GREEN BAY, Wis.--(BUSINESS WIRE)--
Associated Banc-Corp (NASDAQ: ASBC):
-- $500 million common stock offering results in tangible common equity
ratio of 7.73% compared to 5.79% at December 31, 2009
-- At March 31, 2010, the Company's Tier 1 capital to total average assets
ratio was 10.57% and total capital to risk-weighted assets ratio was
18.15%
-- Provision for loan losses of $165.3 million, with net charge offs of
$163.3 million
-- Net loss to common shareholders of $33.8 million, or $0.20 per share,
for the quarter ended March 31, 2010
Associated Banc-Corp (NASDAQ: ASBC) today reported a net loss to common
shareholders of $33.8 million, or $0.20 per common share, for the
quarter ended March 31, 2010. This compares to net income of $35.4
million, or $0.28 per common share, for the quarter ended March 31, 2009.
On January 15, 2010, the Company completed a $500 million common equity
offering, resulting in a net increase in the Company's equity capital of
approximately $478 million and a 44.8 million increase in the number of
common shares outstanding. As a result of the successful capital raise,
the Company's tangible common equity ratio was 7.73% at March 31, 2010
compared to 5.79% at December 31, 2009.
At March 31, 2010, the Company's Tier 1 capital to total average assets
ratio was 10.57% and total capital to risk-weighted assets ratio was
18.15%. These capital ratios far exceed the criteria for "well
capitalized" banks and requirements by banking regulators.
"Our successful capital raise during the quarter positions our company
well and provides us with additional flexibility as we manage through
this credit cycle and focus on our strategic priorities," said President
and CEO Philip B. Flynn. "As anticipated, first quarter results were
impacted by our continuing efforts to address our credit challenges,
particularly in the construction and commercial real estate segments of
our loan portfolio."
CREDIT QUALITY
Credit-related charges of $165.7 million for the first quarter of 2010
were down from $405.3 million for the fourth quarter of 2009. First
quarter credit-related charges were comprised of a $165.3 million
provision for loan losses and a $0.4 million increase in the reserve for
losses on unfunded commitments. Net charge offs for the quarter were
$163.3 million. This compares to net charge offs of $233.8 million for
the fourth quarter of 2009.
Total nonperforming loans increased $88.1 million during the quarter to
$1.210 billion at March 31, 2010, with commercial real estate and
construction-related nonperforming loans increasing $123.6 million to
$844.4 million. Potential problem loans declined $227.8 million during
the quarter to $1.368 billion at March 31, 2010, with potential problem
loans in the commercial real estate and construction segments of the
Company's loan portfolio declining $160.7 million to $828.5 million.
The Company's allowance for loan losses rose to $575.6 million, or 4.33%
of total loans, at March 31, 2010 primarily due to an $829.3 million
decline in the Company's loan portfolio balance during the quarter. This
compares to an allowance for loan losses as a percent of total loans of
4.06% at December 31, 2009 and 1.97% at March 31, 2009.
LOANS AND DEPOSITS
At March 31, 2010, the Company's loan portfolio was $13.3 billion, down
5.9% from $14.1 billion at December 31, 2009, and down 16.5% from $15.9
billion at March 31, 2009, as declines were experienced in all segments
of the portfolio during the first quarter of 2010.
Total deposits were $17.5 billion at March 31, 2010, up 4.6% from $16.7
billion at December 31, 2009, and up 10.2% from $15.9 billion at March
31, 2009. During the first quarter of 2010, a combined decrease of
$411.7 million occurred in interest bearing and noninterest bearing
demand accounts, which was more than offset by a $716.2 million increase
in money market deposits, primarily from institutional depositors, and a
$600.2 million increase in brokered CDs. This compares to a $1.3 billion
combined increase in interest-bearing and noninterest demand account
balances and a $1.1 billion increase in money market deposits
year-over-year, which were offset by a $839.5 million decline in time
deposit (brokered and customer combined) balances.
NET INTEREST INCOME AND NET INTEREST
MARGIN
Net interest income for the first quarter ended March 31, 2010 was
$169.2 million compared to $178.4 million for the fourth quarter of 2009
and $189.3 million for the first quarter of 2009. The Company's net
interest margin was 3.35% for the first quarter 2010, down 24 basis
points from 3.59% for both the quarter ended December 31, 2009 and
quarter ended March 31, 2009. The net interest margin was impacted by
two factors during the quarter. First, an increase in the Company's
liquidity position resulted in a 19 basis point reduction in net
interest margin during the quarter. Second, increased levels of
nonaccrual loans for the quarter resulted in a 4 basis point reduction
in the net interest margin.
NONINTEREST INCOME AND EXPENSE
Noninterest income for the quarter ended March 31, 2010 was $98.0
million, up $13.3 million from $84.7 million for the fourth quarter of
2009, and up $9.0 million from $89.0 million for the first quarter of
2009. The increase from the quarter ended December 31, 2009 was
primarily due to a $23.6 million gain on the sale of $538.3 million of
investment securities during the first quarter of 2010, which was
partially offset by a $4.7 million decline in core fee-based revenues
and a $3.8 million decline in mortgage banking income. The increase over
the first quarter 2009 was primarily due to a $13.0 million higher gain
on sale of investments in the first quarter of 2010 compared to the
first quarter of 2009.
Core fee-based revenue remained relatively strong at $62.1 million for
the first quarter of 2010, compared to $66.8 million for the fourth
quarter of 2009 and $61.4 million for the first quarter of 2009. The
reduction in first quarter core fee-based revenue from the prior quarter
was due to lower levels of consumer fee-based deposit activity, as
overdraft and debit card fees declined a total of $4.2 million.
Mortgage loans originated for sale during the first quarter of 2010 were
$454.7 million compared to $671.3 million for the fourth quarter of
2009, and a record $1.080 billion for the first quarter of 2009. Net
mortgage banking income totaled $5.4 million for the first quarter of
2010, down $3.8 million from the fourth quarter of 2009, and up $1.1
million from the first quarter of 2009. First quarter 2010 net mortgage
banking income included a $0.9 million valuation recovery related to
mortgage servicing rights, compared to a valuation recovery of $0.7
million in the fourth quarter of 2009, and a $12.3 million valuation
charge in the first quarter of 2009.
Total noninterest expense for the first quarter of 2010 was $151.9
million, down $7.1 million from $159.0 million in the fourth quarter of
2009, and up $10.6 million from $141.3 million in the first quarter of
2009. The decrease over the fourth quarter of 2009 was primarily due to
a $0.4 million increase in the reserve for unfunded commitments in the
first quarter of 2010 compared to $10.5 million in the fourth quarter of
2009. Personnel expenses increased $6.7 million over the prior quarter
due to the resetting of payroll tax and incentive accruals, and $2.2
million increase in FDIC expense on higher deposit balances. These
increases were offset by decreases in several other expense categories,
most notably in legal and professional fees, which were down $3.6
million, and foreclosure/OREO costs, down $3.1 million from the prior
quarter. The $10.6 million increase over the first quarter of 2009 was
mainly due to $6.1 million higher FDIC expense, and $2.7 million higher
foreclosure/OREO costs.
CONFERENCE CALL
Senior management will host a conference call for investors and analysts
at 4 p.m. Central Time (CT) on Thursday, April 22, 2010. The toll-free
dial-in number for the live call is 877-941-4774. The number for
international callers is 480-629-9760. Participants should ask the
operator for the Associated Banc-Corp first quarter 2010 earnings call,
or for call ID number 4277482. A replay of the call will be available
starting at 7 p.m. CT on April 22, 2010 through 11 p.m. CT on May 22,
2010 by calling 800-406-7325 domestically or 303-590-3030
internationally. The call ID number, 4277482, is required to access the
replay.
ABOUT ASSOCIATED BANC-CORP
Associated Banc-Corp, headquartered in Green Bay, Wis., is a diversified
bank holding company with total assets of $23 billion. Associated has
290 banking offices serving approximately 160 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
as updated by Form 10-Q for the three months ended March 31, 2010.
Consolidated Balance Sheets (Unaudited)
Associated Banc-Corp
March 31, December 31, Mar10 vs March 31, Mar10 vs
Dec09 Mar09
(in thousands) 2010 2009 % Change 2009 % Change
Assets
Cash and due from $ 284,882 $ 770,816 (63.0 %) $ 378,645 (24.8 %)
banks
Interest-bearing
deposits in other 1,998,528 26,091 N/M 12,527 N/M
financial
institutions
Federal funds sold
and securities
purchased under 19,220 23,785 (19.2 %) 48,578 (60.4 %)
agreements to
resell
Investment
securities 5,267,372 5,835,533 (9.7 %) 5,314,617 (0.9 %)
available for sale,
at fair value
Federal Home Loan
Bank and Federal 184,811 181,316 1.9 % 181,205 2.0 %
Reserve Bank
stocks, at cost
Loans held for sale 274,003 81,238 237.3 % 355,077 (22.8 %)
Loans 13,299,321 14,128,625 (5.9 %) 15,917,952 (16.5 %)
Allowance for loan (575,573 ) (573,533 ) 0.4 % (313,228 ) 83.8 %
losses
Loans, net 12,723,748 13,555,092 (6.1 %) 15,604,724 (18.5 %)
Premises and 183,401 186,564 (1.7 %) 187,685 (2.3 %)
equipment, net
Goodwill 929,168 929,168 0.0 % 929,168 0.0 %
Other intangible 91,991 92,807 (0.9 %) 72,965 26.1 %
assets, net
Other assets 1,150,512 1,191,732 (3.5 %) 1,264,534 (9.0 %)
Total assets $ 23,107,636 $ 22,874,142 1.0 % $ 24,349,725 (5.1 %)
Liabilities and
Stockholders'
Equity
Noninterest-bearing $ 3,023,247 $ 3,274,973 (7.7 %) $ 2,818,088 7.3 %
deposits
Interest-bearing
deposits, excluding 13,731,421 13,311,672 3.2 % 12,132,610 13.2 %
Brokered CDs
Brokered CDs 742,119 141,968 422.7 % 922,491 (19.6 %)
Total deposits 17,496,787 16,728,613 4.6 % 15,873,189 10.2 %
Short-term 575,564 1,226,853 (53.1 %) 3,365,130 (82.9 %)
borrowings
Long-term funding 1,643,979 1,953,998 (15.9 %) 1,961,604 (16.2 %)
Accrued expenses
and other 210,797 226,070 (6.8 %) 252,633 (16.6 %)
liabilities
Total liabilities 19,927,127 20,135,534 (1.0 %) 21,452,556 (7.1 %)
Stockholders'
Equity
Preferred equity 511,910 511,107 0.2 % 508,766 0.6 %
Common stock 1,737 1,284 35.3 % 1,284 35.3 %
Surplus 1,564,536 1,082,335 44.6 % 1,075,598 45.5 %
Retained earnings 1,044,501 1,081,156 (3.4 %) 1,287,687 (18.9 %)
Accumulated other
comprehensive 59,744 63,432 (5.8 %) 23,931 149.7 %
income
Treasury stock (1,919 ) (706 ) N/M (97 ) N/M
Total stockholders' 3,180,509 2,738,608 16.1 % 2,897,169 9.8 %
equity
Total liabilities
and stockholders' $ 23,107,636 $ 22,874,142 1.0 % $ 24,349,725 (5.1 %)
equity
N/M = Not
meaningful.
Consolidated Statements of Income (Unaudited)
Associated Banc-Corp
For The Three Months Ended
March 31, Quarter
(in thousands, except per share amounts) 2010 2009 % Change
Interest Income
Interest and fees on loans $ 159,291 $ 202,025 (21.2 %)
Interest and dividends on investment
securities and deposits in other
financial institutions:
Taxable 47,918 50,903 (5.9 %)
Tax-exempt 8,709 9,494 (8.3 %)
Interest on federal funds sold and
securities purchased under agreements to 22 63 (65.1 %)
resell
Total interest income 215,940 262,485 (17.7 %)
Interest Expense
Interest on deposits 28,745 46,599 (38.3 %)
Interest on short-term borrowings 2,026 5,154 (60.7 %)
Interest on long-term funding 15,947 21,454 (25.7 %)
Total interest expense 46,718 73,207 (36.2 %)
Net Interest Income 169,222 189,278 (10.6 %)
Provision for loan losses 165,345 105,424 56.8 %
Net interest income after provision for 3,877 83,854 (95.4 %)
loan losses
Noninterest Income
Trust service fees 9,356 8,477 10.4 %
Service charges on deposit accounts 26,059 27,205 (4.2 %)
Card-based and other nondeposit fees 10,820 10,174 6.3 %
Retail commissions 15,817 15,512 2.0 %
Mortgage banking, net 5,407 4,267 26.7 %
Capital market fees, net 130 2,626 (95.0 %)
Bank owned life insurance income 3,256 5,772 (43.6 %)
Asset sale losses, net (1,641 ) (1,107 ) 48.2 %
Investment securities gains, net 23,581 10,596 122.5 %
Other 5,253 5,455 (3.7 %)
Total noninterest income 98,038 88,977 10.2 %
Noninterest Expense
Personnel expense 79,355 77,098 2.9 %
Occupancy 13,175 12,881 2.3 %
Equipment 4,385 4,589 (4.4 %)
Data processing 7,299 7,597 (3.9 %)
Business development and advertising 4,445 4,737 (6.2 %)
Other intangible amortization 1,253 1,386 (9.6 %)
Legal and professional fees 2,795 4,241 (34.1 %)
Foreclosure/OREO expense 7,729 5,013 54.2 %
FDIC expense 11,829 5,775 104.8 %
Other 19,594 17,947 9.2 %
Total noninterest expense 151,859 141,264 7.5 %
Income (loss) before income taxes (49,944 ) 31,567 (258.2 %)
Income tax benefit (23,555 ) (11,158 ) 111.1 %
Net income (loss) (26,389 ) 42,725 (161.8 %)
Preferred stock dividends and discount 7,365 7,321 0.6 %
Net income (loss) available to common $ (33,754 ) $ 35,404 (195.3 %)
equity
Earnings (Loss) Per Common Share:
Basic $ (0.20 ) $ 0.28 (171.4 %)
Diluted $ (0.20 ) $ 0.28 (171.4 %)
Average Common Shares Outstanding:
Basic 165,842 127,839 29.7 %
Diluted 165,842 127,845 29.7 %
Consolidated Statements of Income (Unaudited) - Quarterly Trend
Associated Banc-Corp
(in thousands,
except per share 1Q10 4Q09 3Q09 2Q09 1Q09
amounts)
Interest Income
Interest and $ 159,291 $ 172,624 $ 183,264 $ 194,352 $ 202,025
fees on loans
Interest and
dividends on
investment
securities and
deposits in
other financial
institutions:
Taxable 47,918 48,567 46,873 46,688 50,903
Tax-exempt 8,709 8,987 8,498 8,819 9,494
Interest on
federal funds
sold and
securities 22 32 16 51 63
purchased under
agreements to
resell
Total interest 215,940 230,210 238,651 249,910 262,485
income
Interest Expense
Interest on 28,745 31,471 37,811 44,993 46,599
deposits
Interest on
short-term 2,026 3,062 2,895 5,088 5,154
borrowings
Interest on
long-term 15,947 17,324 18,709 20,691 21,454
funding
Total interest 46,718 51,857 59,415 70,772 73,207
expense
Net Interest 169,222 178,353 179,236 179,138 189,278
Income
Provision for 165,345 394,789 95,410 155,022 105,424
loan losses
Net interest
income (loss) 3,877 (216,436 ) 83,826 24,116 83,854
after provision
for loan losses
Noninterest
Income
Trust service 9,356 9,906 9,057 8,569 8,477
fees
Service charges
on deposit 26,059 29,213 30,829 29,671 27,205
accounts
Card-based and
other nondeposit 10,820 12,359 11,586 11,858 10,174
fees
Retail 15,817 15,296 15,041 14,829 15,512
commissions
Total core
fee-based 62,052 66,774 66,513 64,927 61,368
revenue
Mortgage 5,407 9,227 (909 ) 28,297 4,267
banking, net
Capital market 130 291 226 2,393 2,626
fees, net
Bank owned life 3,256 3,310 3,789 3,161 5,772
insurance income
Asset sale (1,641 ) (1,551 ) (126 ) (1,287 ) (1,107 )
losses, net
Investment
securities gains 23,581 (395 ) (42 ) (1,385 ) 10,596
(losses), net
Other 5,253 7,078 5,858 5,835 5,455
Total
noninterest 98,038 84,734 75,309 101,941 88,977
income
Noninterest
Expense
Personnel 79,355 72,620 73,501 81,171 77,098
expense
Occupancy 13,175 12,170 11,949 12,341 12,881
Equipment 4,385 4,551 4,575 4,670 4,589
Data processing 7,299 7,728 7,442 8,126 7,597
Business
development and 4,445 4,443 3,910 4,943 4,737
advertising
Other intangible 1,253 1,386 1,386 1,385 1,386
amortization
Legal and
professional 2,795 6,386 3,349 5,586 4,241
fees
Foreclosure/OREO 7,729 10,852 8,688 13,576 5,013
expense
FDIC expense 11,829 9,618 8,451 18,090 5,775
Other 19,594 29,260 17,860 20,143 17,947
Total
noninterest 151,859 159,014 141,111 170,031 141,264
expense
Income (loss)
before income (49,944 ) (290,716 ) 18,024 (43,974 ) 31,567
taxes
Income tax
expense (23,555 ) (117,479 ) 2,030 (26,633 ) (11,158 )
(benefit)
Net income (26,389 ) (173,237 ) 15,994 (17,341 ) 42,725
(loss)
Preferred stock
dividends and 7,365 7,354 7,342 7,331 7,321
discount
Net income
(loss) available $ (33,754 ) $ (180,591 ) $ 8,652 $ (24,672 ) $ 35,404
to common equity
Earnings (Loss)
Per Common
Share:
Basic $ (0.20 ) $ (1.41 ) $ 0.07 $ (0.19 ) $ 0.28
Diluted $ (0.20 ) $ (1.41 ) $ 0.07 $ (0.19 ) $ 0.28
Average Common
Shares
Outstanding:
Basic 165,842 127,869 127,863 127,861 127,839
Diluted 165,842 127,869 127,863 127,861 127,845
Selected Quarterly Information
Associated Banc-Corp
(in thousands,
except per share
and full time 1st Qtr 2010 4th Qtr 2009 3rd Qtr 2009 2nd Qtr 2009 1st Qtr 2009
equivalent
employee data)
Summary of
Operations
Net interest $ 169,222 $ 178,353 $ 179,236 $ 179,138 $ 189,278
income
Provision for 165,345 394,789 95,410 155,022 105,424
loan losses
Asset sale (1,641 ) (1,551 ) (126 ) (1,287 ) (1,107 )
losses, net
Investment
securities gains 23,581 (395 ) (42 ) (1,385 ) 10,596
(losses), net
Noninterest
income
(excluding 76,098 86,680 75,477 104,613 79,488
securities &
asset gains)
Noninterest 151,859 159,014 141,111 170,031 141,264
expense
Income (loss)
before income (49,944 ) (290,716 ) 18,024 (43,974 ) 31,567
taxes
Income tax
expense (23,555 ) (117,479 ) 2,030 (26,633 ) (11,158 )
(benefit)
Net income (26,389 ) (173,237 ) 15,994 (17,341 ) 42,725
(loss)
Net income
(loss) available (33,754 ) (180,591 ) 8,652 (24,672 ) 35,404
to common equity
Taxable
equivalent 6,034 6,188 5,938 6,150 6,544
adjustment
Per Common Share
Data
Net income
(loss):
Basic $ (0.20 ) $ (1.41 ) $ 0.07 $ (0.19 ) $ 0.28
Diluted (0.20 ) (1.41 ) 0.07 (0.19 ) 0.28
Dividends 0.01 0.05 0.05 0.05 0.32
Market Value:
High $ 14.54 $ 13.00 $ 12.67 $ 19.00 $ 21.39
Low 11.48 10.37 9.21 12.50 10.60
Close 13.76 11.01 11.42 12.50 15.45
Book value 15.44 17.42 18.88 18.49 18.68
Tangible book 9.90 9.93 11.38 10.97 11.15
value
Performance
Ratios
(annualized)
Earning assets 4.24 % 4.59 % 4.62 % 4.70 % 4.94 %
yield
Interest-bearing 1.11 1.24 1.36 1.57 1.61
liabilities rate
Net interest 3.35 3.59 3.50 3.40 3.59
margin
Return on (0.46 ) (3.02 ) 0.27 (0.29 ) 0.71
average assets
Return on (3.40 ) (23.72 ) 2.19 (2.40 ) 5.98
average equity
Return on
average tangible (8.17 ) (50.16 ) 2.39 (6.88 ) 10.05
common equity
(1)
Efficiency ratio 60.42 58.63 54.14 58.65 51.31
(2)
Effective tax (47.16 ) (40.41 ) 11.26 (60.57 ) (35.35 )
rate (benefit)
Dividend payout N/M N/M 71.43 N/M 114.29
ratio (3)
Average Balances
Assets $ 23,151,767 $ 22,773,576 $ 23,362,954 $ 24,064,567 $ 24,255,783
Earning assets 21,075,408 20,499,225 21,063,016 21,847,267 21,959,077
Interest-bearing 16,970,884 16,663,947 17,412,341 18,125,389 18,457,879
liabilities
Loans 13,924,978 14,605,107 15,248,895 16,122,063 16,430,347
Deposits 17,143,924 16,407,034 16,264,181 16,100,686 15,045,976
Wholesale 2,837,001 3,332,642 4,067,830 4,876,970 6,098,266
funding
Common
stockholders' 2,633,680 2,387,534 2,394,410 2,400,664 2,391,325
equity
Stockholders' 3,145,074 2,898,132 2,904,210 2,909,700 2,899,603
equity
Common
stockholders' 11.38 % 10.48 % 10.25 % 9.98 % 9.86 %
equity/assets
Stockholders' 13.58 % 12.73 % 12.43 % 12.09 % 11.95 %
equity / assets
At Period End
Assets $ 23,107,636 $ 22,874,142 $ 22,881,527 $ 24,013,567 $ 24,349,725
Loans 13,299,321 14,128,625 14,765,597 15,310,107 15,917,952
Allowance for 575,573 573,533 412,530 407,167 313,228
loan losses
Goodwill 929,168 929,168 929,168 929,168 929,168
Mortgage
servicing rights 64,190 63,753 61,066 59,762 39,754
at fair value,
net
Other intangible 27,801 29,054 30,440 31,826 33,211
assets
Deposits 17,496,787 16,728,613 16,446,109 16,320,391 15,873,189
Wholesale 2,219,543 3,180,851 3,279,100 4,474,542 5,326,734
funding
Stockholders' 3,180,509 2,738,608 2,924,659 2,873,768 2,897,169
equity
Stockholders' 13.76 % 11.97 % 12.78 % 11.97 % 11.90 %
equity / assets
Tangible common
equity / 7.73 % 5.79 % 6.64 % 6.09 % 6.10 %
tangible assets
(4)
Tangible
equity/tangible 10.04 % 8.12 % 8.96 % 8.30 % 8.27 %
assets (5)
Tier 1
risk-based 16.40 % 12.52 % 13.14 % 12.45 % 11.93 %
capital ratio
Tier 1 leverage 10.57 % 8.76 % 9.35 % 9.06 % 9.06 %
ratio
Total risk-based 18.15 % 14.24 % 14.83 % 14.35 % 13.79 %
capital ratio
Shares
outstanding, end 172,880 127,876 127,864 127,861 127,860
of period
Selected trend
information
Average full
time equivalent 4,777 4,802 5,004 5,116 5,143
employees
Trust assets
under $ 5,500,000 $ 5,300,000 $ 5,200,000 $ 5,000,000 $ 4,800,000
management, at
market value
Mortgage loans
originated for 454,746 671,305 638,229 1,335,175 1,079,732
sale during
period
Mortgage
portfolio 7,751,000 7,667,000 7,473,000 6,904,000 6,582,000
serviced for
others
Mortgage
servicing
rights, net / 0.83 % 0.83 % 0.82 % 0.87 % 0.60 %
Portfolio
serviced for
others
N/M = Not
meaningful.
(1) Return on average tangible common equity = Net income available to common equity divided by
average common equity excluding average goodwill and other intangible assets. This is a non-GAAP
financial measure.
(2) Efficiency ratio = Noninterest expense divided by sum of taxable equivalent net interest
income plus noninterest income, excluding investment securities gains, net, and asset sales
gains, net.
This is a non-GAAP financial measure.
(3) Ratio is based upon basic earnings per common share.
(4) Tangible common equity to tangible assets = Common stockholders' equity excluding goodwill
and other intangible assets divided by assets excluding goodwill and other intangible assets.
This is a non-GAAP financial measure.
(5) Tangible equity to tangible assets = Stockholders' equity excluding goodwill and other
intangible assets divided by assets excluding goodwill and other intangible assets.
This is a non-GAAP financial measure.
Selected
Asset Quality
Information
Associated
Banc-Corp
Mar10 vs Mar10 vs
Dec09 Mar09
(in Mar 31, 2010 Dec 31, 2009 % Change Sept 30, 2009 Jun 30, 2009 Mar 31, 2009 % Change
thousands)
Allowance for
Loan Losses
Beginning $ 573,533 $ 412,530 39.0 % $ 407,167 $ 313,228 $ 265,378 116.1 %
balance
Provision for 165,345 394,789 (58.1 %) 95,410 155,022 105,424 56.8 %
loan losses
Charge offs (174,627 ) (236,367 ) (26.1 %) (92,340 ) (63,325 ) (60,174 ) 190.2 %
Recoveries 11,322 2,581 338.7 % 2,293 2,242 2,600 335.5 %
Net charge (163,305 ) (233,786 ) (30.1 %) (90,047 ) (61,083 ) (57,574 ) 183.6 %
offs
Ending $ 575,573 $ 573,533 0.4 % $ 412,530 $ 407,167 $ 313,228 83.8 %
balance
Net Charge Mar10 vs Mar10 vs
Offs Dec09 Mar09
Mar 31, 2010 Dec 31, 2009 % Change Sept 30, 2009 Jun 30, 2009 Mar 31, 2009 % Change
Commercial,
financial & $ 63,699 $ 42,940 48.3 % $ 57,480 $ 19,367 $ 35,890 77.5 %
agricultural
Commercial 21,328 40,550 (47.4 %) 4,449 8,382 2,858 646.3 %
real estate
Real estate - 60,186 124,659 (51.7 %) 12,837 16,249 3,452 N/M
construction
Lease 774 261 196.6 % 319 988 2 N/M
financing
Total 145,987 208,410 (30.0 %) 75,085 44,986 42,202 245.9 %
commercial
Home equity 11,769 16,503 (28.7 %) 11,202 10,343 10,742 9.6 %
Installment 2,222 2,099 5.9 % 2,433 2,321 1,986 11.9 %
Total retail 13,991 18,602 (24.8 %) 13,635 12,664 12,728 9.9 %
Residential 3,327 6,774 (50.9 %) 1,327 3,433 2,644 25.8 %
mortgage
Total net $ 163,305 $ 233,786 (30.1 %) $ 90,047 $ 61,083 $ 57,574 183.6 %
charge offs
Net Charge
Offs to
Average Loans
Mar 31, 2010 Dec 31, 2009 Sept 30, 2009 Jun 30, 2009 Mar 31, 2009
Commercial,
financial & 7.95 % 4.90 % 6.11 % 1.91 % 3.41 %
agricultural
Commercial 2.30 % 4.12 % 0.45 % 0.92 % 0.32 %
real estate
Real estate - 17.80 % 31.85 % 2.85 % 3.07 % 0.62 %
construction
Lease 3.41 % 1.05 % 1.19 % 3.49 % 0.01 %
financing
Total 6.98 % 9.15 % 3.13 % 1.82 % 1.67 %
commercial
Home equity 1.90 % 2.54 % 1.70 % 1.52 % 1.53 %
Installment 0.98 % 0.94 % 1.13 % 1.10 % 0.94 %
Total retail 1.66 % 2.13 % 1.56 % 1.42 % 1.39 %
Residential 0.67 % 1.27 % 0.23 % 0.53 % 0.43 %
mortgage
Total net 4.76 % 6.35 % 2.34 % 1.52 % 1.42 %
charge offs
Credit Mar10 vs Mar10 vs
Quality Dec09 Mar09
Mar 31, 2010 Dec 31, 2009 % Change Sept 30, 2009 Jun 30, 2009 Mar 31, 2009 % Change
Nonaccrual $ 1,180,185 $ 1,077,799 9.5 % $ 845,320 $ 700,514 $ 433,246 172.4 %
loans
Loans 90 or
more days
past due and 6,353 24,981 (74.6 %) 23,174 19,785 16,002 (60.3 %)
still
accruing
Restructured 23,420 19,037 23.0 % 17,256 13,089 2,927 N/M
loans
Total
nonperforming 1,209,958 1,121,817 7.9 % 885,750 733,388 452,175 167.6 %
loans
Other real
estate owned 62,220 68,441 (9.1 %) 60,010 51,633 54,883 13.4 %
(OREO)
Total
nonperforming $ 1,272,178 $ 1,190,258 6.9 % $ 945,760 $ 785,021 $ 507,058 150.9 %
assets
Provision for 165,345 394,789 (58.1 %) 95,410 155,022 105,424 56.8 %
loan losses
Net charge 163,305 233,786 (30.1 %) 90,047 61,083 57,574 183.6 %
offs
Allowance for
loan losses / 4.33 % 4.06 % 2.79 % 2.66 % 1.97 %
loans
Allowance for
loan losses / 47.57 51.13 46.57 55.52 69.27
nonperforming
loans
Nonperforming
loans / total 9.10 7.94 6.00 4.79 2.84
loans
Nonperforming
assets / 9.52 8.38 6.38 5.11 3.17
total loans
plus OREO
Nonperforming
assets / 5.51 5.20 4.13 3.27 2.08
total assets
Net charge
offs / 4.76 6.35 2.34 1.52 1.42
average loans
(annualized)
Year-to-date
net charge 4.76 2.84 1.75 1.47 1.42
offs /
average loans
Nonperforming
loans by
type:
Commercial,
financial & $ 180,182 $ 234,418 (23.1 %) $ 209,843 $ 187,943 $ 102,257 76.2 %
agricultural
Commercial 356,853 307,478 16.1 % 213,736 165,929 100,838 253.9 %
real estate
Real estate - 487,552 413,360 17.9 % 301,844 264,402 152,008 220.7 %
construction
Lease 29,466 19,506 51.1 % 18,814 1,929 1,707 N/M
financing
Total 1,054,053 974,762 8.1 % 744,237 620,203 356,810 195.4 %
commercial
Home equity 47,231 44,257 6.7 % 45,905 38,474 35,224 34.1 %
Installment 7,059 7,577 (6.8 %) 7,387 7,545 6,755 4.5 %
Total retail 54,290 51,834 4.7 % 53,292 46,019 41,979 29.3 %
Residential 101,615 95,221 6.7 % 88,221 67,166 53,386 90.3 %
mortgage
Total
nonperforming $ 1,209,958 $ 1,121,817 7.9 % $ 885,750 $ 733,388 $ 452,175 167.6 %
loans
Loans past
due 30-89 $ 165,280 $ 240,755 (31.3 %) $ 175,492 $ 209,323 $ 245,854 (32.8 %)
days
Potential Mar10 vs Mar10 vs
Problem Loans Dec09 Mar09
Mar 31, 2010 Dec 31, 2009 % Change Sept 30, 2009 Jun 30, 2009 Mar 31, 2009 % Change
Commercial,
financial & $ 505,903 $ 563,836 (10.3 %) $ 481,034 $ 428,550 $ 365,069 38.6 %
agricultural
Commercial 565,969 598,137 (5.4 %) 588,013 462,103 280,479 101.8 %
real estate
Real estate - 262,572 391,105 (32.9 %) 462,029 481,467 347,968 (24.5 %)
construction
Lease 5,158 8,367 (38.4 %) 9,572 24,934 2,938 75.6 %
financing
Total 1,339,602 1,561,445 (14.2 %) 1,540,648 1,397,054 996,454 34.4 %
commercial
Home equity 7,446 13,400 (44.4 %) 15,933 13,626 5,935 25.5 %
Installment 1,103 1,524 (27.6 %) 1,908 1,043 1,132 (2.6 %)
Total retail 8,549 14,924 (42.7 %) 17,841 14,669 7,067 21.0 %
Residential 19,591 19,150 2.3 % 15,414 14,448 13,030 50.4 %
mortgage
Total
potential $ 1,367,742 $ 1,595,519 (14.3 %) $ 1,573,903 $ 1,426,171 $ 1,016,551 34.5 %
problem loans
N/M - Not
meaningful.
Net Interest Income
Analysis - Taxable
Equivalent Basis
Associated Three months ended March 31, Three months ended March 31,
Banc-Corp 2010 2009
Average Interest Average Average Interest Average
(in thousands) Balance Income / Yield / Balance Income / Yield /
Expense Rate Expense Rate
Earning assets:
Loans: (1) (2) (3)
Commercial $ 8,478,259 $ 89,895 4.29 % $ 10,227,260 $ 116,664 4.62 %
Residential 2,019,855 25,471 5.06 2,499,853 33,868 5.44
mortgage
Retail 3,426,864 44,733 5.27 3,703,234 52,340 5.71
Total loans 13,924,978 160,099 4.65 16,430,347 202,872 4.99
Investments and 7,150,430 61,875 3.46 5,528,730 66,157 4.79
other
Total earning 21,075,408 221,974 4.24 21,959,077 269,029 4.94
assets
Other assets, net 2,076,359 2,296,706
Total assets $ 23,151,767 $ 24,255,783
Interest-bearing
liabilities:
Savings deposits $ 858,440 $ 250 0.12 % $ 857,111 $ 322 0.15 %
Interest-bearing 2,920,510 1,779 0.25 1,699,989 829 0.20
demand deposits
Money market 6,242,934 8,221 0.53 4,945,174 11,566 0.95
deposits
Time deposits,
excluding Brokered 3,451,638 17,453 2.05 3,993,154 30,056 3.05
CDs
Total
interest-bearing 13,473,522 27,703 0.83 11,495,428 42,773 1.51
deposits, excluding
Brokered CDs
Brokered CDs 660,361 1,042 0.64 864,185 3,826 1.80
Total
interest-bearing 14,133,883 28,745 0.82 12,359,613 46,599 1.53
deposits
Wholesale funding 2,837,001 17,973 2.55 6,098,266 26,608 1.76
Total
interest-bearing 16,970,884 46,718 1.11 18,457,879 73,207 1.61
liabilities
Noninterest-bearing 3,010,041 2,686,363
demand deposits
Other liabilities 25,768 211,938
Stockholders' 3,145,074 2,899,603
equity
Total liabilities
and stockholders' $ 23,151,767 $ 24,255,783
equity
Net interest income $ 175,256 3.13 % $ 195,822 3.33 %
and rate spread (1)
Net interest margin 3.35 % 3.59 %
(1)
Taxable equivalent $ 6,034 $ 6,544
adjustment
Net Interest Income
Analysis - Taxable
Equivalent Basis
Associated Three months ended March 31, Three months ended December 31,
Banc-Corp 2010 2009
Average Interest Average Average Interest Average
(in thousands) Balance Income / Yield / Balance Income / Yield /
Expense Rate Expense Rate
Earning assets:
Loans: (1) (2) (3)
Commercial $ 8,478,259 $ 89,895 4.29 % $ 9,037,436 $ 100,124 4.40 %
Residential 2,019,855 25,471 5.06 2,108,755 27,316 5.17
mortgage
Retail 3,426,864 44,733 5.27 3,458,916 45,980 5.29
Total loans 13,924,978 160,099 4.65 14,605,107 173,420 4.72
Investments and 7,150,430 61,875 3.46 5,894,118 62,978 4.27
other
Total earning 21,075,408 221,974 4.24 20,499,225 236,398 4.59
assets
Other assets, net 2,076,359 2,274,351
Total assets $ 23,151,767 $ 22,773,576
Interest-bearing
liabilities:
Savings deposits $ 858,440 $ 250 0.12 % $ 869,996 $ 344 0.16 %
Interest-bearing 2,920,510 1,779 0.25 2,605,242 1,630 0.25
demand deposits
Money market 6,242,934 8,221 0.53 5,658,251 8,463 0.59
deposits
Time deposits,
excluding Brokered 3,451,638 17,453 2.05 3,671,087 20,215 2.18
CDs
Total
interest-bearing 13,473,522 27,703 0.83 12,804,576 30,652 0.95
deposits, excluding
Brokered CDs
Brokered CDs 660,361 1,042 0.64 526,729 819 0.62
Total
interest-bearing 14,133,883 28,745 0.82 13,331,305 31,471 0.94
deposits
Wholesale funding 2,837,001 17,973 2.55 3,332,642 20,386 2.43
Total
interest-bearing 16,970,884 46,718 1.11 16,663,947 51,857 1.24
liabilities
Noninterest-bearing 3,010,041 3,075,729
demand deposits
Other liabilities 25,768 135,768
Stockholders' 3,145,074 2,898,132
equity
Total liabilities
and stockholders' $ 23,151,767 $ 22,773,576
equity
Net interest income $ 175,256 3.13 % $ 184,541 3.35 %
and rate spread (1)
Net interest margin 3.35 % 3.59 %
(1)
Taxable equivalent $ 6,034 $ 6,188
adjustment
(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.
Financial
Summary and
Comparison
Associated
Banc-Corp
Period End Loan Mar10 vs Mar10 vs
Composition Dec09 Mar09
Mar 31, 2010 Dec 31, 2009 % Change Sept 30, Jun 30, 2009 Mar 31, 2009 % Change
2009
Commercial,
financial & $ 3,099,265 $ 3,450,632 (10.2 %) $ 3,613,457 $ 3,904,925 $ 4,160,274 (25.5 %)
agricultural
Commercial real 3,699,139 3,817,066 (3.1 %) 3,902,340 3,737,749 3,575,301 3.5 %
estate
Real estate - 1,281,868 1,397,493 (8.3 %) 1,611,857 1,963,919 2,228,090 (42.5 %)
construction
Lease financing 87,568 95,851 (8.6 %) 102,130 110,262 116,100 (24.6 %)
Total commercial 8,167,840 8,761,042 (6.8 %) 9,229,784 9,716,855 10,079,765 (19.0 %)
Home equity 2,468,587 2,546,167 (3.0 %) 2,591,262 2,656,747 2,784,248 (11.3 %)
Installment 759,025 873,568 (13.1 %) 885,970 844,065 853,214 (11.0 %)
Total retail 3,227,612 3,419,735 (5.6 %) 3,477,232 3,500,812 3,637,462 (11.3 %)
Residential 1,903,869 1,947,848 (2.3 %) 2,058,581 2,092,440 2,200,725 (13.5 %)
mortgage
Total loans $ 13,299,321 $ 14,128,625 (5.9 %) $ 14,765,597 $ 15,310,107 $ 15,917,952 (16.5 %)
Period End Mar10 vs Mar10 vs
Deposit Dec09 Mar09
Composition
Mar 31, 2010 Dec 31, 2009 % Change Sept 30, Jun 30, 2009 Mar 31, 2009 % Change
2009
Demand $ 3,023,247 $ 3,274,973 (7.7 %) $ 2,984,486 $ 2,846,570 $ 2,818,088 7.3 %
Savings 897,740 845,509 6.2 % 871,539 898,527 895,310 0.3 %
Interest-bearing 2,939,390 3,099,358 (5.2 %) 2,395,429 2,242,800 1,796,724 63.6 %
demand
Money market 6,522,901 5,806,661 12.3 % 5,724,418 5,410,498 5,410,095 20.6 %
Brokered CDs 742,119 141,968 422.7 % 653,090 930,582 922,491 (19.6 %)
Other time 3,371,390 3,560,144 (5.3 %) 3,817,147 3,991,414 4,030,481 (16.4 %)
deposits
Total deposits $ 17,496,787 $ 16,728,613 4.6 % $ 16,446,109 $ 16,320,391 $ 15,873,189 10.2 %
Network
transaction
deposits
included above $ 2,641,648 $ 1,926,539 37.1 % $ 1,767,271 $ 1,605,722 $ 1,759,656 50.1 %
in
interest-bearing
demand and money
market
Customer repo $ 188,314 $ 195,858 (3.9 %) $ 242,575 $ 269,809 $ 333,706 (43.6 %)
sweeps (a)
(a) Included within short-term borrowings.
Source: Associated Banc-Corp
Contact: Associated Banc-Corp
Investors:
Joseph B. Selner, Chief Financial Officer
920-491-7120
Media:
Janet L. Ford, SVP Public Relations Director
414-278-1890