Associated Banc-Corp (NASDAQ: ASBC):
- Net income to common shareholders of $165 million for 2008, and $14 million for fourth quarter
- Net interest income of $696 million, up 8% over 2007
- Net interest margin 3.65% for 2008 versus 3.60% for 2007, and 3.88% for fourth quarter
- Average loan growth up 6% over 2007, and up 2% annualized between fourth and third quarters
- Core fee-based income up 6% over 2007, and up 5% between the comparable fourth quarters
- Other-than-temporary valuation losses on investments of $53 million for 2008 (or $0.27 per share after tax), and $35 million for 4Q
- $525 million senior preferred stock investment by the U.S. Department of the Treasury on Nov. 21st
- Over $1.5 billion of credit originated, renewed or extended to new and existing customers since Nov. 21st
- Tangible capital ratio grew to 8.23% at Dec 31, compared to 6.50% at Sept 30 and 6.59% a year ago
Associated Banc-Corp (NASDAQ: ASBC) reported net income available to common shareholders of $165 million, or $1.29 per common share for 2008. Comparatively, net income was $286 million, or $2.23 per common share for 2007.
Net income available to common shareholders was $14 million, or $0.11 per common share for fourth quarter 2008, compared to $38 million ($0.30 per common share) for third quarter 2008 and $65 million ($0.51 per common share) for fourth quarter 2007.
Fourth quarter 2008 results included several nonrecurring items or other charges. Other-than-temporary valuation losses on investments were $35 million or $0.18 per common share after tax. In combination, a $7 million valuation reserve expense related to the fair value of mortgage servicing rights, a $3 million loss on an alleged customer fraud, and a $3 million write down on a foreclosed property reduced diluted earnings per common share by $0.07.
A single bond security is responsible for $31 million of the fourth quarter other-than-temporary marks, and has a remaining carrying value of $33 million at Dec. 31. The bond is comprised of large fixed-rate, 30-year amortizing mortgages with reasonably strong loan-to-value ratios and weighted average credit scores. In consideration of a significant fourth quarter decline in the market value of this bond and the business and economic environment, other-than-temporary impairment was recorded. Of the remaining $3.7 billion of mortgage-related securities held at year-end 2008, $3.6 billion are agency insured, and the vast majority of the remainder are seasoned. As a result, further exposure to other-than-temporary impairment is not expected to be significant.
In November 2008, Associated sold $525 million of senior preferred stock, bearing a 5% dividend for the first 5 years and 9% thereafter, and related common stock warrants, to the U.S. Department of the Treasury under the federal government’s voluntary Capital Purchase Program. As a result, stockholders’ equity at December 31, 2008, included $508 million attributable to the senior preferred stock net of the preferred stock discount. The tangible capital ratio grew to 8.23% at year end 2008, compared to 6.50% at Sept. 30 and 6.59% a year ago. Finally, the senior preferred stock dividends and discount amortization that began in the fourth quarter reduced net income available to common shareholders by $3 million, or $0.03 per common share.
Since the infusion of capital over $1.5 billion of credit has been originated or committed to be extended to new and existing customers.
During the fourth quarter of 2008, Associated invested in guaranteed government agency mortgage-related securities in support of the mortgage markets. Thus, since Sept. 30, total assets and investment securities were each up $1.7 billion.
For fourth quarter 2008, net interest income was $192 million, $25 million (15 percent) higher than third quarter, with the net interest margin improving 40 basis to 3.88 percent.
Average loans were $16.3 billion for fourth quarter 2008, up $0.1 billion (2 percent annualized) over the third quarter of 2008, led by consumer-based loan growth, while commercial loan growth was offset by workouts and charge offs. Average deposits for fourth quarter were $14.4 billion, up $0.7 billion over third quarter 2008, primarily attributable to higher network transaction deposits and brokered CDs. At Dec. 31, deposits were $15.2 billion, up $0.9 billion over Sept. 30, with growth in nearly all categories, especially demand deposits (up $0.3 million or 11 percent) and money markets (up $0.3 million or 7 percent).
The provision for loan losses was $65 million and net charge offs were $46 million for fourth quarter 2008, compared to $55 million and $38 million, respectively, for third quarter 2008. During this quarter, nonperforming loans increased $36 million to $341 million at year-end 2008 (representing 2.09 percent of loans), compared to nonperforming loans of $163 million (or 1.05 percent of loans) at year-end 2007. The allowance for loan losses to total loans ratio increased to 1.63 percent at Dec. 31, 2008, compared to 1.51 percent at Sept. 30, 2008, and 1.29 percent at year-end 2007.
Core fee-based revenues for fourth quarter 2008 were $67 million, up $3 million or 5 percent over the fourth quarter of last year.
For the fourth quarter 2008 mortgage banking incurred a $1 million net loss, principally from a $7 million valuation charge related to mortgage servicing rights fair value. Comparatively, net mortgage banking income was $0.5 million (including a $1.4 million valuation charge) for fourth quarter 2007, and $4 million (including a favorable $1 million valuation recovery) for third quarter 2008. Mortgage applications increased 200% in December of 2008 over November, of which the majority will close in the first quarter of 2009.
Fourth quarter 2008 noninterest expense was $149 million, up $12 million or 9 percent over third quarter 2008. Previously noted items (severance, fraud matter and foreclosed property write down) accounted for $7 million of the increase, with the remainder largely due to elevated foreclosure/collection costs, increased legal and consultant expense, and higher weather-related occupancy costs. Compared to the fourth quarter last year, noninterest expense was up 6 percent. The efficiency ratio improved to 52.41 percent for 2008, compared to 53.92 percent for 2007, while for the fourth and third quarters of 2008, the efficiency ratio was 53.87 percent and 52.18 percent, respectively.
During the fourth quarter, Associated paid a dividend of 32 cents per common share, bringing the 2008 dividend per common share to $1.27, up 4 percent from 2007.
Associated will host a conference call for investors and analysts at 3 p.m. Central Time (CT) today, January 22, 2009. 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 fourth quarter 2008 earnings call, or for call ID number 3960724. A replay of the call will be available starting at 6 p.m. CT Jan. 22, 2009, through 12:00 midnight CT on February 22, 2009, by calling 800-406-7325 (toll-free) domestically or 303-590-3030 internationally. The call ID number, 3960724, is required to access the replay.
Associated Banc-Corp, headquartered in Green Bay, Wis., is a diversified bank holding company with total assets of $24 billion. Associated has approximately 300 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.
Six pages of tables follow.
| Consolidated Balance Sheets (Unaudited) | |||||||||
| Associated Banc-Corp | |||||||||
| December 31, | December 31, | Dec08 vs Dec07 | |||||||
| (in thousands) | 2008 | 2007 | % Change | ||||||
| Assets | |||||||||
| Cash and due from banks | $ 533,338 | $ 553,031 | (3.6 | %) | |||||
Interest-bearing deposits in other financial institutions | 12,649 | 11,671 | 8.4 | % | |||||
Federal funds sold and securities purchased under agreements to resell | 24,741 | 22,447 | 10.2 | % | |||||
| Securities available for sale, at fair value | 5,349,417 | 3,543,019 | 51.0 | % | |||||
| Loans held for sale | 87,084 | 94,441 | (7.8 | %) | |||||
| Loans | 16,283,908 | 15,516,252 | 4.9 | % | |||||
| Allowance for loan losses | (265,378 | ) | (200,570 | ) | 32.3 | % | |||
| Loans, net | 16,018,530 | 15,315,682 | 4.6 | % | |||||
| Premises and equipment, net | 190,942 | 197,446 | (3.3 | %) | |||||
| Goodwill | 929,168 | 929,168 | 0.0 | % | |||||
| Other intangible assets, net | 80,165 | 92,220 | (13.1 | %) | |||||
| Other assets | 966,033 | 832,958 | 16.0 | % | |||||
| Total assets | $ 24,192,067 | $ 21,592,083 | 12.0 | % | |||||
| Liabilities and Stockholders' Equity | |||||||||
| Noninterest-bearing deposits | $ 2,814,079 | $ 2,661,078 | 5.7 | % | |||||
| Interest-bearing deposits, excluding Brokered CDs | 11,551,181 | 10,903,198 | 5.9 | % | |||||
| Brokered CDs | 789,536 | 409,637 | 92.7 | % | |||||
| Total deposits | 15,154,796 | 13,973,913 | 8.5 | % | |||||
| Short-term borrowings | 3,703,936 | 3,226,787 | 14.8 | % | |||||
| Long-term funding | 1,861,647 | 1,864,771 | (0.2 | %) | |||||
| Accrued expenses and other liabilities | 595,185 | 196,907 | 202.3 | % | |||||
| Total liabilities | 21,315,564 | 19,262,378 | 10.7 | % | |||||
| Stockholders' Equity | |||||||||
| Preferred equity | 508,008 | - | N/M | ||||||
| Common stock | 1,281 | 1,278 | 0.2 | % | |||||
| Surplus | 1,073,218 | 1,040,694 | 3.1 | % | |||||
| Retained earnings | 1,293,941 | 1,305,136 | (0.9 | %) | |||||
| Accumulated other comprehensive loss | 55 | (2,498 | ) | (102.2 | %) | ||||
| Treasury stock | - | (14,905 | ) | (100.0 | %) | ||||
| Total stockholders' equity | 2,876,503 | 2,329,705 | 23.5 | % | |||||
| Total liabilities and stockholders' equity | $ 24,192,067 | $ 21,592,083 | 12.0 | % | |||||
| N/M = Not meaningful. | |||||||||
| Consolidated Statements of Income (Unaudited) | |||||||||||||||||
| Associated Banc-Corp | |||||||||||||||||
| For The Three Months Ended | For The Year Ended, | ||||||||||||||||
| December 31, | Quarter | December 31, | Year-to-Date | ||||||||||||||
| (in thousands, except per share amounts) | 2008 | 2007 | % Change | 2008 | 2007 | % Change | |||||||||||
| Interest Income | |||||||||||||||||
| Interest and fees on loans | $ 230,872 | $ 277,647 | (16.8 | %) | $ 952,653 | $ 1,111,919 | (14.3 | %) | |||||||||
Interest and dividends on investment securities and deposits in other financial institutions: | |||||||||||||||||
| Taxable | 38,032 | 30,712 | 23.8 | % | 133,471 | 122,961 | 8.5 | % | |||||||||
| Tax-exempt | 9,811 | 10,394 | (5.6 | %) | 39,733 | 39,897 | (0.4 | %) | |||||||||
Interest on federal funds sold and securities purchased under agreements to resell | 154 | 214 | (28.0 | %) | 852 | 935 | (8.9 | %) | |||||||||
| Total interest income | 278,869 | 318,967 | (12.6 | %) | 1,126,709 | 1,275,712 | (11.7 | %) | |||||||||
| Interest Expense | |||||||||||||||||
| Interest on deposits | 56,402 | 98,678 | (42.8 | %) | 263,306 | 403,353 | (34.7 | %) | |||||||||
| Interest on short-term borrowings | 10,090 | 32,470 | (68.9 | %) | 86,584 | 134,624 | (35.7 | %) | |||||||||
| Interest on long-term funding | 20,595 | 23,600 | (12.7 | %) | 80,671 | 93,922 | (14.1 | %) | |||||||||
| Total interest expense | 87,087 | 154,748 | (43.7 | %) | 430,561 | 631,899 | (31.9 | %) | |||||||||
| Net Interest Income | 191,782 | 164,219 | 16.8 | % | 696,148 | 643,813 | 8.1 | % | |||||||||
| Provision for loan losses | 65,044 | 15,501 | 319.6 | % | 202,058 | 34,509 | 485.5 | % | |||||||||
Net interest income after provision for loan losses | 126,738 | 148,718 | (14.8 | %) | 494,090 | 609,304 | (18.9 | %) | |||||||||
| Noninterest Income | |||||||||||||||||
| Trust service fees | 8,248 | 10,723 | (23.1 | %) | 38,420 | 42,629 | (9.9 | %) | |||||||||
| Service charges on deposit accounts | 30,946 | 25,866 | 19.6 | % | 118,368 | 101,042 | 17.1 | % | |||||||||
| Card-based and other nondeposit fees | 12,297 | 12,088 | 1.7 | % | 48,540 | 47,558 | 2.1 | % | |||||||||
| Retail commissions | 15,541 | 14,917 | 4.2 | % | 62,588 | 61,645 | 1.5 | % | |||||||||
| Mortgage banking, net | (1,227 | ) | 498 | (346.4 | %) | 14,684 | 22,750 | (35.5 | %) | ||||||||
| Bank owned life insurance income | 4,711 | 4,240 | 11.1 | % | 19,804 | 17,419 | 13.7 | % | |||||||||
| Asset sale gains (losses), net | (1,054 | ) | 11,062 | (109.5 | %) | (1,668 | ) | 15,607 | (110.7 | %) | |||||||
| Investment securities gains (losses), net | (35,298 | ) | (815 | ) | N/M | (52,541 | ) | 8,174 | N/M | ||||||||
| Other | 6,910 | 7,094 | (2.6 | %) | 37,455 | 27,957 | 34.0 | % | |||||||||
| Total noninterest income | 41,074 | 85,673 | (52.1 | %) | 285,650 | 344,781 | (17.2 | %) | |||||||||
| Noninterest Expense | |||||||||||||||||
| Personnel expense | 77,374 | 76,487 | 1.2 | % | 309,478 | 303,428 | 2.0 | % | |||||||||
| Occupancy | 13,134 | 11,784 | 11.5 | % | 50,461 | 46,659 | 8.1 | % | |||||||||
| Equipment | 4,785 | 4,820 | (0.7 | %) | 19,123 | 17,908 | 6.8 | % | |||||||||
| Data processing | 7,446 | 8,189 | (9.1 | %) | 30,451 | 31,690 | (3.9 | %) | |||||||||
| Business development and advertising | 6,047 | 5,482 | 10.3 | % | 21,400 | 19,785 | 8.2 | % | |||||||||
| Other intangible amortization | 1,564 | 1,758 | (11.0 | %) | 6,269 | 7,116 | (11.9 | %) | |||||||||
| Legal and professional fees | 5,311 | 3,358 | 58.2 | % | 14,566 | 11,841 | 23.0 | % | |||||||||
| Foreclosure/OREO expense | 6,716 | 2,575 | 160.8 | % | 13,685 | 7,508 | 82.3 | % | |||||||||
| Other | 26,373 | 25,649 | 2.8 | % | 92,027 | 88,956 | 3.5 | % | |||||||||
| Total noninterest expense | 148,750 | 140,102 | 6.2 | % | 557,460 | 534,891 | 4.2 | % | |||||||||
| Income before income taxes | 19,062 | 94,289 | (79.8 | %) | 222,280 | 419,194 | (47.0 | %) | |||||||||
| Income tax expense | 2,203 | 29,498 | (92.5 | %) | 53,828 | 133,442 | (59.7 | %) | |||||||||
| Net Income | 16,859 | 64,791 | (74.0 | %) | 168,452 | 285,752 | (41.0 | %) | |||||||||
| Preferred stock dividends and discount | 3,250 | - | N/M | 3,250 | - | N/M | |||||||||||
| Net Income Available to Common Equity | $ 13,609 | $ 64,791 | (79.0 | %) | $ 165,202 | $ 285,752 | (42.2 | %) | |||||||||
| Earnings Per Common Share: | |||||||||||||||||
| Basic | $ 0.11 | $ 0.51 | (78.4 | %) | $ 1.30 | $ 2.24 | (42.0 | %) | |||||||||
| Diluted | $ 0.11 | $ 0.51 | (78.4 | %) | $ 1.29 | $ 2.23 | (42.2 | %) | |||||||||
| Average Common Shares Outstanding: | |||||||||||||||||
| Basic | 127,717 | 127,095 | 0.5 | % | 127,501 | 127,408 | 0.1 | % | |||||||||
| Diluted | 127,944 | 127,835 | 0.1 | % | 127,891 | 128,428 | (0.4 | %) | |||||||||
| N/M = Not meaningful. | |||||||||||||||||
| Consolidated Statements of Income (Unaudited) - Quarterly Trend | |||||||||||||||
| Associated Banc-Corp | |||||||||||||||
| (in thousands, except per share amounts) | 4Q08 | 3Q08 | 2Q08 | 1Q08 | 4Q07 | ||||||||||
| Interest Income | |||||||||||||||
| Interest and fees on loans | $ 230,872 | $ 229,001 | $ 237,727 | $ 255,053 | $ 277,647 | ||||||||||
Interest and dividends on investment securities and deposits in other financial institutions: | |||||||||||||||
| Taxable | 38,032 | 32,209 | 31,878 | 31,352 | 30,712 | ||||||||||
| Tax-exempt | 9,811 | 9,887 | 9,776 | 10,259 | 10,394 | ||||||||||
Interest on federal funds sold and securities purchased under agreements to resell | 154 | 279 | 213 | 206 | 214 | ||||||||||
| Total interest income | 278,869 | 271,376 | 279,594 | 296,870 | 318,967 | ||||||||||
| Interest Expense | |||||||||||||||
| Interest on deposits | 56,402 | 61,743 | 63,655 | 81,506 | 98,678 | ||||||||||
| Interest on short-term borrowings | 10,090 | 23,958 | 24,363 | 28,173 | 32,470 | ||||||||||
| Interest on long-term funding | 20,595 | 19,158 | 18,844 | 22,074 | 23,600 | ||||||||||
| Total interest expense | 87,087 | 104,859 | 106,862 | 131,753 | 154,748 | ||||||||||
| Net Interest Income | 191,782 | 166,517 | 172,732 | 165,117 | 164,219 | ||||||||||
| Provision for loan losses | 65,044 | 55,011 | 59,001 | 23,002 | 15,501 | ||||||||||
Net interest income after provision for loan losses | 126,738 | 111,506 | 113,731 | 142,115 | 148,718 | ||||||||||
| Noninterest Income | |||||||||||||||
| Trust service fees | 8,248 | 10,020 | 10,078 | 10,074 | 10,723 | ||||||||||
| Service charges on deposit accounts | 30,946 | 33,609 | 30,129 | 23,684 | 25,866 | ||||||||||
| Card-based and other nondeposit fees | 12,297 | 12,517 | 12,301 | 11,425 | 12,088 | ||||||||||
| Retail commissions | 15,541 | 14,928 | 16,004 | 16,115 | 14,917 | ||||||||||
| Total core fee-based revenue | 67,032 | 71,074 | 68,512 | 61,298 | 63,594 | ||||||||||
| Mortgage banking, net | (1,227 | ) | 3,571 | 5,395 | 6,945 | 498 | |||||||||
| Bank owned life insurance income | 4,711 | 5,235 | 4,997 | 4,861 | 4,240 | ||||||||||
| Asset sale gains (losses), net | (1,054 | ) | 573 | (731 | ) | (456 | ) | 11,062 | |||||||
| Investment securities gains (losses), net | (35,298 | ) | (13,585 | ) | (718 | ) | (2,940 | ) | (815 | ) | |||||
| Other | 6,910 | 8,455 | 9,170 | 12,920 | 7,094 | ||||||||||
| Total noninterest income | 41,074 | 75,323 | 86,625 | 82,628 | 85,673 | ||||||||||
| Noninterest Expense | |||||||||||||||
| Personnel expense | 77,374 | 78,395 | 78,066 | 75,643 | 76,487 | ||||||||||
| Occupancy | 13,134 | 12,037 | 12,026 | 13,264 | 11,784 | ||||||||||
| Equipment | 4,785 | 5,088 | 4,653 | 4,597 | 4,820 | ||||||||||
| Data processing | 7,446 | 7,634 | 8,250 | 7,121 | 8,189 | ||||||||||
| Business development and advertising | 6,047 | 5,175 | 5,137 | 5,041 | 5,482 | ||||||||||
| Other intangible amortization | 1,564 | 1,568 | 1,568 | 1,569 | 1,758 | ||||||||||
| Legal and professional fees | 5,311 | 3,538 | 2,944 | 2,773 | 3,358 | ||||||||||
| Foreclosure/OREO expense | 6,716 | 2,427 | 2,573 | 1,969 | 2,575 | ||||||||||
| Other | 26,373 | 20,715 | 20,604 | 24,335 | 25,649 | ||||||||||
| Total noninterest expense | 148,750 | 136,577 | 135,821 | 136,312 | 140,102 | ||||||||||
| Income before income taxes | 19,062 | 50,252 | 64,535 | 88,431 | 94,289 | ||||||||||
| Income tax expense | 2,203 | 12,483 | 17,176 | 21,966 | 29,498 | ||||||||||
| Net Income | 16,859 | 37,769 | 47,359 | 66,465 | 64,791 | ||||||||||
| Preferred stock dividends and discount | 3,250 | - | - | - | - | ||||||||||
| Net Income Available to Common Equity | $ 13,609 | $ 37,769 | $ 47,359 | $ 66,465 | $ 64,791 | ||||||||||
| Earnings Per Common Share: | |||||||||||||||
| Basic | $ 0.11 | $ 0.30 | $ 0.37 | $ 0.52 | $ 0.51 | ||||||||||
| Diluted | $ 0.11 | $ 0.30 | $ 0.37 | $ 0.52 | $ 0.51 | ||||||||||
| Average Common Shares Outstanding: | |||||||||||||||
| Basic | 127,717 | 127,553 | 127,433 | 127,298 | 127,095 | ||||||||||
| Diluted | 127,944 | 127,711 | 127,964 | 127,825 | 127,835 | ||||||||||
| Selected Quarterly Information | |||||||||||||||||||||
| Associated Banc-Corp | |||||||||||||||||||||
| (in thousands, except per share and full time equivalent employee data) | YTD 2008 | YTD 2007 | 4th Qtr 2008 | 3rd Qtr 2008 | 2nd Qtr 2008 | 1st Qtr 2008 | 4th Qtr 2007 | ||||||||||||||
| Summary of Operations | |||||||||||||||||||||
| Net interest income | $ 696,148 | $ 643,813 | $ 191,782 | $ 166,517 | $ 172,732 | $ 165,117 | $ 164,219 | ||||||||||||||
| Provision for loan losses | 202,058 | 34,509 | 65,044 | 55,011 | 59,001 | 23,002 | 15,501 | ||||||||||||||
| Asset sale gains (losses), net | (1,668 | ) | 15,607 | (1,054 | ) | 573 | (731 | ) | (456 | ) | 11,062 | ||||||||||
| Investment securities gains (losses), net | (52,541 | ) | 8,174 | (35,298 | ) | (13,585 | ) | (718 | ) | (2,940 | ) | (815 | ) | ||||||||
| Noninterest income (excluding securities & asset gains) | 339,859 | 321,000 | 77,426 | 88,335 | 88,074 | 86,024 | 75,426 | ||||||||||||||
| Noninterest expense | 557,460 | 534,891 | 148,750 | 136,577 | 135,821 | 136,312 | 140,102 | ||||||||||||||
| Income before income taxes | 222,280 | 419,194 | 19,062 | 50,252 | 64,535 | 88,431 | 94,289 | ||||||||||||||
| Income taxes | 53,828 | 133,442 | 2,203 | 12,483 | 17,176 | 21,966 | 29,498 | ||||||||||||||
| Net income | 168,452 | 285,752 | 16,859 | 37,769 | 47,359 | 66,465 | 64,791 | ||||||||||||||
| Net income available to common equity | 165,202 | 285,752 | 13,609 | 37,769 | 47,359 | 66,465 | 64,791 | ||||||||||||||
| Taxable equivalent adjustment | 27,711 | 27,259 | 6,902 | 6,899 | 6,814 | 7,096 | 7,119 | ||||||||||||||
| Per Common Share Data | |||||||||||||||||||||
| Net income: | |||||||||||||||||||||
| Basic | $ 1.30 | $ 2.24 | $ 0.11 | $ 0.30 | $ 0.37 | $ 0.52 | $ 0.51 | ||||||||||||||
| Diluted | 1.29 | 2.23 | 0.11 | 0.30 | 0.37 | 0.52 | 0.51 | ||||||||||||||
| Dividends | 1.27 | 1.22 | 0.32 | 0.32 | 0.32 | 0.31 | 0.31 | ||||||||||||||
| Market Value: | |||||||||||||||||||||
| High | $ 29.23 | $ 35.43 | $ 24.21 | $ 25.92 | $ 29.23 | $ 28.86 | $ 30.49 | ||||||||||||||
| Low | 14.85 | 25.23 | 15.72 | 14.85 | 19.29 | 22.60 | 25.23 | ||||||||||||||
| Close | 20.93 | 27.09 | 20.93 | 19.95 | 19.29 | 26.63 | 27.09 | ||||||||||||||
| Book value | 18.54 | 18.32 | 18.54 | 18.52 | 18.46 | 18.71 | 18.32 | ||||||||||||||
| Performance Ratios (annualized) | |||||||||||||||||||||
| Earning assets yield | 5.82 | % | 6.99 | % | 5.57 | % | 5.58 | % | 5.82 | % | 6.33 | % | 6.88 | % | |||||||
| Interest-bearing liabilities rate | 2.53 | 3.98 | 2.00 | 2.44 | 2.53 | 3.19 | 3.82 | ||||||||||||||
| Net interest margin | 3.65 | 3.60 | 3.88 | 3.48 | 3.65 | 3.58 | 3.62 | ||||||||||||||
| Return on average assets | 0.76 | 1.38 | 0.30 | 0.68 | 0.87 | 1.25 | 1.23 | ||||||||||||||
| Return on average equity | 6.95 | 12.68 | 2.58 | 6.38 | 8.01 | 11.34 | 11.23 | ||||||||||||||
| Return on average tangible common equity (1) | 11.81 | 21.91 | 3.83 | 10.83 | 13.51 | 19.26 | 19.50 | ||||||||||||||
| Efficiency ratio (2) | 52.41 | 53.92 | 53.87 | 52.18 | 50.75 | 52.79 | 56.78 | ||||||||||||||
| Effective tax rate | 24.22 | 31.83 | 11.56 | 24.84 | 26.61 | 24.84 | 31.28 | ||||||||||||||
| Dividend payout ratio (3) | 97.69 | 54.46 | 290.91 | 106.67 | 86.49 | 59.62 | 60.78 | ||||||||||||||
| Average Balances | |||||||||||||||||||||
| Assets | $ 22,037,963 | $ 20,638,005 | $ 22,646,421 | $ 22,072,948 | $ 21,975,451 | $ 21,449,963 | $ 20,935,023 | ||||||||||||||
| Earning assets | 19,839,706 | 18,644,770 | 20,436,483 | 19,884,434 | 19,754,651 | 19,276,208 | 18,849,079 | ||||||||||||||
| Interest-bearing liabilities | 17,019,832 | 15,886,710 | 17,363,481 | 17,107,551 | 16,992,508 | 16,611,047 | 16,090,488 | ||||||||||||||
| Loans | 16,080,565 | 15,132,634 | 16,285,881 | 16,203,717 | 16,120,732 | 15,708,321 | 15,301,761 | ||||||||||||||
| Deposits | 13,812,072 | 13,741,803 | 14,395,626 | 13,710,297 | 13,493,511 | 13,643,559 | 13,760,991 | ||||||||||||||
| Wholesale funding | 5,654,373 | 4,520,916 | 5,496,248 | 5,876,051 | 5,950,699 | 5,293,797 | 4,750,471 | ||||||||||||||
| Common stockholders' equity | 2,366,453 | 2,253,878 | 2,376,639 | 2,353,606 | 2,377,841 | 2,357,757 | 2,289,522 | ||||||||||||||
| Stockholders' equity | 2,423,332 | 2,253,878 | 2,602,917 | 2,353,606 | 2,377,841 | 2,357,757 | 2,289,522 | ||||||||||||||
| Common stockholders' equity/assets | 10.74 | % | 10.92 | % | 10.49 | % | 10.66 | % | 10.82 | % | 10.99 | % | 10.94 | % | |||||||
| Stockholders' equity / assets | 11.00 | % | 10.92 | % | 11.49 | % | 10.66 | % | 10.82 | % | 10.99 | % | 10.94 | % | |||||||
| At Period End | |||||||||||||||||||||
| Assets | $ 24,192,067 | $ 22,487,394 | $ 22,302,704 | $ 21,903,753 | $ 21,592,083 | ||||||||||||||||
| Loans | 16,283,908 | 16,272,487 | 16,149,327 | 15,785,283 | 15,516,252 | ||||||||||||||||
| Allowance for loan losses | 265,378 | 246,189 | 229,605 | 207,602 | 200,570 | ||||||||||||||||
| Goodwill | 929,168 | 929,168 | 929,168 | 929,168 | 929,168 | ||||||||||||||||
| Mortgage servicing rights, net | 45,568 | 53,977 | 54,725 | 51,013 | 51,187 | ||||||||||||||||
| Other intangible assets | 34,597 | 36,161 | 37,896 | 39,464 | 41,033 | ||||||||||||||||
| Deposits | 15,154,796 | 14,245,667 | 13,378,734 | 13,882,174 | 13,973,913 | ||||||||||||||||
| Wholesale funding | 5,565,583 | 5,667,737 | 6,359,811 | 5,388,923 | 5,091,558 | ||||||||||||||||
| Stockholders' equity | 2,876,503 | 2,364,247 | 2,353,882 | 2,382,418 | 2,329,705 | ||||||||||||||||
| Stockholders' equity / assets | 11.89 | % | 10.51 | % | 10.55 | % | 10.88 | % | 10.79 | % | |||||||||||
| Tangible common equity / tangible assets (4) | 6.05 | % | 6.50 | % | 6.50 | % | 6.75 | % | 6.59 | % | |||||||||||
| Tangible equity/tangible assets (5) | 8.23 | % | 6.50 | % | 6.50 | % | 6.75 | % | 6.59 | % | |||||||||||
| Shares outstanding, end of period | 127,762 | 127,646 | 127,537 | 127,365 | 127,160 | ||||||||||||||||
| Selected trend information | |||||||||||||||||||||
| Average full time equivalent employees | 5,109 | 5,141 | 5,179 | 5,093 | 5,095 | ||||||||||||||||
| Trust assets under management, at market value | $ 5,100,000 | $ 5,600,000 | $ 5,900,000 | $ 6,000,000 | $ 6,100,000 | ||||||||||||||||
| Mortgage loans originated for sale during period | 247,465 | 217,993 | 431,757 | 516,780 | 333,331 | ||||||||||||||||
| Mortgage portfolio serviced for others | 6,606,000 | 6,596,000 | 6,584,000 | 6,472,000 | 6,403,000 | ||||||||||||||||
| Mortgage servicing rights, net / Portfolio serviced for others | 0.69 | % | 0.82 | % | 0.83 | % | 0.79 | % | 0.80 | % | |||||||||||
| (1) Return on average equity = Net income divided by average equity. | |||||||||||||||||||||
| (2) 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. | |||||||||||||||||||||
| (3) 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. | |||||||||||||||||||||
| (4) Ratio is based upon basic earnings per common share. | |||||||||||||||||||||
| (5) 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. | |||||||||||||||||||||
(6) 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. | |||||||||||||||||||||
| Financial Summary and Comparison | ||||||||||||||||
| Associated Banc-Corp | Three months ended | Year ended | ||||||||||||||
| December 31, | December 31, | |||||||||||||||
| (in thousands) | 2008 | 2007 | % Change | 2008 | 2007 | % Change | ||||||||||
| Allowance for Loan Losses | ||||||||||||||||
| Beginning balance | $ 246,189 | $ 200,560 | 22.8 | % | $ 200,570 | $ 203,481 | (1.4 | %) | ||||||||
| Balance related to acquisition | - | - | N/M | - | 2,991 | N/M | ||||||||||
| Provision for loan losses | 65,044 | 15,501 | 319.6 | % | 202,058 | 34,509 | 485.5 | % | ||||||||
| Charge offs | (47,750 | ) | (17,156 | ) | 178.3 | % | (145,826 | ) | (47,249 | ) | 208.6 | % | ||||
| Recoveries | 1,895 | 1,665 | 13.8 | % | 8,576 | 6,838 | 25.4 | % | ||||||||
| Net charge offs | (45,855 | ) | (15,491 | ) | 196.0 | % | (137,250 | ) | (40,411 | ) | 239.6 | % | ||||
| Ending balance | $ 265,378 | $ 200,570 | 32.3 | % | $ 265,378 | $ 200,570 | 32.3 | % | ||||||||
| Credit Quality | Dec08 vs Sept08 | Dec08 vs Dec07 | ||||||||||||||
| Dec 31, 2008 | Sept 30, 2008 | % Change | Jun 30, 2008 | Mar 31, 2008 | Dec 31,2007 | % Change | ||||||||||
| Nonaccrual loans | $ 326,857 | $ 290,039 | 12.7 | % | $ 277,100 | $ 197,498 | $ 152,528 | 114.3 | % | |||||||
| Loans 90 or more days past due and still accruing | 13,811 | 14,631 | (5.6 | %) | 11,762 | 9,959 | 10,118 | 36.5 | % | |||||||
| Total nonperforming loans | 340,668 | 304,670 | 11.8 | % | 288,862 | 207,457 | 162,646 | 109.5 | % | |||||||
| Other real estate owned (OREO) | 48,710 | 46,473 | 4.8 | % | 46,579 | 26,798 | 26,489 | 83.9 | % | |||||||
| Total nonperforming assets | $ 389,378 | $ 351,143 | 10.9 | % | $ 335,441 | $ 234,255 | $ 189,135 | 105.9 | % | |||||||
| Provision for loan losses | 65,044 | 55,011 | 18.2 | % | 59,001 | 23,002 | 15,501 | 319.6 | % | |||||||
| Net charge offs | 45,855 | 38,427 | 19.3 | % | 36,998 | 15,970 | 15,491 | 196.0 | % | |||||||
| Allowance for loan losses / loans | 1.63 | % | 1.51 | % | 1.42 | % | 1.32 | % | 1.29 | % | ||||||
| Allowance for loan losses / nonperforming loans | 77.90 | 80.81 | 79.49 | 100.07 | 123.32 | |||||||||||
| Nonperforming loans / total loans | 2.09 | 1.87 | 1.79 | 1.31 | 1.05 | |||||||||||
| Nonperforming assets / total loans plus OREO | 2.38 | 2.15 | 2.07 | 1.48 | 1.22 | |||||||||||
| Nonperforming assets / total assets | 1.61 | 1.56 | 1.50 | 1.07 | 0.88 | |||||||||||
| Net charge offs / average loans (annualized) | 1.12 | 0.94 | 0.92 | 0.41 | 0.40 | |||||||||||
| Year-to-date net charge offs / average loans | 0.85 | 0.76 | 0.67 | 0.41 | 0.27 | |||||||||||
| Nonperforming loans by type: | ||||||||||||||||
| Commercial, financial & agricultural | $ 104,664 | $ 85,995 | 21.7 | % | $ 78,731 | $ 54,919 | $ 32,610 | 221.0 | % | |||||||
| Commercial real estate | 62,423 | 52,875 | 18.1 | % | 42,280 | 37,367 | 35,049 | 78.1 | % | |||||||
| Real estate - construction | 90,048 | 98,205 | (8.3 | %) | 110,717 | 56,456 | 39,837 | 126.0 | % | |||||||
| Lease financing | 187 | 83 | 125.3 | % | 522 | 1,316 | 1,323 | (85.9 | %) | |||||||
| Total commercial | 257,322 | 237,158 | 8.5 | % | 232,250 | 150,058 | 108,819 | 136.5 | % | |||||||
| Home equity | 31,035 | 25,372 | 22.3 | % | 23,555 | 18,488 | 16,209 | 91.5 | % | |||||||
| Installment | 7,155 | 6,035 | 18.6 | % | 5,184 | 4,184 | 3,881 | 84.4 | % | |||||||
| Total retail | 38,190 | 31,407 | 21.6 | % | 28,739 | 22,672 | 20,090 | 90.1 | % | |||||||
| Residential mortgage | 45,156 | 36,105 | 25.1 | % | 27,873 | 34,727 | 33,737 | 33.8 | % | |||||||
| Total nonperforming loans | $ 340,668 | $ 304,670 | 11.8 | % | $ 288,862 | $ 207,457 | $ 162,646 | 109.5 | % | |||||||
| Period End Loan Composition | Dec08 vs Sept08 | Dec08 vs Dec07 | ||||||||||||||
| Dec 31, 2008 | Sept 30, 2008 | % Change | Jun 30, 2008 | Mar 31, 2008 | Dec 31,2007 | % Change | ||||||||||
| Commercial, financial & agricultural | $ 4,388,691 | $ 4,343,208 | 1.0 | % | $ 4,423,192 | $ 4,458,639 | $ 4,281,091 | 2.5 | % | |||||||
| Commercial real estate | 3,566,551 | 3,534,791 | 0.9 | % | 3,583,877 | 3,585,779 | 3,635,365 | (1.9 | %) | |||||||
| Real estate - construction | 2,260,888 | 2,363,116 | (4.3 | %) | 2,351,401 | 2,273,125 | 2,260,766 | 0.0 | % | |||||||
| Lease financing | 122,113 | 125,907 | (3.0 | %) | 124,661 | 118,613 | 108,794 | 12.2 | % | |||||||
| Total commercial | 10,338,243 | 10,367,022 | (0.3 | %) | 10,483,131 | 10,436,156 | 10,286,016 | 0.5 | % | |||||||
| Home equity | 2,883,317 | 2,892,952 | (0.3 | %) | 2,757,684 | 2,387,223 | 2,269,122 | 27.1 | % | |||||||
| Installment | 827,303 | 842,741 | (1.8 | %) | 826,895 | 842,564 | 841,136 | (1.6 | %) | |||||||
| Total retail | 3,710,620 | 3,735,693 | (0.7 | %) | 3,584,579 | 3,229,787 | 3,110,258 | 19.3 | % | |||||||
| Residential mortgage | 2,235,045 | 2,169,772 | 3.0 | % | 2,081,617 | 2,119,340 | 2,119,978 | 5.4 | % | |||||||
| Total loans | $ 16,283,908 | $ 16,272,487 | 0.1 | % | $ 16,149,327 | $ 15,785,283 | $ 15,516,252 | 4.9 | % | |||||||
| Period End Deposit Composition | Dec08 vs Sept08 | Dec08 vs Dec07 | ||||||||||||||
| Dec 31, 2008 | Sept 30, 2008 | % Change | Jun 30, 2008 | Mar 31, 2008 | Dec 31,2007 | % Change | ||||||||||
| Demand | $ 2,814,079 | $ 2,545,779 | 10.5 | % | $ 2,602,026 | $ 2,516,265 | $ 2,661,078 | 5.7 | % | |||||||
| Savings | 841,129 | 888,731 | (5.4 | %) | 921,000 | 891,806 | 853,618 | (1.5 | %) | |||||||
| Interest-bearing demand | 1,796,405 | 1,667,640 | 7.7 | % | 1,697,910 | 1,788,404 | 1,947,551 | (7.8 | %) | |||||||
| Money market | 4,926,088 | 4,608,686 | 6.9 | % | 3,917,505 | 3,972,080 | 3,923,063 | 25.6 | % | |||||||
| Brokered CDs | 789,536 | 579,607 | 36.2 | % | 398,423 | 731,398 | 409,637 | 92.7 | % | |||||||
| Other time deposits | 3,987,559 | 3,955,224 | 0.8 | % | 3,841,870 | 3,982,221 | 4,178,966 | (4.6 | %) | |||||||
| Total deposits | $ 15,154,796 | $ 14,245,667 | 6.4 | % | $ 13,378,734 | $ 13,882,174 | $ 13,973,913 | 8.5 | % | |||||||
Network transaction deposits included above in interest-bearing demand and money market | $ 1,530,675 | $ 1,356,616 | 12.8 | % | $ 620,440 | $ 610,351 | $ 664,982 | 130.2 | % | |||||||
| Customer repo sweeps (a) | $ 505,788 | $ 657,032 | (23.0 | %) | $ 667,720 | $ 789,218 | $ 844,414 | (40.1 | %) | |||||||
| (a) Included within short-term borrowings. | ||||||||||||||||
| N/M = Not meaningful. | ||||||||||||||||
| Net Interest Income Analysis - Taxable Equivalent Basis | ||||||||||
| Associated Banc-Corp | Year ended December 31, 2008 | Year ended December 31, 2007 | ||||||||
Average | Interest | Average | Average | Interest | Average | |||||
| (in thousands) | Balance | Income / Expense | Yield / Rate | Balance | Income / Expense | Yield / Rate | ||||
| Earning assets: | ||||||||||
| Loans: (1) (2) (3) | ||||||||||
| Commercial | $ 10,387,727 | $ 600,079 | 5.78 | % | $ 9,807,964 | $ 730,712 | 7.45 | % | ||
| Residential mortgage | 2,200,145 | 129,077 | 5.87 | 2,292,606 | 141,127 | 6.16 | ||||
| Retail | 3,492,693 | 227,368 | 6.51 | 3,032,064 | 243,401 | 8.03 | ||||
| Total loans | 16,080,565 | 956,524 | 5.95 | 15,132,634 | 1,115,240 | 7.37 | ||||
| Investments and other | 3,759,141 | 197,896 | 5.26 | 3,512,136 | 187,731 | 5.35 | ||||
| Total earning assets | 19,839,706 | 1,154,420 | 5.82 | 18,644,770 | 1,302,971 | 6.99 | ||||
| Other assets, net | 2,198,257 | 1,993,235 | ||||||||
| Total assets | $ 22,037,963 | $ 20,638,005 | ||||||||
| Interest-bearing liabilities: | ||||||||||
| Savings deposits | $ 890,811 | $ 4,021 | 0.45 | % | $ 913,143 | $ 4,494 | 0.49 | % | ||
| Interest-bearing demand deposits | 1,752,991 | 15,061 | 0.86 | 1,844,274 | 35,585 | 1.93 | ||||
| Money market deposits | 4,231,678 | 79,057 | 1.87 | 3,752,199 | 138,924 | 3.70 | ||||
| Time deposits, excluding Brokered CDs | 3,957,174 | 148,294 | 3.75 | 4,340,473 | 197,262 | 4.54 | ||||
| Total interest-bearing deposits, excluding Brokered CDs | 10,832,654 | 246,433 | 2.27 | 10,850,089 | 376,265 | 3.47 | ||||
| Brokered CDs | 532,805 | 16,873 | 3.17 | 515,705 | 27,088 | 5.25 | ||||
| Total interest-bearing deposits | 11,365,459 | 263,306 | 2.32 | 11,365,794 | 403,353 | 3.55 | ||||
| Wholesale funding | 5,654,373 | 167,255 | 2.96 | 4,520,916 | 228,546 | 5.06 | ||||
| Total interest-bearing liabilities | 17,019,832 | 430,561 | 2.53 | 15,886,710 | 631,899 | 3.98 | ||||
| Noninterest-bearing demand deposits | 2,446,613 | 2,376,009 | ||||||||
| Other liabilities | 148,186 | 121,408 | ||||||||
| Stockholders' equity | 2,423,332 | 2,253,878 | ||||||||
| Total liabilities and stockholders' equity | $ 22,037,963 | $ 20,638,005 | ||||||||
| Net interest income and rate spread (1) | $ 723,859 | 3.29 | % | $ 671,072 | 3.01 | % | ||||
| Net interest margin (1) | 3.65 | % | 3.60 | % | ||||||
| Taxable equivalent adjustment | $ 27,711 | $ 27,259 | ||||||||
| Three months ended December 31, 2008 | Three months ended December 31, 2007 | |||||||||
Average | Interest | Average | Average | Interest | Average | |||||
Balance | Income / Expense | Yield / Rate | Balance | Income / Expense | Yield / Rate | |||||
| Earning assets: | ||||||||||
| Loans: (1) (2) (3) | ||||||||||
| Commercial | $ 10,333,624 | $ 144,181 | 5.55 | % | $ 9,983,063 | $ 182,789 | 7.27 | % | ||
| Residential mortgage | 2,218,470 | 31,300 | 5.63 | 2,206,003 | 34,283 | 6.19 | ||||
| Retail | 3,733,787 | 56,406 | 6.02 | 3,112,695 | 61,459 | 7.86 | ||||
| Total loans | 16,285,881 | 231,887 | 5.67 | 15,301,761 | 278,531 | 7.23 | ||||
| Investments and other | 4,150,602 | 53,884 | 5.19 | 3,547,318 | 47,555 | 5.36 | ||||
| Total earning assets | 20,436,483 | 285,771 | 5.57 | 18,849,079 | 326,086 | 6.88 | ||||
| Other assets, net | 2,209,938 | 2,085,944 | ||||||||
| Total assets | $ 22,646,421 | $ 20,935,023 | ||||||||
| Interest-bearing liabilities: | ||||||||||
| Savings deposits | $ 880,155 | $ 903 | 0.41 | % | $ 898,780 | $ 1,259 | 0.56 | % | ||
| Interest-bearing demand deposits | 1,637,383 | 1,930 | 0.47 | 1,816,676 | 8,353 | 1.82 | ||||
| Money market deposits | 4,889,011 | 17,480 | 1.42 | 3,772,661 | 32,746 | 3.44 | ||||
| Time deposits, excluding Brokered CDs | 3,951,360 | 32,464 | 3.27 | 4,317,752 | 49,506 | 4.55 | ||||
| Total interest-bearing deposits, excluding Brokered CDs | 11,357,909 | 52,777 | 1.85 | 10,805,869 | 91,864 | 3.37 | ||||
| Brokered CDs | 509,324 | 3,625 | 2.83 | 534,148 | 6,814 | 5.06 | ||||
| Total interest-bearing deposits | 11,867,233 | 56,402 | 1.89 | 11,340,017 | 98,678 | 3.45 | ||||
| Wholesale funding | 5,496,248 | 30,685 | 2.22 | 4,750,471 | 56,070 | 4.69 | ||||
| Total interest-bearing liabilities | 17,363,481 | 87,087 | 2.00 | 16,090,488 | 154,748 | 3.82 | ||||
| Noninterest-bearing demand deposits | 2,528,393 | 2,420,974 | ||||||||
| Other liabilities | 151,630 | 134,039 | ||||||||
| Stockholders' equity | 2,602,917 | 2,289,522 | ||||||||
| Total liabilities and stockholders' equity | $ 22,646,421 | $ 20,935,023 | ||||||||
| Net interest income and rate spread (1) | $ 198,684 | 3.57 | % | $ 171,338 | 3.06 | % | ||||
| Net interest margin (1) | 3.88 | % | 3.62 | % | ||||||
| Taxable equivalent adjustment | $ 6,902 | $ 7,119 | ||||||||
| (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
