Press Release Details

Associated Reports Third Quarter Earnings of $0.31 per share

10/16/2014

GREEN BAY, Wis., Oct. 16, 2014 /PRNewswire/ -- Associated Banc-Corp (NASDAQ: ASBC) today reported net income to common shareholders of $49 million, or $0.31 per common share, for the quarter ended September 30, 2014.  This compares to net income to common shareholders of $45 million, or $0.28 per common share, for the quarter ended June 30, 2014 and $44 million, or $0.27 per common share for the quarter ended September 30, 2013.

"We are pleased with our strong results this quarter.  Growth in loan interest income drove top line revenue higher.  We remain focused on investing in technology which is essential to sustain and improve operational efficiency," said President and CEO Philip B. Flynn.  "We will continue our on-going commitment to build long-term shareholder value at Associated with a focus on strengthening our franchise and deploying capital in a disciplined manner."

HIGHLIGHTS  

  • Average loans grew $495 million, or 3% from the second quarter to $17.1 billion
    • Average total commercial loan balances grew $235 million, or 2% from the second quarter
    • Average residential mortgage loans grew $231 million or 6% from the prior quarter
  • Average deposits grew $701 million, or 4% from the second quarter to $17.9 billion
    • Average checking balances grew $369 million or 5% from the prior quarter
  • Net interest income of $173 million increased $4 million, or 2% from the second quarter, and $12 million, or 8% compared to the year ago quarter
  • Provision for credit losses of $1 million declined $4 million from the second quarter
  • Noninterest income increased $3 million, or 4% compared to the prior quarter, and increased $4 million, or 6% from the year ago quarter
  • Noninterest expenses of $172 million were up $4 million, or 2% compared to the prior quarter
  • Pretax income of $75 million increased $7 million, or 10% from the second quarter and increased $8 million, or 11% from the year ago quarter
  • During the third quarter, the Company repurchased approximately 5 million shares of common stock at an average cost of $18.17 per share
  • Return on Tier 1 common equity was 10.4% for the third quarter
  • Capital ratios remain strong with a Tier 1 common equity ratio of 10.39% at September 30, 2014

THIRD QUARTER 2014 FINANCIAL RESULTS

Loans

Average loans of $17.1 billion increased $495 million, or 3% from the second quarter, and have increased $1.4 billion on average or 9%, from the year ago quarter. Total average commercial loans grew $235 million, or 2% from the second quarter, and are up $1 billion or 11%, from the year ago quarter.  Commercial and business lending average balances grew $184 million, or 3% from the prior quarter.   Within commercial and business lending, the mortgage warehouse portfolio grew an average of $115 million during the quarter and accounted for the largest share of the growth.  Commercial real estate lending average balances grew by $51 million, or 1% from the second quarter.  Total average consumer loans grew $260 million, or 4% from the prior quarter.  Residential mortgage average balances grew $231 million, or 6% from the second quarter.  Installment loan average balances grew $75 million from the second quarter, related to the purchase of a participation in the Associated Bank branded credit card portfolio on June 30, 2014.  Home equity average balances declined $46 million during the quarter.

Deposits

Third quarter average deposits of $17.9 billion increased $701 million, or 4% compared to the second quarter and are up $264 million, or 2% from the year ago quarter.  Average checking balances increased $369 million, or 5% from the prior quarter and have increased $261 million, or 4% from the year ago quarter.  Money market average balances increased $381 million, or 5% from the second quarter.  Average time deposits declined $52 million, or 3% during the third quarter, and have declined $228 million, or 13% from the year ago quarter.

Net Interest Income and Net Interest Margin

Third quarter net interest income of $173 million increased $4 million, or 2% compared to the prior quarter and $12 million, or 8% compared to the year ago quarter.

Third quarter net interest margin was 3.06%, a decrease of 2 basis points from the 3.08% reported in the second quarter and a decrease of 7 basis points from a year ago.   The decrease from the second quarter was the result of a 2 basis point decline in asset yields while liability costs remained flat.  Total interest-bearing funding costs remained at 29 basis points, while total interest-bearing deposit costs were at 19 basis points, for the third quarter.

Noninterest Income and Expense

Noninterest income for the third quarter was $75 million, up $3 million, or 4% from the second quarter and up $4 million, or 6% from the year ago quarter.    Mortgage banking income increased $1 million from the prior quarter and $3 million from the year ago quarter.  Insurance commissions declined from the prior quarter, primarily related to the establishment of a $4 million reserve for remediation on legacy debt protection products.   Asset gains increased from the prior quarter related to two corporate real estate gains of $3 million and $1 million, respectively.

Total noninterest expense for the third quarter was $172 million, up $4 million, or 2% from the second quarter.  Advertising expenses increased $2 million from the second quarter primarily related to the Bank's fall marketing campaign.  FDIC expense increased from the second quarter reflecting the growth in risk-weighted assets.

Taxes

Third quarter income taxes of $24 million were up $3 million from the prior quarter.  The effective tax rate for the third quarter was 33%.

Credit

Net charge offs of $3 million for the third quarter were flat to the prior quarter, and were down $3 million from the year ago quarter.  Potential problem loans of $220 million declined 24% from the prior quarter.  With these improvements in credit portfolio metrics, the third quarter provision for credit losses of $1 million was down $4 million from the prior quarter. 

The Company's allowance for loan losses was $266 million, equal to 1.55% of loans and reflects a coverage ratio of 145% of nonaccrual loans at September 30, 2014.

Nonaccrual loans were up 3%, to $184 million compared to the second quarter, but were down 11% from a year ago.  The ratio of nonaccrual loans to total loans was up slightly from the previous quarter and stands at 1.07%. 

Capital Ratios

The Company's capital position remains strong, with a Tier 1 common equity ratio of 10.39% at September 30, 2014.  The Company's capital ratios continue to be in excess of the Basel III "well-capitalized" regulatory benchmarks on a fully phased in basis.

THIRD QUARTER 2014 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 16, 2014.  Interested parties can listen to the call live on the internet through the investor relations section of the company's website, https://www.associatedbank.com/investor or by dialing 877-407-8037. 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 201-689-8037. Participants should ask the operator for the Associated Banc-Corp third quarter 2014 earnings call.

An audio archive of the webcast will be available on the company's website at https://www.associatedbank.com/investor approximately fifteen minutes after the call is over.

ABOUT ASSOCIATED BANC-CORP

Associated Banc-Corp (NASDAQ: ASBC) has total assets of $26 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 in over 200 banking locations serving more than 100 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. 

NON-GAAP FINANCIAL MEASURES

This press release contains references to measures which are not defined in generally accepted accounting principles ("GAAP"), including "efficiency ratio," "Tier 1 common equity", and "core fee-based revenue."  Information concerning these non-GAAP financial measures can be found in the attached tables.

Investor Contact:
Brian Klaus, Senior Vice President, Director of Investor Relations
920-491-7059

Media Contact:
Cliff Bowers, Senior Vice President, Director of Public Relations
920-491-7542

 

 










Associated Banc-Corp








Consolidated Balance Sheets (Unaudited)









September 30,

June 30,

Seql Qtr

March 31,

December 31,

September 30,

Comp Qtr

(in thousands)

2014

2014

$ Change

2014

2013

2013

$ Change

Assets








Cash and due from banks

$ 381,287

$ 549,883

$ (168,596)

$ 526,951

$ 455,482

$ 526,009

$ (144,722)

Interest-bearing deposits in other








 financial institutions

74,945

78,233

(3,288)

92,071

126,018

277,761

(202,816)

Federal funds sold and securities purchased








 under agreements to resell

18,320

18,135

185

4,400

20,745

25,400

(7,080)

Securities held to maturity, at amortized cost

301,941

246,050

55,891

193,759

175,210

125,095

176,846

Securities available for sale, at fair value

5,345,422

5,506,379

(160,957)

5,277,908

5,250,585

4,840,035

505,387

Federal Home Loan Bank and Federal








   Reserve Bank stocks, at cost

188,875

186,247

2,628

181,360

181,249

181,129

7,746

Loans held for sale

141,672

78,657

63,015

46,529

64,738

102,052

39,620

Loans

17,159,090

17,045,052

114,038

16,441,444

15,896,261

15,585,854

1,573,236

Allowance for loan losses

(266,262)

(271,851)

5,589

(267,916)

(268,315)

(271,724)

5,462

    Loans, net

16,892,828

16,773,201

119,627

16,173,528

15,627,946

15,314,130

1,578,698

Premises and equipment, net

272,283

264,735

7,548

269,257

270,890

265,636

6,647

Goodwill

929,168

929,168

-

929,168

929,168

929,168

-

Other intangible assets, net

69,201

70,538

(1,337)

72,629

74,464

75,730

(6,529)

Trading assets

34,005

40,630

(6,625)

40,822

43,728

49,402

(15,397)

Other assets

1,003,875

985,930

17,945

997,815

1,006,697

977,128

26,747

    Total assets

$ 25,653,822

$ 25,727,786

$ (73,964)

$ 24,806,197

$ 24,226,920

$ 23,688,675

$ 1,965,147









Liabilities and Stockholders' Equity








Noninterest-bearing demand deposits

$ 4,302,454

$ 4,211,057

$ 91,397

$ 4,478,981

$ 4,626,312

$ 4,453,663

$ (151,209)

Interest-bearing deposits

13,898,804

13,105,202

793,602

13,030,946

12,640,855

13,884,245

14,559

    Total deposits

18,201,258

17,316,259

884,999

17,509,927

17,267,167

18,337,908

(136,650)

Federal funds purchased and securities sold








 under agreements to repurchase

765,641

959,051

(193,410)

939,254

475,442

580,479

185,162

Other short-term funding

664,539

1,378,120

(713,581)

308,652

265,484

1,046,401

(381,862)

Long-term funding

2,931,547

2,931,809

(262)

2,932,040

3,087,267

614,568

2,316,979

Trading liabilities

36,003

43,311

(7,308)

43,450

46,470

52,430

(16,427)

Accrued expenses and other liabilities

185,256

169,290

15,966

171,850

193,800

184,607

649

    Total liabilities

22,784,244

22,797,840

(13,596)

21,905,173

21,335,630

20,816,393

1,967,851

Stockholders' Equity








  Preferred equity

61,024

61,024

-

61,158

61,862

62,737

(1,713)

  Common stock

1,719

1,750

(31)

1,750

1,750

1,750

(31)

  Surplus

1,583,032

1,628,356

(45,324)

1,623,323

1,617,990

1,614,516

(31,484)

  Retained earnings

1,466,525

1,432,518

34,007

1,402,549

1,392,508

1,361,498

105,027

  Accumulated other comprehensive








   income (loss)

(1,725)

10,494

(12,219)

(11,577)

(24,244)

(37,120)

35,395

  Treasury stock

(240,997)

(204,196)

(36,801)

(176,179)

(158,576)

(131,099)

(109,898)

    Total stockholders' equity

2,869,578

2,929,946

(60,368)

2,901,024

2,891,290

2,872,282

(2,704)

    Total liabilities and stockholders' equity

$ 25,653,822

$ 25,727,786

$ (73,964)

$ 24,806,197

$ 24,226,920

$ 23,688,675

$ 1,965,147

 















Associated Banc-Corp













Consolidated Statements of Income (Unaudited)















For The Three Months Ended





For The Nine Months Ended






September 30,


Quarter


September 30,


Year-to-Date

(in thousands, except per share amounts)


2014

2013


$ Change

% Change


2014

2013


$ Change

% Change

Interest Income













Interest and fees on loans


$ 152,030

$ 146,219


$ 5,811

4.0%


$ 442,046

$ 438,642


$ 3,404

0.8%

Interest and dividends on investment securities:













  Taxable


25,037

21,544


3,493

16.2%


77,403

64,603


12,800

19.8%

  Tax-exempt


7,483

6,711


772

11.5%


21,484

20,461


1,023

5.0%

Other interest


1,503

1,260


243

19.3%


4,814

3,740


1,074

28.7%

    Total interest income


186,053

175,734


10,319

5.9%


545,747

527,446


18,301

3.5%

Interest Expense













Interest on deposits


6,621

7,617


(996)

(13.1%)


18,975

23,927


(4,952)

(20.7%)

Interest on Federal funds purchased and securities













 sold under agreements to repurchase


390

308


82

26.6%


1,001

1,051


(50)

(4.8%)

Interest on other short-term funding


233

434


(201)

(46.3%)


629

1,291


(662)

(51.3%)

Interest on long-term funding


6,179

6,866


(687)

(10.0%)


18,836

22,833


(3,997)

(17.5%)

    Total interest expense


13,423

15,225


(1,802)

(11.8%)


39,441

49,102


(9,661)

(19.7%)

Net Interest Income


172,630

160,509


12,121

7.6%


506,306

478,344


27,962

5.8%

Provision for credit losses


1,000

(800)


1,800

N/M


11,000

7,800


3,200

41.0%

Net interest income after provision for













credit losses


171,630

161,309


10,321

6.4%


495,306

470,544


24,762

5.3%

Noninterest Income













Trust service fees


12,218

11,380


838

7.4%


35,946

33,695


2,251

6.7%

Service charges on deposit accounts


17,961

18,407


(446)

(2.4%)


51,773

52,679


(906)

(1.7%)

Card-based and other nondeposit fees


12,407

12,688


(281)

(2.2%)


37,493

37,229


264

0.7%

Insurance commissions


7,860

11,356


(3,496)

(30.8%)


33,828

32,750


1,078

3.3%

Brokerage and annuity commissions


4,040

3,792


248

6.5%


12,593

10,996


1,597

14.5%

  Total core fee-based revenue


54,486

57,623


(3,137)

(5.4%)


171,633

167,349


4,284

2.6%














Mortgage banking, net


6,669

3,542


3,127

88.3%


18,392

40,570


(22,178)

(54.7%)

Capital market fees, net


2,939

2,652


287

10.8%


7,360

10,309


(2,949)

(28.6%)

Bank owned life insurance income


3,506

2,817


689

24.5%


10,837

9,068


1,769

19.5%

Asset gains, net


4,934

1,934


3,000

155.1%


6,561

2,726


3,835

140.7%

Investment securities gains, net


57

248


(191)

(77.0%)


469

582


(113)

(19.4%)

Other


2,317

2,100


217

10.3%


5,424

6,622


(1,198)

(18.1%)

    Total noninterest income


74,908

70,916


3,992

5.6%


220,676

237,226


(16,550)

(7.0%)

Noninterest Expense













Personnel expense


97,650

98,102


(452)

(0.5%)


293,141

295,800


(2,659)

(0.9%)

Occupancy


13,743

14,758


(1,015)

(6.9%)


43,088

44,725


(1,637)

(3.7%)

Equipment


6,133

6,213


(80)

(1.3%)


18,636

18,842


(206)

(1.1%)

Technology


13,573

12,323


1,250

10.1%


40,891

36,482


4,409

12.1%

Business development and advertising


7,467

5,947


1,520

25.6%


17,606

15,512


2,094

13.5%

Other intangible amortization


990

1,010


(20)

(2.0%)


2,972

3,032


(60)

(2.0%)

Loan expense


3,813

3,157


656

20.8%


10,220

9,485


735

7.7%

Legal and professional fees


4,604

3,482


1,122

32.2%


13,228

14,310


(1,082)

(7.6%)

Losses other than loans


677

(600)


1,277

N/M


1,602

283


1,319

N/M

Foreclosure/OREO expense


2,083

2,515


(432)

(17.2%)


5,554

7,239


(1,685)

(23.3%)

FDIC expense


6,859

4,755


2,104

44.2%


16,805

14,582


2,223

15.2%

Other


14,261

13,509


752

5.6%


43,693

41,190


2,503

6.1%

    Total noninterest expense


171,853

165,171


6,682

4.0%


507,436

501,482


5,954

1.2%

Income before income taxes


74,685

67,054


7,631

11.4%


208,546

206,288


2,258

1.1%

Income tax expense


24,478

21,396


3,082

14.4%


66,775

65,354


1,421

2.2%

Net income


50,207

45,658


4,549

10.0%


141,771

140,934


837

0.6%

Preferred stock dividends


1,255

1,285


(30)

(2.3%)


3,777

3,885


(108)

(2.8%)

Net income available to common equity


$ 48,952

$ 44,373


$ 4,579

10.3%


$ 137,994

$ 137,049


$ 945

0.7%














Earnings Per Common Share:













  Basic


$ 0.31

$ 0.27


$ 0.04

14.8%


0.86

0.82


$ 0.04

4.9%

  Diluted


$ 0.31

$ 0.27


$ 0.04

14.8%


0.85

0.82


$ 0.03

3.7%














Average Common Shares Outstanding:













  Basic


155,925

164,954


(9,029)

(5.5%)


159,090

166,586


(7,496)

(4.5%)

  Diluted


156,991

165,443


(8,452)

(5.1%)


159,993

166,760


(6,767)

(4.1%)














N/M = Not meaningful













 












Associated Banc-Corp










Consolidated Statements of Income (Unaudited) - Quarterly Trend











Sequential Qtr




Comparable Qtr

(in thousands, except per share amounts)

3Q14

2Q14

$ Change

% Change

1Q14

4Q13

3Q13

$ Change

% Change

Interest Income










Interest and fees on loans

$ 152,030

$ 146,629

$ 5,401

3.7%

$ 143,387

$ 148,884

$ 146,219

$ 5,811

4.0%

Interest and dividends on investment securities:










  Taxable

25,037

26,109

(1,072)

(4.1%)

26,257

24,316

21,544

3,493

16.2%

  Tax-exempt

7,483

7,030

453

6.4%

6,971

6,884

6,711

772

11.5%

Other interest

1,503

1,862

(359)

(19.3%)

1,449

1,453

1,260

243

19.3%

    Total interest income

186,053

181,630

4,423

2.4%

178,064

181,537

175,734

10,319

5.9%

Interest Expense










Interest on deposits

6,621

6,195

426

6.9%

6,159

7,340

7,617

(996)

(13.1%)

Interest on Federal funds purchased and










 securities  sold under agreements to repurchase

390

306

84

27.5%

305

271

308

82

26.6%

Interest on other short-term funding

233

280

(47)

(16.8%)

116

228

434

(201)

(46.3%)

Interest on long-term funding

6,179

6,146

33

0.5%

6,511

6,499

6,866

(687)

(10.0%)

    Total interest expense

13,423

12,927

496

3.8%

13,091

14,338

15,225

(1,802)

(11.8%)

Net Interest Income

172,630

168,703

3,927

2.3%

164,973

167,199

160,509

12,121

7.6%

Provision for credit losses

1,000

5,000

(4,000)

(80.0%)

5,000

2,300

(800)

1,800

N/M

Net interest income after provision for










credit losses

171,630

163,703

7,927

4.8%

159,973

164,899

161,309

10,321

6.4%

Noninterest Income










Trust service fees

12,218

12,017

201

1.7%

11,711

11,938

11,380

838

7.4%

Service charges on deposit accounts

17,961

17,412

549

3.2%

16,400

17,330

18,407

(446)

(2.4%)

Card-based and other nondeposit fees

12,407

12,577

(170)

(1.4%)

12,509

12,684

12,688

(281)

(2.2%)

Insurance commissions

7,860

13,651

(5,791)

(42.4%)

12,317

11,274

11,356

(3,496)

(30.8%)

Brokerage and annuity commissions

4,040

4,520

(480)

(10.6%)

4,033

3,881

3,792

248

6.5%

  Total core fee-based revenue

54,486

60,177

(5,691)

(9.5%)

56,970

57,107

57,623

(3,137)

(5.4%)











Mortgage banking, net

6,669

5,362

1,307

24.4%

6,361

8,277

3,542

3,127

88.3%

Capital market fees, net

2,939

2,099

840

40.0%

2,322

2,771

2,652

287

10.8%

Bank owned life insurance income

3,506

3,011

495

16.4%

4,320

2,787

2,817

689

24.5%

Asset gains, net

4,934

899

4,035

N/M

728

2,687

1,934

3,000

155.1%

Investment securities gains (losses), net

57

34

23

67.6%

378

(18)

248

(191)

(77.0%)

Other

2,317

665

1,652

248.4%

2,442

2,262

2,100

217

10.3%

    Total noninterest income

74,908

72,247

2,661

3.7%

73,521

75,873

70,916

3,992

5.6%

Noninterest Expense










Personnel expense

97,650

97,793

(143)

(0.1%)

97,698

101,215

98,102

(452)

(0.5%)

Occupancy

13,743

13,785

(42)

(0.3%)

15,560

14,684

14,758

(1,015)

(6.9%)

Equipment

6,133

6,227

(94)

(1.5%)

6,276

6,509

6,213

(80)

(1.3%)

Technology

13,573

14,594

(1,021)

(7.0%)

12,724

12,963

12,323

1,250

10.1%

Business development and advertising

7,467

5,077

2,390

47.1%

5,062

7,834

5,947

1,520

25.6%

Other intangible amortization

990

991

(1)

(0.1%)

991

1,011

1,010

(20)

(2.0%)

Loan expense

3,813

3,620

193

5.3%

2,787

3,677

3,157

656

20.8%

Legal and professional fees

4,604

4,436

168

3.8%

4,188

5,916

3,482

1,122

32.2%

Losses other than loans

677

381

296

77.7%

544

1,559

(600)

1,277

N/M

Foreclosure/OREO expense

2,083

1,575

508

32.3%

1,896

2,829

2,515

(432)

(17.2%)

FDIC expense

6,859

4,945

1,914

38.7%

5,001

4,879

4,755

2,104

44.2%

Other

14,261

14,501

(240)

(1.7%)

14,931

16,091

13,509

752

5.6%

    Total noninterest expense

171,853

167,925

3,928

2.3%

167,658

179,167

165,171

6,682

4.0%

Income before income taxes

74,685

68,025

6,660

9.8%

65,836

61,605

67,054

7,631

11.4%

Income tax expense

24,478

21,660

2,818

13.0%

20,637

13,847

21,396

3,082

14.4%

Net income

50,207

46,365

3,842

8.3%

45,199

47,758

45,658

4,549

10.0%

Preferred stock dividends

1,255

1,278

(23)

(1.8%)

1,244

1,273

1,285

(30)

(2.3%)

Net income available to common equity

$ 48,952

$ 45,087

$ 3,865

8.6%

$ 43,955

$ 46,485

$ 44,373

$ 4,579

10.3%











Earnings Per Common Share:










  Basic

$ 0.31

$ 0.28

$ 0.03

10.7%

$ 0.27

$ 0.28

$ 0.27

$ 0.04

14.8%

  Diluted

$ 0.31

$ 0.28

$ 0.03

10.7%

$ 0.27

$ 0.28

$ 0.27

$ 0.04

14.8%











Average Common Shares Outstanding:










  Basic

155,925

159,940

(4,015)

(2.5%)

161,467

162,611

164,954

(9,029)

(5.5%)

  Diluted

156,991

160,838

(3,847)

(2.4%)

162,188

163,235

165,443

(8,452)

(5.1%)











N/M = Not meaningful.










 


Associated Banc-Corp








Selected Quarterly Information








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

YTD 2014

YTD 2013

3rd Qtr 2014

2nd Qtr 2014

1st Qtr 2014

4th Qtr 2013

3rd Qtr 2013

Per Common Share Data








Dividends

$ 0.27

$ 0.24

$ 0.09

$ 0.09

$ 0.09

$ 0.09

$ 0.08

Market Value:








  High

18.90

17.60

18.90

18.39

18.35

17.56

17.60

  Low

15.58

13.46

17.42

16.82

15.58

15.34

15.29

  Close

17.42

15.49

17.42

18.08

18.06

17.40

15.49

Book value

18.15

17.10

18.15

17.99

17.64

17.40

17.10

Tier 1 common equity / share

12.10

11.59

12.10

12.04

11.88

11.77

11.59

Tangible book value / share

$ 12.09

$ 11.37

$ 12.09

$ 12.11

$ 11.80

$ 11.62

$ 11.37









Performance Ratios (annualized)








Return on average assets

0.76%

0.81%

0.78%

0.75%

0.76%

0.80%

0.78%

Return on average tangible common equity

9.79

9.68

10.35

9.56

9.45

9.87

9.48

Return on average Tier 1 common equity (1)

9.78

9.77

10.38

9.56

9.38

9.78

9.31

Effective tax rate

32.02

31.68

32.77

31.84

31.35

22.48

31.91

Dividend payout ratio (3)

31.40

29.27

29.03

32.14

33.33

32.14

29.63









Average Balances








Common stockholders' equity

$ 2,824

$ 2,836

$ 2,815

$ 2,830

$ 2,827

$ 2,810

$ 2,800

Average Tier 1 common equity (1)

$ 1,887

$ 1,876

$ 1,871

$ 1,892

$ 1,900

$ 1,885

$ 1,890









Selected Trend Information








Average full time equivalent employees

4,435

4,776

4,359

4,431

4,517

4,584

4,699

Trust assets under management, at market value

$ 7,700

$ 7,078

$ 7,700

$ 7,720

$ 7,535

$ 7,424

$ 7,078

Total revenue (4)

$ 741

$ 731

$ 252

$ 246

$ 243

$ 248

$ 236

Core fee-based revenue (5)

$ 172

$ 167

$ 54

$ 60

$ 57

$ 57

$ 58

Mortgage loans originated for sale during period

$ 778

$ 1,977

$ 298

$ 276

$ 204

$ 327

$ 514

Mortgage portfolio serviced for others

$ 8,012

$ 8,014

$ 8,012

$ 8,052

$ 8,084

$ 8,084

$ 8,014

Mortgage servicing rights, net / Portfolio serviced for others

0.76%

0.79%

0.76%

0.76%

0.77%

0.78%

0.79%









At Period End








Loans / deposits



94.27%

98.43%

93.90%

92.06%

84.99%

Risk weighted assets (6) (7)



$ 18,031

$ 17,911

$ 17,075

$ 16,694

$ 16,359

Tier 1 common equity (1)



$ 1,873

$ 1,920

$ 1,912

$ 1,913

$ 1,904

Stockholders' equity / assets



11.19%

11.39%

11.69%

11.93%

12.13%

Tangible common equity / tangible assets (8)



7.57%

7.79%

7.96%

8.11%

8.21%

Tangible equity / tangible assets (8)



7.82%

8.03%

8.22%

8.38%

8.49%

Tier 1 common equity / risk-weighted assets (6) (7)



10.39%

10.72%

11.20%

11.46%

11.64%

Tier 1 leverage ratio (6) (7)



7.87%

8.26%

8.46%

8.70%

8.76%

Tier 1 risk-based capital ratio (6) (7)



10.73%

11.06%

11.56%

11.83%

12.02%

Total risk-based capital ratio (6) (7)



11.98%

12.31%

12.81%

13.09%

13.44%

Shares outstanding, end of period



154,743

159,480

161,012

162,623

164,303









Non-GAAP Financial Measures Reconciliation








Efficiency ratio (2)

69.85%

70.14%

69.44%

69.70%

70.41%

73.70%

71.45%

Taxable equivalent adjustment

(1.34)

(1.44)

(1.36)

(1.32)

(1.35)

(1.49)

(1.50)

Asset gains, net

0.61

0.25

1.36

0.26

0.22

0.80

0.59

Other intangible amortization

(0.41)

(0.42)

(0.40)

(0.41)

(0.42)

(0.42)

(0.44)

Efficiency ratio, fully taxable equivalent (2)

68.71%

68.53%

69.04%

68.23%

68.86%

72.59%

70.10%









(1) Tier 1 common equity, a non-GAAP financial measure, is used by banking regulators, investors and analysts to assess and compare the quality and composition of our capital with the capital of other financial services companies. Management uses Tier 1 common equity, along with other capital measures, to assess and monitor our capital position.  Tier 1 common equity (period end and average) is Tier 1 capital excluding qualifying perpetual preferred stock and qualifying trust preferred securities.

(2) Efficiency ratio is defined by the Federal Reserve guidance as noninterest expense divided by the sum of net interest income plus noninterest income, excluding investment securities gains / losses, net.  Efficiency ratio, fully taxable equivalent, is noninterest expense, excluding other intangible amortization, divided by the sum of taxable equivalent net interest income plus noninterest income, excluding investment securities gains / losses, net and asset gains / losses, net.  This efficiency ratio is presented on a taxable equivalent basis, which adjusts net interest income for the tax-favored status of certain loans and investment securities.  Management believes this measure to be the preferred industry measurement of net interest income as it enhances the comparability of net interest income arising from taxable and tax-exempt sources and it excludes certain specific revenue items (such as investment securities gains / losses, net and asset gains / losses, net).

(3) Ratio is based upon basic earnings per common share.

(4) Total revenue, a non-GAAP financial measure, is the sum of taxable equivalent net interest income, core fee-based revenues, and other noninterest income categories, as presented on Page 2 in the Consolidated Statements of Income and Page 6 in the Net Interest Income Analysis.

(5) Core fee-based revenue, a non-GAAP financial measure, is the sum of trust service fees, service charges on deposit accounts, card-based and other nondeposit fees, insurance commissions, and brokerage and annuity commissions, as presented on Page 2 in the Consolidated Statements of Income.

(6) September 30, 2014 data is estimated.

(7) The Federal Reserve establishes capital adequacy requirements, including well-capitalized standards for the Corporation.  The OCC establishes similar capital adequacy requirements and standards for the Bank.  Regulatory capital primarily consists of Tier 1 risk-based capital and Tier 2 risk-based capital.  The sum of Tier 1 risk-based capital and Tier 2 risk-based capital equals our total risk-based capital.  Risk-based capital guidelines require a minimum level of capital as a percentage of risk-weighted assets.  Risk-weighted assets consist of total assets plus certain off-balance sheet and market items, subject to adjustment for predefined credit risk factors.

(8) Tangible equity, tangible common equity and tangible assets exclude goodwill and other intangible assets, which is a non-GAAP financial measure.  These financial measures have been included as they are considered to be critical metrics with which to analyze and evaluate financial condition and capital strength.

 


Associated Banc-Corp









Selected Asset Quality Information



Sep14 vs Jun14





Sep14 vs Sep13

(in thousands)

Sep 30, 2014

Jun 30, 2014

% Change


Mar 31, 2014

Dec 31, 2013

Sep 30, 2013

% Change

Allowance for Loan Losses









Beginning balance

$ 271,851

$ 267,916

1.5%


$ 268,315

$ 271,724

$ 277,218

(1.9%)

Provision for loan losses

(3,000)

6,500

(146.2%)


5,000

2,000

-

N/M

Charge offs

(14,850)

(9,107)

63.1%


(11,361)

(18,742)

(20,288)

(26.8%)

Recoveries

12,261

6,542

87.4%


5,962

13,333

14,794

(17.1%)

Net charge offs

(2,589)

(2,565)

0.9%


(5,399)

(5,409)

(5,494)

(52.9%)

Ending balance

$ 266,262

$ 271,851

(2.1%)


$ 267,916

$ 268,315

$ 271,724

(2.0%)










Allowance for Unfunded Commitments









Beginning balance

$ 20,400

$ 21,900

(6.8%)


$ 21,900

$ 21,600

$ 22,400

(8.9%)

Provision for unfunded commitments

4,000

(1,500)

N/M


-

300

(800)

N/M

Ending balance

$ 24,400

$ 20,400

19.6%


$ 21,900

$ 21,900

$ 21,600

13.0%










Allowance for credit losses

$ 290,662

$ 292,251

(0.5%)


$ 289,816

$ 290,215

$ 293,324

(0.9%)










Net Charge Offs



Sep14 vs Jun14





Sep14 vs Sep13


Sep 30, 2014

Jun 30, 2014

% Change


Mar 31, 2014

Dec 31, 2013

Sep 30, 2013

% Change

Commercial and industrial

$ 572

$ (1,377)

(141.5%)


$ 2,725

$ 4,555

$ (447)

(228.0%)

Commercial real estate - owner occupied

2,210

(550)

N/M


(124)

967

2,076

6.5%

Lease financing

(6)

29

(120.7%)


-

(16)

-

N/M

  Commercial and business lending

2,776

(1,898)

(246.3%)


2,601

5,506

1,629

70.4%

Commercial real estate - investor

(4,065)

(239)

N/M


(1,031)

137

(414)

N/M

Real estate construction

350

795

(56.0%)


113

(3,130)

(303)

(215.5%)

  Commercial real estate lending

(3,715)

556

N/M


(918)

(2,993)

(717)

418.1%

    Total commercial

(939)

(1,342)

(30.0%)


1,683

2,513

912

(203.0%)

Home equity revolving lines of credit

1,098

1,380

(20.4%)


1,182

966

767

43.2%

Home equity loans 1st liens

118

448

(73.7%)


406

372

564

(79.1%)

Home equity loans junior liens

728

948

(23.2%)


859

1,111

800

(9.0%)

  Home equity

1,944

2,776

(30.0%)


2,447

2,449

2,131

(8.8%)

Installment and credit cards

910

247

268.4%


113

(611)

124

N/M

Residential mortgage

674

884

(23.8%)


1,156

1,058

2,327

(71.0%)

  Total consumer

3,528

3,907

(9.7%)


3,716

2,896

4,582

(23.0%)

        Total net charge offs

$ 2,589

$ 2,565

0.9%


$ 5,399

$ 5,409

$ 5,494

(52.9%)










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

Sep 30, 2014

Jun 30, 2014



Mar 31, 2014

Dec 31, 2013

Sep 30, 2013


Commercial and industrial

4

(10)



22

38

(4)


Commercial real estate - owner occupied

84

(20)



(5)

34

72


Lease financing

(5)

22



-

(12)

-


  Commercial and business lending

17

(12)



17

37

11


Commercial real estate - investor

(54)

(3)



(14)

2

(6)


Real estate construction

14

33



5

(145)

(15)


  Commercial real estate lending

(37)

6



(10)

(32)

(8)


    Total commercial

(3)

(5)



7

10

4


Home equity revolving lines of credit

50

64



55

44

34


Home equity loans 1st liens

7

26



23

19

27


Home equity loans junior liens

159

196



171

205

140


  Home equity

45

64



55

52

44


Installment and credit cards

78

25



11

(59)

11


Residential mortgage

6

9



12

11

25


  Total consumer

22

25



25

19

30


        Total net charge offs

6

6



14

14

14











Credit Quality



Sep14 vs Jun14





Sep14 vs Sep13


Sep 30, 2014

Jun 30, 2014

% Change


Mar 31, 2014

Dec 31, 2013

Sep 30, 2013

% Change

Nonaccrual loans

$ 184,138

$ 179,226

2.7%


$ 177,978

$ 185,428

$ 207,594

(11.3%)

Other real estate owned (OREO)

16,840

17,729

(5.0%)


19,173

18,118

25,077

(32.8%)

    Total nonperforming assets

$ 200,978

$ 196,955

2.0%


$ 197,151

$ 203,546

$ 232,671

(13.6%)










Loans 90 or more days past due and still accruing

$ 1,690

$ 1,776

(4.8%)


$ 723

$ 2,350

$ 2,063

(18.1%)










Allowance for loan losses / loans

1.55%

1.59%



1.63%

1.69%

1.74%


Allowance for loan losses / nonaccrual loans

144.60

151.68



150.53

144.70

130.89


Nonaccrual loans / total loans

1.07

1.05



1.08

1.17

1.33


Nonperforming assets / total loans plus OREO

1.17

1.15



1.20

1.28

1.49


Nonperforming assets / total assets

0.78

0.77



0.79

0.84

0.98


Net charge offs / average loans (annualized)

0.06

0.06



0.14

0.14

0.14


Year-to-date net charge offs / average loans

0.08

0.10



0.14

0.25

0.29











Nonaccrual loans by type:









Commercial and industrial

$ 51,143

$ 40,846

25.2%


$ 38,488

$ 37,719

$ 36,105

41.7%

Commercial real estate - owner occupied

24,340

31,725

(23.3%)


26,735

29,664

28,301

(14.0%)

Lease financing

1,947

1,541

26.3%


172

69

99

N/M

  Commercial and business lending

77,430

74,112

4.5%


65,395

67,452

64,505

20.0%

Commercial real estate - investor

25,106

28,135

(10.8%)


33,611

37,596

49,841

(49.6%)

Real estate construction

8,187

6,988

17.2%


6,667

6,467

18,670

(56.1%)

  Commercial real estate lending

33,293

35,123

(5.2%)


40,278

44,063

68,511

(51.4%)

    Total commercial

110,723

109,235

1.4%


105,673

111,515

133,016

(16.8%)

Home equity revolving lines of credit

10,154

10,056

1.0%


10,356

11,883

11,991

(15.3%)

Home equity loans 1st liens

4,664

4,634

0.6%


5,341

6,135

6,131

(23.9%)

Home equity loans junior liens

6,443

6,183

4.2%


6,788

7,149

7,321

(12.0%)

  Home equity

21,261

20,873

1.9%


22,485

25,167

25,443

(16.4%)

Installment and credit cards

653

771

(15.3%)


915

1,114

1,269

(48.5%)

Residential mortgage

51,501

48,347

6.5%


48,905

47,632

47,866

7.6%

  Total consumer

73,415

69,991

4.9%


72,305

73,913

74,578

(1.6%)

        Total nonaccrual loans

$ 184,138

$ 179,226

2.7%


$ 177,978

$ 185,428

$ 207,594

(11.3%)



















* Annualized.









N/M = Not meaningful.









 


Associated Banc-Corp









Selected Asset Quality Information (continued)



Sep14 vs Jun14





Sep14 vs Sep13

(in thousands)

Sep 30, 2014

Jun 30, 2014

% Change


Mar 31, 2014

Dec 31, 2013

Sep 30, 2013

% Change

Restructured loans (accruing)









Commercial and industrial

$ 36,955

$ 28,849

28.1%


$ 27,776

$ 32,517

$ 32,145

15.0%

Commercial real estate - owner occupied

11,574

12,168

(4.9%)


11,579

13,009

14,425

(19.8%)

  Commercial and business lending

48,529

41,017

18.3%


39,355

45,526

46,570

4.2%

Commercial real estate - investor

24,440

41,758

(41.5%)


46,020

44,946

35,073

(30.3%)

Real estate construction

805

1,224

(34.2%)


2,954

3,793

4,825

(83.3%)

  Commercial real estate lending

25,245

42,982

(41.3%)


48,974

48,739

39,898

(36.7%)

    Total commercial

73,774

83,999

(12.2%)


88,329

94,265

86,468

(14.7%)

Home equity revolving lines of credit

1,531

1,527

0.3%


1,178

1,117

1,118

36.9%

Home equity loans 1st liens

1,867

1,674

11.5%


1,656

1,436

1,628

14.7%

Home equity loans junior liens

7,184

7,243

(0.8%)


6,738

7,080

7,113

1.0%

  Home equity

10,582

10,444

1.3%


9,572

9,633

9,859

7.3%

Installment and credit cards

1,106

1,185

(6.7%)


225

246

416

165.9%

Residential mortgage

19,141

18,753

2.1%


18,798

19,841

20,300

(5.7%)

  Total consumer

30,829

30,382

1.5%


28,595

29,720

30,575

0.8%

        Total restructured loans (accruing)

$ 104,603

$ 114,381

(8.5%)


$ 116,924

$ 123,985

$ 117,043

(10.6%)










Restructured loans in nonaccrual loans (not included above)

$ 63,314

$ 72,388

(12.5%)


$ 74,231

$ 59,585

$ 69,311

(8.7%)



















Loans Past Due 30-89 Days



Sep14 vs Jun14





Sep14 vs Sep13


Sep 30, 2014

Jun 30, 2014

% Change


Mar 31, 2014

Dec 31, 2013

Sep 30, 2013

% Change

Commercial and industrial

$ 3,947

$ 2,519

56.7%


$ 4,126

$ 6,826

$ 6,518

(39.4%)

Commercial real estate - owner occupied

2,675

6,323

(57.7%)


5,342

3,106

8,505

(68.5%)

Lease financing

-

556

(100.0%)


567

-

1,000

(100.0%)

  Commercial and business lending

6,622

9,398

(29.5%)


10,035

9,932

16,023

(58.7%)

Commercial real estate - investor

15,869

2,994

430.0%


7,188

23,215

21,747

(27.0%)

Real estate construction

399

258

54.7%


679

1,954

820

(51.3%)

  Commercial real estate lending

16,268

3,252

400.2%


7,867

25,169

22,567

(27.9%)

    Total commercial

22,890

12,650

80.9%


17,902

35,101

38,590

(40.7%)

Home equity revolving lines of credit

6,739

6,986

(3.5%)


5,344

6,728

6,318

6.7%

Home equity loans 1st liens

1,503

1,685

(10.8%)


1,469

1,110

1,376

9.2%

Home equity loans junior liens

2,496

2,138

16.7%


3,006

2,842

2,206

13.1%

  Home equity

10,738

10,809

(0.7%)


9,819

10,680

9,900

8.5%

Installment and credit cards

1,818

1,734

4.8%


1,269

1,150

1,170

55.4%

Residential mortgage

3,231

7,070

(54.3%)


4,498

6,118

6,722

(51.9%)

  Total consumer

15,787

19,613

(19.5%)


15,586

17,948

17,792

(11.3%)

        Total loans past due 30-89 days

$ 38,677

$ 32,263

19.9%


$ 33,488

$ 53,049

$ 56,382

(31.4%)



















Potential Problem Loans



Sep14 vs Jun14





Sep14 vs Sep13


Sep 30, 2014

Jun 30, 2014

% Change


Mar 31, 2014

Dec 31, 2013

Sep 30, 2013

% Change

Commercial and industrial

$ 133,416

$ 187,251

(28.8%)


$ 109,027

$ 113,669

$ 112,947

18.1%

Commercial real estate - owner occupied

49,008

57,757

(15.1%)


64,785

56,789

61,256

(20.0%)

Lease financing

3,787

2,280

66.1%


3,065

1,784

207

N/M

  Commercial and business lending

186,211

247,288

(24.7%)


176,877

172,242

174,410

6.8%

Commercial real estate - investor

28,474

31,903

(10.7%)


34,790

52,429

87,526

(67.5%)

Real estate construction

2,227

4,473

(50.2%)


4,870

5,263

7,540

(70.5%)

  Commercial real estate lending

30,701

36,376

(15.6%)


39,660

57,692

95,066

(67.7%)

    Total commercial

216,912

283,664

(23.5%)


216,537

229,934

269,476

(19.5%)

Home equity revolving lines of credit

224

277

(19.1%)


310

303

170

31.8%

Home equity loans junior liens

687

822

(16.4%)


741

1,810

2,067

(66.8%)

  Home equity

911

1,099

(17.1%)


1,051

2,113

2,237

(59.3%)

Installment and credit cards

4

844

(99.5%)


-

50

67

(94.0%)

Residential mortgage

2,166

2,445

(11.4%)


2,091

3,312

5,342

(59.5%)

  Total consumer

3,081

4,388

(29.8%)


3,142

5,475

7,646

(59.7%)

        Total potential problem loans

$ 219,993

$ 288,052

(23.6%)


$ 219,679

$ 235,409

$ 277,122

(20.6%)



















N/M = Not meaningful.









 


Associated Banc-Corp








Net Interest Income Analysis - Taxable Equivalent Basis







Sequential Quarter

Three months ended September 30, 2014


Three months ended June 30, 2014


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 and business lending

$ 6,652,227

$ 54,990

3.28%


$ 6,468,844

$ 53,519

3.32%

      Commercial real estate lending

4,019,286

37,780

3.73


3,967,848

36,309

3.67

         Total commercial

10,671,513

92,770

3.45


10,436,692

89,828

3.45

      Residential mortgage

4,309,121

35,264

3.27


4,077,617

33,575

3.29

      Retail

2,160,327

24,968

4.60


2,132,080

24,157

4.54

         Total loans

17,140,961

153,002

3.55


16,646,389

147,560

3.55

      Investment securities (1)

5,619,982

36,486

2.60


5,606,279

36,865

2.63

      Other short-term investments

335,774

1,503

1.79


284,847

1,862

2.62

         Investments and other

5,955,756

37,989

2.55


5,891,126

38,727

2.63

Total earning assets

23,096,717

$ 190,991

3.29


22,537,515

$ 186,287

3.31

   Other assets, net

2,375,335




2,320,557



Total assets

$ 25,472,052




$ 24,858,072











Interest-bearing liabilities:








   Savings deposits

$ 1,269,994

$ 254

0.08%


$ 1,267,297

$ 242

0.08%

   Interest-bearing demand deposits

3,096,712

1,111

0.14


2,894,446

969

0.13

   Money market deposits

7,721,167

3,153

0.16


7,340,244

2,928

0.16

   Time deposits

1,545,851

2,103

0.54


1,597,535

2,056

0.52

      Total interest-bearing deposits

13,633,724

6,621

0.19


13,099,522

6,195

0.19

   Federal funds purchased and securities sold under








   agreements to repurchase

927,904

390

0.17


847,756

306

0.14

   Other short-term funding

665,647

233

0.14


832,299

280

0.13

   Long-term funding

2,931,714

6,179

0.84


2,931,957

6,146

0.84

      Total short and long-term funding

4,525,265

6,802

0.60


4,612,012

6,732

0.58

Total interest-bearing liabilities

18,158,989

$ 13,423

0.29


17,711,534

$ 12,927

0.29

   Noninterest-bearing demand deposits

4,239,654




4,073,310



   Other liabilities

197,330




182,110



   Stockholders' equity

2,876,079




2,891,118



Total liabilities and stockholders' equity

$ 25,472,052




$ 24,858,072











Net interest income and rate spread


$ 177,568

3.00%



$ 173,360

3.02%

Net interest margin



3.06%




3.08%

Taxable equivalent adjustment


$ 4,938




$ 4,657










Net Interest Income Analysis - Taxable Equivalent Basis







Comparable Quarter

Three months ended September 30, 2014


Three months ended September 30, 2013


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 and business lending

$ 6,652,227

$ 54,990

3.28%


$ 5,876,745

$ 52,215

3.53%

      Commercial real estate lending

4,019,286

37,780

3.73


3,768,895

37,630

3.96

         Total commercial

10,671,513

92,770

3.45


9,645,640

89,845

3.70

      Residential mortgage

4,309,121

35,264

3.27


3,714,459

30,479

3.28

      Retail

2,160,327

24,968

4.60


2,364,266

26,816

4.51

         Total loans

17,140,961

153,002

3.55


15,724,365

147,140

3.72

      Investment securities (1)

5,619,982

36,486

2.60


4,980,228

32,282

2.59

      Other short-term investments

335,774

1,503

1.79


334,874

1,260

1.51

         Investments and other

5,955,756

37,989

2.55


5,315,102

33,542

2.52

Total earning assets

23,096,717

$ 190,991

3.29


21,039,467

$ 180,682

3.42

   Other assets, net

2,375,335




2,274,110



Total assets

$ 25,472,052




$ 23,313,577











Interest-bearing liabilities:








   Savings deposits

$ 1,269,994

$ 254

0.08%


$ 1,204,743

$ 249

0.08%

   Interest-bearing demand deposits

3,096,712

1,111

0.14


2,810,962

1,101

0.16

   Money market deposits

7,721,167

3,153

0.16


7,556,050

3,449

0.18

   Time deposits

1,545,851

2,103

0.54


1,773,760

2,818

0.63

      Total interest-bearing deposits

13,633,724

6,621

0.19


13,345,515

7,617

0.23

   Federal funds purchased and securities sold under








   agreements to repurchase

927,904

390

0.17


633,594

308

0.19

   Other short-term funding

665,647

233

0.14


1,417,113

434

0.12

   Long-term funding

2,931,714

6,179

0.84


614,708

6,866

4.47

      Total short and long-term funding

4,525,265

6,802

0.60


2,665,415

7,608

1.14

Total interest-bearing liabilities

18,158,989

$ 13,423

0.29


16,010,930

$ 15,225

0.38

   Noninterest-bearing demand deposits

4,239,654




4,264,304



   Other liabilities

197,330




175,453



   Stockholders' equity

2,876,079




2,862,890



Total liabilities and stockholders' equity

$ 25,472,052




$ 23,313,577











Net interest income and rate spread


$ 177,568

3.00%



$ 165,457

3.04%

Net interest margin



3.06%




3.13%

Taxable equivalent adjustment


$ 4,938




$ 4,948










(1) The yield on tax exempt loans and securities is computed on a taxable equivalent basis using a tax rate of 35% for all periods presented and is net of the effects of certain disallowed interest deductions.

(2) Nonaccrual loans and loans held for sale have been included in the average balances.

(3) Interest income includes net loan fees.

 


Associated Banc-Corp








Net Interest Income Analysis - Taxable Equivalent Basis







Year Over Year

Nine months ended September 30, 2014


Nine months ended September 30, 2013


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 and business lending

$ 6,419,328

$ 160,189

3.34%


$ 5,785,024

$ 156,541

3.62%

      Commercial real estate lending

3,965,242

109,681

3.70


3,695,150

109,298

3.95

         Total commercial

10,384,570

269,870

3.47


9,480,174

265,839

3.75

      Residential mortgage

4,105,892

101,503

3.30


3,666,556

91,074

3.31

      Retail

2,163,771

73,538

4.54


2,487,723

84,487

4.54

         Total loans

16,654,233

444,911

3.57


15,634,453

441,400

3.77

      Investment securities (1)

5,559,398

110,273

2.64


4,930,195

97,340

2.63

      Other short-term investments

299,692

4,814

2.14


327,209

3,740

1.53

         Investments and other

5,859,090

115,087

2.62


5,257,404

101,080

2.56

Total earning assets

22,513,323

$ 559,998

3.32


20,891,857

$ 542,480

3.47

   Other assets, net

2,339,067




2,328,652



Total assets

$ 24,852,390




$ 23,220,509











Interest-bearing liabilities:








   Savings deposits

$ 1,244,483

$ 715

0.08%


$ 1,185,059

$ 693

0.08%

   Interest-bearing demand deposits

2,930,236

2,903

0.13


2,819,585

3,470

0.16

   Money market deposits

7,413,513

8,906

0.16


7,178,857

10,304

0.19

   Time deposits

1,600,472

6,451

0.54


1,891,026

9,460

0.67

      Total interest-bearing deposits

13,188,704

18,975

0.19


13,074,527

23,927

0.24

   Federal funds purchased and securities sold under








   agreements to repurchase

860,732

1,001

0.16


696,343

1,051

0.20

   Other short-term funding

610,055

629

0.14


1,357,230

1,291

0.13

   Long-term funding

2,955,797

18,836

0.85


779,079

22,833

3.91

      Total short and long-term funding

4,426,584

20,466

0.62


2,832,652

25,175

1.19

Total interest-bearing liabilities

17,615,288

$ 39,441

0.30


15,907,179

$ 49,102

0.41

   Noninterest-bearing demand deposits

4,160,025




4,214,265



   Other liabilities

191,802




200,123



   Stockholders' equity

2,885,275




2,898,942



Total liabilities and stockholders' equity

$ 24,852,390




$ 23,220,509











Net interest income and rate spread


$ 520,557

3.02%



$ 493,378

3.06%

Net interest margin



3.09%




3.15%

Taxable equivalent adjustment


$ 14,251




$ 15,034










(1) The yield on tax exempt loans and securities is computed on a taxable equivalent basis using a tax rate of 35% for all periods presented and is net of the effects of certain disallowed interest deductions.

(2) Nonaccrual loans and loans held for sale have been included in the average balances.


(3) Interest income includes net loan fees.

 

Associated Banc-Corp









Financial Summary and Comparison


















Period End Loan Composition



 Sep14 vs Jun14





Sep14 vs Sep13


Sep 30, 2014

Jun 30, 2014

% Change


Mar 31, 2014

Dec 31, 2013

Sep 30, 2013

% Change

Commercial and industrial

$ 5,603,899

$ 5,616,205

(0.2%)


$ 5,222,141

$ 4,822,680

$ 4,703,056

19.2%

Commercial real estate - owner occupied

1,014,335

1,070,463

(5.2%)


1,098,089

1,114,715

1,147,352

(11.6%)

Lease financing

52,600

51,873

1.4%


52,500

55,483

51,727

1.7%

  Commercial and business lending

6,670,834

6,738,541

(1.0%)


6,372,730

5,992,878

5,902,135

13.0%

Commercial real estate - investor

3,043,361

2,990,732

1.8%


3,001,219

2,939,456

2,847,152

6.9%

Real estate construction

982,426

1,000,421

(1.8%)


969,617

896,248

834,744

17.7%

  Commercial real estate lending

4,025,787

3,991,153

0.9%


3,970,836

3,835,704

3,681,896

9.3%

  Total commercial

10,696,621

10,729,694

(0.3%)


10,343,566

9,828,582

9,584,031

11.6%

Home equity revolving lines of credit

880,435

866,042

1.7%


856,679

874,840

875,703

0.5%

Home equity loans 1st liens

619,774

659,598

(6.0%)


705,835

742,120

794,912

(22.0%)

Home equity loans junior liens

176,316

187,732

(6.1%)


199,488

208,054

220,763

(20.1%)

  Home equity

1,676,525

1,713,372

(2.2%)


1,762,002

1,825,014

1,891,378

(11.4%)

Installment and credit cards

459,682

469,203

(2.0%)


393,321

407,074

420,268

9.4%

Residential mortgage

4,326,262

4,132,783

4.7%


3,942,555

3,835,591

3,690,177

17.2%

    Total consumer

6,462,469

6,315,358

2.3%


6,097,878

6,067,679

6,001,823

7.7%

Total loans

$ 17,159,090

$ 17,045,052

0.7%


$ 16,441,444

$ 15,896,261

$ 15,585,854

10.1%



















Period End Deposit and Customer Funding Composition

 Sep14 vs Jun14





Sep14 vs Sep13


Sep 30, 2014

Jun 30, 2014

% Change


Mar 31, 2014

Dec 31, 2013

Sep 30, 2013

% Change

Noninterest-bearing demand

$ 4,302,454

$ 4,211,057

2.2%


$ 4,478,981

$ 4,626,312

$ 4,453,663

(3.4%)

Savings

1,256,567

1,275,493

(1.5%)


1,252,669

1,159,512

1,195,944

5.1%

Interest-bearing demand

3,637,411

2,918,900

24.6%


3,084,457

2,889,705

2,735,529

33.0%

Money market

7,491,460

7,348,650

1.9%


7,069,173

6,906,442

8,199,281

(8.6%)

Brokered CDs

9,242

44,809

(79.4%)


51,235

50,450

56,024

(83.5%)

Other time

1,504,124

1,517,350

(0.9%)


1,573,412

1,634,746

1,697,467

(11.4%)

  Total deposits

18,201,258

17,316,259

5.1%


17,509,927

17,267,167

18,337,908

(0.7%)

Customer repo sweeps

493,451

489,886

0.7%


548,179

419,247

515,555

(4.3%)

    Total deposits and customer funding

$18,694,709

$17,806,145

5.0%


$ 18,058,106

$ 17,686,414

$ 18,853,463

(0.8%)










Network transaction deposits included above









  in interest-bearing demand & money market

$ 2,207,055

$ 2,238,923

(1.4%)


$ 2,141,976

$ 1,936,403

$ 2,222,810

(0.7%)

Brokered CDs

9,242

44,809

(79.4%)


51,235

50,450

56,024

(83.5%)

    Total network and brokered funding

2,216,297

2,283,732

(3.0%)


2,193,211

1,986,853

2,278,834

(2.7%)










    Net customer deposits and funding (1)

$ 16,478,412

$ 15,522,413

6.2%


$ 15,864,895

$ 15,699,561

$ 16,574,629

(0.6%)










(1) Total deposits and customer funding excluding total network and brokered funding.



















Quarter Average Loan Composition


 Sep14 vs Jun14





Sep14 vs Sep13


Sep 30, 2014

Jun 30, 2014

% Change


Mar 31, 2014

Dec 31, 2013

Sep 30, 2013

% Change

Commercial and industrial

$ 5,558,135

$ 5,335,488

4.2%


$ 4,983,943

$ 4,709,435

$ 4,680,582

18.7%

Commercial real estate - owner occupied

1,043,001

1,081,552

(3.6%)


1,093,114

1,119,186

1,142,919

(8.7%)

Lease financing

51,091

51,804

(1.4%)


54,128

53,817

53,244

(4.0%)

  Commercial and business lending

6,652,227

6,468,844

2.8%


6,131,185

5,882,438

5,876,745

13.2%

Commercial real estate - investor

3,013,210

3,014,827

(0.1%)


2,993,046

2,878,176

2,940,115

2.5%

Real estate construction

1,006,076

953,021

5.6%


914,317

858,138

828,780

21.4%

  Commercial real estate lending

4,019,286

3,967,848

1.3%


3,907,363

3,736,314

3,768,895

6.6%

  Total commercial

10,671,513

10,436,692

2.2%


10,038,548

9,618,752

9,645,640

10.6%

Home equity revolving lines of credit

875,388

866,952

1.0%


868,614

876,938

882,478

(0.8%)

Home equity loans 1st liens

638,592

681,607

(6.3%)


724,995

767,857

826,653

(22.7%)

Home equity loans junior liens

181,880

193,727

(6.1%)


203,984

214,557

227,021

(19.9%)

  Home equity

1,695,860

1,742,286

(2.7%)


1,797,593

1,859,352

1,936,152

(12.4%)

Installment and credit cards

464,467

389,794

19.2%


401,742

413,236

428,114

8.5%

Residential mortgage

4,309,121

4,077,617

5.7%


3,926,734

3,856,944

3,714,459

16.0%

  Total consumer

6,469,448

6,209,697

4.2%


6,126,069

6,129,532

6,078,725

6.4%

Total loans

$ 17,140,961

$ 16,646,389

3.0%


$ 16,164,617

$ 15,748,284

$ 15,724,365

9.0%



















Quarter Average Deposit Composition



 Sep14 vs Jun14





Sep14 vs Sep13


Sep 30, 2014

Jun 30, 2014

% Change


Mar 31, 2014

Dec 31, 2013

Sep 30, 2013

% Change

Noninterest-bearing demand

$ 4,239,654

$ 4,073,310

4.1%


$ 4,166,305

$ 4,353,315

$ 4,264,304

(0.6%)

Savings

1,269,994

1,267,297

0.2%


1,195,337

1,200,338

1,204,743

5.4%

Interest-bearing demand

3,096,712

2,894,446

7.0%


2,796,247

2,852,090

2,810,962

10.2%

Money market

7,721,167

7,340,244

5.2%


7,173,106

7,748,650

7,556,050

2.2%

Time deposits

1,545,851

1,597,535

(3.2%)


1,659,277

1,727,138

1,773,760

(12.8%)

  Total deposits

$17,873,378

$17,172,832

4.1%


$16,990,272

$17,881,531

$17,609,819

1.5%










SOURCE Associated Banc-Corp