Associated Banc-Corp (NASDAQ: ASBC):
- Net income of $37.8 million, or $0.30 per share
- Provision for loan losses of $55 million and net charge offs of $38 million, consistent with second quarter levels
- Allowance for loan losses to loans ratio increased to 1.51% from 1.42% at June 30
- Other-than-temporary valuation charges of $13.6 million ($0.07 per share after tax)
- Tangible capital ratio remains at 6.50%
Associated Banc-Corp (NASDAQ: ASBC) reported net income of $37.8 million, or $0.30 per share, for the third quarter of 2008. Comparatively, net income was $47.4 million ($0.37 per share) for second quarter 2008 and $71.7 million ($0.56 per share) for the third quarter of 2007. Book value per share rose to $18.52 at Sept. 30, 2008, up 3 percent over a year ago. The tangible capital ratio of 6.50 percent for Sept. 30 was unchanged from June 30.
Net income was $151.6 million, or $1.19 per share, for the nine months ending Sept. 30, 2008, compared to net income of $221.0 million, or $1.72 per share, for the comparable period of 2007.
Quarterly earnings were impacted by other-than-temporary valuation losses of $13.6 million, or $0.07 per share after tax, related predominantly to preferred stock holdings of Freddie Mac and Fannie Mae.
Provision for loan losses was $55 million and net charge offs were $38 million, compared to $59 million and $37 million, respectively, for second quarter 2008. Nonperforming loans increased $16 million during the quarter to $305 million. On a year-to-date basis, the 2008 provision was $137 million, and net charge offs were $91 million (representing 76 basis points of average loans). Comparatively, for the first nine months of 2007, the provision for loan losses was $19 million, and net charge offs were $25 million (or 22 basis points of average loans). The allowance for loan losses to total loans ratio increased to 1.51 percent at Sept. 30, 2008, compared to 1.42 percent at June 30, and 1.29 percent at year-end 2007.
Net interest income was $167 million for the third quarter, $6 million lower than the second quarter. The net interest margin was 3.48 percent for third quarter, down from 3.65 percent in second quarter. Associated anticipates that the fourth quarter margin will benefit from the current environment.
On average, loans were $16.2 billion for the third quarter of 2008, up $0.1 billion or 2 percent annualized over the second quarter of 2008, led by home equity loan growth (up $0.2 billion). On a period end basis, loans were $16.3 billion, up $0.1 billion (3 percent annualized) since June 30.
Deposits, on average, were $13.7 billion for the third quarter of 2008, up $0.2 billion compared to second quarter, primarily attributable to higher network transaction deposits and non-brokered time deposits. At Sept. 30, deposits were $14.2 billion, up $0.9 billion over June 30.
Core fee-based revenues were $71 million, up $3 million or 4 percent over the second quarter 2008, and up $6 million or 9 percent over the third quarter a year ago, led predominantly by increased service charges on deposit accounts for both comparable periods.
Total noninterest expense was $137 million for third quarter 2008, up $0.8 million (less than 1 percent) over second quarter, and up $2.6 million (2 percent) over third quarter 2007. The efficiency ratio was 52.18 percent and 51.89 percent, respectively, for the three and nine months ended Sept. 30, 2008.
The tangible capital ratio remained stable at 6.50 percent at Sept. 30. In its opening offering week in mid-September, Associated successfully sold $25.8 million of subordinated debt to retail investors through co-agents and a national broker dealer network.
Associated will host a conference call for investors and analysts at 3 p.m. Central Time (CT) today, October 16, 2008. The toll-free dial-in number for the live call is 800-762-8779. The number for international callers is 480-248-5081. Participants should ask the operator for the Associated Banc-Corp third quarter 2008 earnings call, or for call ID number 3927618. A replay of the call will be available starting at 6 p.m. CT Oct. 16, 2008, through Nov. 6, 2008, by calling 800-406-7325 (toll-free) domestically or 303-590-3030 internationally. The call ID number, 3927618, is required to access the replay.
Associated Banc-Corp, headquartered in Green Bay, Wis., is a diversified bank holding company with total assets of $22 billion. Associated has approximately 300 banking offices serving 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.
Six pages of tables follow.
| Consolidated Balance Sheets (Unaudited) | ||||||||||||||
| Associated Banc-Corp | ||||||||||||||
| September 30, | December 31, | Sep08 vs Dec07 | September 30, | Sep08 vs Sep07 | ||||||||||
| (in thousands) | 2008 | 2007 | % Change | 2007 | % Change | |||||||||
| Assets | ||||||||||||||
| Cash and due from banks | $ 623,132 | $ 553,031 | 12.7 | % | $ 358,662 | 73.7 | % | |||||||
Interest-bearing deposits in other financial institutions | 12,288 | 11,671 | 5.3 | % | 10,809 | 13.7 | % | |||||||
Federal funds sold and securities purchased under agreements to resell | 60,655 | 22,447 | 170.2 | % | 11,441 | 430.2 | % | |||||||
| Investment securities available for sale, at fair value | 3,616,817 | 3,543,019 | 2.1 | % | 3,521,307 | 2.7 | % | |||||||
| Loans held for sale | 40,912 | 94,441 | (56.7 | %) | 62,632 | (34.7 | %) | |||||||
| Loans | 16,272,487 | 15,516,252 | 4.9 | % | 15,174,758 | 7.2 | % | |||||||
| Allowance for loan losses | (246,189 | ) | (200,570 | ) | 22.7 | % | (200,560 | ) | 22.8 | % | ||||
| Loans, net | 16,026,298 | 15,315,682 | 4.6 | % | 14,974,198 | 7.0 | % | |||||||
| Premises and equipment, net | 188,817 | 197,446 | (4.4 | %) | 197,114 | (4.2 | %) | |||||||
| Goodwill | 929,168 | 929,168 | 0.0 | % | 929,168 | 0.0 | % | |||||||
| Other intangible assets, net | 90,138 | 92,220 | (2.3 | %) | 96,427 | (6.5 | %) | |||||||
| Other assets | 899,169 | 832,958 | 7.9 | % | 778,249 | 15.5 | % | |||||||
| Total assets | $ 22,487,394 | $ 21,592,083 | 4.1 | % | $ 20,940,007 | 7.4 | % | |||||||
| Liabilities and Stockholders' Equity | ||||||||||||||
| Noninterest-bearing deposits | $ 2,545,779 | $ 2,661,078 | (4.3 | %) | $ 2,407,026 | 5.8 | % | |||||||
| Interest-bearing deposits, excluding Brokered CDs | 11,120,281 | 10,903,198 | 2.0 | % | 10,950,921 | 1.5 | % | |||||||
| Brokered CDs | 579,607 | 409,637 | 41.5 | % | 800,422 | (27.6 | %) | |||||||
| Total deposits | 14,245,667 | 13,973,913 | 1.9 | % | 14,158,369 | 0.6 | % | |||||||
| Short-term borrowings | 4,106,015 | 3,226,787 | 27.2 | % | 2,349,525 | 74.8 | % | |||||||
| Long-term funding | 1,561,722 | 1,864,771 | (16.3 | %) | 1,933,871 | (19.2 | %) | |||||||
| Accrued expenses and other liabilities | 209,743 | 196,907 | 6.5 | % | 207,060 | 1.3 | % | |||||||
| Total liabilities | 20,123,147 | 19,262,378 | 4.5 | % | 18,648,825 | 7.9 | % | |||||||
| Stockholders' Equity | ||||||||||||||
| Preferred stock | - | - | - | |||||||||||
| Common stock | 1,280 | 1,278 | 0.2 | % | 1,278 | 0.2 | % | |||||||
| Surplus | 1,051,976 | 1,040,694 | 1.1 | % | 1,039,027 | 1.2 | % | |||||||
| Retained earnings | 1,321,323 | 1,305,136 | 1.2 | % | 1,281,352 | 3.1 | % | |||||||
| Accumulated other comprehensive loss | (10,332 | ) | (2,498 | ) | 313.6 | % | (11,979 | ) | (13.7 | %) | ||||
| Treasury stock, at cost | - | (14,905 | ) | (100.0 | %) | (18,496 | ) | (100.0 | %) | |||||
| Total stockholders' equity | 2,364,247 | 2,329,705 | 1.5 | % | 2,291,182 | 3.2 | % | |||||||
| Total liabilities and stockholders' equity | $ 22,487,394 | $ 21,592,083 | 4.1 | % | $ 20,940,007 | 7.4 | % | |||||||
| Consolidated Statements of Income (Unaudited) | ||||||||||||||||
| Associated Banc-Corp | ||||||||||||||||
For The Three Months Ended | For The Nine Months Ended | |||||||||||||||
| September 30, | Quarter | September 30, | Year-to-Date | |||||||||||||
(in thousands, except per share amounts) | 2008 | 2007 | % Change | 2008 | 2007 | % Change | ||||||||||
| Interest Income | ||||||||||||||||
| Interest and fees on loans | $ 229,001 | $ 283,330 | (19.2 | %) | $ 721,781 | $ 834,272 | (13.5 | %) | ||||||||
Interest and dividends on investment securities and deposits in other financial institutions | ||||||||||||||||
| Taxable | 32,209 | 31,140 | 3.4 | % | 95,439 | 92,249 | 3.5 | % | ||||||||
| Tax-exempt | 9,887 | 9,924 | (0.4 | %) | 29,922 | 29,503 | 1.4 | % | ||||||||
Interest on federal funds sold and securities purchased under agreements to resell | 279 | 214 | 30.4 | % | 698 | 721 | (3.2 | %) | ||||||||
| Total interest income | 271,376 | 324,608 | (16.4 | %) | 847,840 | 956,745 | (11.4 | %) | ||||||||
| Interest Expense | ||||||||||||||||
| Interest on deposits | 61,743 | 104,596 | (41.0 | %) | 206,904 | 304,675 | (32.1 | %) | ||||||||
| Interest on short-term borrowings | 23,958 | 31,548 | (24.1 | %) | 76,494 | 102,154 | (25.1 | %) | ||||||||
| Interest on long-term funding | 19,158 | 25,391 | (24.5 | %) | 60,076 | 70,322 | (14.6 | %) | ||||||||
| Total interest expense | 104,859 | 161,535 | (35.1 | %) | 343,474 | 477,151 | (28.0 | %) | ||||||||
| Net Interest Income | 166,517 | 163,073 | 2.1 | % | 504,366 | 479,594 | 5.2 | % | ||||||||
| Provision for loan losses | 55,011 | 8,733 | 529.9 | % | 137,014 | 19,008 | 620.8 | % | ||||||||
Net interest income after provision for loan losses | 111,506 | 154,340 | (27.8 | %) | 367,352 | 460,586 | (20.2 | %) | ||||||||
| Noninterest Income | ||||||||||||||||
| Trust service fees | 10,020 | 10,886 | (8.0 | %) | 30,172 | 31,906 | (5.4 | %) | ||||||||
| Service charges on deposit accounts | 33,609 | 26,609 | 26.3 | % | 87,422 | 75,176 | 16.3 | % | ||||||||
| Card-based and other nondeposit fees | 12,517 | 12,436 | 0.7 | % | 36,243 | 35,470 | 2.2 | % | ||||||||
| Retail commissions | 14,928 | 15,476 | (3.5 | %) | 47,047 | 46,728 | 0.7 | % | ||||||||
| Mortgage banking, net | 3,571 | 3,006 | 18.8 | % | 15,911 | 22,252 | (28.5 | %) | ||||||||
| Bank owned life insurance income | 5,235 | 4,650 | 12.6 | % | 15,093 | 13,179 | 14.5 | % | ||||||||
| Asset sale gains (losses), net | 573 | 2,220 | (74.2 | %) | (614 | ) | 4,545 | (113.5 | %) | |||||||
| Investment securities gains (losses), net | (13,585 | ) | 1,879 | (823.0 | %) | (17,243 | ) | 8,989 | (291.8 | %) | ||||||
| Other | 8,455 | 7,758 | 9.0 | % | 30,545 | 20,863 | 46.4 | % | ||||||||
| Total noninterest income | 75,323 | 84,920 | (11.3 | %) | 244,576 | 259,108 | (5.6 | %) | ||||||||
| Noninterest Expense | ||||||||||||||||
| Personnel expense | 78,395 | 76,617 | 2.3 | % | 232,104 | 226,941 | 2.3 | % | ||||||||
| Occupancy | 12,037 | 11,967 | 0.6 | % | 37,327 | 34,875 | 7.0 | % | ||||||||
| Equipment | 5,088 | 4,440 | 14.6 | % | 14,338 | 13,088 | 9.6 | % | ||||||||
| Data processing | 7,634 | 7,991 | (4.5 | %) | 23,005 | 23,501 | (2.1 | %) | ||||||||
| Business development and advertising | 5,175 | 4,830 | 7.1 | % | 15,353 | 14,303 | 7.3 | % | ||||||||
| Other intangible amortization | 1,568 | 1,979 | (20.8 | %) | 4,705 | 5,358 | (12.2 | %) | ||||||||
| Other | 26,680 | 26,185 | 1.9 | % | 81,878 | 76,723 | 6.7 | % | ||||||||
| Total noninterest expense | 136,577 | 134,009 | 1.9 | % | 408,710 | 394,789 | 3.5 | % | ||||||||
| Income before income taxes | 50,252 | 105,251 | (52.3 | %) | 203,218 | 324,905 | (37.5 | %) | ||||||||
| Income tax expense | 12,483 | 33,510 | (62.7 | %) | 51,625 | 103,944 | (50.3 | %) | ||||||||
| Net Income | $ 37,769 | $ 71,741 | (47.4 | %) | $ 151,593 | $ 220,961 | (31.4 | %) | ||||||||
| Earnings Per Share: | ||||||||||||||||
| Basic | $ 0.30 | $ 0.57 | (47.4 | %) | $ 1.19 | $ 1.73 | (31.2 | %) | ||||||||
| Diluted | $ 0.30 | $ 0.56 | (46.4 | %) | $ 1.19 | $ 1.72 | (30.8 | %) | ||||||||
| Average Shares Outstanding: | ||||||||||||||||
| Basic | 127,553 | 126,958 | 0.5 | % | 127,428 | 127,513 | (0.1 | %) | ||||||||
| Diluted | 127,711 | 127,847 | (0.1 | %) | 127,843 | 128,638 | (0.6 | %) | ||||||||
| Consolidated Statements of Income (Unaudited) - Quarterly Trend | ||||||||||||||
| Associated Banc-Corp | ||||||||||||||
| (in thousands, except per share amounts) | 3Q08 | 2Q08 | 1Q08 | 4Q07 | 3Q07 | |||||||||
| Interest Income | ||||||||||||||
| Interest and fees on loans | $ 229,001 | $ 237,727 | $ 255,053 | $ 277,647 | $ 283,330 | |||||||||
Interest and dividends on investment securities and deposits in other financial institutions | ||||||||||||||
| Taxable | 32,209 | 31,878 | 31,352 | 30,712 | 31,140 | |||||||||
| Tax-exempt | 9,887 | 9,776 | 10,259 | 10,394 | 9,924 | |||||||||
Interest on federal funds sold and securities purchased under agreements to resell | 279 | 213 | 206 | 214 | 214 | |||||||||
| Total interest income | 271,376 | 279,594 | 296,870 | 318,967 | 324,608 | |||||||||
| Interest Expense | ||||||||||||||
| Interest on deposits | 61,743 | 63,655 | 81,506 | 98,678 | 104,596 | |||||||||
| Interest on short-term borrowings | 23,958 | 24,363 | 28,173 | 32,470 | 31,548 | |||||||||
| Interest on long-term funding | 19,158 | 18,844 | 22,074 | 23,600 | 25,391 | |||||||||
| Total interest expense | 104,859 | 106,862 | 131,753 | 154,748 | 161,535 | |||||||||
| Net Interest Income | 166,517 | 172,732 | 165,117 | 164,219 | 163,073 | |||||||||
| Provision for loan losses | 55,011 | 59,001 | 23,002 | 15,501 | 8,733 | |||||||||
Net interest income after provision for loan losses | 111,506 | 113,731 | 142,115 | 148,718 | 154,340 | |||||||||
| Noninterest Income | ||||||||||||||
| Trust service fees | 10,020 | 10,078 | 10,074 | 10,723 | 10,886 | |||||||||
| Service charges on deposit accounts | 33,609 | 30,129 | 23,684 | 25,866 | 26,609 | |||||||||
| Card-based and other nondeposit fees | 12,517 | 12,301 | 11,425 | 12,088 | 12,436 | |||||||||
| Retail commissions | 14,928 | 16,004 | 16,115 | 14,917 | 15,476 | |||||||||
| Total core fee-based revenue | 71,074 | 68,512 | 61,298 | 63,594 | 65,407 | |||||||||
| Mortgage banking, net | 3,571 | 5,395 | 6,945 | 498 | 3,006 | |||||||||
| Bank owned life insurance income | 5,235 | 4,997 | 4,861 | 4,240 | 4,650 | |||||||||
| Asset sale gains (losses), net | 573 | (731 | ) | (456 | ) | 11,062 | 2,220 | |||||||
| Investment securities gains (losses), net | (13,585 | ) | (718 | ) | (2,940 | ) | (815 | ) | 1,879 | |||||
| Other | 8,455 | 9,170 | 12,920 | 7,094 | 7,758 | |||||||||
| Total noninterest income | 75,323 | 86,625 | 82,628 | 85,673 | 84,920 | |||||||||
| Noninterest Expense | ||||||||||||||
| Personnel expense | 78,395 | 78,066 | 75,643 | 76,487 | 76,617 | |||||||||
| Occupancy | 12,037 | 12,026 | 13,264 | 11,784 | 11,967 | |||||||||
| Equipment | 5,088 | 4,653 | 4,597 | 4,820 | 4,440 | |||||||||
| Data processing | 7,634 | 8,250 | 7,121 | 8,189 | 7,991 | |||||||||
| Business development and advertising | 5,175 | 5,137 | 5,041 | 5,482 | 4,830 | |||||||||
| Other intangible amortization | 1,568 | 1,568 | 1,569 | 1,758 | 1,979 | |||||||||
| Other | 26,680 | 26,121 | 29,077 | 31,582 | 26,185 | |||||||||
| Total noninterest expense | 136,577 | 135,821 | 136,312 | 140,102 | 134,009 | |||||||||
| Income before income taxes | 50,252 | 64,535 | 88,431 | 94,289 | 105,251 | |||||||||
| Income tax expense | 12,483 | 17,176 | 21,966 | 29,498 | 33,510 | |||||||||
| Net Income | $ 37,769 | $ 47,359 | $ 66,465 | $ 64,791 | $ 71,741 | |||||||||
| Earnings Per Share: | ||||||||||||||
| Basic | $ 0.30 | $ 0.37 | $ 0.52 | $ 0.51 | $ 0.57 | |||||||||
| Diluted | $ 0.30 | $ 0.37 | $ 0.52 | $ 0.51 | $ 0.56 | |||||||||
| Average Shares Outstanding: | ||||||||||||||
| Basic | 127,553 | 127,433 | 127,298 | 127,095 | 126,958 | |||||||||
| Diluted | 127,711 | 127,964 | 127,825 | 127,835 | 127,847 | |||||||||
| Selected Quarterly Information | |||||||||||||||||||||
| Associated Banc-Corp | |||||||||||||||||||||
| (in thousands, except per share and full time equivalent employee data) | YTD 2008 | YTD 2007 | 3rd Qtr 2008 | 2nd Qtr 2008 | 1st Qtr 2008 | 4th Qtr 2007 | 3rd Qtr 2007 | ||||||||||||||
| Summary of Operations | |||||||||||||||||||||
| Net interest income | $ 504,366 | $ 479,594 | $ 166,517 | $ 172,732 | $ 165,117 | $ 164,219 | $ 163,073 | ||||||||||||||
| Provision for loan losses | 137,014 | 19,008 | 55,011 | 59,001 | 23,002 | 15,501 | 8,733 | ||||||||||||||
| Asset sale gains (losses), net | (614 | ) | 4,545 | 573 | (731 | ) | (456 | ) | 11,062 | 2,220 | |||||||||||
| Investment securities gains (losses), net | (17,243 | ) | 8,989 | (13,585 | ) | (718 | ) | (2,940 | ) | (815 | ) | 1,879 | |||||||||
| Noninterest income (excluding securities & asset gains) | 262,433 | 245,574 | 88,335 | 88,074 | 86,024 | 75,426 | 80,821 | ||||||||||||||
| Noninterest expense | 408,710 | 394,789 | 136,577 | 135,821 | 136,312 | 140,102 | 134,009 | ||||||||||||||
| Income before income taxes | 203,218 | 324,905 | 50,252 | 64,535 | 88,431 | 94,289 | 105,251 | ||||||||||||||
| Income taxes | 51,625 | 103,944 | 12,483 | 17,176 | 21,966 | 29,498 | 33,510 | ||||||||||||||
| Net income | 151,593 | 220,961 | 37,769 | 47,359 | 66,465 | 64,791 | 71,741 | ||||||||||||||
| Taxable equivalent adjustment | 20,809 | 20,140 | 6,899 | 6,814 | 7,096 | 7,119 | 6,856 | ||||||||||||||
| Per Common Share Data (1) | |||||||||||||||||||||
| Net income: | |||||||||||||||||||||
| Basic | $ 1.19 | $ 1.73 | $ 0.30 | $ 0.37 | $ 0.52 | $ 0.51 | $ 0.57 | ||||||||||||||
| Diluted | 1.19 | 1.72 | 0.30 | 0.37 | 0.52 | 0.51 | 0.56 | ||||||||||||||
| Dividends | 0.95 | 0.91 | 0.32 | 0.32 | 0.31 | 0.31 | 0.31 | ||||||||||||||
| Market Value: | |||||||||||||||||||||
| High | $ 29.23 | $ 35.43 | $ 25.92 | $ 29.23 | $ 28.86 | $ 30.49 | $ 33.05 | ||||||||||||||
| Low | 14.85 | 26.86 | 14.85 | 19.29 | 22.60 | 25.23 | 26.86 | ||||||||||||||
| Close | 19.95 | 29.63 | 19.95 | 19.29 | 26.63 | 27.09 | 29.63 | ||||||||||||||
| Book value | 18.52 | 18.04 | 18.52 | 18.46 | 18.71 | 18.32 | 18.04 | ||||||||||||||
| Performance Ratios (annualized) | |||||||||||||||||||||
| Earning assets yield | 5.90 | % | 7.03 | % | 5.58 | % | 5.82 | % | 6.33 | % | 6.88 | % | 7.05 | % | |||||||
| Interest-bearing liabilities rate | 2.71 | 4.03 | 2.44 | 2.53 | 3.19 | 3.82 | 4.02 | ||||||||||||||
| Net interest margin | 3.57 | 3.59 | 3.48 | 3.65 | 3.58 | 3.62 | 3.62 | ||||||||||||||
| Return on average assets | 0.93 | 1.44 | 0.68 | 0.87 | 1.25 | 1.23 | 1.38 | ||||||||||||||
| Return on average equity | 8.57 | 13.18 | 6.38 | 8.01 | 11.34 | 11.23 | 12.69 | ||||||||||||||
| Return on tangible average equity (2) | 14.52 | 22.73 | 10.83 | 13.51 | 19.26 | 19.50 | 22.42 | ||||||||||||||
| Efficiency ratio (3) | 51.89 | 52.97 | 52.18 | 50.75 | 52.79 | 56.78 | 53.44 | ||||||||||||||
| Effective tax rate | 25.40 | 31.99 | 24.84 | 26.61 | 24.84 | 31.28 | 31.84 | ||||||||||||||
| Dividend payout ratio (4) | 79.83 | 52.60 | 106.67 | 86.49 | 59.62 | 60.78 | 54.39 | ||||||||||||||
| Average Balances | |||||||||||||||||||||
| Assets | $ 21,833,664 | $ 20,537,911 | $ 22,072,948 | $ 21,975,451 | $ 21,449,963 | $ 20,935,023 | $ 20,678,498 | ||||||||||||||
| Earning assets | 19,639,329 | 18,575,919 | 19,884,434 | 19,754,651 | 19,276,208 | 18,849,079 | 18,685,978 | ||||||||||||||
| Interest-bearing liabilities | 16,904,447 | 15,818,037 | 17,107,551 | 16,992,508 | 16,611,047 | 16,090,488 | 15,941,683 | ||||||||||||||
| Loans | 16,011,627 | 15,075,639 | 16,203,717 | 16,120,732 | 15,708,321 | 15,301,761 | 15,183,444 | ||||||||||||||
| Deposits | 13,616,134 | 13,735,336 | 13,710,297 | 13,493,511 | 13,643,559 | 13,760,991 | 13,940,970 | ||||||||||||||
| Wholesale funding | 5,707,467 | 4,443,557 | 5,876,051 | 5,950,699 | 5,293,797 | 4,750,471 | 4,386,354 | ||||||||||||||
| Stockholders' equity | 2,363,033 | 2,241,866 | 2,353,606 | 2,377,841 | 2,357,757 | 2,289,522 | 2,242,665 | ||||||||||||||
| Stockholders' equity / assets | 10.82 | % | 10.92 | % | 10.66 | % | 10.82 | % | 10.99 | % | 10.94 | % | 10.85 | % | |||||||
| At Period End | |||||||||||||||||||||
| Assets | $ 22,487,394 | $ 22,302,704 | $ 21,903,753 | $ 21,592,083 | $ 20,940,007 | ||||||||||||||||
| Loans | 16,272,487 | 16,149,327 | 15,785,283 | 15,516,252 | 15,174,758 | ||||||||||||||||
| Allowance for loan losses | 246,189 | 229,605 | 207,602 | 200,570 | 200,560 | ||||||||||||||||
| Goodwill | 929,168 | 929,168 | 929,168 | 929,168 | 929,168 | ||||||||||||||||
| Mortgage servicing rights, net | 53,977 | 54,725 | 51,013 | 51,187 | 53,636 | ||||||||||||||||
| Other intangible assets | 36,161 | 37,896 | 39,464 | 41,033 | 42,791 | ||||||||||||||||
| Deposits | 14,245,667 | 13,378,734 | 13,882,174 | 13,973,913 | 14,158,369 | ||||||||||||||||
| Wholesale funding | 5,667,737 | 6,359,811 | 5,388,923 | 5,091,558 | 4,283,396 | ||||||||||||||||
| Stockholders' equity | 2,364,247 | 2,353,882 | 2,382,418 | 2,329,705 | 2,291,182 | ||||||||||||||||
| Stockholders' equity / assets | 10.51 | % | 10.55 | % | 10.88 | % | 10.79 | % | 10.94 | % | |||||||||||
| Tangible equity / tangible assets (5) | 6.50 | % | 6.50 | % | 6.75 | % | 6.59 | % | 6.61 | % | |||||||||||
| Shares outstanding, end of period | 127,646 | 127,537 | 127,365 | 127,160 | 127,035 | ||||||||||||||||
| Shares repurchased during period, including settlements (6) | - | - | - | - | 11 | ||||||||||||||||
| Average per share cost of shares repurchased during period (6) | $ - | $ - | $ - | $ - | $ - | ||||||||||||||||
| YTD shares repurchased during period, including settlements (6) | - | - | - | 3,920 | 3,920 | ||||||||||||||||
| YTD average per share cost of shares repurchased during period (6) | $ - | $ - | $ - | $ 34.15 | $ 34.15 | ||||||||||||||||
| Selected trend information | |||||||||||||||||||||
| Average full time equivalent employees | 5,141 | 5,179 | 5,093 | 5,095 | 5,200 | ||||||||||||||||
| Trust assets under management, at market value | $ 5,600,000 | $ 5,900,000 | $ 6,000,000 | $ 6,100,000 | $ 6,200,000 | ||||||||||||||||
| Mortgage loans originated for sale during period | 217,993 | 431,757 | 516,780 | 333,331 | 353,233 | ||||||||||||||||
| Mortgage portfolio serviced for others | 6,596,000 | 6,584,000 | 6,472,000 | 6,403,000 | 6,297,000 | ||||||||||||||||
| Mortgage servicing rights, net / Portfolio serviced for others | 0.82 | % | 0.83 | % | 0.79 | % | 0.80 | % | 0.85 | % | |||||||||||
(1) | Per share data adjusted retroactively for stock splits and stock dividends. | |
(2) | Return on tangible average equity = Net income divided by average equity excluding average goodwill and 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 gain, net, and asset sales gains, net. | |
(4) | Ratio is based upon basic earnings per share. | |
(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. | ||
(6) | Does not include shares repurchased for minimum tax withholding on equity compensation. |
| Financial Summary and Comparison | |||||||||||||||||||||
Associated Banc-Corp | |||||||||||||||||||||
| Three months ended | Nine months ended | ||||||||||||||||||||
| September 30, | September 30, | ||||||||||||||||||||
| (in thousands) | 2008 | 2007 | % Change | 2008 | 2007 | % Change | |||||||||||||||
| Allowance for Loan Losses | |||||||||||||||||||||
| Beginning balance | $ 229,605 | $ 206,493 | 11.2 | % | $ 200,570 | $ 203,481 | (1.4 | %) | |||||||||||||
| Balance related to acquisition | - | - | N/M | - | 2,991 | N/M | |||||||||||||||
| Provision for loan losses | 55,011 | 8,733 | 529.9 | % | 137,014 | 19,008 | 620.8 | % | |||||||||||||
| Charge offs | (40,344 | ) | (15,966 | ) | 152.7 | % | (98,076 | ) | (30,093 | ) | 225.9 | % | |||||||||
| Recoveries | 1,917 | 1,300 | 47.5 | % | 6,681 | 5,173 | 29.2 | % | |||||||||||||
| Net charge offs | (38,427 | ) | (14,666 | ) | 162.0 | % | (91,395 | ) | (24,920 | ) | 266.8 | % | |||||||||
| Ending balance | $ 246,189 | $ 200,560 | 22.8 | % | $ 246,189 | $ 200,560 | 22.8 | % | |||||||||||||
| Credit Quality | Sep08 vs Jun08 | Sep08 vs Sep07 | |||||||||||||||||||
| Sept 30, 2008 | Jun 30, 2008 | % Change | Mar 31, 2008 | Dec 31, 2007 | Sept 30, 2007 | % Change | |||||||||||||||
| Nonaccrual loans | $ 290,039 | $ 277,100 | 4.7 | % | $ 197,498 | $ 152,528 | $ 142,509 | 103.5 | % | ||||||||||||
| Loans 90 or more days past due and still accruing | 14,631 | 11,762 | 24.4 | % | 9,959 | 10,118 | 8,163 | 79.2 | % | ||||||||||||
| Total nonperforming loans | 304,670 | 288,862 | 5.5 | % | 207,457 | 162,646 | 150,672 | 102.2 | % | ||||||||||||
| Other real estate owned (OREO) | 46,473 | 46,579 | (0.2 | %) | 26,798 | 26,489 | 20,866 | 122.7 | % | ||||||||||||
| Total nonperforming assets | $ 351,143 | $ 335,441 | 4.7 | % | $ 234,255 | $ 189,135 | $ 171,538 | 104.7 | % | ||||||||||||
| Provision for loan losses | 55,011 | 59,001 | (6.8 | %) | 23,002 | 15,501 | 8,733 | 529.9 | % | ||||||||||||
| Net charge offs | 38,427 | 36,998 | 3.9 | % | 15,970 | 15,491 | 14,666 | 162.0 | % | ||||||||||||
| Allowance for loan losses / loans | 1.51 | % | 1.42 | % | 1.32 | % | 1.29 | % | 1.32 | % | |||||||||||
| Allowance for loan losses / nonperforming loans | 80.81 | 79.49 | 100.07 | 123.32 | 133.11 | ||||||||||||||||
| Nonperforming loans / total loans | 1.87 | 1.79 | 1.31 | 1.05 | 0.99 | ||||||||||||||||
| Nonperforming assets / total loans plus OREO | 2.15 | 2.07 | 1.48 | 1.22 | 1.13 | ||||||||||||||||
| Nonperforming assets / total assets | 1.56 | 1.50 | 1.07 | 0.88 | 0.82 | ||||||||||||||||
| Net charge offs / average loans (annualized) | 0.94 | 0.92 | 0.41 | 0.40 | 0.38 | ||||||||||||||||
| Year-to-date net charge offs / average loans | 0.76 | 0.67 | 0.41 | 0.27 | 0.22 | ||||||||||||||||
| Nonperforming loans by type: | |||||||||||||||||||||
| Commercial, financial & agricultural | $ 85,995 | $ 78,731 | 9.2 | % | $ 54,919 | $ 32,610 | $ 35,695 | 140.9 | % | ||||||||||||
| Commercial real estate | 52,875 | 42,280 | 25.1 | % | 37,367 | 35,049 | 42,447 | 24.6 | % | ||||||||||||
| Real estate - construction | 98,205 | 110,717 | (11.3 | %) | 56,456 | 39,837 | 26,602 | 269.2 | % | ||||||||||||
| Lease financing | 83 | 522 | (84.1 | %) | 1,316 | 1,323 | 79 | 5.1 | % | ||||||||||||
| Total commercial | 237,158 | 232,250 | 2.1 | % | 150,058 | 108,819 | 104,823 | 126.2 | % | ||||||||||||
| Home equity | 25,372 | 23,555 | 7.7 | % | 18,488 | 16,209 | 13,529 | 87.5 | % | ||||||||||||
| Installment | 6,035 | 5,184 | 16.4 | % | 4,184 | 3,881 | 3,290 | 83.4 | % | ||||||||||||
| Total retail | 31,407 | 28,739 | 9.3 | % | 22,672 | 20,090 | 16,819 | 86.7 | % | ||||||||||||
| Residential mortgage | 36,105 | 27,873 | 29.5 | % | 34,727 | 33,737 | 29,030 | 24.4 | % | ||||||||||||
Total nonperforming loans | $ 304,670 | $ 288,862 | 5.5 | % | $ 207,457 | $ 162,646 | $ 150,672 | 102.2 | % | ||||||||||||
| Period End Loan Composition | Sep08 vs Jun08 | Sep08 vs Sep07 | |||||||||||||||||||
| Sept 30, 2008 | Jun 30, 2008 | % Change | Mar 31, 2008 | Dec 31,2007 | Sept 30, 2007 | % Change | |||||||||||||||
| Commercial, financial & agricultural | $ 4,343,208 | $ 4,423,192 | (1.8 | %) | $ 4,458,639 | $ 4,281,091 | $ 3,935,976 | 10.3 | % | ||||||||||||
| Commercial real estate | 3,534,791 | 3,583,877 | (1.4 | %) | 3,585,779 | 3,635,365 | 3,656,937 | (3.3 | %) | ||||||||||||
| Real estate - construction | 2,363,116 | 2,351,401 | 0.5 | % | 2,273,125 | 2,260,766 | 2,215,264 | 6.7 | % | ||||||||||||
| Lease financing | 125,907 | 124,661 | 1.0 | % | 118,613 | 108,794 | 95,644 | 31.6 | % | ||||||||||||
| Total commercial | 10,367,022 | 10,483,131 | (1.1 | %) | 10,436,156 | 10,286,016 | 9,903,821 | 4.7 | % | ||||||||||||
| Home equity | 2,892,952 | 2,757,684 | 4.9 | % | 2,387,223 | 2,269,122 | 2,230,640 | 29.7 | % | ||||||||||||
| Installment | 842,741 | 826,895 | 1.9 | % | 842,564 | 841,136 | 866,185 | (2.7 | %) | ||||||||||||
| Total retail | 3,735,693 | 3,584,579 | 4.2 | % | 3,229,787 | 3,110,258 | 3,096,825 | 20.6 | % | ||||||||||||
| Residential mortgage | 2,169,772 | 2,081,617 | 4.2 | % | 2,119,340 | 2,119,978 | 2,174,112 | (0.2 | %) | ||||||||||||
| Total loans | $ 16,272,487 | $ 16,149,327 | 0.8 | % | $ 15,785,283 | $ 15,516,252 | $ 15,174,758 | 7.2 | % | ||||||||||||
| Period End Deposit Composition | Sep08 vs Jun08 | Sep08 vs Sep07 | |||||||||||||||||||
| Sept 30, 2008 | Jun 30, 2008 | % Change | Mar 31, 2008 | Dec 31, 2007 | Sept 30, 2007 | % Change | |||||||||||||||
| Demand | $ 2,545,779 | $ 2,602,026 | (2.2 | %) | $ 2,516,265 | $ 2,661,078 | $ 2,407,026 | 5.8 | % | ||||||||||||
| Savings | 888,731 | 921,000 | (3.5 | %) | 891,806 | 853,618 | 919,891 | (3.4 | %) | ||||||||||||
| Interest-bearing demand | 1,667,640 | 1,697,910 | (1.8 | %) | 1,788,404 | 1,947,551 | 1,881,235 | (11.4 | %) | ||||||||||||
| Money market | 4,608,686 | 3,917,505 | 17.6 | % | 3,972,080 | 3,923,063 | 3,770,487 | 22.2 | % | ||||||||||||
| Brokered CDs | 579,607 | 398,423 | 45.5 | % | 731,398 | 409,637 | 800,422 | (27.6 | %) | ||||||||||||
| Other time deposits | 3,955,224 | 3,841,870 | 3.0 | % | 3,982,221 | 4,178,966 | 4,379,308 | (9.7 | %) | ||||||||||||
| Total deposits | $ 14,245,667 | $ 13,378,734 | 6.5 | % | $ 13,882,174 | $ 13,973,913 | $ 14,158,369 | 0.6 | % | ||||||||||||
Network transaction deposits included above in interest-bearing demand and money market | $ 1,356,616 | $ 620,440 | 118.7 | % | $ 610,351 | $ 664,982 | $ 483,100 | 180.8 | % | ||||||||||||
| Customer repo sweeps (a) | $ 657,032 | $ 667,720 | (1.6 | %) | $ 789,218 | $ 844,414 | $ 874,737 | (24.9 | %) | ||||||||||||
| (a) Included within short-term borrowings. | |||||||||||||||||||||
| N/M - Not meaningful. | |||||||||||||||||||||
| Net Interest Income Analysis - Taxable Equivalent Basis | ||||||||||
Associated Banc-Corp | ||||||||||
| Nine months ended September 30, 2008 | Nine months ended September 30, 2007 | |||||||||
| (in thousands) |
Average |
Interest |
Average |
Average |
Interest |
Average | ||||
| Earning assets: | ||||||||||
| Loans: (1) (2) (3) | ||||||||||
| Commercial | $ 10,405,893 | $ 455,899 | 5.85 | % | $ 9,748,956 | $ 547,923 | 7.51 | % | ||
| Residential mortgage | 2,193,992 | 97,776 | 5.95 | 2,321,792 | 106,845 | 6.14 | ||||
| Retail | 3,411,742 | 170,962 | 6.69 | 3,004,891 | 181,942 | 8.08 | ||||
| Total loans | 16,011,627 | 724,637 | 6.04 | 15,075,639 | 836,710 | 7.42 | ||||
| Investments and other | 3,627,702 | 144,012 | 5.29 | 3,500,280 | 140,175 | 5.34 | ||||
| Total earning assets | 19,639,329 | 868,649 | 5.90 | 18,575,919 | 976,885 | 7.03 | ||||
| Other assets, net | 2,194,335 | 1,961,992 | ||||||||
| Total assets | $21,833,664 | $ 20,537,911 | ||||||||
| Interest-bearing liabilities: | ||||||||||
| Savings deposits | $ 894,389 | 3,118 | 0.47 | % | $ 917,983 | $ 3,236 | 0.47 | % | ||
| Interest-bearing demand deposits | 1,791,808 | 13,131 | 0.98 | 1,853,573 | 27,232 | 1.96 | ||||
| Money market deposits | 4,010,968 | 61,577 | 2.05 | 3,745,304 | 106,177 | 3.79 | ||||
| Time deposits, excluding Brokered CDs | 3,959,126 | 115,830 | 3.91 | 4,348,130 | 147,756 | 4.54 | ||||
| Total interest-bearing deposits, excluding Brokered CDs | 10,656,291 | 193,656 | 2.43 | 10,864,990 | 284,401 | 3.50 | ||||
| Brokered CDs | 540,689 | 13,248 | 3.27 | 509,490 | 20,274 | 5.32 | ||||
| Total interest-bearing deposits | 11,196,980 | 206,904 | 2.47 | 11,374,480 | 304,675 | 3.58 | ||||
| Wholesale funding | 5,707,467 | 136,570 | 3.20 | 4,443,557 | 172,476 | 5.19 | ||||
| Total interest-bearing liabilities | 16,904,447 | 343,474 | 2.71 | 15,818,037 | 477,151 | 4.03 | ||||
| Noninterest-bearing demand deposits | 2,419,154 | 2,360,856 | ||||||||
| Other liabilities | 147,030 | 117,152 | ||||||||
| Stockholders' equity | 2,363,033 | 2,241,866 | ||||||||
| Total liabilities and stockholders' equity | $21,833,664 | $ 20,537,911 | ||||||||
| Net interest income and rate spread (1) | $ 525,175 | 3.19 | % | $ 499,734 | 3.00 | % | ||||
| Net interest margin (1) | 3.57 | % | 3.59 | % | ||||||
| Taxable equivalent adjustment | $ 20,809 | $ 20,140 | ||||||||
| Three months ended September 30, 2008 | Three months ended September 30, 2007 | |||||||||
| Average | Interest | Average | Average | Interest | Average | |||||
| Balance | Income / Expense | Yield / Rate | Balance | Income / Expense | Yield / Rate | |||||
| Earning assets: | ||||||||||
| Loans: (1) (2) (3) | ||||||||||
| Commercial | $ 10,393,313 | $ 141,040 | 5.40 | % | $ 9,850,510 | $ 186,947 | 7.53 | % | ||
| Residential mortgage | 2,151,163 | 31,452 | 5.84 | 2,276,094 | 35,514 | 6.22 | ||||
| Retail | 3,659,241 | 57,477 | 6.26 | 3,056,840 | 61,770 | 8.05 | ||||
| Total loans | 16,203,717 | 229,969 | 5.65 | 15,183,444 | 284,231 | 7.44 | ||||
| Investments and other | 3,680,717 | 48,306 | 5.25 | 3,502,534 | 47,233 | 5.39 | ||||
| Total earning assets | 19,884,434 | 278,275 | 5.58 | 18,685,978 | 331,464 | 7.05 | ||||
| Other assets, net | 2,188,514 | 1,992,520 | ||||||||
| Total assets | $22,072,948 | $ 20,678,498 | ||||||||
| Interest-bearing liabilities: | ||||||||||
| Savings deposits | $ 911,216 | 1,027 | 0.45 | % | $ 942,305 | $ 1,324 | 0.56 | % | ||
| Interest-bearing demand deposits | 1,771,091 | 3,366 | 0.76 | 1,926,181 | 9,547 | 1.97 | ||||
| Money market deposits | 4,191,771 | 19,577 | 1.86 | 3,694,646 | 34,914 | 3.75 | ||||
| Time deposits, excluding Brokered CDs | 3,941,384 | 34,860 | 3.52 | 4,393,590 | 50,755 | 4.58 | ||||
| Total interest-bearing deposits, excluding Brokered CDs | 10,815,462 | 58,830 | 2.16 | 10,956,722 | 96,540 | 3.50 | ||||
| Brokered CDs | 416,038 | 2,913 | 2.79 | 598,607 | 8,056 | 5.34 | ||||
| Total interest-bearing deposits | 11,231,500 | 61,743 | 2.19 | 11,555,329 | 104,596 | 3.59 | ||||
| Wholesale funding | 5,876,051 | 43,116 | 2.92 | 4,386,354 | 56,939 | 5.16 | ||||
| Total interest-bearing liabilities | 17,107,551 | 104,859 | 2.44 | 15,941,683 | 161,535 | 4.02 | ||||
| Noninterest-bearing demand deposits | 2,478,797 | 2,385,641 | ||||||||
| Other liabilities | 132,994 | 108,509 | ||||||||
| Stockholders' equity | 2,353,606 | 2,242,665 | ||||||||
| Total liabilities and stockholders' equity | $22,072,948 | $ 20,678,498 | ||||||||
| Net interest income and rate spread (1) | $ 173,416 | 3.14 | % | $ 169,929 | 3.03 | % | ||||
| Net interest margin (1) | 3.48 | % | 3.62 | % | ||||||
| Taxable equivalent adjustment | $ 6,899 | $ 6,856 | ||||||||
(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. |
Contacts:
Investors:
Joe Selner, Chief Financial
Officer, 920-491-7120
Media:
Janet L. Ford, VP of Public
Relations, 414-207-5070
