GREEN BAY, Wis.--(BUSINESS WIRE)--July 22, 2004--Associated
Banc-Corp (NASDAQ:ASBC) earned $.58 per diluted share in the quarter
ended June 30, 2004, a 13.7 percent increase from $.51 per diluted
share for the same period in 2003, and up from $.53 per diluted share
for the first quarter of 2004.
All share and per share information in this news release has been
restated to reflect Associated's 3-for-2 stock split, effected in the
form of a stock dividend, paid May 12, 2004 to its shareholders of
record as of May 7.
Return on average assets was 1.67 percent in the second quarter
2004 compared to 1.51 percent in the second quarter of 2003, and 1.57
percent in the first quarter 2004. Return on average equity was 18.87
percent compared to 17.37 percent in both the year-earlier quarter and
first quarter of 2004.
For the six months ended June 30, 2004, diluted earnings per share
were $1.11, up 8.8 percent from $1.02 per diluted share in the same
period in 2003. Return on average assets was 1.62 percent and return
on average equity was 18.12 percent, compared to 1.55 percent and
17.86 percent, respectively, for the six months ended June 30, 2003.
"We are pleased with our results in the second quarter, which
reflect the progress we're making on our strategic priorities,"
Associated President and CEO Paul Beideman said. "Our asset quality is
strong and continues to improve. Our fee income, particularly from
insurance and brokerage activities, shows positive momentum. At the
same time, sound expense control is a contributor to our performance,"
he said.
Net income was $64.5 million for the quarter that ended June 30,
2004. This compares to $56.7 million for the second quarter of 2003
and $59.6 million for first quarter 2004. On a year-to-date basis net
income was $124.1 million for the first half of 2004, up 8.2 percent
from $114.7 million for the comparable period of 2003.
The quarter-period comparisons between 2004 and 2003 continue to
be impacted by anticipated changes in mortgage banking, notably from
significantly lower refinancing activity throughout the industry,
which began in the fourth quarter of 2003. While the reduced
refinancing activity reduced mortgage banking income, it also slowed
loan prepayment speeds which supported greater value of the mortgage
loan servicing asset and lowered mortgage servicing rights expense.
Mortgage servicing rights expense included $6.7 million and $4.2
million of valuation reserve recovery for the three months and six
months ended June 30, 2004, respectively, compared to $8.5 million and
$15.8 million of additional valuation reserve for the three months and
six months ended June 30, 2003, respectively.
Therefore, for the comparable second quarter periods, mortgage
banking revenue was down $18.1 million while mortgage servicing rights
expense was lower by $15.4 million, for a net unfavorable pre-tax
impact of $2.7 million. For the first half of 2004 compared to the
same period for 2003, mortgage banking fee revenue was down $33.5
million, while mortgage servicing rights expense was down $20.2
million for a net $13.3 million unfavorable pre-tax impact.
Also, Associated's acquisition of Jabas Group, Inc., one of
Wisconsin's leading employee benefit firms, on April 1, 2004, affected
the comparison of retail commission income and noninterest expenses
between second quarter periods. The Jabas acquisition builds on
Associated's previous acquisition of CFG Insurance Services, Inc. on
April 1, 2003. Associated merged the insurance agencies, which now
operate as Associated Financial Group, LLC.
Associated Banc-Corp's net interest income rose to $131.9 million
in the second quarter, compared to $127.2 million in the second
quarter of 2003 and $129.1 million in the first quarter of 2004. For
the first half of 2004, net interest income was $261.0 million, up 2.5
percent compared to $254.6 million for the same period of 2003.
The net interest margin was steady at 3.80 percent for both
quarters of 2004, compared to 3.79 percent for second quarter of 2003
and 3.83 percent for the first six months of 2003.
Total loans at the end of the second quarter 2004 were $10.6
billion, up from $10.4 billion at the end of the second quarter of
2003, including 2 percent growth in commercial loans and 13 percent
growth in home equity loans. Total loans increased 3 percent on an
annualized basis since March 31, 2004, led by 5 percent annualized
growth in commercial loans. Total deposits were $9.6 billion at June
30, 2004, up from $9.5 billion a year earlier, and down from $9.7
billion at March 31, 2004, particularly from maturities of time
deposits.
The company's credit quality showed improvement as our
relationship managers continue to work through problem credits with
satisfactory results. Total nonperforming loans were $85.9 million, or
0.81 percent of total loans at June 30, 2004, down from $117.2
million, or 1.13 percent of loans a year ago, and $93.6 million, or
0.89 percent of loans at March 31, 2004.
Second quarter net charge-offs were $5.6 million (0.21 percent of
average loans annualized), down from $10.1 million (0.38 percent
annualized) for second quarter 2003 and up slightly from $5.1 million
(0.20 percent annualized) for first quarter 2004. For the first half
of 2004, annualized net charge-offs were 0.20 percent of average
loans, compared to 0.29 percent annualized for the same period last
year. The provision for loan losses was $5.9 million for second
quarter 2004, compared to $12.1 million for second quarter 2003, and
$5.2 million for first quarter 2004. For the first six months of 2004
the provision for loan losses was $11.1 million, compared to $25.1
million for the same period last year. This decrease is due to
improved asset quality. The allowance for loan losses was 1.69 percent
of total loans at both June 30, 2004 and March 31, 2004, compared to
1.66 percent a year ago.
Excluding mortgage fee revenue, noninterest income was $46.5
million for second quarter 2004, up from $41.3 million for the second
quarter of 2003, and $43.9 million for first quarter 2004. Compared to
the second quarter of 2003, insurance and brokerage retail commissions
increased $5.8 million (primarily due to the inclusion of Jabas and
stronger fixed annuity sales commissions), credit card and other
nondeposit fees were up $0.9 million, and service charges on deposit
accounts were up $0.7 million. Compared to the first quarter of 2004,
the $2.6 million increase was also primarily due to the inclusion of
Jabas in retail commissions and increased service charges on deposits.
On a year-to-date basis, noninterest income excluding mortgage fee
revenue, was $90.4 million, or 12 percent higher than $80.4 million
for the first half of 2003. The increase was led by insurance revenues
that more than doubled given the insurance agency acquisitions, as
well as growth in trust fees and service charges on deposit accounts.
Excluding mortgage servicing rights expense, noninterest expense
was $92.0 million for second quarter 2004, compared to $89.2 million
for the comparable 2003 period, and $86.9 million for first quarter
2004. The $2.8 million increase from the same quarter last year was
primarily a result of incurring Jabas operating expenses. Compared to
the first quarter of 2004, the $5.1 million increase was primarily the
result of including Jabas operating expenses, as well as increased
data processing costs, marketing expense and legal and professional
fees.
On a year-to-date basis, noninterest expense excluding mortgage
servicing rights expense was $178.9 million for the first six months
of 2004, only 3 percent higher than $174.1 million for the comparative
period last year. The efficiency ratio improved to 48.18 percent,
compared to 49.79 percent for the first half of 2003.
"We are continuing to invest in our capabilities to diversify
Associated's revenue streams. Our asset quality and expense controls
will continue to positively affect our earnings through the remainder
of 2004. We are continuing to see positive momentum in our fee-based
businesses," Beideman said. "We look forward to increasing the pace of
commercial lending growth as the economy improves and as we continue
to implement our 'Achieving Excellence' sales initiative.
"Given the current trends in our business, we remain confident
that we can meet or exceed the consensus of analysts' estimates for
our 2004 earnings," Beideman said.
Associated repurchased approximately 0.2 million shares of its
common stock during the second quarter of 2004 at an average cost of
$27.93 per share, bringing year-to-date repurchases to 0.7 million
shares at $28.91 average cost per share, compared to 1.8 million
shares repurchased at $23.11 average cost per share for the first half
of 2003.
"Additionally, planning for our acquisition and integration of
First Federal Capital Corp. continues to progress well. We feel very
positive about the benefits of this combination. We remain on target
for a fourth quarter closing," Beideman said.
The company will host a conference call for investors and analysts
at 3 p.m. CDT today. The toll-free dial-in number is 877-654-5513.
Participants should ask the operator for the Associated Banc-Corp
earnings call, number 876-4788. An archived recording of the call will
be available for two weeks.
Associated Banc-Corp has more than 200 banking offices serving
more than 150 communities in Wisconsin, Illinois, and Minnesota. The
company offers a full range of traditional banking services and a
variety of other financial products and services. More information
about Associated Banc-Corp is available at www.AssociatedBank.com.
Statements made in this document that are not purely historical
are forward-looking statements, as defined in the Private Securities
Litigation Reform Act of 1995. This includes any statements regarding
management's plans, objectives, or goals for future operations,
products or services, and forecasts of its revenues, earnings, or
other measures of performance. Forward-looking statements are based on
current management expectations and, by their nature, are subject to
risks and uncertainties. These statements may be identified by the use
of words such as "believe," "expect," "anticipate," "plan,"
"estimate," "should," "will," "intend," or similar expressions.
Outcomes related to such statements are subject to numerous risk
factors and uncertainties including those listed in the company's
Annual Report filed on Form 10-K.
----------------------------------------------------------------------
Consolidated Balance Sheets (Unaudited)
Associated Banc-CorpJune 30, December 31, % June 30, %
(in thousands) 2004 2003 Change 2003 Change
----------------------------------------------------------------------
Assets
Cash and due from
banks $309,804 $389,140 (20.4%) $393,882 (21.3%)
Interest-bearing
deposits in other
financial
institutions 11,353 7,434 52.7% 13,456 (15.6%)
Federal funds sold
and securities
purchased
under agreements
to resell 39,245 3,290 1092.9% 14,550 169.7%
Securities
available for
sale, at fair
value 3,799,842 3,773,784 0.7% 3,374,834 12.6%
Loans held for sale 69,891 104,336 (33.0%) 392,563 (82.2%)
Loans 10,556,603 10,291,810 2.6% 10,387,364 1.6%
Allowance for loan
losses (177,980) (177,622) 0.2% (172,440) 3.2%
------------ ----------- ------------
Loans, net 10,378,623 10,114,188 2.6% 10,214,924 1.6%
Premises and
equipment 129,401 131,315 (1.5%) 131,436 (1.5%)
Goodwill 232,528 224,388 3.6% 224,388 3.6%
Intangible assets 73,977 63,509 16.5% 50,556 46.3%
Other assets 457,892 436,510 4.9% 408,227 12.2%
------------ ----------- ------------
Total assets $15,502,556 $15,247,894 1.7% $15,218,816 1.9%
============ =========== ============
Liabilities and
Stockholders' Equity
Noninterest-
bearing deposits $1,822,716 $1,814,446 0.5% $1,833,703 (0.6%)
Interest-bearing
deposits,
excluding
Brokered CDs 7,497,441 7,813,267 (4.0%) 7,455,900 0.6%
Brokered CDs 263,435 165,130 59.5% 163,857 60.8%
------------ ----------- ------------
Total deposits 9,583,592 9,792,843 (2.1%) 9,453,460 1.4%
Short-term
borrowings 2,588,103 1,928,876 34.2% 2,079,371 24.5%
Long-term funding 1,827,326 2,034,160 (10.2%) 2,204,517 (17.1%)
Accrued expenses
and other
liabilities 124,641 143,588 (13.2%) 163,222 (23.6%)
------------ ----------- ------------
Total
liabilities 14,123,662 13,899,467 1.6% 13,900,570 1.6%
Stockholders'
Equity
Preferred stock - - -
Common stock 1,105 734 50.5% 743 48.7%
Surplus 584,853 575,975 1.5% 606,660 (3.6%)
Retained
earnings 791,432 724,356 9.3% 664,280 19.1%
Accumulated
other comprehensive
income 15,305 52,089 (70.6%) 65,822 (76.7%)
Deferred
compensation (1,981) (1,981) 0.0% (1,744) 13.6%
Treasury stock,
at cost (11,820) (2,746) 330.4% (17,515)(32.5%)
------------ ----------- ------------
Total
stockholders'
equity 1,378,894 1,348,427 2.3% 1,318,246 4.6%
------------ ----------- ------------
Total
liabilities
and
stockholders'
equity $15,502,556 $15,247,894 1.7% $15,218,816 1.9%
============ =========== ============
----------------------------------------------------------------------
Consolidated Statements of Income (Unaudited)
Associated Banc-Corp
For The Three For The Six
Months Ended, Months Ended,
June 30, June 30,
------------------ ------------------
(in thousands, except % %
per share amounts) 2004 2003 Change 2004 2003 Change
----------------------------------------------------------------------
Interest Income
Interest and fees
on loans $137,449 $147,785 (7.0%) $272,701 $296,281 (8.0%)
Interest and
dividends on
investment
securities
and deposits
with other
financial
institutions
Taxable 30,767 25,923 18.7% 61,799 52,720 17.2%
Tax-exempt 10,267 9,942 3.3% 20,502 19,997 2.5%
Interest on
federal funds
sold and
securities
purchased under
agreements to
resell 68 54 25.9% 95 89 6.7%
--------- -------- --------- --------
Total interest
income 178,551 183,704 (2.8%) 355,097 369,087 (3.8%)
Interest Expense
Interest on
deposits 26,656 31,558 (15.5%) 54,210 63,548 (14.7%)
Interest on
short-term
borrowings 7,241 8,442 (14.2%) 13,780 17,009 (19.0%)
Interest on long-
term funding 12,775 16,509 (22.6%) 26,153 33,881 (22.8%)
--------- -------- --------- --------
Total interest
expense 46,672 56,509 (17.4%) 94,143 114,438 (17.7%)
--------- -------- --------- --------
Net Interest
Income 131,879 127,195 3.7% 260,954 254,649 2.5%
Provision for
loan losses 5,889 12,132 (51.5%) 11,065 25,092 (55.9%)
--------- -------- --------- --------
Net interest
income after
provision for
loan losses 125,990 115,063 9.5% 249,889 229,557 8.9%
Noninterest Income
Trust service
fees 8,043 7,796 3.2% 15,911 14,426 10.3%
Service charges
on deposit
accounts 13,141 12,462 5.4% 25,538 24,273 5.2%
Mortgage banking 9,045 27,113 (66.6%) 18,071 51,613 (65.0%)
Credit card and
other nondeposit
fees 6,074 5,192 17.0% 11,745 12,588 (6.7%)
Retail
commissions 13,162 7,407 77.7% 22,519 10,710 110.3%
Bank owned life
insurance income 3,641 3,450 5.5% 6,996 6,841 2.3%
Asset sale gains
(losses), net 218 (790)(127.6%) 440 (668)(165.9%)
Investment
securities gains
(losses), net (569) 1,027 (155.4%) 1,362 701 94.3%
Other 2,742 4,771 (42.5%) 5,874 11,550 (49.1%)
--------- -------- --------- --------
Total noninterest
income 55,497 68,428 (18.9%) 108,456 132,034 (17.9%)
Noninterest Expense
Personnel expense 53,612 51,733 3.6% 105,888 100,569 5.3%
Occupancy 6,864 7,151 (4.0%) 14,336 14,266 0.5%
Equipment 2,878 3,190 (9.8%) 5,877 6,434 (8.7%)
Data processing 6,128 5,602 9.4% 11,801 11,220 5.2%
Business
development and
advertising 4,057 3,553 14.2% 6,714 6,916 (2.9%)
Stationery and
supplies 1,429 1,634 (12.5%) 2,655 3,313 (19.9%)
Mortgage servicing
rights expense (2,368) 13,021 (118.2%) 4,404 24,619 (82.1%)
Other intangible
amortization 934 870 7.4% 1,716 1,220 40.7%
Loan expense 1,670 950 75.8% 3,056 4,298 (28.9%)
Other 14,415 14,483 (0.5%) 26,828 25,886 3.6%
--------- -------- --------- --------
Total noninterest
expense 89,619 102,187 (12.3%) 183,275 198,741 (7.8%)
--------- -------- --------- --------
Income before
income taxes 91,868 81,304 13.0% 175,070 162,850 7.5%
Income tax
expense 27,363 24,635 11.1% 51,005 48,188 5.8%
--------- -------- --------- --------
Net Income $64,505 $56,669 13.8% $124,065 $114,662 8.2%
========= ======== ======== =========
Earnings Per Share:
Basic $ 0.59 $ 0.51 15.7% $ 1.13 $ 1.03 9.7%
Diluted $ 0.58 $ 0.51 13.7% $ 1.11 $ 1.02 8.8%
Average Shares
Outstanding:
Basic 110,116 110,938 (0.7%) 110,205 111,157 (0.9%)
Diluted 111,520 112,025 (0.5%) 111,647 112,166 (0.5%)
----------------------------------------------------------------------
Consolidated Statements of Income (Unaudited) - Quarterly Trend
Associated Banc-Corp
(in thousands, except
per share amounts) 2Q04 1Q04 4Q03 3Q03 2Q03
----------------------------------------------------------------------
Interest Income
Interest and fees on
loans $137,449 $135,252 $137,289 $145,246 $147,785
Interest and
dividends on
investment
securities
and deposits in
other financial
institutions:
Taxable 30,767 31,032 29,194 26,710 25,923
Tax-exempt 10,267 10,235 9,939 9,825 9,942
Interest on federal
funds sold and
securities
purchased under
agreements to
resell 68 27 36 38 54
--------- --------- --------- --------- ---------
Total interest
income 178,551 176,546 176,458 181,819 183,704
Interest Expense
Interest on deposits 26,656 27,554 29,247 30,327 31,558
Interest on short-
term borrowings 7,241 6,539 5,390 6,757 8,442
Interest on long-
term funding 12,775 13,378 14,684 15,759 16,509
--------- --------- --------- --------- ---------
Total interest
expense 46,672 47,471 49,321 52,843 56,509
--------- --------- --------- --------- ---------
Net Interest Income 131,879 129,075 127,137 128,976 127,195
Provision for loan
losses 5,889 5,176 9,603 12,118 12,132
--------- --------- --------- --------- ---------
Net interest income
after provision for
loan losses 125,990 123,899 117,534 116,858 115,063
Noninterest Income
Trust service fees 8,043 7,868 8,150 7,001 7,796
Service charges on
deposit accounts 13,141 12,397 12,735 13,338 12,462
Mortgage banking 9,045 9,026 9,753 21,671 27,113
Credit card and
other nondeposit
fees 6,074 5,671 5,646 5,435 5,192
Retail commissions 13,162 9,357 8,031 6,830 7,407
Bank owned life
insurance income 3,641 3,355 3,417 3,532 3,450
Asset sale gains
(losses), net 218 222 1,366 871 (790)
Investment
securities gains
(losses), net (569) 1,931 - 1 1,027
Other 2,742 3,132 3,379 3,245 4,771
--------- --------- --------- --------- ---------
Total noninterest
income 55,497 52,959 52,477 61,924 68,428
Noninterest Expense
Personnel expense 53,612 52,276 54,391 53,080 51,733
Occupancy 6,864 7,472 6,710 7,101 7,151
Equipment 2,878 2,999 3,206 3,178 3,190
Data processing 6,128 5,673 5,731 6,322 5,602
Business development
and advertising 4,057 2,657 4,165 4,113 3,553
Stationery and
supplies 1,429 1,226 1,741 1,651 1,634
Mortgage servicing
rights expense (2,368) 6,772 735 4,199 13,021
Other intangible
amortization 934 782 870 871 870
Loan expense 1,670 1,386 1,446 1,806 950
Other 14,415 12,413 15,125 13,486 14,483
--------- --------- --------- --------- ---------
Total noninterest
expense 89,619 93,656 94,120 95,807 102,187
--------- --------- --------- --------- ---------
Income before income
taxes 91,868 83,202 75,891 82,975 81,304
Income tax expense 27,363 23,642 20,282 24,589 24,635
--------- --------- --------- --------- ---------
Net Income $64,505 $59,560 $55,609 $58,386 $56,669
========= ========= ========= ========= =========
Earnings Per Share:
Basic $ 0.59 $ 0.54 $ 0.51 $ 0.53 $ 0.51
Diluted $ 0.58 $ 0.53 $ 0.50 $ 0.52 $ 0.51
Average Shares
Outstanding:
Basic 110,116 110,294 109,965 110,209 110,938
Diluted 111,520 111,830 111,499 111,485 112,025
----------------------------------------------------------------------
Selected Quarterly Information
Associated Banc-Corp
----------------------------------------------------------------------
(in thousands,
except per share
& full time
equivalent YTD YTD 2nd Qtr 1st Qtr
employee data) 2004 2003 2004 2004
----------------------------------------------------------------------
Summary of Operations
Net interest
income 260,954 254,649 131,879 129,075
Provision for
loan losses 11,065 25,092 5,889 5,176
Asset sale gains
(losses), net 440 (668) 218 222
Investment
securities gains
(losses), net 1,362 701 (569) 1,931
Noninterest
income
(excluding
securities &
asset gains) 106,654 132,001 55,848 50,806
Noninterest
expense 183,275 198,741 89,619 93,656
Income before
income taxes 175,070 162,850 91,868 83,202
Income taxes 51,005 48,188 27,363 23,642
Net income 124,065 114,662 64,505 59,560
Taxable equivalent
adjustment 12,791 12,508 6,387 6,404
----------------------------------------------------------------------
Per Common Share Data (1)
Net income:
Basic $ 1.13 $ 1.03 $ 0.59 $ 0.54
Diluted 1.11 1.02 0.58 0.53
Dividends 0.4767 0.4333 0.2500 0.2267
Market Value:
High $30.37 $25.61 $30.13 $30.37
Low 27.09 21.43 27.09 28.08
Close 29.63 24.41 29.63 29.86
Book value 12.53 11.92 12.53 12.67
----------------------------------------------------------------------
Performance Ratios (annualized)
Net interest
margin (FTE) 3.80% 3.83% 3.80% 3.80%
Return on average
assets 1.62 1.55 1.67 1.57
Return on average
equity 18.12 17.86 18.87 17.37
Efficiency ratio (2) 48.18 49.79 46.17 50.28
Effective tax rate 29.13 29.59 29.78 28.42
Dividend payout
ratio (3) 42.18 42.07 42.37 41.98
----------------------------------------------------------------------
Average Balances
Assets $15,379,641 $14,942,330 $15,498,005 $15,261,277
Earning assets 14,333,135 13,914,288 14,480,701 14,185,569
Interest-bearing
liabilities 12,157,368 11,914,412 12,231,733 12,083,003
Loans 10,559,476 10,661,386 10,685,542 10,433,411
Deposits 9,643,509 9,011,930 9,701,945 9,585,074
Stockholders'
equity 1,376,718 1,294,804 1,374,632 1,378,804
Stockholders'
equity / assets 8.95% 8.67% 8.87% 9.03%
----------------------------------------------------------------------
At Period End
Assets $15,502,556 $15,510,868
Loans 10,556,603 10,486,610
Allowance for
loan losses 177,980 177,717
Goodwill 232,528 224,388
Mortgage
servicing
rights, net 48,735 39,649
Other intangible
assets 25,242 20,250
Deposits 9,583,592 9,702,758
Stockholders'
equity 1,378,894 1,395,293
Stockholders'
equity / assets 8.89% 9.00%
Shares
outstanding, end
of period 110,048 110,168
Shares
repurchased
during period 205 492
Average per share
cost of shares
repurchased
during period $27.93 $29.32
Year-to-date
shares
repurchased
during period 697 492
YTD average per
share cost of
shares
repurchased
during period $28.91 $29.32
----------------------------------------------------------------------
Selected trend information
Average full time
equivalent employees 4,010 4,024
Trust assets
under management, at
market value $4,300,000 $4,300,000
Mortgage loans
originated for sale 579,020 359,791
Portfolio
serviced for others 6,010,000 5,904,000
Mortgage
servicing
rights, net /
Portfolio
serviced for
others 0.81% 0.67%
----------------------------------------------------------------------
Selected Quarterly Information
Associated Banc-Corp
----------------------------------------------------------------------
(in thousands,
except per share
& full time
equivalent 4th Qtr 3rd Qtr 2nd Qtr
employee data) 2003 2003 2003
----------------------------------------------------------------------
Summary of Operations
Net interest
income 127,137 128,976 127,195
Provision for loan
losses 9,603 12,118 12,132
Asset sale gains
(losses), net 1,366 871 (790)
Investment
securities gains
(losses), net - 1 1,027
Noninterest income
(excluding
securities &
asset gains) 51,111 61,052 68,191
Noninterest
expense 94,120 95,807 102,187
Income before
income taxes 75,891 82,975 81,304
Income taxes 20,282 24,589 24,635
Net income 55,609 58,386 56,669
Taxable equivalent
adjustment 6,230 6,165 6,231
----------------------------------------------------------------------
Per Common Share Data (1)
Net income:
Basic $ 0.51 $ 0.53 $ 0.51
Diluted 0.50 0.52 0.51
Dividends 0.2267 0.2267 0.2267
Market Value:
High $28.75 $25.93 $25.61
Low 25.87 24.75 21.43
Close 28.53 25.26 24.41
Book value 12.26 11.84 11.92
----------------------------------------------------------------------
Performance Ratios (annualized)
Net interest
margin (FTE) 3.81% 3.78% 3.79%
Return on average assets 1.49 1.53 1.51
Return on average equity 16.85 17.75 17.37
Efficiency ratio (2) 51.02 48.83 50.68
Effective tax rate 26.73 29.63 30.30
Dividend payout
ratio (3) 44.44 42.77 44.44
----------------------------------------------------------------------
Average Balances
Assets $14,852,390 $15,152,676 $15,016,497
Earning assets 13,828,992 14,128,702 13,991,615
Interest-bearing
liabilities 11,637,646 11,955,420 11,941,877
Loans 10,354,726 10,813,769 10,743,430
Deposits 9,679,789 9,485,000 9,121,204
Stockholders'
equity 1,309,167 1,304,983 1,308,505
Stockholders'
equity / assets 8.81% 8.61% 8.71%
----------------------------------------------------------------------
At Period End
Assets $15,247,894 $15,114,169 $15,218,816
Loans 10,291,810 10,289,242 10,387,364
Allowance for loan
losses 177,622 176,223 172,440
Goodwill 224,388 224,388 224,388
Mortgage servicing
rights, net 42,477 36,663 27,784
Other intangible
assets 21,032 21,902 22,772
Deposits 9,792,843 9,635,356 9,453,460
Stockholders'
equity 1,348,427 1,300,948 1,318,246
Stockholders'
equity / assets 8.84% 8.61% 8.66%
Shares
outstanding, end
of period 109,966 109,840 110,604
Shares repurchased
during period 212 1,090 714
Average per share
cost of shares
repurchased
during period $28.18 $24.97 $24.08
Year-to-date
shares
repurchased
during period 3,091 2,880 1,789
YTD average per
share cost of
shares
repurchased
during period $24.11 $23.81 $23.11
----------------------------------------------------------------------
Selected trend information
Average full time
equivalent employees 4,098 4,173 4,145
Trust assets under
management, at
market value $4,100,000 $3,800,000 $3,800,000
Mortgage loans
originated for
sale 524,118 1,422,747 1,229,022
Portfolio serviced
for others 5,928,000 5,587,000 5,471,000
Mortgage servicing
rights, net /
Portfolio
serviced for
others 0.72% 0.66% 0.51%
----------------------------------------------------------------------
(1) Per share data adjusted retroactively for stock splits and stock
dividends.
(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.
(3) Ratio is based upon basic earnings per share.
----------------------------------------------------------------------
Financial Summary and Comparison
Associated Banc-Corp
Three months ended Six months ended
June 30, June 30,
-------------------------- --------------------------
(in thousands) 2004 2003 % Change 2004 2003 % Change
--------------- -------------------------- ---------------------------
Allowance for
Loan Losses
Beginning
balance $177,717 $170,391 4.3% $177,622 $162,541 9.3%
Provision for
loan losses 5,889 12,132 (51.5%) 11,065 25,092 (55.9%)
Charge offs (6,660) (11,537) (42.3%) (12,722) (17,291) (26.4%)
Recoveries 1,034 1,454 (28.9%) 2,015 2,098 (4.0%)
------------------ ------------------
Net charge offs (5,626) (10,083) (44.2%) (10,707) (15,193) (29.5%)
------------------ ------------------
Ending Balance $177,980 $172,440 3.2% $177,980 $172,440 3.2%
================== ==================
----------------------------------------------------------------------
Credit Quality 2Q04
vs
June 30, Mar 31, 1Q04
2004 2004 % Change
--------- --------- ---------
Nonaccrual loans $80,622 $88,313 (8.7%)
Loans 90 or more days past due
and still accruing 5,207 5,258 (1.0%)
Restructured loans 40 42 (4.8%)
--------- ---------
Total nonperforming loans 85,869 93,613 (8.3%)
Other real estate owned 6,613 7,199 (8.1%)
--------- ---------
Total nonperforming assets 92,482 100,812 (8.3%)
========= =========
Provision for loan losses 5,889 5,176 13.8%
Net charge offs 5,626 5,081 10.7%
Allowance for loan losses / loans 1.69% 1.69%
Allowance for loan losses /
nonperforming loans 207.27 189.84
Nonperforming loans / total
loans 0.81 0.89
Nonperforming assets / total
assets 0.60 0.65
Net charge offs / average
loans (annualized) 0.21 0.20
Year-to-date net charge offs /
average loans 0.20 0.20
-------------------------------------------------------------
Credit Quality 2Q04
vs
Dec 31, Sept 30, June 30, 2Q03
2003 2003 2003 % Change
--------- --------- --------- ---------
Nonaccrual loans $113,944 $114,067 $110,820 (27.2%)
Loans 90 or more days past due
and still accruing 7,495 11,055 6,311 (17.5%)
Restructured loans 43 44 46 (13.0%)
--------- --------- ---------
Total nonperforming loans 121,482 125,166 117,177 (26.7%)
Other real estate owned 5,457 6,380 14,707 (55.0%)
--------- --------- ---------
Total nonperforming assets 126,939 131,546 131,884 (29.9%)
========= ========= =========
Provision for loan losses 9,603 12,118 12,132 (51.5%)
Net charge offs 8,204 8,335 10,083 (44.2%)
Allowance for loan losses / loans 1.73% 1.71% 1.66%
Allowance for loan losses /
nonperforming loans 146.21 140.79 147.16
Nonperforming loans / total
loans 1.18 1.22 1.13
Nonperforming assets / total
assets 0.83 0.87 0.87
Net charge offs / average
loans (annualized) 0.31 0.31 0.38
Year-to-date net charge offs /
average loans 0.30 0.29 0.29
-------------------------------------------------------------
Period End Loan Composition 2Q04
vs
June 30, Mar 31, 1Q04
2004 2004 % Change
------------ ------------ ---------
Commercial, financial
& agricultural $2,247,779 $2,123,846 5.8%
Real estate -
construction 1,118,284 1,094,597 2.2%
Commercial real
estate 3,292,783 3,368,660 (2.3%)
Lease financing 48,979 45,998 6.5%
------------ ------------
Commercial 6,707,825 6,633,101 1.1%
Residential mortgage 2,170,984 2,166,035 0.2%
Home equity 1,011,489 1,007,572 0.4%
------------ ------------
Residential real
estate 3,182,473 3,173,607 0.3%
Consumer 666,305 679,902 (2.0%)
------------ ------------
Total loans $10,556,603 $10,486,610 0.7%
============ ============
2Q04
vs
Dec 31, Sept 30, June 30, 2Q03
2003 2003 2003 % Change
------------ ------------ ------------ ---------
Commercial, financial
& agricultural $2,116,463 $2,186,214 $2,312,143 (2.8%)
Real estate -
construction 1,077,731 1,035,674 975,415 14.6%
Commercial real
estate 3,246,954 3,240,757 3,255,918 1.1%
Lease financing 38,968 37,193 38,666 26.7%
------------ ------------ ------------
Commercial 6,480,116 6,499,838 6,582,142 1.9%
Residential mortgage 2,145,227 2,166,187 2,202,690 (1.4%)
Home equity 968,744 912,142 895,952 12.9%
------------ ------------ ------------
Residential real
estate 3,113,971 3,078,329 3,098,642 2.7%
Consumer 697,723 711,075 706,580 (5.7%)
------------ ------------ ------------
Total loans $10,291,810 $10,289,242 $10,387,364 1.6%
============ ============ ============
------------------------------------------------------------
Period End Deposit Composition 2Q04
vs
June 30, Mar 31, 1Q04
2004 2004 % Change
------------ ------------ ---------
Demand $1,822,716 $1,755,485 3.8%
Savings 948,755 918,608 3.3%
Interest-bearing demand 2,355,287 2,375,492 (0.9%)
Money market 1,477,513 1,542,875 (4.2%)
Brokered CDs 263,435 230,983 14.0%
Other time deposits 2,715,886 2,879,315 (5.7%)
------------ ------------
Total deposits $9,583,592 $9,702,758 (1.2%)
============ ============
2Q04
vs
Dec 31, Sept 30, June 30, 2Q03
2003 2003 2003 % Change
------------- ----------- ----------- ---------
Demand $1,814,446 $1,804,596 $1,833,703 (0.6%)
Savings 890,092 924,036 942,027 0.7%
Interest-bearing demand 2,330,478 2,086,964 1,797,065 31.1%
Money market 1,573,678 1,559,769 1,598,317 (7.6%)
Brokered CDs 165,130 156,994 163,857 60.8%
Other time deposits 3,019,019 3,102,997 3,118,491 (12.9%)
------------ ----------- -----------
Total deposits $9,792,843 $9,635,356 $9,453,460 1.4%
============ =========== ===========
----------------------------------------------------------------------
Net Interest Income Analysis - Taxable Equivalent Basis
Associated Banc-Corp
Six months ended June 30, 2004
------------------------------
Interest Average
(in thousands) Average Income / Yield /
Balance Expense Rate
------------ --------- --------
Earning assets:
Loans: (1) (2) (3)
Commercial $ 6,608,371 $160,794 4.82%
Residential real estate 3,272,422 88,955 5.45
Consumer 678,683 23,441 6.94
------------ ---------
Total loans 10,559,476 273,190 5.15
Investments and other 3,773,659 94,698 5.02
------------ ---------
Total earning assets 14,333,135 367,888 5.11
Other assets, net 1,046,506
------------
Total assets $15,379,641
============
Interest-bearing liabilities:
Savings deposits $ 918,775 $1,684 0.37%
Interest-bearing demand deposits 2,380,375 9,571 0.81
Money market deposits 1,537,955 5,952 0.78
Time deposits, excluding Brokered
CDs 2,880,996 35,739 2.49
------------ ---------
Total interest-bearing deposits,
excluding Brokered CDs 7,718,101 52,946 1.38
Brokered CDs 206,527 1,264 1.23
------------ ---------
Total interest-bearing deposits 7,924,628 54,210 1.38
Wholesale funding 4,232,740 39,933 1.87
------------ ---------
Total interest-bearing liabilities 12,157,368 94,143 1.55
Noninterest-bearing demand 1,718,881
Other liabilities 126,674
Stockholders' equity 1,376,718
------------
Total liabilities and stockholders'
equity $15,379,641
============
---------
Net interest income and rate spread (1) $273,745 3.56%
=========
Net interest margin (1) 3.80%
Taxable equivalent adjustment $12,791
=========
----------------------------------------------------------------------
Net Interest Income Analysis - Taxable Equivalent Basis
Associated Banc-Corp
Six months ended June 30, 2003
-------------------------------
Interest Average
(in thousands) Average Income / Yield /
Balance Expense Rate
------------- --------- --------
Earning assets:
Loans: (1) (2) (3)
Commercial $6,399,244 $166,188 5.17%
Residential real estate 3,551,134 104,600 5.92
Consumer 711,008 26,003 7.37
------------ ---------
Total loans 10,661,386 296,791 5.56
Investments and other 3,252,902 84,804 5.22
------------ ---------
Total earning assets 13,914,288 381,595 5.48
Other assets, net 1,028,042
------------
Total assets $14,942,330
============
Interest-bearing liabilities:
Savings deposits $ 927,413 $ 2,884 0.63%
Interest-bearing demand deposits 1,591,942 6,925 0.88
Money market deposits 1,668,467 8,264 1.00
Time deposits, excluding Brokered
CDs 3,032,421 43,614 2.90
------------ ---------
Total interest-bearing deposits,
excluding Brokered CDs 7,220,243 61,687 1.72
Brokered CDs 203,719 1,861 1.84
------------ ---------
Total interest-bearing deposits 7,423,962 63,548 1.73
Wholesale funding 4,490,450 50,890 2.26
------------ ---------
Total interest-bearing liabilities 11,914,412 114,438 1.93
Noninterest-bearing demand 1,587,968
Other liabilities 145,146
Stockholders' equity 1,294,804
------------
Total liabilities and stockholders'
equity $14,942,330
============
---------
Net interest income and rate spread (1) $267,157 3.55%
=========
Net interest margin (1) 3.83%
Taxable equivalent adjustment $ 12,508
=========
----------------------------------------------------------------------
Net Interest Income Analysis - Taxable Equivalent Basis
Associated Banc-Corp
Three months ended June 30, 2004
--------------------------------
Interest Average
Average Income / Yield /
Balance Expense Rate
------------ --------- --------
Earning assets:
Loans: (1) (2) (3)
Commercial $ 6,684,527 $ 81,007 4.80%
Residential real estate 3,334,052 45,095 5.42
Consumer 666,963 11,573 6.97
------------ ---------
Total loans 10,685,542 137,675 5.13
Investments and other 3,795,159 47,263 4.98
------------ ---------
Total earning assets 14,480,701 184,938 5.09
Other assets, net 1,017,304
------------
Total assets $15,498,005
============
Interest-bearing liabilities:
Savings deposits $ 939,025 $ 843 0.36%
Interest-bearing demand deposits 2,396,737 4,871 0.82
Money market deposits 1,498,900 2,790 0.75
Time deposits, excluding Brokered
CDs 2,824,920 17,327 2.47
------------ ---------
Total interest-bearing deposits,
excluding Brokered CDs 7,659,582 25,831 1.36
Brokered CDs 268,709 825 1.24
------------ ---------
Total interest-bearing deposits 7,928,291 26,656 1.35
Wholesale funding 4,303,442 20,016 1.85
------------ ---------
Total interest-bearing liabilities 12,231,733 46,672 1.53
Noninterest-bearing demand 1,773,654
Other liabilities 117,986
Stockholders' equity 1,374,632
------------
Total liabilities and stockholders'
equity $15,498,005
============
---------
Net interest income and rate spread (1) $138,266 3.56%
=========
Net interest margin (1) 3.80%
Taxable equivalent adjustment $ 6,387
=========
----------------------------------------------------------------------
Net Interest Income Analysis - Taxable Equivalent Basis
Associated Banc-Corp
Three months ended June 30, 2003
--------------------------------
Interest Average
Average Income / Yield /
Balance Expense Rate
------------- --------- --------
Earning assets:
Loans: (1) (2) (3)
Commercial $ 6,470,954 $ 83,333 5.10%
Residential real estate 3,564,125 51,778 5.81
Consumer 708,351 12,940 7.32
------------ ---------
Total loans 10,743,430 148,051 5.48
Investments and other 3,248,185 41,884 5.16
------------ ---------
Total earning assets 13,991,615 189,935 5.41
Other assets, net 1,024,882
------------
Total assets $15,016,497
============
Interest-bearing liabilities:
Savings deposits $ 945,048 $ 1,431 0.61%
Interest-bearing demand deposits 1,696,412 3,812 0.90
Money market deposits 1,632,710 3,999 0.98
Time deposits, excluding Brokered
CDs 3,052,046 21,549 2.83
------------ ---------
Total interest-bearing deposits,
excluding Brokered CDs 7,326,216 30,791 1.69
Brokered CDs 175,215 767 1.76
------------ ---------
Total interest-bearing deposits 7,501,431 31,558 1.69
Wholesale funding 4,440,446 24,951 2.23
------------ ---------
Total interest-bearing liabilities 11,941,877 56,509 1.89
Noninterest-bearing demand 1,619,773
Other liabilities 146,342
Stockholders' equity 1,308,505
------------
Total liabilities and stockholders'
equity $15,016,497
============
---------
Net interest income and rate spread (1) $133,426 3.52%
=========
Net interest margin (1) 3.79%
Taxable equivalent adjustment $ 6,231
=========
----------------------------------------------------------------------
(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.
CONTACT: Associated Banc-Corp
Investors:
Joe Selner, 920-491-7120
or
Media:
Jon Drayna, 920-491-7006
SOURCE: Associated Banc-Corp