Press Release Details

Associated Reports Second Quarter Earnings of $0.24 per share

07/19/2012

GREEN BAY, Wis., July 19, 2012 /PRNewswire/ -- Associated Banc-Corp (NASDAQ: ASBC) today reported net income to common shareholders of $42 million, or $0.24 per common share, for the quarter ended June 30, 2012. This compares to net income to common shareholders of $26 million, or $0.15 per common share, for the comparable quarter ended June 30, 2011.

For the first six months of 2012, Associated reported net income to common shareholders of $83 million, or $0.48 per common share.  This compares to net income to common shareholders of $41 million, or $0.24 per common share, for the comparable year ago period.

"We are pleased to report another quarter of improving results and business prospects," said President and CEO Philip B. Flynn.  "We remain focused on strengthening our franchise and deploying our capital in a disciplined manner, consistent with our commitment to building long-term shareholder value at Associated."

HIGHLIGHTS   

  • Net income to common shareholders of $42 million
    • Quarterly net income to common increased $16 million, or 64%, year-over-year
    • Quarterly net income to common is at the highest level since early 2008
  • Loan balances increased by a net $445 million, or 3%, during the second quarter to $14.7 billion, and have increased by $1.6 billion, or 12%, from a year ago
    • Commercial and business lending balances are 23% higher than a year ago
    • All of the net loan growth during the quarter came from commercial portfolios as $121 million of retail and residential mortgage loans were sold from the portfolio during the quarter
  • Credit metrics continued to improve with levels of nonaccrual loans, potential problem loans, and delinquent loans all declining during the quarter
  • Completed the previously announced consolidation of 20 branches and closed on the sale of three additional branches in rural Western Illinois during the quarter
  • Repurchased $30 million of common stock and redeemed $25 million of outstanding 7.625% Trust Preferred securities during the quarter
  • Return on Tier 1 common equity for the quarter of 9.26%, compared to 6.07% a year ago
  • Capital ratios remain very strong with a Tier 1 common equity ratio of 12.04%

SECOND QUARTER 2012 FINANCIAL RESULTS

Loans

At June 30, 2012, the Company's loan portfolio was $14.7 billion, up $445 million, or 3%, from $14.3 billion at March 31, 2012, and up $1.6 billion, or 12%, from $13.1 billion a year ago.  Commercial and business lending balances increased by $401 million, or 8%, from the prior quarter and accounted for the majority of the quarter's net loan growth.  Commercial real estate lending balances grew by a net $193 million or 6% on a linked-quarter basis.  The residential mortgage portfolio experienced net shrinkage of $50 million during the quarter as the Company sold $109 million of residential mortgage loans from portfolio. The retail portfolio declined by a net $99 million during the quarter as consumers continued to refinance equity loans into new first mortgages.

Deposits

Average deposits of $15.1 billion were up slightly from the first quarter, and have increased by $1 billion, or 7%, from a year ago.  Total deposits of $15.1 billion at the end of the second quarter were down from first quarter levels, but essentially flat compared to prior year-end and up year-over-year.  Period end core checking and savings account balances are up more than 18% from a year ago.  Deposit trends were negatively impacted during the quarter by the continued reduction of collateralized public funds deposits, reduced retail and brokered CD balances, and the sale of 3 retail branches with $114 million of related deposits.

Net Interest Income and Net Interest Margin

Second quarter net interest income of $154 million was flat compared to both the prior quarter and the year-ago quarter.  This stability in net interest income is reflective of the relatively consistent level of interest-earning assets over the past year.   The net interest margin for the quarter was 3.30%.  While yields on earning assets decreased by 5 basis points from the prior quarter, the cost of deposits and interest-bearing liabilities also declined, contributing to a net decrease in overall net interest margin of just 1 basis point compared to the prior quarter.

Noninterest Income and Expense

Noninterest income for the quarter was $76 million, down $2 million, or 3%, from the first quarter. The Company recorded a $6 million write-down on software placed into production during the quarter.  Income from fee-based businesses was flat, as insurance, card-based fees, trust service fees and brokerage revenue, posted modest increases in income, offset by lower service charges on deposit accounts and capital markets income compared to the prior quarter.  The Company also completed the sale of 3 retail branches in rural Western Illinois that resulted in a net $6 million gain during the quarter.  Other notable factors impacting noninterest income compared to the prior quarter include a $3 million impairment charge on certain limited partnership investments, a $1 million decrease in bank owned life insurance income and reduced net mortgage banking income of $1 million

Total noninterest expense for the quarter ended June 30, 2012 was $166 million, down $4 million, or 2%, from the first quarter.  Personnel and occupancy expenses decreased by $2 million from the prior quarter while data processing expense increased by $2 million from the first quarter due to increased software and systems costs during the quarter.  Other expenses were lower as the Company settled with and received $4 million from its insurance carrier during the quarter as reimbursement for costs previously incurred related to the proposed settlement of an ongoing legal matter. 

Credit Metrics

The Company reported another quarter of improving credit metrics with nonaccrual loans down 3%, to $318 million compared to the first quarter, and down 32%, from $468 million a year ago.  Potential problem loans declined 15% from the prior quarter to $410 million, and declined 41%, from $699 million a year ago.

Net charge offs were $24 million for the second quarter, an increase of $2 million from the first quarter, but were 47% lower than a year ago.  The Company's allowance for loan losses was $333 million, representing an allowance equal to 2.26% of loans, and which represented a coverage ratio of over 104% of nonaccrual loans at June 30, 2012.

Capital Ratios

The Company's capital position remains very strong, with a Tier 1 common equity ratio of 12.04% at June 30, 2012.  The Company's capital ratios continue to be well in excess of "well-capitalized" regulatory benchmarks.

SECOND QUARTER 2012 EARNINGS RELEASE CONFERENCE CALL

The Company will host a conference call for investors and analysts at 4:00 p.m. Central Time (CT) today, July 19, 2012.  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 877-317-6789. 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 412-317-6789. Participants should ask the operator for the Associated Banc-Corp second quarter 2012 earnings call.

An audio archive of the webcast will be available on the company's website.  A telephone replay will be available two hours after the completion of the call through 8:00 a.m. CT on August 20, 2012, by dialing 877-344-7529 and entering the conference ID number 10015418. The replay number for international callers is 412-317-0088.

ABOUT ASSOCIATED BANC-CORP

Associated Banc-Corp (NASDAQ: ASBC) has total assets of $22 billion and is one of the top 50, publicly traded, U.S. bank holding companies.  Headquartered in Green Bay, Wis., Associated is a leading Midwest banking franchise, offering a full range of financial products and services through more than 250 banking locations serving more than 150 communities throughout Wisconsin, Illinois and Minnesota, and commercial financial services in Indiana, Michigan, Missouri, Ohio and Texas. Associated Bank, N.A. is an Equal Housing Lender, Equal Opportunity Lender and Member FDIC.  More information about Associated Banc-Corp is available at www.associatedbank.com.

FORWARD LOOKING STATEMENTS

Statements made in this document which 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.  Such forward-looking statements may be identified by the use of words such as "believe", "expect", "anticipate", "plan", "estimate", "should", "will", "intend", "outlook", or similar expressions.  Forward-looking statements are based on current management expectations and, by their nature, are subject to risks and uncertainties. Actual results may differ materially from those contained in the forward-looking statements.  Factors which may cause actual results to differ materially from those contained in such forward-looking statements include those identified in the company's most recent Form 10-K and subsequent SEC filings.  Such factors are incorporated herein by reference. 

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

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

 



Consolidated Balance Sheets (Unaudited)

Associated Banc-Corp



June 30,


March 31,


Seql Qtr


December 31,


September 30,


June 30,


Comp Qtr

(in thousands)


2012


2012


$ Change


2011


2011


2011


$ Change

Assets















Cash and due from banks


$      414,760


$      360,728


$    54,032


$      454,958


$      410,644


$      314,682


$   100,078

Interest-bearing deposits in other















 financial institutions


180,050


344,148


(164,098)


154,562


250,648


777,675


(597,625)

Federal funds sold and securities purchased















 under agreements to resell


3,800


7,100


(3,300)


7,075


4,180


2,400


1,400

Securities available for sale, at fair value


4,521,436


4,669,100


(147,664)


4,937,483


5,453,816


5,742,034


(1,220,598)

Federal Home Loan Bank and Federal 















   Reserve Bank stocks, at cost


176,041


177,808


(1,767)


191,188


191,128


191,075


(15,034)

Loans held for sale


157,481


196,570


(39,089)


249,195


201,142


84,323


73,158

Loans


14,698,902


14,253,725


445,177


14,031,071


13,503,507


13,089,589


1,609,313

Allowance for loan losses


(332,658)


(356,298)


23,640


(378,151)


(399,723)


(425,961)


93,303

    Loans, net


14,366,244


13,897,427


468,817


13,652,920


13,103,784


12,663,628


1,702,616

Premises and equipment, net


225,245


225,164


81


223,736


208,301


192,506


32,739

Goodwill


929,168


929,168


-


929,168


929,168


929,168


-

Other intangible assets, net


64,812


68,374


(3,562)


67,574


67,970


74,872


(10,060)

Trading assets


73,484


69,081


4,403


73,253


76,694


56,991


16,493

Other assets


968,579


969,002


(423)


983,105


1,005,174


1,019,121


(50,542)

    Total assets


$ 22,081,100


$ 21,913,670


$  167,430


$ 21,924,217


$ 21,902,649


$ 22,048,475


$     32,625
















Liabilities and Stockholders' Equity















Noninterest-bearing deposits


$   3,874,429


$   3,989,156


$(114,727)


$   3,928,792


$   3,711,570


$   3,218,722


$   655,707

Interest-bearing deposits


11,232,442


11,664,220


(431,778)


11,161,863


11,070,840


10,847,328


385,114

    Total deposits


15,106,871


15,653,376


(546,505)


15,090,655


14,782,410


14,066,050


1,040,821

Federal funds purchased and securities sold















 under agreements to repurchase


1,253,270


1,236,219


17,051


1,514,485


2,213,364


2,141,583


(888,313)

Other short-term borrowed funds


1,400,000


700,000


700,000


1,000,000


318,412


1,114,087


285,913

Junior subordinated debentures, net


189,849


215,573


(25,724)


215,628


215,683


215,738


(25,889)

Other long-term borrowed funds


960,880


961,163


(283)


961,443


1,261,725


1,268,436


(307,556)

Trading liabilities


80,107


75,130


4,977


80,046


84,376


64,936


15,171

Accrued expenses and other liabilities


180,502


171,336


9,166


196,166


176,060


178,497


2,005

    Total liabilities


19,171,479


19,012,797


158,682


19,058,423


19,052,030


19,049,327


122,152

Stockholders' Equity















  Preferred equity


63,272


63,272


-


63,272


63,272


258,051


(194,779)

  Common stock


1,750


1,750


-


1,746


1,746


1,745


5

  Surplus


1,594,995


1,590,336


4,659


1,586,401


1,585,208


1,581,594


13,401

  Retained earnings


1,213,735


1,181,247


32,488


1,148,773


1,111,080


1,079,076


134,659

  Accumulated other comprehensive income 


66,579


65,278


1,301


65,602


89,313


79,345


(12,766)

  Treasury stock


(30,710)


(1,010)


(29,700)


-


-


(663)


(30,047)

    Total stockholders' equity


2,909,621


2,900,873


8,748


2,865,794


2,850,619


2,999,148


(89,527)

    Total liabilities and stockholders' equity

$ 22,081,100


$ 21,913,670


$  167,430


$ 21,924,217


$ 21,902,649


$ 22,048,475


$     32,625

 

 































Consolidated Statements of Income (Unaudited)

Associated Banc-Corp



For The Three Months Ended





For The Six Months Ended,






June 30,


Quarter


June 30,


Year-to-Date

(in thousands, except per share amounts)


2012


2011


$ Change

% Change


2012


2011


$ Change

% Change

Interest Income















Interest and fees on loans


$ 147,188


$ 144,358


$   2,830

2.0%


$ 296,211


$ 287,129


$   9,082

3.2%

Interest and dividends on investment securities:















  Taxable


23,000


35,351


(12,351)

(34.9%)


46,029


70,003


(23,974)

(34.2%)

  Tax-exempt


7,135


7,504


(369)

(4.9%)


14,409


15,217


(808)

(5.3%)

Other interest 


1,262


1,438


(176)

(12.2%)


2,509


2,896


(387)

(13.4%)

    Total interest income


178,585


188,651


(10,066)

(5.3%)


359,158


375,245


(16,087)

(4.3%)

Interest Expense















Interest on deposits 


10,553


16,901


(6,348)

(37.6%)


22,589


35,150


(12,561)

(35.7%)

Interest on Federal funds purchased and securities 















 sold under agreements to repurchase


612


1,600


(988)

(61.8%)


1,379


3,109


(1,730)

(55.6%)

Interest on other short-term borrowed funds


1,197


2,036


(839)

(41.2%)


2,253


4,107


(1,854)

(45.1%)

Interest on junior subordinated debentures


3,627


3,700


(73)

(2.0%)


7,345


7,399


(54)

(0.7%)

Interest on other long-term borrowed funds


8,329


10,291


(1,962)

(19.1%)


16,657


17,634


(977)

(5.5%)

    Total interest expense


24,318


34,528


(10,210)

(29.6%)


50,223


67,399


(17,176)

(25.5%)

Net Interest Income


154,267


154,123


144

0.1%


308,935


307,846


1,089

0.4%

Provision for loan losses


-


16,000


(16,000)

(100.0%)


-


47,000


(47,000)

(100.0%)

Net interest income after provision for 















 loan losses


154,267


138,123


16,144

11.7%


308,935


260,846


48,089

18.4%

Noninterest Income















Trust service fees


10,125


10,012


113

1.1%


19,912


19,843


69

0.3%

Service charges on deposit accounts


16,768


19,112


(2,344)

(12.3%)


34,810


38,176


(3,366)

(8.8%)

Card-based and other nondeposit fees


12,084


15,747


(3,663)

(23.3%)


22,963


31,345


(8,382)

(26.7%)

Insurance commissions


12,912


11,552


1,360

11.8%


24,502


23,318


1,184

5.1%

Brokerage and annuity commissions


4,206


4,923


(717)

(14.6%)


8,333


9,538


(1,205)

(12.6%)

  Total core fee-based revenue


56,095


61,346


(5,251)

(8.6%)


110,520


122,220


(11,700)

(9.6%)







-









Mortgage banking, net


16,735


(3,320)


20,055

N/M


34,389


(1,475)


35,864

N/M

Capital market fees, net


2,673


(890)


3,563

N/M


6,389


1,488


4,901

N/M

Bank owned life insurance income


3,164


3,500


(336)

(9.6%)


7,456


7,086


370

5.2%

Asset gains (losses), net


(4,984)


(3,378)


(1,606)

47.5%


(8,578)


(6,541)


(2,037)

31.1%

Investment securities gains (losses), net


563


(36)


599

N/M


603


(58)


661

N/M

Other


1,705


4,364


(2,659)

(60.9%)


3,618


9,871


(6,253)

(63.3%)

    Total noninterest income


75,951


61,586


14,365

23.3%


154,397


132,591


21,806

16.4%

Noninterest Expense















Personnel expense


93,819


89,526


4,293

4.8%


188,100


178,754


9,346

5.2%

Occupancy 


14,008


12,663


1,345

10.6%


29,187


27,938


1,249

4.5%

Equipment 


5,719


4,969


750

15.1%


11,187


9,736


1,451

14.9%

Data processing


11,304


7,974


3,330

41.8%


20,820


15,508


5,312

34.3%

Business development and advertising


5,468


5,652


(184)

(3.3%)


10,849


10,595


254

2.4%

Other intangible amortization


1,049


1,178


(129)

(11.0%)


2,098


2,356


(258)

(11.0%)

Loan expense


2,948


2,983


(35)

(1.2%)


5,858


5,939


(81)

(1.4%)

Legal and professional fees


5,657


4,783


874

18.3%


15,372


9,265


6,107

65.9%

Losses other than loans


2,060


(1,925)


3,985

N/M


5,610


4,372


1,238

28.3%

Foreclosure/OREO expense


4,343


6,358


(2,015)

(31.7%)


7,705


11,242


(3,537)

(31.5%)

FDIC expense


4,778


7,198


(2,420)

(33.6%)


9,648


15,442


(5,794)

(37.5%)

Other


14,877


14,358


519

3.6%


29,358


27,569


1,789

6.5%

    Total noninterest expense


166,030


155,717


10,313

6.6%


335,792


318,716


17,076

5.4%

Income before income taxes


64,188


43,992


20,196

45.9%


127,540


74,721


52,819

70.7%

Income tax expense 


20,871


9,610


11,261

117.2%


41,590


17,486


24,104

137.8%

Net income 


43,317


34,382


8,935

26.0%


85,950


57,235


$ 28,715

50.2%

Preferred stock dividends and discount


1,300


8,812


(7,512)

(85.2%)


2,600


16,225


(13,625)

(84.0%)

Net income available to common equity


$   42,017


$   25,570


$ 16,447

64.3%


$   83,350


$   41,010


$ 42,340

103.2%
















Earnings Per Common Share:















  Basic


$       0.24


$       0.15


$     0.09

60.0%


$       0.48


$       0.24


$     0.24

100.0%

  Diluted


$       0.24


$       0.15


$     0.09

60.0%


$       0.48


$       0.24


$     0.24

100.0%
















Average Common Shares Outstanding:















  Basic


172,839


173,323


(484)

(0.3%)


173,343


173,268


75

0.0%

  Diluted


172,841


173,327


(486)

(0.3%)


173,345


173,272


73

0.0%
















N/M = Not meaningful.















 

 

 



































Consolidated Statements of Income (Unaudited) - Quarterly Trend

Associated Banc-Corp







Sequential Qtr








Comparable Qtr

(in thousands, except per share amounts)


2Q12


1Q12


$ Change

% Change


4Q11


3Q11


2Q11


$ Change

% Change

Interest Income

















Interest and fees on loans


$ 147,188


$ 149,023


$ (1,835)

(1.2%)


$ 149,832


$ 145,778


$ 144,358


$   2,830

2.0%

Interest and dividends on investment securities:

















  Taxable


23,000


23,029


(29)

(0.1%)


22,855


30,513


35,351


(12,351)

(34.9%)

  Tax-exempt


7,135


7,274


(139)

(1.9%)


7,344


7,376


7,504


(369)

(4.9%)

Other interest 


1,262


1,247


15

1.2%


1,251


1,428


1,438


(176)

(12.2%)

    Total interest income


178,585


180,573


(1,988)

(1.1%)


181,282


185,095


188,651


(10,066)

(5.3%)

Interest Expense

















Interest on deposits 


10,553


12,036


(1,483)

(12.3%)


14,954


15,644


16,901


(6,348)

(37.6%)

Interest on Federal funds purchased and securities 

















 sold under agreements to repurchase


612


767


(155)

(20.2%)


1,278


1,810


1,600


(988)

(61.8%)

Interest on other short-term borrowed funds


1,197


1,056


141

13.4%


879


1,229


2,036


(839)

(41.2%)

Interest on junior subordinated debentures


3,627


3,718


(91)

(2.4%)


3,629


3,785


3,700


(73)

(2.0%)

Interest on other long-term borrowed funds


8,329


8,328


1

0.0%


8,717


9,467


10,291


(1,962)

(19.1%)

    Total interest expense


24,318


25,905


(1,587)

(6.1%)


29,457


31,935


34,528


(10,210)

(29.6%)

Net Interest Income


154,267


154,668


(401)

(0.3%)


151,825


153,160


154,123


144

0.1%

Provision for loan losses


-


-


-

N/M


1,000


4,000


16,000


(16,000)

(100.0%)

Net interest income after provision for 

















 loan losses


154,267


154,668


(401)

(0.3%)


150,825


149,160


138,123


16,144

11.7%

Noninterest Income

















Trust service fees


10,125


9,787


338

3.5%


9,511


9,791


10,012


113

1.1%

Service charges on deposit accounts


16,768


18,042


(1,274)

(7.1%)


17,783


19,949


19,112


(2,344)

(12.3%)

Card-based and other nondeposit fees


12,084


10,879


1,205

11.1%


11,269


15,291


15,747


(3,663)

(23.3%)

Insurance commissions


12,912


11,590


1,322

11.4%


11,216


11,020


11,552


1,360

11.8%

Brokerage and annuity commissions


4,206


4,127


79

1.9%


3,665


4,027


4,923


(717)

(14.6%)

  Total core fee-based revenue


56,095


54,425


1,670

3.1%


53,444


60,078


61,346


(5,251)

(8.6%)


















Mortgage banking, net


16,735


17,654


(919)

(5.2%)


9,677


4,521


(3,320)


20,055

N/M

Capital market fees, net


2,673


3,716


(1,043)

(28.1%)


3,950


3,273


(890)


3,563

N/M

Bank owned life insurance income


3,164


4,292


(1,128)

(26.3%)


3,820


3,990


3,500


(336)

(9.6%)

Asset gains (losses), net


(4,984)


(3,594)


(1,390)

38.7%


(1,799)


(3,859)


(3,378)


(1,606)

47.5%

Investment securities gains (losses), net


563


40


523

N/M


(310)


(744)


(36)


599

N/M

Other


1,705


1,913


(208)

(10.9%)


2,750


1,737


4,364


(2,659)

(60.9%)

    Total noninterest income


75,951


78,446


(2,495)

(3.2%)


71,532


68,996


61,586


14,365

23.3%

Noninterest Expense

















Personnel expense


93,819


94,281


(462)

(0.5%)


90,306


91,084


89,526


4,293

4.8%

Occupancy 


14,008


15,179


(1,171)

(7.7%)


13,796


14,205


12,663


1,345

10.6%

Equipment 


5,719


5,468


251

4.6%


5,286


4,851


4,969


750

15.1%

Data processing


11,304


9,516


1,788

18.8%


9,080


7,887


7,974


3,330

41.8%

Business development and advertising


5,468


5,381


87

1.6%


6,904


5,539


5,652


(184)

(3.3%)

Other intangible amortization


1,049


1,049


-

0.0%


1,179


1,179


1,178


(129)

(11.0%)

Loan expense


2,948


2,910


38

1.3%


3,469


2,600


2,983


(35)

(1.2%)

Legal and professional fees


5,657


9,715


(4,058)

(41.8%)


4,651


4,289


4,783


874

18.3%

Losses other than loans


2,060


3,550


(1,490)

(42.0%)


11,890


1,659


(1,925)


3,985

N/M

Foreclosure/OREO expense


4,343


3,362


981

29.2%


5,169


4,982


6,358


(2,015)

(31.7%)

FDIC expense


4,778


4,870


(92)

(1.9%)


6,136


6,906


7,198


(2,420)

(33.6%)

Other


14,877


14,481


396

2.7%


14,461


14,299


14,358


519

3.6%

    Total noninterest expense


166,030


169,762


(3,732)

(2.2%)


172,327


159,480


155,717


10,313

6.6%

Income before income taxes


64,188


63,352


836

1.3%


50,030


58,676


43,992


20,196

45.9%

Income tax expense 


20,871


20,719


152

0.7%


8,905


17,337


9,610


11,261

117.2%

Net income


43,317


42,633


684

1.6%


41,125


41,339


34,382


8,935

26.0%

Preferred stock dividends and discount


1,300


1,300


-

0.0%


1,300


7,305


8,812


(7,512)

(85.2%)

Net income available to common equity


$   42,017


$   41,333


$     684

1.7%


$   39,825


$   34,034


$   25,570


$ 16,447

64.3%


















Earnings Per Common Share:

















  Basic


$       0.24


$       0.24


$        -

0.0%


$       0.23


$       0.20


$       0.15


$     0.09

60.0%

  Diluted


$       0.24


$       0.24


$        -

0.0%


$       0.23


$       0.20


$       0.15


$     0.09

60.0%


















Average Common Shares Outstanding:

















  Basic


172,839


173,846


(1,007)

(0.6%)


173,523


173,418


173,323


(484)

(0.3%)

  Diluted


172,841


173,848


(1,007)

(0.6%)


173,523


173,418


173,327


(486)

(0.3%)


















N/M = Not meaningful.

















 

 















Selected Quarterly Information

Associated Banc-Corp

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

YTD 2012


YTD 2011


2nd Qtr 2012


1st Qtr 2012


4th Qtr 2011


3rd Qtr 2011


2nd Qtr 2011

Summary of Operations














Net interest income

$      308,935


$      307,846


$      154,267


$      154,668


$      151,825


$      153,160


$      154,123

Provision for loan losses

-


47,000


-


-


1,000


4,000


16,000

Asset gains (losses), net

(8,578)


(6,541)


(4,984)


(3,594)


(1,799)


(3,859)


(3,378)

Investment securities gains (losses), net

603


(58)


563


40


(310)


(744)


(36)

Noninterest income (excluding securities & asset gains)

162,372


139,190


80,372


82,000


73,641


73,599


65,000

Noninterest expense

335,792


318,716


166,030


169,762


172,327


159,480


155,717

Income before income taxes

127,540


74,721


64,188


63,352


50,030


58,676


43,992

Income tax expense

41,590


17,486


20,871


20,719


8,905


17,337


9,610

Net income

85,950


57,235


43,317


42,633


41,125


41,339


34,382

Net income available to common equity

83,350


41,010


42,017


41,333


39,825


34,034


25,570

Taxable equivalent adjustment

10,557


10,772


5,254


5,303


5,307


5,295


5,332















Per Common Share Data 














Net income:














  Basic

$            0.48


$            0.24


$            0.24


$            0.24


$            0.23


$            0.20


$            0.15

  Diluted

0.48


0.24


0.24


0.24


0.23


0.20


0.15

Dividends

0.10


0.02


0.05


0.05


0.01


0.01


0.01

Market Value:














  High

$          14.63


$          15.36


$          13.97


$          14.63


$          11.78


$          14.17


$          15.02

  Low

11.43


13.06


11.76


11.43


9.15


8.95


13.06

  Close

13.19


13.90


13.19


13.96


11.17


9.30


13.90

Book value

16.59


15.81


16.59


16.32


16.15


16.07


15.81

Tangible book value

11.07


10.33


11.07


10.87


10.68


10.59


10.33















Performance Ratios (annualized)














Earning assets yield

3.83%


4.00%


3.80%


3.85%


3.81%


3.88%


4.00%

Interest-bearing liabilities rate

0.68


0.90


0.65


0.70


0.78


0.83


0.91

Net interest margin

3.31


3.30


3.30


3.31


3.21


3.23


3.29

Return on average assets

0.80


0.54


0.80


0.79


0.75


0.75


0.64

Return on average equity

5.95


3.75


5.98


5.93


5.71


5.49


4.63

Return on average Tier 1 common equity (1)

9.25


4.92


9.26


9.23


8.96


7.83


6.07

Efficiency ratio (2)

69.69


69.62


69.21


70.16


74.67


68.73


69.38

Effective tax rate

32.61


23.40


32.52


32.70


17.80


29.55


21.84

Dividend payout ratio (3)

20.83


8.33


20.83


20.83


4.35


5.00


6.67















Average Balances














Assets

$ 21,671,870


$ 21,432,029


$ 21,684,600


$ 21,659,139


$ 21,755,870


$ 21,729,187


$ 21,526,155

Earning assets

19,378,888


19,364,948


19,386,046


19,371,729


19,506,627


19,530,007


19,431,292

Interest-bearing liabilities

14,921,209


15,085,468


14,922,006


14,920,413


15,095,689


15,215,517


15,261,514

Loans (4)

14,456,522


12,840,289


14,602,602


14,310,441


14,043,585


13,376,928


13,004,904

Deposits

15,025,625


14,148,618


15,050,684


15,000,567


14,893,469


14,405,311


14,052,689

Borrowed funds

3,585,023


4,160,335


3,566,346


3,603,700


3,857,252


4,227,319


4,434,500

Common stockholders' equity

2,839,482


2,681,562


2,852,050


2,826,913


2,792,823


2,765,023


2,704,909

Stockholders' equity

2,902,754


3,074,197


2,915,322


2,890,185


2,856,095


2,987,178


2,976,840

Common stockholders' equity / assets

13.10%


12.51%


13.15%


13.05%


12.84%


12.72%


12.57%

Stockholders' equity / assets

13.39%


14.34%


13.44%


13.34%


13.13%


13.75%


13.83%















At Period End














Assets





$ 22,081,100


$ 21,913,670


$ 21,924,217


$ 21,902,649


$ 22,048,475

Loans





14,698,902


14,253,725


14,031,071


13,503,507


13,089,589

Allowance for loan losses





332,658


356,298


378,151


399,723


425,961

Goodwill





929,168


929,168


929,168


929,168


929,168

Mortgage servicing rights, net





47,488


50,001


48,152


47,370


53,093

Other intangible assets





17,324


18,373


19,422


20,600


21,779

Deposits





15,106,871


15,653,376


15,090,655


14,782,410


14,066,050

Borrowed funds





3,803,999


3,112,955


3,691,556


4,009,184


4,739,844

Stockholders' equity





2,909,621


2,900,873


2,865,794


2,850,619


2,999,148

Stockholders' equity / assets





13.18%


13.24%


13.07%


13.01%


13.60%

Tangible common equity / tangible assets (5)





8.99%


9.01%


8.84%


8.77%


8.49%

Tangible equity / tangible assets (6)





9.29%


9.32%


9.14%


9.07%


9.71%

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





12.04%


12.49%


12.24%


12.44%


12.61%

Tier 1 leverage ratio





9.95%


10.03%


9.81%


9.62%


10.46%

Tier 1 risk-based capital ratio





13.64%


14.33%


14.08%


14.35%


16.03%

Total risk-based capital ratio





15.08%


15.78%


15.53%


15.81%


17.50%

Shares outstanding, end of period





171,611


173,923


173,575


173,474


173,374















Selected trend information














Average full time equivalent employees





4,951


5,045


5,056


4,980


4,977

Trust assets under management, at market value





$   5,900,000


$   6,000,000


$   5,600,000


$   5,300,000


$   5,700,000

Mortgage loans originated for sale during period





738,091


563,688


843,614


470,530


250,880

Mortgage portfolio serviced for others





7,511,000


7,284,000


7,321,000


7,281,000


7,367,000

Mortgage servicing rights, net / Portfolio serviced for others





0.63%


0.69%


0.66%


0.65%


0.72%


(1)

Return on average Tier 1 common equity = Net income available to common equity divided by average Tier 1 capital excluding qualifying perpetual preferred stock and qualifying trust preferred securities.


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





Jun12 vs Mar12





Jun12 vs Jun11

(in thousands)


Jun 30, 2012

Mar 31, 2012

% Change


Dec 31, 2011

Sep 30, 2011

Jun 30, 2011

% Change

Allowance for Loan Losses










Beginning balance


$       356,298

$         378,151

(5.8%)


$        399,723

$       425,961

$       454,461

(21.6%)

Provision for loan losses


-

-

0.0%


1,000

4,000

16,000

(100.0%)

Charge offs


(30,340)

(31,259)

(2.9%)


(34,056)

(38,155)

(52,365)

(42.1%)

Recoveries


6,700

9,406

(28.8%)


11,484

7,917

7,865

(14.8%)

Net charge offs


(23,640)

(21,853)

8.2%


(22,572)

(30,238)

(44,500)

(46.9%)

Ending balance


$       332,658

$         356,298

(6.6%)


$        378,151

$       399,723

$       425,961

(21.9%)











Reserve for losses on unfunded commitments


$         18,900

$           15,600

21.2%


$          14,700

$         14,900

$         14,900

26.8%





















Net Charge Offs




Jun12 vs Mar12





Jun12 vs Jun11



Jun 30, 2012

Mar 31, 2012

% Change


Dec 31, 2011

Sep 30, 2011

Jun 30, 2011

% Change

Commercial and industrial


$         14,544

$             3,872

N/M


$               231

$           3,741

$         14,026

3.7%

Commercial real estate - owner occupied


1,164

415

180.5%


539

134

4,436

(73.8%)

Lease financing


-

(1,836)

(100.0%)


19

(1,889)

60

(100.0%)

  Commercial and business lending


15,708

2,451

N/M


789

1,986

18,522

(15.2%)

Commercial real estate - investor


177

7,354

(97.6%)


2,394

10,472

4,941

(96.4%)

Real estate construction


558

230

142.6%


7,088

5,646

6,031

(90.7%)

  Commercial real estate lending


735

7,584

(90.3%)


9,482

16,118

10,972

(93.3%)

    Total commercial


16,443

10,035

63.9%


10,271

18,104

29,494

(44.2%)

Home equity


5,284

8,950

(41.0%)


8,113

8,736

8,251

(36.0%)

Installment


371

101

N/M


452

764

664

(44.1%)

    Total retail


5,655

9,051

(37.5%)


8,565

9,500

8,915

(36.6%)

    Residential mortgage


1,542

2,767