Press Release Details

Associated Reports Third Quarter Earnings of $0.20 per share

10/20/2011

GREEN BAY, Wis., Oct. 20, 2011 /PRNewswire/ -- Associated Banc-Corp (NASDAQ: ASBC) today reported net income to common shareholders of $34.0 million, or $0.20 per common share, for the quarter ended September 30, 2011. This compares to net income to common shareholders of $25.6 million, or $0.15 per common share, for the quarter ended June 30, 2011, and net income to common shareholders of $6.9 million, or $0.04 per common share, for the comparable quarter ended September 30, 2010.

“We are pleased with our improving results.  Our focus remains on meeting the needs of our customers and investing in our core businesses.  We continue to see opportunities to invest in our franchise and expect to see these investments pay-off in the future,” said President and CEO Philip B. Flynn.

HIGHLIGHTS  

  • Quarterly pre-tax income improved by 33%, or $15 million and net income available to common shareholders improved by 33%, or $8 million from the prior quarter
  • Total loans of $13.5 billion were up 3%, or $414 million from the prior quarter, with growth in each major segment of the portfolio including commercial and business lending, commercial real estate lending, and residential mortgage
    • Commercial and business lending (C&I, leasing, and owner-occupied CRE loans) grew $198 million during the quarter
    • Commercial real estate lending (Investor CRE and construction loans) increased $108 million from the prior quarter
    • Retail loans and residential mortgage loans grew $108 million during the quarter
  • Continued improvements in key credit metrics
    • Nonaccrual loans declined $64 million, or 14% from the prior quarter to $403 million, the lowest level in seven quarters
    • Provision for loan losses of $4 million was down significantly from the prior quarter
    • Net charge-offs of $30 million were down 32% from $45 million for the prior quarter
  • Completed the repurchase of remaining TARP funds through senior note and preferred stock offerings

Loans

At September 30, 2011, the Company’s loan portfolio was $13.5 billion, up $414 million, or 3%, from $13.1 billion at June 30, 2011, and up $1.1 billion, or 9%, from $12.4 billion a year ago.  Commercial loans grew $306 million on a linked-quarter basis, with strong growth coming from both the commercial and industrial (C&I) and commercial real estate (CRE) portfolios.  The retail and residential mortgage segment was also up by a net $108 million, or 2%, from the second quarter.  

Deposits and Customer Funding

Total deposits and customer funding of $16.8 billion at the end of the third quarter was up 4% from $16.1 billion at the end of the second quarter.  Total deposits were $14.8 billion at September 30, 2011, up significantly from $14.1 billion at June 30, 2011.  The net deposit growth during the quarter included a $493 million, or a 15% increase, in demand deposits and a $223 million, or 5% increase, in money market deposits and was primarily driven by customer activity and seasonal flows.  The Company continued to focus on growing core customer funding and reducing brokered CDs and network deposits which declined by a net $61 million, down 5% from the prior quarter.

Net Interest Income and Net Interest Margin

Third quarter net interest income was $153 million, declining by $1 million from the second quarter of 2011.  Consistent with the Company’s strategy of funding loan growth primarily through securities run-off, net interest income from loans grew quarter over quarter while securities income continued to contract.  The third quarter net interest margin was 3.23%, down 6 basis points from the prior period.  Yields on earning assets compressed by 12 basis points quarter over quarter, while the cost of interest-bearing deposits (excluding brokered CDs) declined by 6 basis points; contributing to the net 6 basis point reduction in overall net interest margin.

Noninterest Income and Expense

Noninterest income for the quarter was $72 million, up $7 million, or 11%, from the second quarter.  The improvement was primarily driven by increases in mortgage banking income which benefited from a $5 million increase in income as a result of higher mortgage production as well as $2 million from lower valuation expense on mortgage servicing rights.  However, we expect that regulatory changes, coupled with changes in checking-related product fees and customer behavior will negatively impact fee-based revenues going forward.

Total noninterest expense for the quarter ended September 30, 2011 was $162 million, up $3 million, or 2%, from the second quarter, primarily attributable to increases in personnel and occupancy expenses.  Personnel expense increased $1 million for the quarter as the investment in key hires continued and occupancy expense was up $2 million from the second quarter.

Key Credit Metrics

The Company reported another quarter of improving credit metrics with nonaccrual loans down 14% to $403 million from $468 million at June 30, 2011, and down 45% from $728 million at September 30, 2010.  Potential problem loans declined to $660 million, down 6% from $699 million for the second quarter, and down 42% from $1.1 billion a year ago.

Net charge-offs were $30 million for the third quarter, down 32% from $45 million for the second quarter of 2011, and down 73% from $110 million for the third quarter of 2010.  Third quarter provision for loan losses was $4 million, down significantly from $16 million for the second quarter of 2011, and $64 million for the third quarter of 2010.  The Company’s allowance for loan losses was $400 million, representing an allowance equal to 2.96% of loans, and covered 99% of nonaccrual loans at September 30, 2011.

Capital Ratios

The Company’s capital position remains very strong, with a Tier 1 common ratio of 12.44% at September 30, 2011 compared to 12.61% at the end of the second quarter and 12.31% a year ago.  The Company’s capital ratios continue to be in excess of “well-capitalized” regulatory benchmarks, the highest regulatory capital level, and also exceed the proposed guidelines recently published by the Basel Committee and endorsed by U.S. regulatory agencies.

On September 14, 2011, the Company used the net proceeds from the September debt and preferred stock offerings to retire the remaining balance of the CPP preferred shares the Company issued under TARP.  The Company recorded a noncash charge of $4 million during the quarter for the repurchase of the remaining CPP preferred shares, which represented the difference between the unamortized cost of the repurchased preferred stock and the repurchase price.

“Our capital ratios following our September senior notes and preferred stock offerings and the subsequent TARP repayment continue to exceed the standards for well-capitalized banks,” Flynn continued.  “This strong capital position provides us with flexibility as we continue to execute our strategic plans for growth.”

“We are pleased with the solid results of this quarter.  We are proud to have delivered on our commitment we made to our shareholders to repay TARP in a shareholder-friendly manner,” Flynn continued.  “Despite the soft economy, we continue to see opportunities to create shareholder value and are committed to capitalizing on these opportunities.”

THIRD QUARTER 2011 EARNINGS RELEASE CONFERENCE CALL

The Company will host a conference call for investors and analysts at 4:00 p.m. Central Time (CT) today, October, 20, 2011.  Interested parties can listen to the call live on the Internet through the investor relations section of the company’s website, http://investor.associatedbank.com/ or by dialing 877-348-9354. The slide presentation for the call will be available on the company’s website just prior to the call.  The number for international callers is 253-237-1160. Participants should ask the operator for the Associated Banc-Corp third quarter 2011 earnings call, or conference ID number 10934250.

An audio archive of the webcast will be available on the company’s website for one month following the call.  A replay of the call will be available starting at 7:00 p.m. CT on October 20, 2011 through 11:00 p.m. CT on November 20, 2011 by dialing 855-859-2056 and entering the conference ID number 10934250. The replay number for international callers is 404-537-3406.  

ABOUT ASSOCIATED BANC-CORP

Associated Banc-Corp (NASDAQ: ASBC) has total assets of $22 billion and is one of the top 50 financial services holding companies operating in the United States.  Headquartered in Green Bay, Wis., Associated has approximately 270 banking locations serving more than 150 communities throughout Wisconsin, Illinois and Minnesota.  The company offers a full range of banking services and other financial products and services.  More information about Associated Banc-Corp is available at www.associatedbank.com.

FORWARD LOOKING STATEMENTS

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 most recent Annual Report filed on Form 10-K as updated by the Company’s most recent Form 10-Q.

Investor Contact:
Tim Sedabres, Vice President, Finance
920-491-7059

Media Contact:
Autumn Latimore, Public Relations Director
414-278-1860


Consolidated Balance Sheets (Unaudited)  


Associated Banc-Corp










September 30,


June 30,


Seql Qtr


March 31,


December 31,


September 30,


Comp Qtr


(in thousands)


2011


2011


$ Change


2011


2010


2010


$ Change


Assets
















Cash and due from banks


$          410,644


$      314,682


$    95,962


$      299,040


$      319,487


$       316,914


$     93,730


Interest-bearing deposits in other
















financial institutions


250,648


777,675


(527,027)


498,094


546,125


1,717,853


(1,467,205)


Federal funds sold and securities purchased
















under agreements to resell


4,180


2,400


1,780


2,015


2,550


503,950


(499,770)


Securities available for sale, at fair value


5,453,816


5,742,034


(288,218)


5,883,541


6,101,341


5,291,336


162,480


Federal Home Loan Bank and Federal
















  Reserve Bank stocks, at cost


191,128


191,075


53


191,017


190,968


190,918


210


Loans held for sale


201,142


84,323


116,819


85,493


144,808


274,666


(73,524)


Loans


13,503,507


13,089,589


413,918


12,655,322


12,616,735


12,372,393


1,131,114


Allowance for loan losses


(399,723)


(425,961)


26,238


(454,461)


(476,813)


(522,018)


122,295


   Loans, net


13,103,784


12,663,628


440,156


12,200,861


12,139,922


11,850,375


1,253,409


Premises and equipment, net


208,301


192,506


15,795


186,329


190,533


181,236


27,065


Goodwill


929,168


929,168


-


929,168


929,168


929,168


-


Other intangible assets, net


67,970


74,872


(6,902)


85,200


88,044


84,824


(16,854)


Other assets


1,081,868


1,076,112


5,756


1,112,807


1,132,650


1,184,046


(102,178)


   Total assets


$     21,902,649


$ 22,048,475


$ (145,826)


$ 21,473,565


$ 21,785,596


$  22,525,286


(622,637)


















Liabilities and Stockholders' Equity
















Noninterest-bearing deposits


$       3,711,570


$   3,218,722


$  492,848


$   3,285,604


$   3,684,965


$    3,054,121


657,449


Interest-bearing deposits, excl Brokered CDs


10,867,013


10,530,658


336,355


10,413,994


11,097,788


13,308,530


(2,441,517)


Brokered CDs


203,827


316,670


(112,843)


324,045


442,640


442,209


(238,382)


   Total deposits


14,782,410


14,066,050


716,360


14,023,643


15,225,393


16,804,860


(2,022,450)


Short-term funding


2,531,776


3,255,670


(723,894)


2,547,805


1,747,382


539,263


1,992,513


Long-term funding


1,477,408


1,484,174


(6,766)


1,484,177


1,413,605


1,713,671


(236,263)


Accrued expenses and other liabilities


260,436


243,433


17,003


223,226


240,425


266,643


(6,207)


   Total liabilities


19,052,030


19,049,327


2,703


18,278,851


18,626,805


19,324,437


(272,407)


Stockholders' Equity
















 Preferred equity


63,272


258,051


(194,779)


515,238


514,388


513,550


(450,278)


 Common stock


1,746


1,745


1


1,744


1,739


1,738


8


 Surplus


1,585,208


1,581,594


3,614


1,576,903


1,573,372


1,569,963


15,245


 Retained earnings


1,111,080


1,079,076


32,004


1,055,344


1,041,666


1,036,800


74,280


 Accumulated other comprehensive income


89,313


79,345


9,968


45,731


27,626


78,798


10,515


 Treasury stock


-


(663)


663


(246)


-


-


-


   Total stockholders' equity


2,850,619


2,999,148


(148,529)


3,194,714


3,158,791


3,200,849


(350,230)


   Total liabilities and stockholders' equity


$     21,902,649


$ 22,048,475


$ (145,826)


$ 21,473,565


$ 21,785,596


$  22,525,286


$  (622,637)




Consolidated Statements of Income (Unaudited)  









Associated Banc-Corp















For The Three Months Ended





For The Nine Months Ended,







September 30,


Quarter


September 30,


Year-to-Date


(in thousands, except per share amounts)


2011


2010


$ Change

% Change


2011


2010


$ Change

% Change


Interest Income
















Interest and fees on loans


$ 145,778


$ 148,937


$ (3,159)

(2.1%)


$ 432,907


$ 462,043


$ (29,136)

(6.3%)


Interest and dividends on investment securities:
















 Taxable


30,513


36,151


(5,638)

(15.6%)


100,516


122,611


(22,095)

(18.0%)


 Tax-exempt


7,376


8,499


(1,123)

(13.2%)


22,593


25,765


(3,172)

(12.3%)


Other interest and dividends


1,428


2,629


(1,201)

(45.7%)


4,324


6,615


(2,291)

(34.6%)


   Total interest income


185,095


196,216


(11,121)

(5.7%)


560,340


617,034


(56,694)

(9.2%)


Interest Expense
















Interest on deposits


15,644


25,879


(10,235)

(39.5%)


50,794


82,984


(32,190)

(38.8%)


Interest on short-term funding


3,039


1,849


1,190

64.4%


10,255


5,695


4,560

80.1%


Interest on long-term funding


13,252


14,584


(1,332)

(9.1%)


38,285


45,436


(7,151)

(15.7%)


   Total interest expense


31,935


42,312


(10,377)

(24.5%)


99,334


134,115


(34,781)

(25.9%)


Net Interest Income


153,160


153,904


(744)

(0.5%)


461,006


482,919


(21,913)

(4.5%)


Provision for loan losses


4,000


64,000


(60,000)

(93.8%)


51,000


327,010


(276,010)

(84.4%)


Net interest income after provision for
















loan losses


149,160


89,904


59,256

65.9%


410,006


155,909


254,097

163.0%


Noninterest Income
















Trust service fees


9,791


9,462


329

3.5%


29,634


28,335


1,299

4.6%


Service charges on deposit accounts


19,949


23,845


(3,896)

(16.3%)


58,125


76,350


(18,225)

(23.9%)


Card-based and other nondeposit fees


15,291


14,906


385

2.6%


46,636


43,457


3,179

7.3%


Retail commissions


15,047


15,276


(229)

(1.5%)


47,903


46,815


1,088

2.3%


 Total core fee-based revenue


60,078


63,489


(3,411)

(5.4%)


182,298


194,957


(12,659)

(6.5%)








-










Mortgage banking, net


4,521


9,007


(4,486)

(49.8%)


3,046


19,907


(16,861)

(84.7%)


Capital market fees, net


3,273


891


2,382

267.3%


4,761


885


3,876

438.0%


Bank owned life insurance income


3,990


3,756


234

6.2%


11,076


11,252


(176)

(1.6%)


Asset sale losses, net


(1,179)


(2,354)


1,175

(49.9%)


(3,374)


(2,518)


(856)

34.0%


Investment securities gains (losses), net


(744)


3,365


(4,109)

N/M


(802)


26,800


(27,602)

N/M


Other


1,737


3,743


(2,006)

(53.6%)


11,608


9,543


2,065

21.6%


   Total noninterest income


71,676


81,897


(10,221)

(12.5%)


208,613


260,826


(52,213)

(20.0%)


Noninterest Expense
















Personnel expense


90,377


80,640


9,737

12.1%


268,510


239,337


29,173

12.2%


Occupancy


14,205


12,157


2,048

16.8%


42,143


37,038


5,105

13.8%


Equipment


4,851


4,637


214

4.6%


14,587


13,472


1,115

8.3%


Data processing


7,887


7,502


385

5.1%


23,395


22,667


728

3.2%


Business development and advertising


5,539


4,297


1,242

28.9%


16,134


13,515


2,619

19.4%


Other intangible amortization


1,179


1,206


(27)

(2.2%)


3,535


3,713


(178)

(4.8%)


Legal and professional fees


4,289


6,774


(2,485)

(36.7%)


13,554


15,086


(1,532)

(10.2%)


Losses other than loans


1,659


2,504


(845)

(33.7%)


6,031


7,323


(1,292)

(17.6%)


Foreclosure/OREO expense


7,662


7,349


313

4.3%


23,250


23,984


(734)

(3.1%)


FDIC expense


6,906


11,426


(4,520)

(39.6%)


22,348


35,282


(12,934)

(36.7%)


Other


17,606


18,088


(482)

(2.7%)


51,735


52,060


(325)

(0.6%)


   Total noninterest expense


162,160


156,580


5,580

3.6%


485,222


463,477


21,745

4.7%


Income (loss) before income taxes


58,676


15,221


43,455

285.5%


133,397


(46,742)


180,139

N/M


Income tax expense (benefit)


17,337


917


16,420

N/M


34,823


(31,878)


66,701

N/M


Net income (loss)


41,339


14,304


27,035

189.0%


98,574


(14,864)


$ 113,438

N/M


Preferred stock dividends and discount


7,305


7,389


(84)

(1.1%)


23,530


22,131


1,399

6.3%


Net income (loss) available to common equity


$   34,034


$     6,915


$ 27,119

392.2%


$   75,044


$ (36,995)


$ 112,039

N/M


















Earnings (Loss) Per Common Share:
















 Basic


$       0.20


$       0.04


$     0.16

400.0%


$       0.43


$     (0.22)


$       0.65

N/M


 Diluted


$       0.20


$       0.04


$     0.16

400.0%


$       0.43


$     (0.22)


$       0.65

N/M


















Average Common Shares Outstanding:
















 Basic


173,418


172,989


429

0.2%


173,319


170,610


2,709

1.6%


 Diluted


173,418


172,990


428

0.2%


173,321


170,610


2,711

1.6%


















N/M = Not meaningful.


















Consolidated Statements of Income (Unaudited) - Quarterly Trend



Associated Banc-Corp










Sequential Qtr


Comparable Qtr


(in thousands, except per share amounts)


3Q11


2Q11


$ Change

% Change


1Q11


4Q10


3Q10


$ Change

% Change


Interest Income


















Interest and fees on loans


$ 145,778


$ 144,358


$   1,420

1.0%


$ 142,771


$ 146,444


$ 148,937


$ (3,159)

(2.1%)


Interest and dividends on investment securities:


















 Taxable


30,513


35,351


(4,838)

(13.7%)


34,652


32,420


36,151


(5,638)

(15.6%)


 Tax-exempt


7,376


7,504


(128)

(1.7%)


7,713


8,150


8,499


(1,123)

(13.2%)


Other interest and dividends


1,428


1,438


(10)

(0.7%)


1,458


2,078


2,629


(1,201)

(45.7%)


   Total interest income


185,095


188,651


(3,556)

(1.9%)


186,594


189,092


196,216


(11,121)

(5.7%)


Interest Expense


















Interest on deposits


15,644


16,901


(1,257)

(7.4%)


18,249


23,039


25,879


(10,235)

(39.5%)


Interest on short-term funding


3,039


3,637


(598)

(16.4%)


3,579


2,288


1,849


1,190

64.4%


Interest on long-term funding


13,252


13,990


(738)

(5.3%)


11,043


12,905


14,584


(1,332)

(9.1%)


   Total interest expense


31,935


34,528


(2,593)

(7.5%)


32,871


38,232


42,312


(10,377)

(24.5%)


Net Interest Income


153,160


154,123


(963)

(0.6%)


153,723


150,860


153,904


(744)

(0.5%)


Provision for loan losses


4,000


16,000


(12,000)

(75.0%)


31,000


63,000


64,000


(60,000)

(93.8%)


Net interest income after provision for


















loan losses


149,160


138,123


11,037

8.0%


122,723


87,860


89,904


59,256

65.9%


Noninterest Income


















Trust service fees


9,791


10,012


(221)

(2.2%)


9,831


9,518


9,462


329

3.5%


Service charges on deposit accounts


19,949


19,112


837

4.4%


19,064


20,390


23,845


(3,896)

(16.3%)


Card-based and other nondeposit fees


15,291


15,747


(456)

(2.9%)


15,598


15,842


14,906


385

2.6%


Retail commissions


15,047


16,475


(1,428)

(8.7%)


16,381


14,441


15,276


(229)

(1.5%)


 Total core fee-based revenue


60,078


61,346


(1,268)

(2.1%)


60,874


60,191


63,489


(3,411)

(5.4%)




















Mortgage banking, net


4,521


(3,320)


7,841

N/M


1,845


13,229


9,007


(4,486)

(49.8%)


Capital market fees, net


3,273


(890)


4,163

N/M


2,378


5,187


891


2,382

267.3%


Bank owned life insurance income


3,990


3,500


490

14.0%


3,586


4,509


3,756


234

6.2%


Asset sale gains (losses), net


(1,179)


(209)


(970)

N/M


(1,986)


514


(2,354)


1,175

(49.9%)


Investment securities gains (losses), net


(744)


(36)


(708)

N/M


(22)


(1,883)


3,365


(4,109)

(122.1%)


Other


1,737


4,364


(2,627)

(60.2%)


5,507


2,950


3,743


(2,006)

(53.6%)


   Total noninterest income


71,676


64,755


6,921

10.7%


72,182


84,697


81,897


(10,221)

(12.5%)


Noninterest Expense


















Personnel expense


90,377


89,203


1,174

1.3%


88,930


83,912


80,640


9,737

12.1%


Occupancy


14,205


12,663


1,542

12.2%


15,275


12,899


12,157


2,048

16.8%


Equipment


4,851


4,969


(118)

(2.4%)


4,767


4,899


4,637


214

4.6%


Data processing


7,887


7,974


(87)

(1.1%)


7,534


7,047


7,502


385

5.1%


Business development and advertising


5,539


5,652


(113)

(2.0%)


4,943


4,870


4,297


1,242

28.9%


Other intangible amortization


1,179


1,178


1

0.1%


1,178


1,206


1,206


(27)

(2.2%)


Legal and professional fees


4,289


4,783


(494)

(10.3%)


4,482


5,353


6,774


(2,485)

(36.7%)


Losses other than loans


1,659


(1,925)


3,584

N/M


6,297


7,470


2,504


(845)

(33.7%)


Foreclosure/OREO expense


7,662


9,527


(1,865)

(19.6%)


6,061


9,860


7,349


313

4.3%


FDIC expense


6,906


7,198


(292)

(4.1%)


8,244


11,095


11,426


(4,520)

(39.6%)


Other


17,606


17,664


(58)

(0.3%)


16,465


18,232


18,088


(482)

(2.7%)


   Total noninterest expense


162,160


158,886


3,274

2.1%


164,176


166,843


156,580


5,580

3.6%


Income before income taxes


58,676


43,992


14,684

33.4%


30,729


5,714


15,221


43,455

285.5%


Income tax expense (benefit)


17,337


9,610


7,727

80.4%


7,876


(8,294)


917


16,420

N/M


Net income


41,339


34,382


6,957

20.2%


22,853


14,008


14,304


27,035

189.0%


Preferred stock dividends and discount


7,305


8,812


(1,507)

(17.1%)


7,413


7,400


7,389


(84)

(1.1%)


Net income available to common equity


$   34,034


$   25,570


$   8,464

33.1%


$   15,440


$     6,608


$     6,915


$ 27,119

392.2%




















Earnings Per Common Share:


















 Basic


$       0.20


$       0.15


$     0.05

33.3%


$       0.09


$       0.04


$       0.04


$     0.16

400.0%


 Diluted


$       0.20


$       0.15


$     0.05

33.3%


$       0.09


$       0.04


$       0.04


$     0.16

400.0%




















Average Common Shares Outstanding:


















 Basic


173,418


173,323


95

0.1%


173,213


173,068


172,989


429

0.2%


 Diluted


173,418


173,327


91

0.1%


173,217


173,072


172,990


428

0.2%




















N/M = Not meaningful.




















Selected Quarterly Information  


Associated Banc-Corp
































(in thousands, except per share and full time equivalent employee data)

YTD 2011


YTD 2010


3rd Qtr 2011


2nd Qtr 2011


1st Qtr 2011


4th Qtr 2010


3rd Qtr 2010


Summary of Operations















Net interest income

$      461,006


$      482,919


$      153,160


$      154,123


$      153,723


$      150,860


$      153,904


Provision for loan losses

51,000


327,010


4,000


16,000


31,000


63,000


64,000


Asset sale gains (losses), net

(3,374)


(2,518)


(1,179)


(209)


(1,986)


514


(2,354)


Investment securities gains (losses), net

(802)


26,800


(744)


(36)


(22)


(1,883)


3,365


Noninterest income (excluding securities & asset gains)

212,789


236,544


73,599


65,000


74,190


86,066


80,886


Noninterest expense

485,222


463,477


162,160


158,886


164,176


166,843


156,580


Income (loss) before income taxes

133,397


(46,742)


58,676


43,992


30,729


5,714


15,221


Income tax expense (benefit)

34,823


(31,878)


17,337


9,610


7,876


(8,294)


917


Net income (loss)

98,574


(14,864)


41,339


34,382


22,853


14,008


14,304


Net income (loss) available to common equity

75,044


(36,995)


34,034


25,570


15,440


6,608


6,915


Taxable equivalent adjustment

16,067


17,914


5,295


5,332


5,440


5,721


5,914

















Per Common Share Data















Net income (loss):















 Basic

$            0.43


$          (0.22)


$            0.20


$            0.15


$            0.09


$            0.04


$            0.04


 Diluted

0.43


(0.22)


0.20


0.15


0.09


0.04


0.04


Dividends

0.03


0.03


0.01


0.01


0.01


0.01


0.01


Market Value:















 High

$          15.36


$          16.10


$          14.17


$          15.02


$          15.36


$          15.49


$          13.90


 Low

8.95


11.48


8.95


13.06


13.83


12.57


11.96


 Close

9.30


13.19


9.30


13.90


14.85


15.15


13.19


Book value

16.07


15.53


16.07


15.81


15.46


15.28


15.53


Tangible book value

10.59


10.02


10.59


10.33


9.97


9.77


10.02

















Performance Ratios (annualized)















Earning assets yield

3.96%


4.08%


3.88%


4.00%


4.01%


3.89%


3.90%


Interest-bearing liabilities rate

0.88


1.08


0.83


0.91


0.89


0.98


1.03


Net interest margin

3.28


3.22


3.23


3.29


3.32


3.13


3.08


Return on average assets

0.61


(0.09)


0.75


0.64


0.43


0.25


0.25


Return on average equity

4.33


(0.63)


5.49


4.63


2.92


1.74


1.77


Return on average tangible common equity (1)

5.71


(2.89)


7.44


5.85


3.67


1.52


1.58


Efficiency ratio (2)

70.34


62.85


69.88


70.79


70.36


68.76


65.05


Effective tax rate (benefit)

26.10


(68.20)


29.55


21.84


25.63


(145.13)


6.03


Dividend payout ratio (3)

6.98


N/M


5.00


6.67


11.11


25.00


25.02

















Average Balances















Assets

$ 21,532,170


$ 22,824,238


$ 21,729,187


$ 21,526,155


$ 21,336,858


$ 22,034,041


$ 22,727,208


Earning assets

19,420,572


20,776,661


19,530,007


19,431,292


19,297,866


19,950,784


20,660,498


Interest-bearing liabilities

15,129,294


16,583,326


15,215,517


15,261,514


14,907,465


15,476,002


16,376,904


Loans (4)

13,021,134


13,388,577


13,376,928


13,004,904


12,673,844


12,587,702


12,855,791


Deposits

14,235,123


17,112,719


14,405,311


14,052,689


14,245,614


16,452,473


17,138,105


Short and long-term funding

4,182,908


2,500,326


4,227,319


4,434,500


3,883,122


2,311,016


2,326,469


Common stockholders' equity

2,709,688


2,667,294


2,765,023


2,704,909


2,657,956


2,681,813


2,693,735


Stockholders' equity

3,044,872


3,179,500


2,987,178


2,976,840


3,172,636


3,195,657


3,206,742


Common stockholders' equity / assets

12.58%


11.69%


12.72%


12.57%


12.46%


12.17%


11.85%


Stockholders' equity / assets

14.14%


13.93%


13.75%


13.83%


14.87%


14.50%


14.11%

















At Period End















Assets





$ 21,902,649


$ 22,048,475


$ 21,473,565


$ 21,785,596


$ 22,525,286


Loans





13,503,507


13,089,589


12,655,322


12,616,735


12,372,393


Allowance for loan losses





399,723


425,961


454,461


476,813


522,018


Goodwill





929,168


929,168


929,168


929,168


929,168


Mortgage servicing rights, net





47,370


53,093


62,243


63,909


59,483


Other intangible assets





20,600


21,779


22,957


24,135


25,341


Deposits





14,782,410


14,066,050


14,023,643


15,225,393


16,804,860


Short and long-term funding





4,009,184


4,739,844


4,031,982


3,160,987


2,252,934


Stockholders' equity





2,850,619


2,999,148


3,194,714


3,158,791


3,200,849


Stockholders' equity / assets





13.01%


13.60%


14.88%


14.50%


14.21%


Tangible common equity / tangible assets (5)





8.77%


8.49%


8.42%


8.12%


8.03%


Tangible equity/tangible assets (6)





9.07%


9.71%


10.93%


10.59%


10.41%


Tier 1 common equity / risk-weighted assets (7)





12.44%


12.61%


12.65%


12.26%


12.31%


Tier 1 leverage ratio





9.62%


10.46%


11.65%


11.19%


10.78%


Tier 1 risk-based capital ratio





14.35%


16.03%


18.08%


17.58%


17.68%


Total risk-based capital ratio





15.81%


17.50%


19.56%


19.05%


19.16%


Shares outstanding, end of period





173,474


173,374


173,274


173,112


173,019

















Selected trend information















Average full time equivalent employees





4,980


4,977


4,929


4,865


4,827


Trust assets under management, at market value





$   5,300,000


$   5,700,000


$   5,900,000


$   5,700,000


$   5,400,000


Mortgage loans originated for sale during period





470,530


250,880


290,013


629,978


727,868


Mortgage portfolio serviced for others





7,281,000


7,367,000


7,476,000


7,453,000


7,860,000


Mortgage servicing rights, net / portfolio serviced for others





0.65%


0.72%


0.83%


0.86%


0.76%

















N/M = Not meaningful.














(1) Return on average tangible common equity = Net income available to common equity divided by average common equity excluding average goodwill and other intangible assets. This is a non-GAAP financial measure.


(2) Efficiency ratio = Noninterest expense divided by sum of taxable equivalent 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.




(4) Loans held for sale have been included in the average balances.


(5) Tangible common equity to tangible assets = Common stockholders' equity excluding goodwill and other intangible assets divided by assets excluding goodwill and other intangible assets.



     This is a non-GAAP financial measure.




(6) Tangible equity to tangible assets = Stockholders' equity excluding goodwill and other intangible assets divided by assets excluding goodwill and other intangible assets.


     This is a non-GAAP financial measure.


(7) Tier 1 common equity to risk-weighted assets = Tier 1 capital excluding qualifying perpetual preferred stock and qualifying trust preferred securities divided by risk-weighted assets.  This is a non-GAAP financial measure.




Selected Asset Quality Information  


Associated Banc-Corp






Sep11 vs Jun11





Sep11 vs Sep10


(in thousands)


Sep 30, 2011

Jun 30, 2011

% Change


Mar 31, 2011

Dec 31, 2010

Sep 30, 2010

% Change


Allowance for Loan Losses











Beginning balance


$     425,961

$     454,461

(6.3%)


$     476,813

$     522,018

$     567,912

(25.0%)


Provision for loan losses


4,000

16,000

(75.0%)


31,000

63,000

64,000

(93.8%)


Charge offs


(38,155)

(52,365)

(27.1%)


(65,156)

(118,368)

(122,327)

(68.8%)


Recoveries


7,917

7,865

0.7%


11,804

10,163

12,433

(36.3%)


Net charge offs


(30,238)

(44,500)

(32.0%)


(53,352)

(108,205)

(109,894)

(72.5%)


Ending balance


$     399,723

$     425,961

(6.2%)


$     454,461

$     476,813

$     522,018

(23.4%)













Reserve for losses on unfunded commitments


$       14,900

$       14,900

0.0%


$       17,800

$       17,374

$       16,274

(8.4%)
























Net Charge Offs




Sep11 vs Jun11





Sep11 vs Sep10




Sep 30, 2011

Jun 30, 2011

% Change


Mar 31, 2011

Dec 31, 2010

Sep 30, 2010

% Change


Commercial and industrial


$         3,741

$       14,026

(73.3%)


$         4,314

$       27,041

$         4,274

(12.5%)


Commercial real estate


10,606

9,377

13.1%


7,873

20,103

28,517

(62.8%)


Real estate - construction


5,646

6,031

(6.4%)


11,936

31,879

60,488

(90.7%)


Lease financing


(1,889)

60

N/M


28

9,159

826

(328.7%)


   Total commercial


18,104

29,494

(38.6%)


24,151

88,182

94,105

(80.8%)


Home equity


8,736

8,251

5.9%


14,322

14,541

10,875

(19.7%)


Installment(1)


764

664

15.1%


12,670

2,369

1,640

(53.4%)


   Total retail


9,500

8,915

6.6%


26,992

16,910

12,515

(24.1%)


   Residential mortgage


2,634

6,091

(56.8%)


2,209

3,113

3,274

(19.5%)


       Total net charge offs


$       30,238

$       44,500

(32.0%)


$       53,352

$     108,205

$     109,894

(72.5%)













Net Charge Offs to Average Loans (in basis points) *


Sep 30, 2011

Jun 30, 2011



Mar 31, 2011

Dec 31, 2010

Sep 30, 2010



Commercial and industrial


46

180



60

364

57



Commercial real estate


120

111



94

231

319



Real estate - construction


407

454



888

1,820

2,598



Lease financing


(1,396)

44



20

5,051

416



   Total commercial


98

166



142

488

498



Home equity


134

127



227

231

175



Installment


52

42



759

131

74



   Total retail


119

111



338

209

148



   Residential mortgage


36

92



35

56

65



       Total net charge offs


90

137



171

341

339

























Credit Quality




Sep11 vs Jun11





Sep11 vs Sep10




Sep 30, 2011

Jun 30, 2011

% Change


Mar 31, 2011

Dec 31, 2010

Sep 30, 2010

% Change


Nonaccrual loans


$     403,392

$     467,611

(13.7%)


$     488,321

$     574,356

$     727,877

(44.6%)


Other real estate owned (OREO)


42,076

45,712

(8.0%)


49,019

44,330

53,101

(20.8%)


   Total nonperforming assets


$     445,468

$     513,323

(13.2%)


$     537,340

$     618,686

$     780,978

(43.0%)













Loans 90 or more days past due and still accruing


1,220

12,123

(89.9%)


9,380

3,418

26,593

(95.4%)


Restructured loans (accruing)


113,083

100,343

12.7%


88,193

79,935

62,778

80.1%













Allowance for loan losses / loans


2.96%

3.25%



3.59%

3.78%

4.22%



Allowance for loan losses / nonaccrual loans


99.09

91.09



93.07

83.02

71.72



Nonaccrual loans / total loans


2.99

3.57



3.86

4.55

5.88



Nonperforming assets / total loans plus OREO


3.29

3.91



4.23

4.89

6.29



Nonperforming assets / total assets


2.03

2.33



2.50

2.84

3.47



Net charge offs / average loans (annualized)


0.90

1.37



1.71

3.41

3.39



Year-to-date net charge offs / average loans


1.32

1.54



1.71

3.69

3.78














Nonaccrual loans by type:











Commercial and industrial


$       61,256

$       71,183

(13.9%)


$       76,780

$       99,845

$     156,697

(60.9%)


Commercial real estate


144,893

193,495

(25.1%)


186,547

223,927

275,586

(47.4%)


Real estate - construction


72,300

72,782

(0.7%)


84,903

94,929

132,425

(45.4%)


Lease financing


11,667

12,898

(9.5%)


15,270

17,080

26,922

(56.7%)


   Total commercial


290,116

350,358

(17.2%)


363,500

435,781

591,630

(51.0%)


Home equity


46,119

46,777

(1.4%)


49,618

51,712

50,901

(9.4%)


Installment


3,195

3,724

(14.2%)


4,949

10,544

8,757

(63.5%)


   Total retail


49,314

50,501

(2.4%)


54,567

62,256

59,658

(17.3%)


   Residential mortgage


63,962

66,752

(4.2%)


70,254

76,319

76,589

(16.5%)


       Total nonaccrual loans


$     403,392

$     467,611

(13.7%)


$     488,321

$     574,356

$     727,877

(44.6%)
























* Annualized.











N/M = Not meaningful.











(1) Charge offs for the three months ended March 31, 2011, include $10 million of write-downs related to installment loans transferred to held for sale.




Selected Asset Quality Information (continued)  


Associated Banc-Corp






Sep11 vs Jun11





Sep11 vs Sep10


(in thousands)


Sep 30, 2011

Jun 30, 2011

% Change


Mar 31, 2011

Dec 31, 2010

Sep 30, 2010

% Change


Restructured loans (accruing)











Commercial and industrial


$       23,020

$       22,760

1.1%


$       16,047

$         9,980

$            620

N/M


Commercial real estate


48,892

36,191

35.1%


34,166

15,612

23,387

109.1%


Real estate - construction


10,707

10,706

0.0%


7,859

22,532

7,076

51.3%


Lease financing


-

-

0.0%


-

-

-

0.0%


   Total commercial


82,619

69,657

18.6%


58,072

48,124

31,083

165.8%


Home equity


10,556

11,453

(7.8%)


11,630

11,741

10,269

2.8%


Installment


965

1,017

(5.1%)


1,149

692

793

21.7%


   Total retail


11,521

12,470

(7.6%)


12,779

12,433

11,062

4.1%


   Residential mortgage


18,943

18,216

4.0%


17,342

19,378

20,633

(8.2%)


       Total restructured loans (accruing)


$     113,083

$     100,343

12.7%


$       88,193

$       79,935

$       62,778

80.1%













Restructured loans in nonaccrual loans (not included above)


$       80,063

$       71,084

12.6%


$       49,352

$       35,939

$       32,657

145.2%
























Loans Past Due 30-89 Days




Sep11 vs Jun11





Sep11 vs Sep10




Sep 30, 2011

Jun 30, 2011

% Change


Mar 31, 2011

Dec 31, 2010

Sep 30, 2010

% Change


Commercial and industrial


$         6,255

$         7,581

(17.5%)


$       36,205

$       33,013

$       14,505

(56.9%)


Commercial real estate


99,545

61,240

62.5%


40,537

46,486

56,710

75.5%


Real estate - construction


5,493

13,217

(58.4%)


3,410

8,016

12,225

(55.1%)


Lease financing


507

79

541.8%


135

132

168

201.8%


   Total commercial


111,800

82,117

36.1%


80,287

87,647

83,608

33.7%


Home equity


18,165

14,818

22.6%


14,808

13,886

20,044

(9.4%)


Installment


1,956

3,851

(49.2%)


2,714

9,624

10,536

(81.4%)


   Total retail


20,121

18,669

7.8%


17,522

23,510

30,580

(34.2%)


   Residential mortgage


12,114

12,573

(3.7%)


7,940

8,722

10,065

20.4%


       Total loans past due 30-89 days


$     144,035

$     113,359

27.1%


$     105,749

$     119,879

$     124,253

15.9%
























Potential Problem Loans




Sep11 vs Jun11





Sep11 vs Sep10




Sep 30, 2011

Jun 30, 2011

% Change


Mar 31, 2011

Dec 31, 2010

Sep 30, 2010

% Change


Commercial and industrial


$     207,351

$     229,407

(9.6%)


$     348,949

$     354,284

$     373,955

(44.6%)


Commercial real estate


392,737

382,056

2.8%


465,376

492,778

553,126

(29.0%)


Real estate - construction


37,155

63,186

(41.2%)


70,824

91,618

175,817

(78.9%)


Lease financing


507

1,399

(63.8%)


1,705

2,617

2,302

(78.0%)


   Total commercial


637,750

676,048

(5.7%)


886,854

941,297

1,105,200

(42.3%)


Home equity


4,975

4,515

10.2%


4,737

3,057

6,495

(23.4%)


Installment


272

216

25.9%


230

703

692

(60.7%)


   Total retail


5,247

4,731

10.9%


4,967

3,760

7,187

(27.0%)


   Residential mortgage


16,550

18,575

(10.9%)


19,710

18,672

19,416

(14.8%)


       Total potential problem loans


$     659,547

$     699,354

(5.7%)


$     911,531

$     963,729

$  1,131,803

(41.7%)
























N/M = Not meaningful.












<

Net Interest Income Analysis - Taxable Equivalent Basis 


Associated Banc-Corp


Nine months ended September 30, 2011


Nine months ended September 30, 2010




Average

Interest

Average


Average

Interest

Average


(in thousands)


Balance

Income / Expense

Yield / Rate


Balance

Income / Expense

Yield / Rate












Earning assets:










  Loans: (1) (2) (3)










     Commercial


$   7,121,706

$              232,727

4.37%


$   8,002,403

$              258,475

4.32%


     Residential mortgage


2,685,994

84,564

4.20


2,006,806

74,277

4.94


     Retail


3,213,434

118,127

4.91


3,379,368

131,747

5.21


        Total loans


13,021,134

435,418

4.47


13,388,577

464,499

4.64


     Investment securities


5,658,000

136,665

3.22


5,386,201

163,834

4.06


     Other short-term investments


741,438

4,324

0.78


2,001,883

6,615

0.44


  Investments and other


6,399,438

140,989

2.94


7,388,084

170,449

3.08


Total earning assets


19,420,572

576,407

3.96


20,776,661

634,948

4.08


  Other assets, net


2,111,598




2,047,577




Total assets


$ 21,532,170




$ 22,824,238














Interest-bearing liabilities:










  Savings deposits


$      977,064

$                     861

0.12%


$      894,445

$                     857

0.13%


  Interest-bearing demand deposits


1,878,417

2,314

0.16


2,796,295

4,968

0.24


  Money market deposits


5,093,270

12,736

0.33


6,490,856

26,215

0.54


  Time deposits, excluding Brokered CDs


2,678,134

32,001

1.60


3,317,251

47,294

1.91


     Total interest-bearing deposits, excluding Brokered CDs


10,626,885

47,912

0.60


13,498,847

79,334

0.79


  Brokered CDs


319,501

2,882

1.21


584,153

3,650

0.84


     Total interest-bearing deposits


10,946,386