GREEN BAY, Wis.--(BUSINESS WIRE)--April 20, 2006--Associated
Banc-Corp (Nasdaq:ASBC):
-- First quarter loan growth 9% (annualized)
-- Wholesale funding reduction initiative accelerated late in
first quarter
-- Stock buy-back totals 4 million shares in 1Q and tangible
capital is 6.41% of tangible assets
-- Quarterly dividend increased to 29 centsAssociated Banc-Corp (Nasdaq:ASBC) earned $.60 per diluted share
in the first quarter of 2006, compared to $.59 per diluted share in
the first quarter of 2005. Net income for the first quarter was $81.7
million, up 5.5 percent compared to first quarter 2005 net income of
$77.5 million. Book value per share rose to $16.98 as of March 31,
2006, up 8.7 percent compared to a year earlier.
For the first quarter of 2006, return on average assets (ROA) was
1.52 percent and return on average equity (ROE) was 14.16 percent,
compared to ROA of 1.54 percent and ROE of 15.52 percent for the first
quarter of 2005. Return on average tangible equity (which is a
non-GAAP measure that excludes average goodwill and other intangible
assets from average equity) was 23.48 percent in the first quarter of
2006, versus 24.13 percent in the first quarter of 2005.
Comparatively, for the fourth quarter of 2005, net income was
$87.6 million, and diluted earnings per share were $.64, while book
value per share was $17.15 at year-end 2005. ROA was 1.58 percent, ROE
was 14.99 percent, and return on average tangible equity was 22.70
percent for the fourth quarter of 2005.
Loans as of March 31, 2006 were $15.5 billion, up $1.6 billion or
12 percent over first quarter of 2005. Since year-end 2005, loans
increased $333 million (or 9 percent annualized), driven by growth in
home equity and commercial loans.
At March 31, 2006, the allowance for loan losses represented 1.31
percent of total loans and covered 185 percent of nonperforming loans.
Nonperforming loans rose to $110 million, representing 0.71 percent of
total loans, compared to $99 million or 0.65 percent of loans at
year-end 2005. The provision for loan losses was $4.5 million, $2.3
million, and $3.7 million, respectively, for the first quarter of
2006, the first quarter of 2005, and the fourth quarter of 2005,
approximating net charge-off levels for each period. First quarter
2006 net charge-offs were 0.12 percent of average loans, compared to
0.09 percent for the full year 2005.
"I am very pleased with the growth in our home equity and
commercial loans this quarter. This progress is evidence of traction
in our sales efforts and the investments made in our distribution
system in 2005," Associated Banc-Corp President and CEO Paul S.
Beideman said.
"Also, our overall asset quality remains at historically strong
levels," Beideman said. While consumer loan losses were higher in the
first quarter of 2006, as our customers deal with rising short-term
rates, we anticipate that this trend will moderate over the next few
quarters."
Period-end deposits at March 31, 2006 were $13.6 billion, up $1.4
billion or 12 percent over the first quarter of last year. Since
year-end 2005, interest-bearing deposits grew while non-interest
bearing demand deposits reflected seasonal declines.
"Core deposit growth remains a top priority, and we are beginning
to see progress from our improved deposit product line, sales results,
and investments in core markets," said Beideman. However, competitive
pricing pressures, along with the shifting of deposits to
higher-priced products or to alternatives outside of the banking
industry, continue to challenge deposit growth.
"The first quarter also reflects actions taken in connection with
our previously announced initiative to reduce wholesale funding by up
to $2 billion by year-end 2006," Beideman said.
The company used cash flows from maturing investments, as well as
proceeds from the sale of $0.7 billion of investment securities in
late March, to reduce wholesale funding and to buy back 4 million
shares of common stock under an accelerated share repurchase.
Investment security sales included losses of $15.8 million, offset by
gains of $18.3 million on equity securities sales, resulting in a net
$2.5 million pre-tax gain for the quarter.
"Cumulatively, we have reduced wholesale funding by $1.1 billion
since Sept. 30, 2005, after adjusting for our fourth quarter
acquisition, reducing our ratio of wholesale funding to total funding
from 34 percent to 29 percent at March 31, 2006."
Associated's net interest income for the first quarter of 2006 was
$166.9 million, compared to $165.9 million and $175.6 million for the
first and fourth quarters of 2005, respectively. The first quarter
2006 net interest margin was 3.48 percent, compared to 3.68 percent
for the first quarter of 2005, and 3.59 percent for the fourth quarter
of 2005. Net interest income and the net interest margin were
pressured by the interest rate environment, resulting in a rising cost
of funds that exceeded the increased yield on earning assets. The
late-March 2006 investment sale activity had minimal impact on the
margin for the first quarter.
Of the 11 basis point decline in the margin from the fourth
quarter, approximately 6 basis points was attributable to the seasonal
outflow of net free funds (notably non-interest bearing demand
deposits), with the remainder from the combination of rate, volume and
mix changes. "We believe the steps we are taking should help improve
the margin to a level comparable to that of the fourth quarter of
2005," said Beideman.
Core noninterest revenues grew between the first quarter periods
with increases in trust service fees (7 percent), service charges on
deposits (12 percent), card-based and other nondeposit fees (9
percent), and retail commissions (5 percent). Compared to the fourth
quarter of 2005, seasonal trends impacted retail commissions (up $1.9
million) and service charges (down $2.1 million). Trust fees, as well
as card-based and other nondeposit fees, were relatively flat between
the first quarter of 2006 and fourth quarter of 2005.
Net mortgage banking income was $4.4 million for the first quarter
of 2006, down $5.5 million from the first quarter of 2005, and down
$7.8 million from the fourth quarter of 2005. Mortgage banking
revenues were affected by lower secondary mortgage production (which
was down 27 percent and 31 percent from the first and fourth quarters,
respectively), and by a lower residential mortgage portfolio serviced
for others (down on average 16 percent and 8 percent compared to first
and fourth quarters, respectively) as the company sold $1.5 billion of
its servicing portfolio at a $5.3 million gain during the fourth
quarter. Valuation reserve recoveries on the mortgage servicing rights
asset, included in net mortgage banking income, were $1.4 million,
$4.0 million, and $1.3 million, respectively, for the first quarter of
2006, the first quarter of 2005 and the fourth quarter of 2005.
Expenses remain controlled. Noninterest expense was $123.5 million
for the first quarter of 2006, up $2.2 million (2 percent) over the
first quarter of 2005 and down $2.1 million (2 percent) compared to
the fourth quarter of 2005. Included in personnel expense for the
first quarter of 2006 was $0.2 million of compensation expense related
to unvested options required by the company's January 1, 2006,
adoption of Statement of Financial Accounting Standard No. 123
(revised 2004). The efficiency ratio was 51.00 percent, 49.73 percent
and 48.38 percent for the first quarter of 2006, the first quarter of
2005 and the fourth quarter of 2005, respectively.
The effective tax rate for the first quarter of 2006 was 25.52
percent, compared to 31.87 percent and 31.22 percent during the first
and fourth quarters of 2005, respectively. The decline was primarily
due to the first quarter 2006 resolution of certain
multi-jurisdictional tax issues for certain years, which resulted in
the reduction of previously recorded tax liabilities and reduced
income tax expense in the first quarter of 2006. In addition, the
company entered into a confidential settlement agreement with the
State of Wisconsin regarding its Nevada investment subsidiaries.
Associated repurchased 4 million shares of its common stock in the
first quarter of 2006 at an average price of $33.89 per share. During
the first quarter, the company paid a dividend of 27 cents per share,
up 8 percent from the year-earlier dividend.
Associated's Board of Directors today approved a dividend of 29
cents per share for the second quarter, representing a 7 percent
increase over the previous quarterly dividend. This is Associated's
36th consecutive annual dividend increase.
"While we are facing a challenging business environment, we
believe that the actions we are taking will better position the
company to achieve current consensus earnings estimates," Beideman
said.
Associated will host a conference call for investors and analysts
at 3 p.m. CDT today. The toll-free dial-in number for the live call is
888-694-4769. The number for international callers is 973-582-2757.
Participants should ask the operator for the Associated Banc-Corp
first quarter 2006 earnings call, or for call ID number 7234181. A
replay of the call will be available starting at 6 p.m. CT on April 20
through April 27 by calling 877-519-4471 (toll-free) domestically or
973-341-3080 internationally. The call ID number, 7234181, is required
to access the replay.
Additionally, remarks by Beideman at the company's April 26 Annual
Meeting of Shareholders will be webcast. The webcast, featuring audio
and slides of Beideman's remarks, will be available through the
company's Web site live starting at approximately 11:10 a.m. CDTWednesday, April 26. Interested parties should go the Web site a few
minutes before the start time to register at www.associatedbank.com.
Click on the Investor Relations link on the right side of the page,
and then see the "News and Highlights" section.
Associated Banc-Corp, headquartered in Green Bay, Wis., is a
diversified multibank holding company with total assets of $22
billion. Associated has more than 320 banking offices serving more
than 180 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-Corp
March 31, December 31,
(in thousands) 2006 2005 % Change
---------------------------------------------------------------------
Assets
Cash and due from banks $405,001 $460,230 (12.0%)
Interest-bearing deposits in
other financial institutions 20,096 14,254 41.0%
Federal funds sold and
securities purchased
under agreements to resell 8,380 17,811 (53.0%)
Securities available for sale,
at fair value 3,840,697 4,711,605 (18.5%)
Loans held for sale 47,818 57,710 (17.1%)
Loans 15,539,187 15,206,464 2.2%
Allowance for loan losses (203,408) (203,404) 0.0%
------------ ------------
Loans, net 15,335,779 15,003,060 2.2%
Premises and equipment 200,014 206,153 (3.0%)
Goodwill 875,727 877,680 (0.2%)
Other intangible assets, net 117,290 120,358 (2.5%)
Other assets 668,058 631,221 5.8%
------------ ------------
Total assets $21,518,860 $22,100,082 (2.6%)
============ ============
Liabilities and Stockholders'
Equity
Noninterest-bearing deposits $2,319,075 $2,504,926 (7.4%)
Interest-bearing deposits,
excluding Brokered CDs 10,730,135 10,538,856 1.8%
Brokered CDs 567,660 529,307 7.2%
------------ ------------
Total deposits 13,616,870 13,573,089 0.3%
Short-term borrowings 2,597,950 2,666,307 (2.6%)
Long-term funding 2,898,089 3,348,476 (13.5%)
Accrued expenses and other
liabilities 161,256 187,232 (13.9%)
------------ ------------
Total liabilities 19,274,165 19,775,104 (2.5%)
Stockholders' Equity
Preferred stock - -
Common stock 1,323 1,357 (2.5%)
Surplus 1,178,908 1,301,004 (9.4%)
Retained earnings 1,073,968 1,029,247 4.3%
Accumulated other
comprehensive income (loss) (9,504) (3,938) 141.3%
Deferred compensation - (2,081) (100.0%)
Treasury stock, at cost - (611) (100.0%)
------------ ------------
Total stockholders' equity 2,244,695 2,324,978 (3.5%)
------------ ------------
Total liabilities and
stockholders' equity $21,518,860 $22,100,082 (2.6%)
============ ============
Consolidated Balance Sheets (Unaudited)
Associated Banc-Corp
March 31,
(in thousands) 2005 % Change
---------------------------------------------------------------------
Assets
Cash and due from banks $327,487 23.7%
Interest-bearing deposits in
other financial institutions 14,202 41.5%
Federal funds sold and
securities purchased
under agreements to resell 15,655 (46.5%)
Securities available for sale,
at fair value 4,835,134 (20.6%)
Loans held for sale 79,975 (40.2%)
Loans 13,923,196 11.6%
Allowance for loan losses (189,917) 7.1%
------------
Loans, net 13,733,279 11.7%
Premises and equipment 180,315 10.9%
Goodwill 679,993 28.8%
Other intangible assets, net 119,381 (1.8%)
Other assets 517,021 29.2%
------------
Total assets $20,502,442 5.0%
============
Liabilities and Stockholders' Equity
Noninterest-bearing deposits $2,156,592 7.5%
Interest-bearing deposits,
excluding Brokered CDs 9,819,201 9.3%
Brokered CDs 218,111 160.3%
------------
Total deposits 12,193,904 11.7%
Short-term borrowings 2,778,161 (6.5%)
Long-term funding 3,332,804 (13.0%)
Accrued expenses and other
liabilities 172,502 (6.5%)
------------
Total liabilities 18,477,371 4.3%
Stockholders' Equity
Preferred stock -
Common stock 1,300 1.8%
Surplus 1,128,148 4.5%
Retained earnings 898,578 19.5%
Accumulated other
comprehensive income (loss) 10,505 (190.5%)
Deferred compensation (3,814) (100.0%)
Treasury stock, at cost (9,646) (100.0%)
------------
Total stockholders' equity 2,025,071 10.8%
------------
Total liabilities and
stockholders' equity $20,502,442 5.0%
============
---------------------------------------------------------------------
Consolidated Statements of Income (Unaudited)
Associated Banc-Corp
For The Three Months Ended,
March 31,
-------------------------
(in thousands, except
per share amounts) 2006 2005 % Change
---------------------------------------------------------------------
Interest Income
Interest and fees on loans $261,015 $200,309 30.3%
Interest and dividends on investment
securities and deposits with
other financial institutions
Taxable 39,116 41,034 (4.7%)
Tax-exempt 10,163 9,723 4.5%
Interest on federal funds sold and
securities purchased under
agreements to resell 249 82 203.7%
------------ ------------
Total interest income 310,543 251,148 23.6%
Interest Expense
Interest on deposits 77,878 44,433 75.3%
Interest on short-term
borrowings 33,244 17,169 93.6%
Interest on long-term funding 32,552 23,638 37.7%
------------ ------------
Total interest expense 143,674 85,240 68.6%
------------ ------------
Net Interest Income 166,869 165,908 0.6%
Provision for loan losses 4,465 2,327 91.9%
------------ ------------
Net interest income after
provision for
loan losses 162,404 163,581 (0.7%)
Noninterest Income
Trust service fees 8,897 8,328 6.8%
Service charges on deposit
accounts 20,959 18,665 12.3%
Mortgage banking, net 4,404 9,884 (55.4%)
Card-based and other nondeposit
fees 9,886 9,111 8.5%
Retail commissions 15,478 14,705 5.3%
Bank owned life insurance income 3,071 2,168 41.7%
Asset sale losses, net (230) (302) N/M
Investment securities gains, net 2,456 - N/M
Other 5,852 8,814 (33.6%)
------------ ------------
Total noninterest income 70,773 71,373 (0.8%)
Noninterest Expense
Personnel expense 69,303 72,985 (5.0%)
Occupancy 11,758 9,888 18.9%
Equipment 4,588 4,018 14.2%
Data processing 7,248 6,293 15.2%
Business development and
advertising 4,249 3,939 7.9%
Stationery and supplies 1,774 1,844 (3.8%)
Other intangible amortization 2,343 1,994 17.5%
Other 22,208 20,281 9.5%
------------ ------------
Total noninterest expense 123,471 121,242 1.8%
------------ ------------
Income before income taxes 109,706 113,712 (3.5%)
Income tax expense 27,999 36,242 (22.7%)
------------ ------------
Net Income $81,707 $77,470 5.5%
============ ============
Earnings Per Share:
Basic $0.60 $0.60 0.0%
Diluted $0.60 $0.59 1.7%
Average Shares Outstanding:
Basic 135,114 129,781 4.1%
Diluted 136,404 131,358 3.8%
N/M - Not meaningful.
---------------------------------------------------------------------
Consolidated Statements of Income (Unaudited) - Quarterly Trend
Associated Banc-Corp
(in thousands, except 1Q06 4Q05 3Q05 2Q05 1Q05
per share amounts)
---------------------------------------------------------------------
Interest Income
Interest and fees
on loans $261,015 $252,443 $223,202 $213,420 $200,309
Interest and
dividends on
investment
securities
and deposits in
other financial
institutions
Taxable 39,116 41,486 40,050 41,834 41,034
Tax-exempt 10,163 10,325 9,755 9,507 9,723
Interest on federal
funds sold and
securities
purchased under
agreements to
resell 249 289 384 182 82
--------- --------- --------- --------- ---------
Total interest
income 310,543 304,543 273,391 264,943 251,148
Interest Expense
Interest on
deposits 77,878 66,934 53,598 48,087 44,433
Interest on short-
term borrowings 33,244 26,828 23,628 21,731 17,169
Interest on long-
term funding 32,552 35,186 32,087 28,451 23,638
--------- --------- --------- --------- ---------
Total interest
expense 143,674 128,948 109,313 98,269 85,240
--------- --------- --------- --------- ---------
Net Interest Income 166,869 175,595 164,078 166,674 165,908
Provision for loan
losses 4,465 3,676 3,345 3,671 2,327
--------- --------- --------- --------- ---------
Net interest income
after provision
for loan losses 162,404 171,919 160,733 163,003 163,581
Noninterest Income
Trust service fees 8,897 9,055 8,667 8,967 8,328
Service charges on
deposit accounts 20,959 23,073 22,830 22,215 18,665
Mortgage banking,
net 4,404 12,166 11,969 2,376 9,884
Card-based and
other nondeposit
fees 9,886 10,033 9,505 8,790 9,111
Retail commissions 15,478 13,624 12,905 15,370 14,705
Bank owned life
insurance income 3,071 3,022 2,441 2,311 2,168
Asset sale gains
(losses), net (230) 2,766 942 539 (302)
Investment
securities gains,
net 2,456 1,179 1,446 1,491 -
Other 5,852 6,126 6,260 (355) 8,814
--------- --------- --------- --------- ---------
Total
noninterest
income 70,773 81,044 76,965 61,704 71,373
Noninterest Expense
Personnel expense 69,303 68,619 66,403 66,934 72,985
Occupancy 11,758 10,287 9,412 9,374 9,888
Equipment 4,588 4,361 4,199 4,214 4,018
Data processing 7,248 7,240 7,129 6,728 6,293
Business
development and
advertising 4,249 4,999 4,570 4,153 3,939
Stationery and
supplies 1,774 1,869 1,599 1,644 1,844
Other intangible
amortization 2,343 2,418 1,903 2,292 1,994
Other 22,208 25,746 22,133 20,995 20,281
--------- --------- --------- --------- ---------
Total
noninterest
expense 123,471 125,539 117,348 116,334 121,242
--------- --------- --------- --------- ---------
Income before
income taxes 109,706 127,424 120,350 108,373 113,712
Income tax expense 27,999 39,783 39,315 34,358 36,242
--------- --------- --------- --------- ---------
Net Income $81,707 $87,641 $81,035 $74,015 $77,470
========= ========= ========= ========= =========
Earnings Per Share:
Basic $0.60 $0.65 $0.63 $0.57 $0.60
Diluted $0.60 $0.64 $0.63 $0.57 $0.59
Average Shares
Outstanding:
Basic 135,114 135,684 127,875 128,990 129,781
Diluted 136,404 137,005 129,346 130,463 131,358
---------------------------------------------------------------------
Selected Quarterly Information
Associated Banc-Corp
---------------------------------------------------------------------
(in thousands, except per 1st Qtr 2006 4th Qtr 2005 3rd Qtr 2005
share & full time
equivalent employee data)
---------------------------------------------------------------------
Summary of Operations
Net interest income 166,869 175,595 164,078
Provision for loan losses 4,465 3,676 3,345
Asset sale gains (losses),
net (230) 2,766 942
Investment securities gains,
net 2,456 1,179 1,446
Noninterest income
(excluding securities &
asset gains) 68,547 77,099 74,577
Noninterest expense 123,471 125,539 117,348
Income before income taxes 109,706 127,424 120,350
Income taxes 27,999 39,783 39,315
Net income 81,707 87,641 81,035
Taxable equivalent
adjustment 6,667 6,766 6,347
---------------------------------------------------------------------
Per Common Share Data (1)
Net income:
Basic $0.60 $0.65 $0.63
Diluted 0.60 0.64 0.63
Dividends 0.27 0.27 0.27
Market Value:
High $34.83 $33.23 $34.74
Low 32.75 29.09 30.29
Close 33.98 32.55 30.48
Book value 16.98 17.15 16.12
---------------------------------------------------------------------
Performance Ratios
(annualized)
Earning assets yield 6.38% 6.12% 5.83%
Interest-bearing liabilities
rate 3.37 2.98 2.66
Net interest margin 3.48 3.59 3.56
Return on average assets 1.52 1.58 1.56
Return on average equity 14.16 14.99 15.85
Return on tangible average
equity (2) 23.48 22.70 24.55
Efficiency ratio (3) 51.00 48.38 47.90
Effective tax rate 25.52 31.22 32.67
Dividend payout ratio (4) 45.00 41.54 42.86
---------------------------------------------------------------------
Average Balances
Assets $21,871,969 $22,022,165 $20,607,901
Earning assets 19,910,420 20,080,758 18,960,035
Interest-bearing liabilities 17,204,860 17,090,134 16,198,492
Loans 15,327,803 15,154,225 14,163,827
Deposits 13,319,664 13,282,910 12,133,719
Wholesale funding 6,092,275 6,280,793 6,307,705
Stockholders' equity 2,339,539 2,320,134 2,027,785
Stockholders' equity /
assets 10.70% 10.54% 9.84%
---------------------------------------------------------------------
At Period End
Assets $21,518,860 $22,100,082 $20,741,731
Loans 15,539,187 15,206,464 14,107,137
Allowance for loan losses 203,408 203,404 190,080
Goodwill 875,727 877,680 679,993
Mortgage servicing rights,
net 68,116 68,841 78,688
Other intangible assets 49,174 51,517 37,004
Deposits 13,616,870 13,573,089 12,181,025
Wholesale funding 5,496,039 6,014,783 6,324,451
Stockholders' equity 2,244,695 2,324,978 2,062,565
Stockholders' equity /
assets 10.43% 10.52% 9.94%
Tangible equity / tangible
assets (5) 6.41% 6.59% 6.72%
Shares outstanding, end of
period 132,167 135,602 127,985
Shares repurchased during
period 4,030 974 -
Average per share cost of
shares repurchased during
period $33.63 $30.82 $-
Year-to-date shares
repurchased during period 4,030 3,496 2,522
YTD average per share cost
of shares repurchased
during period $33.63 $32.43 $33.05
---------------------------------------------------------------------
Selected trend information
Average full time equivalent
employees 5,147 5,113 4,815
Trust assets under
management, at market value $5,200,000 $5,000,000 $4,900,000
Mortgage loans originated
for sale 246,724 356,280 498,343
Portfolio serviced for
others 8,050,000 8,028,000 9,492,000
Mortgage servicing rights,
net / Portfolio serviced
for others 0.85% 0.86% 0.83%
Selected Quarterly Information
Associated Banc-Corp
---------------------------------------------------------------------
(in thousands, except per share & full 2nd Qtr 2005 1st Qtr 2005
time equivalent employee data)
---------------------------------------------------------------------
Summary of Operations
Net interest income 166,674 165,908
Provision for loan losses 3,671 2,327
Asset sale gains (losses),
net 539 (302)
Investment securities gains,
net 1,491 -
Noninterest income
(excluding securities &
asset gains) 59,674 71,675
Noninterest expense 116,334 121,242
Income before income taxes 108,373 113,712
Income taxes 34,358 36,242
Net income 74,015 77,470
Taxable equivalent
adjustment 6,174 6,222
---------------------------------------------------------------------
Per Common Share Data (1)
Net income:
Basic $0.57 $0.60
Diluted 0.57 0.59
Dividends 0.27 0.25
Market Value:
High $33.89 $33.50
Low 30.11 30.60
Close 33.58 31.23
Book value 15.80 15.62
---------------------------------------------------------------------
Performance Ratios
(annualized)
Earning assets yield 5.71% 5.51%
Interest-bearing liabilities
rate 2.42 2.13
Net interest margin 3.63 3.68
Return on average assets 1.44 1.54
Return on average equity 14.62 15.52
Return on tangible average
equity (2) 22.65 24.13
Efficiency ratio (3) 50.03 49.73
Effective tax rate 31.70 31.87
Dividend payout ratio (4) 47.37 41.67
---------------------------------------------------------------------
Average Balances
Assets $20,574,770 $20,467,698
Earning assets 18,916,921 18,756,555
Interest-bearing liabilities 16,207,719 16,139,002
Loans 14,084,246 13,977,621
Deposits 12,069,719 12,359,040
Wholesale funding 6,326,418 5,911,177
Stockholders' equity 2,030,929 2,024,265
Stockholders' equity /
assets 9.87% 9.89%
---------------------------------------------------------------------
At Period End
Assets $20,753,714 $20,502,442
Loans 14,054,506 13,923,196
Allowance for loan losses 190,024 189,917
Goodwill 679,993 679,993
Mortgage servicing rights,
net 74,103 78,182
Other intangible assets 38,907 41,199
Deposits 12,098,631 12,193,904
Wholesale funding 6,460,586 6,110,965
Stockholders' equity 2,018,435 2,025,071
Stockholders' equity /
assets 9.73% 9.88%
Tangible equity / tangible
assets (5) 6.49% 6.59%
Shares outstanding, end of
period 127,743 129,622
Shares repurchased during
period 2,111 411
Average per share cost of
shares repurchased during
period $33.10 $32.76
Year-to-date shares
repurchased during
period 2,522 411
YTD average per share cost
of shares repurchased
during period $33.05 $32.76
---------------------------------------------------------------------
Selected trend information
Average full time equivalent
employees 4,889 5,132
Trust assets under
management, at market value $4,800,000 $4,700,000
Mortgage loans originated
for sale 385,677 337,406
Portfolio serviced for
others 9,479,000 9,528,000
Mortgage servicing rights,
net / Portfolio serviced
for others 0.78% 0.82%
---------------------------------------------------------------------
(1) Per share data adjusted retroactively for stock splits & stock
dividends.
(2) Return on tangible average equity = Net income divided by average
equity excluding average goodwill & other intangible assets. This
is a non-GAAP financial measure.
(3) Efficiency ratio = Noninterest expense divided by sum of taxable
equivalent net interest income plus noninterest income, excluding
investment securities gains, net, & asset sales gains, net.
(4) Ratio is based upon basic earnings per share.
(5) Tangible equity to tangible assets = Stockholders' equity
excluding goodwill & other intangible assets divided by assets
excluding goodwill & other intangible assets. This is a non-GAAP
financial measure.
----------------------------------------------------------------------
Financial Summary and Comparison
Associated Banc-Corp Three months ended
March 31,
-------------------------------------
(in thousands) 2006 2005 % Change
----------------------------------------------------------------------
Allowance for Loan Losses
Beginning balance $203,404 $189,762 7.2%
Provision for loan losses 4,465 2,327 91.9%
Charge offs (6,062) (5,683) 6.7%
Recoveries 1,601 3,511 (54.4%)
---------------------------
Net charge offs (4,461) (2,172) 105.4%
---------------------------
Ending Balance $203,408 $189,917 7.1%
===========================
----------------------------------------------------------------------
Credit Quality 1Q06 vs
4Q05
Mar 31, 2006 Dec 31, 2005 % Change
--------------------------------------
Nonaccrual loans $102,824 $95,313 7.9%
Loans 90 or more days past due
and still accruing 7,068 3,270 116.1%
Restructured loans 31 32 (3.1%)
--------------------------
Total nonperforming loans 109,923 98,615 11.5%
Other real estate owned 11,676 11,336 3.0%
--------------------------
Total nonperforming assets 121,599 109,951 10.6%
==========================
Provision for loan losses 4,465 3,676 21.5%
Net charge offs 4,461 3,635 22.7%
Allowance for loan losses /
loans 1.31% 1.34%
Allowance for loan losses /
nonperforming loans 185.05 206.26
Nonperforming loans / total
loans 0.71 0.65
Nonperforming assets / total
assets 0.57 0.50
Net charge offs / average loans
(annualized) 0.12 0.10
Year-to-date net charge offs /
average loans 0.12 0.09
Credit Quality
1Q06 vs
Sept 30, June 30, Mar 31, 1Q05
2005 2005 2005 % Change
--------------------------------------
Nonaccrual loans $107,298 $109,698 $99,835 3.0%
Loans 90 or more days past due
and still accruing 3,354 2,806 3,068 130.4%
Restructured loans 33 35 36 (13.9%)
----------------------------
Total nonperforming loans 110,685 112,539 102,939 6.8%
Other real estate owned 10,017 3,685 4,019 190.5%
----------------------------
Total nonperforming assets 120,702 116,224 106,958 13.7%
============================
Provision for loan losses 3,345 3,671 2,327 91.9%
Net charge offs 3,289 3,564 2,172 105.4%
Allowance for loan losses /
loans 1.35% 1.35% 1.36%
Allowance for loan losses /
nonperforming loans 171.73 168.85 184.49
Nonperforming loans / total
loans 0.78 0.80 0.74
Nonperforming assets / total
assets 0.58 0.56 0.52
Net charge offs / average loans
(annualized) 0.09 0.10 0.06
Year-to-date net charge offs /
average loans 0.09 0.08 0.06
----------------------------------------------------------------------
Period End Loan Composition 1Q06 vs
4Q05
Mar 31, 2006 Dec 31, 2005 % Change
-------------------------------------
Commercial, financial &
agricultural $3,571,835 $3,417,343 4.5%
Real estate - construction 1,981,473 1,783,267 11.1%
Commercial real estate 4,024,260 4,064,327 (1.0%)
Lease financing 62,600 61,315 2.1%
---------------------------
Commercial 9,640,168 9,326,252 3.4%
Home equity (a) 2,121,601 2,025,055 4.8%
Installment 957,877 1,003,938 (4.6%)
---------------------------
Retail 3,079,478 3,028,993 1.7%
Residential mortgage 2,819,541 2,851,219 (1.1%)
---------------------------
Total loans $15,539,187 $15,206,464 2.2%
===========================
Period End Loan Composition
1Q06 vs
Sept 30, June 30, Mar 31, 1Q05
2005 2005 2005 % Change
------------------------------------------------
Commercial, financial
& agricultural $3,213,656 $3,086,663 $2,852,462 25.2%
Real estate -
construction 1,519,681 1,640,941 1,569,013 26.3%
Commercial real
estate 3,648,169 3,650,726 3,813,465 5.5%
Lease financing 57,270 53,270 50,181 24.7%
--------------------------------------
Commercial 8,438,776 8,431,600 8,285,121 16.4%
Home equity (a) 1,878,436 1,806,236 1,744,676 21.6%
Installment 1,024,356 1,025,621 1,048,510 (8.6%)
--------------------------------------
Retail 2,902,792 2,831,857 2,793,186 10.2%
Residential
mortgage 2,765,569 2,791,049 2,844,889 (0.9%)
--------------------------------------
Total loans $14,107,137 $14,054,506 $13,923,196 11.6%
======================================
(a) Home equity includes home equity lines and residential mortgage
junior liens.
----------------------------------------------------------------------
Period End Deposit Composition 1Q06 vs
4Q05
Mar 31, 2006 Dec 31, 2005 % Change
--------------------------------------
Demand $2,319,075 $2,504,926 (7.4%)
Savings 1,074,938 1,079,851 (0.5%)
Interest-bearing demand 2,347,104 2,549,782 (7.9%)
Money market 2,863,174 2,629,933 8.9%
Brokered CDs 567,660 529,307 7.2%
Other time deposits 4,444,919 4,279,290 3.9%
----------------------------
Total deposits $13,616,870 $13,573,089 0.3%
============================
Period End Deposit Composition
1Q06 vs
Sept 30, June 30, Mar 31, 1Q05
2005 2005 2005 % Change
------------------------------------------------
Demand $2,256,774 $2,250,482 $2,156,592 7.5%
Savings 1,074,234 1,117,922 1,137,120 (5.5%)
Interest-bearing
demand 2,252,711 2,227,188 2,485,548 (5.6%)
Money market 2,240,606 2,094,796 2,112,490 35.5%
Brokered CDs 407,459 491,781 218,111 160.3%
Other time deposits 3,949,241 3,916,462 4,084,043 8.8%
--------------------------------------
Total deposits $12,181,025 $12,098,631 $12,193,904 11.7%
======================================
----------------------------------------------------------------------
Net Interest Income Analysis - Taxable Equivalent Basis
Associated Banc-Corp Three months ended
March 31, 2006
-------------------------------
Interest Average
(in thousands) Average Income / Yield /
Balance Expense Rate
-------------------------------
Earning assets:
Loans: (1) (2) (3)
Commercial $9,425,306 $164,288 6.97%
Residential mortgage 2,877,613 40,946 5.71
Retail 3,024,884 56,350 7.50
----------------------
Total loans 15,327,803 261,584 6.84
Investments and other 4,582,617 55,626 4.86
----------------------
Total earning assets 19,910,420 317,210 6.38
Other assets, net 1,961,549
------------
Total assets $21,871,969
============
Interest-bearing liabilities:
Savings deposits $1,065,212 $943 0.36%
Interest-bearing demand deposits 2,384,072 10,392 1.77
Money market deposits 2,800,403 21,352 3.09
Time deposits, excluding Brokered CDs 4,350,733 39,449 3.68
----------------------
Total interest-bearing deposits,
excluding Brokered CDs 10,600,420 72,136 2.76
Brokered CDs 512,165 5,742 4.55
----------------------
Total interest-bearing deposits 11,112,585 77,878 2.84
Wholesale funding 6,092,275 65,796 4.32
----------------------
Total interest-bearing liabilities 17,204,860 143,674 3.37
Noninterest-bearing demand 2,207,079
Other liabilities 120,491
Stockholders' equity 2,339,539
------------
Total liabilities and stockholders'
equity $21,871,969
============
---------
Net interest income and rate spread (1) $173,536 3.01%
=========
Net interest margin (1) 3.48%
Taxable equivalent adjustment $6,667
=========
Net Interest Income Analysis - Taxable Equivalent Basis
Associated Banc-Corp Three months ended
March 31, 2005
-------------------------------
Interest Average
(in thousands) Average Income / Yield /
Balance Expense Rate
-------------------------------
Earning assets:
Loans: (1) (2) (3)
Commercial $8,265,444 $115,902 5.61%
Residential mortgage 2,836,893 39,418 5.58
Retail 2,875,284 45,378 6.40
----------------------
Total loans 13,977,621 200,698 5.77
Investments and other 4,778,934 56,672 4.75
----------------------
Total earning assets 18,756,555 257,370 5.51
Other assets, net 1,711,143
------------
Total assets $20,467,698
============
Interest-bearing liabilities:
Savings deposits $1,119,263 $1,012 0.37%
Interest-bearing demand deposits 2,602,085 6,746 1.05
Money market deposits 2,116,014 7,396 1.42
Time deposits, excluding Brokered CDs 4,071,934 27,247 2.71
----------------------
Total interest-bearing deposits,
excluding Brokered CDs 9,909,296 42,401 1.74
Brokered CDs 318,529 2,032 2.59
----------------------
Total interest-bearing deposits 10,227,825 44,433 1.76
Wholesale funding 5,911,177 40,807 2.76
----------------------
Total interest-bearing liabilities 16,139,002 85,240 2.13
Noninterest-bearing demand 2,131,215
Other liabilities 173,216
Stockholders' equity 2,024,265
------------
Total liabilities and stockholders'
equity $20,467,698
============
---------
Net interest income and rate spread (1) $172,130 3.38%
=========
Net interest margin (1) 3.68%
Taxable equivalent adjustment $6,222
=========
----------------------------------------------------------------------
(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, Green Bay
Joe Selner (Investors), 920-491-7120
Cindy Moon-Mogush (Media), 920-431-8034
SOURCE: Associated Banc-Corp