Data processing 8,126 7,597 7,446 7,634 8,250
Business
development and 4,943 4,737 6,047 5,175 5,137
advertising
Other intangible 1,385 1,386 1,564 1,568 1,568
amortization
Legal and
professional 5,586 4,241 5,311 3,538 2,944
fees
Foreclosure/OREO 13,576 5,013 6,716 2,427 2,573
expense
FDIC expense 18,090 5,775 930 791 397
Other 20,143 17,947 25,443 19,924 20,207
Total
noninterest 170,031 141,264 148,750 136,577 135,821
expense
Income (loss)
before income (43,974 ) 31,567 19,062 50,252 64,535
taxes
Income tax
expense (26,633 ) (11,158 ) 2,203 12,483 17,176
(benefit)
Net income (17,341 ) 42,725 16,859 37,769 47,359
(loss)
Preferred stock
dividends and 7,331 7,321 3,250 - -
discount
Net income $
(loss) available (24,672 ) $ 35,404 $ 13,609 $ 37,769 $ 47,359
to common equity
Earnings (Loss)
Per Common
Share:
Basic $ (0.19 ) $ 0.28 $ 0.11 $ 0.30 $ 0.37
Diluted $ (0.19 ) $ 0.28 $ 0.11 $ 0.30 $ 0.37
Average Common
Shares
Outstanding:
Basic 127,861 127,839 127,717 127,553 127,433
Diluted 127,861 127,845 127,810 127,622 127,909
Selected Quarterly Information
Associated Banc-Corp
(in thousands,
except per share
and full time YTD 2009 YTD 2008 2nd Qtr 2009 1st Qtr 2009 4th Qtr 2008 3rd Qtr 2008 2nd Qtr 2008
equivalent
employee data)
Summary of
Operations
Net interest $ 368,416 $ 337,849 $ 179,138 $ 189,278 $ 191,782 $ 166,517 $ 172,732
income
Provision for 260,446 82,003 155,022 105,424 65,044 55,011 59,001
loan losses
Asset sale gains (2,394 ) (1,187 ) (1,287 ) (1,107 ) (1,054 ) 573 (731 )
(losses), net
Investment
securities gains 9,211 (3,658 ) (1,385 ) 10,596 (35,298 ) (13,585 ) (718 )
(losses), net
Noninterest
income
(excluding 184,101 174,098 104,613 79,488 77,426 88,335 88,074
securities &
asset gains)
Noninterest 311,295 272,133 170,031 141,264 148,750 136,577 135,821
expense
Income before (12,407 ) 152,966 (43,974 ) 31,567 19,062 50,252 64,535
income taxes
Income tax
expense (37,791 ) 39,142 (26,633 ) (11,158 ) 2,203 12,483 17,176
(benefit)
Net income 25,384 113,824 (17,341 ) 42,725 16,859 37,769 47,359
(loss)
Net income
(loss) available 10,732 113,824 (24,672 ) 35,404 13,609 37,769 47,359
to common equity
Taxable
equivalent 12,694 13,910 6,150 6,544 6,902 6,899 6,814
adjustment
Per Common Share
Data
Net income
(loss):
Basic $ 0.08 $ 0.89 $ (0.19 ) $ 0.28 $ 0.11 $ 0.30 $ 0.37
Diluted 0.08 0.89 (0.19 ) 0.28 0.11 0.30 0.37
Dividends 0.37 0.63 0.05 0.32 0.32 0.32 0.32
Market Value:
High $ 21.39 $ 29.23 $ 19.00 $ 21.39 $ 24.21 $ 25.92 $ 29.23
Low 10.60 19.29 12.50 10.60 15.72 14.85 19.29
Close 12.50 19.29 12.50 15.45 20.93 19.95 19.29
Book value 18.49 18.46 18.49 18.68 18.54 18.52 18.46
Performance
Ratios
(annualized)
Earning assets 4.82 % 6.07 % 4.70 % 4.94 % 5.57 % 5.58 % 5.82 %
yield
Interest-bearing 1.59 2.86 1.57 1.61 2.00 2.44 2.53
liabilities rate
Net interest 3.49 3.61 3.40 3.59 3.88 3.48 3.65
margin
Return on 0.21 1.05 (0.29 ) 0.71 0.30 0.68 0.87
average assets
Return on 1.76 9.67 (2.40 ) 5.98 2.58 6.38 8.01
average equity
Return on
average tangible 1.51 16.36 (6.88 ) 10.05 3.83 10.83 13.51
common equity
(1)
Efficiency ratio 55.08 51.75 58.65 51.31 53.87 52.18 50.75
(2)
Effective tax 304.59 25.59 60.57 (35.35 ) 11.56 24.84 26.61
rate
Dividend payout 462.50 70.79 N/M 114.29 290.91 106.67 86.49
ratio (3)
Average Balances
Assets $ $ $ $ $ $ $
24,159,647 21,712,707 24,064,567 24,255,783 22,646,421 22,072,948 21,975,451
Earning assets 21,902,825 19,515,429 21,847,191 21,959,077 20,436,483 19,884,434 19,754,651
Interest-bearing 18,290,716 16,801,778 18,125,389 18,457,879 17,363,481 17,107,551 16,992,508
liabilities
Loans 16,275,353 15,914,526 16,122,063 16,430,347 16,285,881 16,203,717 16,120,732
Deposits 15,576,244 13,568,535 16,100,686 15,045,976 14,395,626 13,710,297 13,493,511
Wholesale 5,484,245 5,622,248 4,876,970 6,098,266 5,496,248 5,876,051 5,950,699
funding
Common
stockholders' 2,396,020 2,367,799 2,400,664 2,391,325 2,376,639 2,353,606 2,377,841
equity
Stockholders' 2,904,679 2,367,799 2,909,700 2,899,603 2,602,917 2,353,606 2,377,841
equity
Common
stockholders' 9.92 % 10.91 % 9.98 % 9.86 % 10.49 % 10.66 % 10.82 %
equity/assets
Stockholders' 12.02 % 10.91 % 12.09 % 11.95 % 11.49 % 10.66 % 10.82 %
equity / assets
At Period End
Assets $ $ $ $ $
24,013,567 24,349,725 24,192,067 22,487,394 22,302,704
Loans 15,310,107 15,917,952 16,283,908 16,272,487 16,149,327
Allowance for 407,167 313,228 265,378 246,189 229,605
loan losses
Goodwill 929,168 929,168 929,168 929,168 929,168
Mortgage
servicing 59,762 39,754 45,568 53,977 54,725
rights, net
Other intangible 31,826 33,211 34,597 36,161 37,896
assets
Deposits 16,320,391 15,873,189 15,154,796 14,245,667 13,378,734
Wholesale 4,474,542 5,326,734 5,565,583 5,667,737 6,359,811
funding
Stockholders' 2,873,768 2,897,169 2,876,503 2,364,247 2,353,882
equity
Stockholders' 11.97 % 11.90 % 11.89 % 10.51 % 10.55 %
equity / assets
Tangible common
equity / 6.09 % 6.10 % 6.05 % 6.50 % 6.50 %
tangible assets
(4)
Tangible
equity/tangible 8.30 % 8.27 % 8.23 % 6.50 % 6.50 %
assets (5)
Shares
outstanding, end 127,861 127,860 127,762 127,646 127,537
of period
Selected trend
information
Average full
time equivalent 5,116 5,143 5,109 5,141 5,179
employees
Trust assets
under $ $ $ $ $
management, at 5,000,000 4,800,000 5,100,000 5,600,000 5,900,000
market value
Mortgage loans
originated for 1,335,175 1,079,732 247,465 217,993 431,757
sale during
period
Mortgage
portfolio 6,904,000 6,582,000 6,606,000 6,596,000 6,584,000
serviced for
others
Mortgage
servicing
rights, net / 0.87 % 0.60 % 0.69 % 0.82 % 0.83 %
Portfolio
serviced for
others
N/M = Not meaningful.
Return on average tangible common equity = Net income available to common
(1) equity divided by average common equity excluding average goodwill and other
intangible assets. This is a non-GAAP financial measure.
Efficiency ratio = Noninterest expense divided by sum of taxable equivalent
(2) net interest income plus noninterest income, excluding investment securities
gains, net, and asset sales gains, net.
This is a non-GAAP financial measure.
(3) Ratio is based upon basic earnings per common share.
Tangible common equity to tangible assets = Common stockholders' equity
(4) excluding goodwill and other intangible assets divided by assets excluding
goodwill and other intangible assets.
This is a non-GAAP financial measure.
Tangible equity to tangible assets = Stockholders' equity excluding goodwill
(5) and other intangible assets divided by assets excluding goodwill and other
intangible assets.
This is a non-GAAP financial measure.
Financial Summary and Comparison
Associated Banc-Corp
Three months ended Six months ended
June 30, June 30,
(in thousands) 2009 2008 % Change 2009 2008 % Change
Allowance for
Loan Losses
Beginning $ 313,228 $ 207,602 50.9 % $ 265,378 $ 200,570 32.3 %
balance
Provision for 155,022 59,001 162.7 % 260,446 82,003 217.6 %
loan losses
Charge offs (63,325 ) (38,238 ) 65.6 % (123,499 ) (57,732 ) 113.9 %
Recoveries 2,242 1,240 80.8 % 4,842 4,764 1.6 %
Net charge offs (61,083 ) (36,998 ) 65.1 % (118,657 ) (52,968 ) 124.0 %
Ending balance $ 407,167 $ 229,605 77.3 % $ 407,167 $ 229,605 77.3 %
Credit Quality Jun09 vs Jun09 vs
Mar09 Jun08
Jun 30, 2009 Mar 31, 2009 % Change Dec 31, 2008 Sept 30, Jun 30, 2008 % Change
2008
Nonaccrual loans $ 700,514 $ 433,246 61.7 % $ 326,857 $ 290,039 $ 277,100 152.8 %
Loans 90 or more
days past due 19,785 16,002 23.6 % 13,811 14,631 11,762 68.2 %
and still
accruing
Restructured 13,089 2,927 347.2 % - - - N/M
loans
Total
nonperforming 733,388 452,175 62.2 % 340,668 304,670 288,862 153.9 %
loans
Other real
estate owned 51,633 54,883 (5.9 %) 48,710 46,473 46,579 10.9 %
(OREO)
Total
nonperforming $ 785,021 $ 507,058 54.8 % $ 389,378 $ 351,143 $ 335,441 134.0 %
assets
Provision for 155,022 105,424 47.0 % 65,044 55,011 59,001 162.7 %
loan losses
Net charge offs 61,083 57,574 6.1 % 45,855 38,427 36,998 65.1 %
Allowance for
loan losses / 2.66 % 1.97 % 1.63 % 1.51 % 1.42 %
loans
Allowance for
loan losses / 55.52 69.27 77.90 80.81 79.49
nonperforming
loans
Nonperforming
loans / total 4.79 2.84 2.09 1.87 1.79
loans
Nonperforming
assets / total 5.11 3.17 2.38 2.15 2.07
loans plus OREO
Nonperforming
assets / total 3.27 2.08 1.61 1.56 1.50
assets
Net charge offs
/ average loans 1.52 1.42 1.12 0.94 0.92
(annualized)
Year-to-date net
charge offs / 1.47 1.42 0.85 0.76 0.67
average loans
Nonperforming
loans by type:
Commercial,
financial & $ 187,943 $ 102,257 83.8 % $ 104,664 $ 85,995 $ 78,731 138.7 %
agricultural
Commercial real 165,929 100,838 64.6 % 62,423 52,875 42,280 292.5 %
estate
Real estate - 264,402 152,008 73.9 % 90,048 98,205 110,717 138.8 %
construction
Lease financing 1,929 1,707 13.0 % 187 83 522 269.5 %
Total commercial 620,203 356,810 73.8 % 257,322 237,158 232,250 167.0 %
Home equity 38,474 35,224 9.2 % 31,035 25,372 23,555 63.3 %
Installment 7,545 6,755 11.7 % 7,155 6,035 5,184 45.5 %
Total retail 46,019 41,979 9.6 % 38,190 31,407 28,739 60.1 %
Residential 67,166 53,386 25.8 % 45,156 36,105 27,873 141.0 %
mortgage
Total
nonperforming $ 733,388 $ 452,175 62.2 % $ 340,668 $ 304,670 $ 288,862 153.9 %
loans
Period End Loan Jun09 vs Jun09 vs
Composition Mar09 Jun08
Jun 30, 2009 Mar 31, 2009 % Change Dec 31, 2008 Sept 30, Jun 30, 2008 % Change
2008
Commercial, $ $ $ $ $
financial & 3,904,925 4,160,274 (6.1 %) 4,388,691 4,343,208 4,423,192 (11.7 %)
agricultural
Commercial real 3,737,749 3,575,301 4.5 % 3,566,551 3,534,791 3,583,877 4.3 %
estate
Real estate - 1,963,919 2,228,090 (11.9 %) 2,260,888 2,363,116 2,351,401 (16.5 %)
construction
Lease financing 110,262 116,100 (5.0 %) 122,113 125,907 124,661 (11.6 %)
Total commercial 9,716,855 10,079,765 (3.6 %) 10,338,243 10,367,022 10,483,131 (7.3 %)
Home equity 2,656,747 2,784,248 (4.6 %) 2,883,317 2,892,952 2,757,684 (3.7 %)
Installment 844,065 853,214 (1.1 %) 827,303 842,741 826,895 2.1 %
Total retail 3,500,812 3,637,462 (3.8 %) 3,710,620 3,735,693 3,584,579 (2.3 %)
Residential 2,092,440 2,200,725 (4.9 %) 2,235,045 2,169,772 2,081,617 0.5 %
mortgage
Total loans $ $ (3.8 %) $ $ $ (5.2 %)
15,310,107 15,917,952 16,283,908 16,272,487 16,149,327
Period End Jun09 vs Jun09 vs
Deposit Mar09 Jun08
Composition
Jun 30, 2009 Mar 31, 2009 % Change Dec 31, 2008 Sept 30, Jun 30, 2008 % Change
2008
Demand $ $ 1.0 % $ $ $ 9.4 %
2,846,570 2,818,088 2,814,079 2,545,779 2,602,026
Savings 898,527 895,310 0.4 % 841,129 888,731 921,000 (2.4 %)
Interest-bearing 2,242,800 1,796,724 24.8 % 1,796,405 1,667,640 1,697,910 32.1 %
demand
Money market 5,410,498 5,410,095 0.0 % 4,926,088 4,608,686 3,917,505 38.1 %
Brokered CDs 930,582 922,491 0.9 % 789,536 579,607 398,423 133.6 %
Other time 3,991,414 4,030,481 (1.0 %) 3,987,559 3,955,224 3,841,870 3.9 %
deposits
Total deposits $ $ 2.8 % $ $ $ 22.0 %
16,320,391 15,873,189 15,154,796 14,245,667 13,378,734
Network
transaction
deposits
included above $ $ (8.7 %) $ $ $ 620,440 158.8 %
in 1,605,722 1,759,656 1,530,675 1,356,616
interest-bearing
demand and money
market
Customer repo $ 269,809 $ 333,706 (19.1 %) $ 505,788 $ 657,032 $ 667,720 (59.6 %)
sweeps (a)
(a) Included
within
short-term
borrowings.
N/M - Not meaningful.
Net Interest Income Analysis - Taxable Equivalent Basis
Associated Banc-Corp
Six months ended June 30, Six months ended June 30, 2008
2009
Average Interest Average Average Interest Average
(in thousands) Balance Income / Yield / Balance Income / Yield /
Expense Rate Expense Rate
Earning assets:
Loans: (1) (2) (3)
Commercial $ $ 4.57 % $ $ 6.08 %
10,083,205 228,424 10,412,253 314,859
Residential 2,553,037 68,231 5.36 2,215,641 66,325 6.00
mortgage
Retail 3,639,111 101,428 5.61 3,286,632 113,484 6.93
Total loans 16,275,353 398,083 4.92 15,914,526 494,668 6.24
Investments and 5,627,472 127,006 4.51 3,600,903 95,706 5.32
other
Total earning 21,902,825 525,089 4.82 19,515,429 590,374 6.07
assets
Other assets, net 2,256,822 2,197,278
Total assets $ $
24,159,647 21,712,707
Interest-bearing
liabilities:
Savings deposits $ 882,533 $ 681 0.16 % $ 885,883 $ 2,091 0.47 %
Interest-bearing 1,836,187 1,867 0.21 1,802,280 9,765 1.09
demand deposits
Money market 5,178,848 23,977 0.93 3,919,573 42,000 2.15
deposits
Time deposits,
excluding Brokered 4,004,253 58,277 2.93 3,968,095 80,970 4.10
CDs
Total
interest-bearing 11,901,821 84,802 1.44 10,575,831 134,826 2.56
deposits, excluding
Brokered CDs
Brokered CDs 904,650 6,790 1.51 603,699 10,335 3.44
Total
interest-bearing 12,806,471 91,592 1.44 11,179,530 145,161 2.61
deposits
Wholesale funding 5,484,245 52,387 1.92 5,622,248 93,454 3.34
Total
interest-bearing 18,290,716 143,979 1.59 16,801,778 238,615 2.86
liabilities
Noninterest-bearing 2,769,773 2,389,005
demand deposits
Other liabilities 194,479 154,125
Stockholders' 2,904,679 2,367,799
equity
Total liabilities $ $
and stockholders' 24,159,647 21,712,707
equity
Net interest income $ 3.23 % $ 3.21 %
and rate spread (1) 381,110 351,759
Net interest margin 3.49 % 3.61 %
(1)
Taxable equivalent $ 12,694 $ 13,910
adjustment
Three months ended June 30, Three months ended June 30,
2009 2008
Average Interest Average Average Interest Average
Balance Income / Yield / Balance Income / Yield /
Expense Rate Expense Rate
Earning assets:
Loans: (1) (2) (3)
Commercial $ $ 4.51 % $ $ 5.75 %
9,940,732 111,760 10,501,226 150,134
Residential 2,605,638 34,363 5.28 2,195,007 32,530 5.94
mortgage
Retail 3,575,693 49,088 5.50 3,424,499 56,010 6.57
Total loans 16,122,063 195,211 4.85 16,120,732 238,674 5.95
Investments and 5,725,128 60,849 4.25 3,633,919 47,734 5.25
other
Total earning 21,847,191 256,060 4.70 19,754,651 286,408 5.82
assets
Other assets, net 2,217,376 2,220,800
Total assets $ $
24,064,567 21,975,451
Interest-bearing
liabilities:
Savings deposits $ 907,677 $ 359 0.16 % $ 910,930 $ 1,009 0.45 %
Interest-bearing 1,970,889 1,038 0.21 1,796,373 3,774 0.84
demand deposits
Money market 5,409,953 12,412 0.92 3,864,739 17,546 1.83
deposits
Time deposits,
excluding Brokered 4,015,230 28,220 2.82 3,892,910 37,229 3.85
CDs
Total
interest-bearing 12,303,749 42,029 1.37 10,464,952 59,558 2.29
deposits, excluding
Brokered CDs
Brokered CDs 944,670 2,964 1.26 576,857 4,097 2.86
Total
interest-bearing 13,248,419 44,993 1.36 11,041,809 63,655 2.32
deposits
Wholesale funding 4,876,970 25,779 2.12 5,950,699 43,207 2.92
Total
interest-bearing 18,125,389 70,772 1.57 16,992,508 106,862 2.53
liabilities
Noninterest-bearing 2,852,267 2,451,702
demand deposits
Other liabilities 177,211 153,400
Stockholders' 2,909,700 2,377,841
equity
Total liabilities $ $
and stockholders' 24,064,567 21,975,451
equity
Net interest income $ 3.13 % $ 3.29 %
and rate spread (1) 185,288 179,546
Net interest margin 3.40 % 3.65 %
(1)
Taxable equivalent $ 6,150 $ 6,814
adjustment
The yield on tax exempt loans and securities is computed on a taxable
(1) 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:
Joseph B. Selner, Chief Financial Officer, 920-491-7120
or
Media:
Janet L. Ford, SVP of Public Relations, 414-207-5070