Associated Banc-Corp Reports 2015 Earnings of $1.19 per share on Record Loans and Deposits

Jan 21, 2016, 16:15 ET from Associated Banc-Corp

GREEN BAY, Wis., Jan. 21, 2016 /PRNewswire/ -- Associated Banc-Corp (NYSE: ASB) today reported net income available to common shareholders of $181 million, or $1.19 per common share, for the year ended December 31, 2015.   This compares to net income available to common shareholders of $186 million, or $1.16 per common share, for the year ended December 31, 2014.

For the quarter ended December 31, 2015, the Company reported earnings of $0.27 per common share.  This compares to $0.31 per common share for the quarter ended December 31, 2014.

"In 2015, we reached record levels of loans and deposits. We are particularly pleased by our year over year deposit growth in a competitive environment and transforming industry. In addition, our successful insurance business acquisition drove year over year fee income growth of 13%. We achieved these results with essentially flat expenses, when you adjust for the acquisition," said President and CEO Philip B. Flynn.  "Over the past five years, we have rebuilt and diversified our loan portfolio. We grew several specialized commercial lending businesses, including an oil and gas business focused entirely on reserve secured lending. Despite the recent energy price volatility, we remain committed to the energy business and we will continue to proactively manage the risk of our portfolio throughout this current cycle. As we enter 2016, we remain focused on enhancing our customer solutions and driving shareholder value."

2015 HIGHLIGHTS  

  • Average loans grew $1.4 billion, or 8% from a year ago to $18.3 billion
    • Commercial lending accounted for 55% of average loan growth
  • Average deposits grew $2.3 billion, or 13% from a year ago to $19.9 billion
  • Net interest income of $676 million decreased $5 million, or 1% from last year
    • Net interest margin of 2.84% declined from 3.08% in 2014
  • Noninterest expenses of $697 million increased $18 million, or 3% from last year
    • Substantially all the increase was attributable to the insurance business acquisition
  • During the year, the Company repurchased $93 million, or approximately 5 million shares, of common stock at an average cost of $18.73 per share
  • Return on average common equity Tier 1 was 9.9% and return on average tangible common equity was 10.0%
  • Total dividends per common share of $0.41 were up 11% from last year
  • Capital ratios remain strong with a common equity tier 1 ratio of 9.5% at year end

FOURTH QUARTER AND 2015 FINANCIAL RESULTS

Loans

Full year 2015 average loans of $18.3 billion were up $1.4 billion, or 8% from 2014. Total commercial lending average balances grew $772 million, or 7% from the prior year. Commercial and business lending average balances grew $540 million, or 8% from 2014.   Commercial real estate lending average balances grew $232 million, or 6% from 2014. Residential lending average balances increased $675 million, or 14% from the prior year.

Fourth quarter 2015 average loans of $18.5 billion increased $90 million, or 0.5% from the third quarter and increased $1.2 billion, or 7% from the year ago quarter.  Total commercial lending average balances decreased $84 million, or 1% from the prior quarter and increased $479 million, or 4% from the year ago quarter. Commercial and business lending average balances declined $198 million, or 3% from the third quarter and was attributed to lower general commercial and mortgage warehouse activity. Commercial and business lending average balances were up $171 million, or 3% from the year ago quarter. Commercial real estate lending average balances grew $113 million, or 3% from the third quarter and are up $307 million, or 8% from the year ago quarter. Residential lending average balances grew $187 million, or 3% from the prior quarter and grew $754 million, or 15% from the year ago quarter.

For the period ended December 31, 2015, total loans of $18.7 billion were up $190 million, or 1% from September 30, 2015, and were up $1.1 billion, or 6% from December 31, 2014.  Total commercial lending was up $103 million, or 1% from the prior quarter end, and was up $474 million, or 4% from the prior year end. Total consumer loans were up $87 million or 1% from the prior quarter end and were up $646 million, or 10% from the prior year end.

For the period ended December 31, 2015, the Company's oil and gas exposure was $1 billion of commitments with $752 million of outstandings, representing approximately 4% of the loan portfolio. The loans are all reserve secured. The portfolio was comprised of approximately 50 credits made primarily to small and mid-sized companies.

Deposits

Full year 2015 average deposits of $19.9 billion were up $2.3 billion, or 13% from 2014.  Noninterest-bearing demand deposits and interest-bearing demand deposits average balances were up $329 million and $217 million, respectively, from the prior year. Money market average balances were up $1.6 billion, or 21% from 2014. Savings and time deposits average balances had modest growth in 2015.

Fourth quarter 2015 average deposits of $20.6 billion were up $322 million, or 2% compared to the third quarter and increased $2.1 billion, or 11% from the year ago quarter.  Noninterest-bearing demand deposits average balances increased $394 million, or 9% from the third quarter and were up $601 million, or 14% from the year ago quarter. Interest-bearing demand deposits average balances decreased $49 million, or 2% from the third quarter, and were modestly up from the year ago quarter. Money market average balances were slightly down compared to the third quarter, and up $1.3 billion, or 16% from the year ago quarter. Average savings balances were flat from the prior quarter and up $94 million, or 7% from the year ago quarter. Average time deposits were down $20 million, or 1% from the third quarter and up $55 million, or 4% from the year ago quarter.

For the period ended December 31, 2015, total deposits of $21.0 billion were up $449 million, or 2% from September 30, 2015, and were up $2.2 billion, or 12% from December 31, 2014.  Noninterest-bearing demand deposit balances were up $905 million, or 19% from the prior quarter end and up $1.1 billion, or 23% from the prior year end. Money market balances decreased $414 million, or 4% from the prior quarter end and up $778 million, or 9% from December 31, 2014. Interest-bearing demand deposits were up $29 million, or 1% from the prior quarter end and up $318 million, or 10% from the prior year end. Savings accounts were down $12 million, or 1% from prior quarter end and up $99 million, or 8% from the prior year end.

Net Interest Income and Net Interest Margin

Net interest income of $676 million for 2015 was down $5 million, or 1% from 2014.  Fourth quarter net interest income of $171 million increased $1 million, or 1% from the prior quarter and was down $3 million, or 2% compared to the year ago quarter.

Net interest margin of 2.84% for 2015 reflected 24 basis points of compression from 2014.  Fourth quarter net interest margin of 2.82% was flat to the prior quarter and 22 basis points lower than the year ago quarter.   The majority of the year over year decline was attributed to commercial loan yield compression.  In addition, funding costs increased 6 basis points from the year ago quarter, primarily related to the carrying cost of the Company's $500 million of senior and subordinated debt issued in November 2014.

Fourth quarter total earning assets yield of 3.14% was up 1 basis point from the prior quarter. Asset yield compression was offset by $2 million in interest recoveries and deferred fees in the fourth quarter. The net interest margin impact of this activity was approximately 3 basis points for the quarter.

Total interest-bearing funding costs of 0.41% in the fourth quarter were up 1 basis point from the prior quarter. 

Noninterest Income

Noninterest income of $328 million for 2015 was up $38 million, or 13% compared to 2014.  Insurance commissions were up $31 million, or 70% from the prior year due to the insurance business acquisition in the first quarter of 2015. Mortgage banking income increased $11 million from the prior year due to higher volumes and margins.

Fourth quarter noninterest income was $82 million, up $2 million, or 2% from the third quarter and up $12 million, or 18% from the year ago quarter.    Mortgage banking income increased $2 million from the third quarter, primarily driven by higher volumes and positive interest rate marks. Insurance commissions were modestly up from the third quarter, and up $7 million from the year ago quarter. Capital market fees increased $1 million from the prior quarter due to increased customer derivatives activity. Fourth quarter net investment securities gains of $4 million were primarily related to the continued restructuring of the Company's investment portfolio from Fannie Mae and Freddie Mac mortgage backed securities into Ginnie Mae securities.

Noninterest Expense

Total noninterest expense of $697 million in 2015 was up $18 million, or 3% compared to 2014, and was substantially attributable to increased personnel expense related to the insurance business acquisition.  Technology expense increased $5 million, or 9% from the prior year. Year over year increases in occupancy and FDIC expense were offset by decreases in several categories including foreclosure/OREO and equipment expense.

Total noninterest expense was $175 million in the fourth quarter, up $3 million, or 2% from both the third quarter and the year ago quarter. Personnel expense decreased $1 million in the fourth quarter due to reduced incentive compensation and lower staffing levels; partially offset by increased health and benefits costs. Business development and advertising increased $2 million from the third quarter driven by the Company's fall marketing campaign. FDIC expense increased $2 million in the fourth quarter related to an increase in FDIC risk premiums. Occupancy was higher in the fourth quarter due to a $2 million expense related to the consolidation of 10 branches during the quarter. Technology, equipment, and legal fees had declines in the fourth quarter.

Taxes

2015 income taxes of $81 million were down $4 million from 2014.  The effective tax rate for 2015 was 30% compared to 31% last year. 

Credit

Net charge offs of $8 million for the fourth quarter were flat to the third quarter, and up $3 million from the year ago quarter.  Potential problem loans increased to $302 million from $264 million in the third quarter, and increased from $190 million in the year ago quarter, primarily attributed to migration within the oil and gas portfolio.

The fourth quarter provision for credit losses was $20 million, up $12 million from the prior quarter, due primarily to an increase in reserves related to energy exposure, driven by the low and volatile price of oil and gas and the resulting downward migration in the portfolio. The allowance for loan losses related to the Company's energy portfolio was $42 million as of December 31, 2015, up from $29 million at the prior quarter end, and up from $17 million at the prior year end. The additional reserves increased the Company's energy reserve as a percent of its energy loans to 5.6% at year end, compared to 3.8% at the prior quarter end, and 2.3% at the prior year end.

Nonaccrual loans of $178 million were up $31 million in the fourth quarter, and were modestly higher than a year ago quarter, primarily attributable to the downgrade of two commercial loans. The nonaccrual loans to total loans ratio increased to 0.95% in the fourth quarter, up from 0.80% in the prior quarter, and down from 1.01% in the year ago quarter.

The Company's allowance for loan losses was $274 million, up $12 million from the third quarter, and up $8 million from the year ago quarter. The allowance for loan losses to total loans ratio increased to 1.47% in the fourth quarter, from 1.42% in the third quarter.

Capital

The Company's capital position remains strong, with a common equity Tier 1 ratio of 9.5% at December 31, 2015.  The Company's capital ratios continue to be in excess of the Basel III "well-capitalized" regulatory benchmarks on a fully phased in basis.

FOURTH QUARTER 2015 EARNINGS RELEASE CONFERENCE CALL

The Company will host a conference call for investors and analysts at 4:00 p.m. Central Time (CT) today, January 21, 2016.  Interested parties can listen to the call live on the internet through the investor relations section of the company's website, http://investor.associatedbank.com or by dialing 877-407-8037. The slide presentation for the call will be available on the company's website just prior to the call. The number for international callers is 201-689-8037. Participants should ask the operator for the Associated Banc-Corp fourth quarter 2015 earnings call.

An audio archive of the webcast will be available on the company's website at http://investor.associatedbank.com approximately fifteen minutes after the call is over.

ABOUT ASSOCIATED BANC-CORP

Associated Banc-Corp (NYSE: ASB) has total assets of over $27 billion and is one of the top 50 publicly traded U.S. bank holding companies. Headquartered in Green Bay, Wisconsin, Associated is a leading Midwest banking franchise, offering a full range of financial products and services from over 200 banking locations serving more than 100 communities throughout Wisconsin, Illinois and Minnesota, and commercial financial services in Indiana, Michigan, Missouri, Ohio and Texas. Associated Bank, N.A. is an Equal Housing Lender, Equal Opportunity Lender and Member FDIC. More information about Associated Banc-Corp is available at www.associatedbank.com.

FORWARD LOOKING STATEMENTS

Statements made in this document which 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.  Such forward-looking statements may be identified by the use of words such as "believe", "expect", "anticipate", "plan", "estimate", "should", "will", "intend", "outlook", or similar expressions.  Forward-looking statements are based on current management expectations and, by their nature, are subject to risks and uncertainties. Actual results may differ materially from those contained in the forward-looking statements.  Factors which may cause actual results to differ materially from those contained in such forward-looking statements include those identified in the Company's most recent Form 10-K and subsequent SEC filings.  Such factors are incorporated herein by reference. 

NON-GAAP FINANCIAL MEASURES

This press release contains references to measures which are not defined in generally accepted accounting principles ("GAAP"), including "efficiency ratio" and "common equity Tier 1." Information concerning these non-GAAP financial measures can be found in the attached tables.

Investor Contact: Teresa Gutierrez, Senior Vice President, Director of Investor Relations  920-491-7059

Media Contact: Cliff Bowers, Senior Vice President, Director of Public Relations 920-491-7542

 

Associated Banc-Corp Consolidated Balance Sheets (Unaudited)

(in thousands)

Dec 31, 2015

Sep 30, 2015

Seql Qtr $ Change

Jun 30, 2015

Mar 31, 2015

Dec 31, 2014

Comp Qtr $ Change

Assets

Cash and due from banks

$

374,921

$

303,701

$

71,220

$

375,369

$

355,541

$

444,113

$

(69,192)

Interest-bearing deposits in other financial institutions

79,764

70,023

9,741

101,573

488,426

571,924

(492,160)

Federal funds sold and securities purchased under agreements to resell

19,000

36,490

(17,490)

39,850

3,380

16,030

2,970

Securities held to maturity, at amortized cost

1,168,230

604,799

563,431

532,382

438,047

404,455

763,775

Securities available for sale, at fair value

4,967,414

5,403,656

(436,242)

5,407,998

5,358,310

5,396,812

(429,398)

Federal Home Loan Bank and Federal Reserve Bank stocks, at cost

147,240

160,871

(13,631)

160,765

189,222

189,107

(41,867)

Loans held for sale

124,915

105,144

19,771

151,146

159,963

154,935

(30,020)

Loans

18,714,343

18,524,773

189,570

18,303,252

17,979,032

17,593,846

1,120,497

Allowance for loan losses

(274,264)

(262,536)

(11,728)

(261,538)

(265,268)

(266,302)

(7,962)

Loans, net

18,440,079

18,262,237

177,842

18,041,714

17,713,764

17,327,544

1,112,535

Premises and equipment, net

267,606

271,119

(3,513)

274,338

274,591

274,688

(7,082)

Goodwill

968,844

968,844

968,844

968,774

929,168

39,676

Mortgage servicing rights

61,341

61,402

(61)

61,192

59,733

60,145

1,196

Other intangible assets

16,458

16,978

(520)

17,863

18,251

7,437

9,021

Trading assets

32,192

43,752

(11,560)

35,386

42,336

35,163

(2,971)

Other assets

1,047,017

1,158,227

(111,210)

1,016,725

998,402

1,010,253

36,764

Total assets

$

27,715,021

$

27,467,243

$

247,778

$

27,185,145

$

27,068,740

$

26,821,774

$

893,247

Liabilities and Stockholders' Equity

Noninterest-bearing demand deposits

$

5,562,466

$

4,657,261

$

905,205

$

4,332,171

$

4,570,872

$

4,505,272

$

1,057,194

Interest-bearing deposits

15,445,199

15,901,134

(455,935)

14,937,392

15,280,720

14,258,232

1,186,967

Total deposits

21,007,665

20,558,395

449,270

19,269,563

19,851,592

18,763,504

2,244,161

Federal funds purchased and securities sold under agreements to repurchase

431,438

702,569

(271,131)

689,699

587,272

493,991

(62,553)

Other short-term funding

402,978

319,766

83,212

905,837

75,265

574,297

(171,319)

Long-term funding

2,679,350

2,679,542

(192)

3,179,734

3,429,925

3,930,117

(1,250,767)

Trading liabilities

33,430

45,817

(12,387)

37,169

44,730

37,329

(3,899)

Accrued expenses and other liabilities

222,914

207,357

15,557

198,752

197,818

222,285

629

Total liabilities

24,777,775

24,513,446

264,329

24,280,754

24,186,602

24,021,523

756,252

Stockholders' Equity

Preferred equity

121,379

121,379

122,015

59,727

59,727

61,652

Common stock

1,642

1,642

1,642

1,674

1,665

(23)

Surplus

1,458,522

1,455,034

3,488

1,450,200

1,505,170

1,484,933

(26,411)

Retained earnings

1,593,239

1,570,199

23,040

1,538,684

1,509,967

1,497,818

95,421

Accumulated other comprehensive income (loss)

(32,616)

15,376

(47,992)

2,594

24,800

(4,850)

(27,766)

Treasury stock

(204,920)

(209,833)

4,913

(210,744)

(219,200)

(239,042)

34,122

Total stockholders' equity

2,937,246

2,953,797

(16,551)

2,904,391

2,882,138

2,800,251

136,995

Total liabilities and stockholders' equity

$

27,715,021

$

27,467,243

$

247,778

$

27,185,145

$

27,068,740

$

26,821,774

$

893,247

 

Associated Banc-Corp Consolidated Statements of Income (Unaudited)

Comp Qtr

Comp YTD

(in thousands, except per share amounts)

4Q15

4Q14

$ Change

% Change

YTD

Dec 2015

YTD

Dec 2014

$ Change

% Change

Interest Income

Interest and fees on loans

$

155,602

$

156,536

$

(934)

(0.6)

%

$

615,627

$

598,582

$

17,045

2.8

%

Interest and dividends on investment securities:

Taxable

26,395

25,061

1,334

5.3

%

100,292

102,464

(2,172)

(2.1)

%

Tax-exempt

7,783

7,580

203

2.7

%

31,152

29,064

2,088

7.2

%

Other interest

1,639

1,821

(182)

(10.0)

%

6,591

6,635

(44)

(0.7)

%

Total interest income

191,419

190,998

421

0.2

%

753,662

736,745

16,917

2.3

%

Interest Expense

Interest on deposits

8,844

7,319

1,525

20.8

%

33,125

26,294

6,831

26.0

%

Interest on Federal funds purchased and securities sold under agreements to repurchase

229

218

11

5.0

%

943

1,219

(276)

(22.6)

%

Interest on other short-term funding

186

156

30

19.2

%

465

785

(320)

(40.8)

%

Interest on long-term funding

10,692

8,644

2,048

23.7

%

42,851

27,480

15,371

55.9

%

Total interest expense

19,951

16,337

3,614

22.1

%

77,384

55,778

21,606

38.7

%

Net Interest Income

171,468

174,661

(3,193)

(1.8)

%

676,278

680,967

(4,689)

(0.7)

%

Provision for credit losses

20,000

5,000

15,000

300.0

%

37,500

16,000

21,500

134.4

%

Net interest income after provision for credit losses

151,468

169,661

(18,193)

(10.7)

%

638,778

664,967

(26,189)

(3.9)

%

Noninterest Income

Trust service fees

11,965

12,457

(492)

(3.9)

%

48,840

48,403

437

0.9

%

Service charges on deposit accounts

16,577

17,006

(429)

(2.5)

%

65,471

68,779

(3,308)

(4.8)

%

Card-based and other nondeposit fees

12,694

12,019

675

5.6

%

51,325

49,512

1,813

3.7

%

Insurance commissions

17,997

10,593

7,404

69.9

%

75,363

44,421

30,942

69.7

%

Brokerage and annuity commissions

3,694

3,496

198

5.7

%

15,378

16,089

(711)

(4.4)

%

Total core fee-based revenue

62,927

55,571

7,356

13.2

%

256,377

227,204

29,173

12.8

%

Mortgage banking, net

8,271

2,928

5,343

182.5

%

32,263

21,320

10,943

51.3

%

Capital market fees, net

3,423

2,613

810

31.0

%

10,752

9,973

779

7.8

%

Bank owned life insurance income

2,092

2,739

(647)

(23.6)

%

9,796

13,576

(3,780)

(27.8)

%

Asset gains (losses), net

(1,492)

3,727

(5,219)

(140.0)

%

1,592

10,288

(8,696)

(84.5)

%

Investment securities gains, net

4,095

25

4,070

N/M

8,133

494

7,639

N/M

Other

2,580

2,040

540

26.5

%

9,496

7,464

2,032

27.2

%

Total noninterest income

81,896

69,643

12,253

17.6

%

328,409

290,319

38,090

13.1

%

Noninterest Expense

Personnel expense

100,469

97,258

3,211

3.3

%

404,741

390,399

14,342

3.7

%

Occupancy

14,718

14,589

129

0.9

%

60,896

57,677

3,219

5.6

%

Equipment

5,695

6,148

(453)

(7.4)

%

23,209

24,784

(1,575)

(6.4)

%

Technology

13,953

14,581

(628)

(4.3)

%

60,613

55,472

5,141

9.3

%

Business development and advertising

7,652

8,538

(886)

(10.4)

%

25,772

26,144

(372)

(1.4)

%

Other intangible amortization

520

775

(255)

(32.9)

%

3,094

3,747

(653)

(17.4)

%

Loan expense

4,120

3,646

474

13.0

%

14,102

13,866

236

1.7

%

Legal and professional fees

3,963

4,257

(294)

(6.9)

%

17,052

17,485

(433)

(2.5)

%

Foreclosure / OREO expense

1,270

1,168

102

8.7

%

4,494

6,722

(2,228)

(33.1)

%

FDIC expense

7,500

6,956

544

7.8

%

26,000

23,761

2,239

9.4

%

Other

15,032

13,889

1,143

8.2

%

57,426

59,184

(1,758)

(3.0)

%

Total noninterest expense

174,892

171,805

3,087

1.8

%

697,399

679,241

18,158

2.7

%

Income before income taxes

58,472

67,499

(9,027)

(13.4)

%

269,788

276,045

(6,257)

(2.3)

%

Income tax expense

15,681

18,761

(3,080)

(16.4)

%

81,487

85,536

(4,049)

(4.7)

%

Net income

42,791

48,738

(5,947)

(12.2)

%

188,301

190,509

(2,208)

(1.2)

%

Preferred stock dividends

2,198

1,225

973

79.4

%

7,155

5,002

2,153

43.0

%

Net income available to common equity

$

40,593

$

47,513

$

(6,920)

(14.6)

%

$

181,146

$

185,507

$

(4,361)

(2.4)

%

Earnings Per Common Share:

Basic

$

0.27

$

0.31

$

(0.04)

(12.9)

%

$

1.20

$

1.17

$

0.03

2.6

%

Diluted

$

0.27

$

0.31

$

(0.04)

(12.9)

%

$

1.19

$

1.16

$

0.03

2.6

%

Average Common Shares Outstanding:

Basic

148,834

151,931

(3,097)

(2.0)

%

149,350

157,286

(7,936)

(5.0)

%

Diluted

150,163

153,083

(2,920)

(1.9)

%

150,603

158,254

(7,651)

(4.8)

%

N/M = Not  meaningful

 

Associated Banc-Corp Consolidated Statements of Income (Unaudited)—Quarterly Trend

Seql Qtr

Comp Qtr

(in thousands, except per share amounts)

4Q15

3Q15

$ Change

% Change

2Q15

1Q15

4Q14

$ Change

% Change

Interest Income

Interest and fees on loans

$

155,602

$

155,663

$

(61)

%

$

152,417

$

151,945

$

156,536

$

(934)

(0.6)

%

Interest and dividends on investment securities:

Taxable

26,395

24,937

1,458

5.8

%

23,868

25,092

25,061

1,334

5.3

%

Tax-exempt

7,783

7,917

(134)

(1.7)

%

7,565

7,887

7,580

203

2.7

%

Other interest

1,639

1,489

150

10.1

%

1,771

1,692

1,821

(182)

(10.0)

%

Total interest income

191,419

190,006

1,413

0.7

%

185,621

186,616

190,998

421

0.2

%

Interest Expense

Interest on deposits

8,844

8,521

323

3.8

%

8,141

7,619

7,319

1,525

20.8

%

Interest on Federal funds purchased and securities sold under agreements to repurchase

229

248

(19)

(7.7)

%

235

231

218

11

5.0

%

Interest on other short-term funding

186

83

103

124.1

%

115

81

156

30

19.2

%

Interest on long-term funding

10,692

10,645

47

0.4

%

10,642

10,872

8,644

2,048

23.7

%

Total interest expense

19,951

19,497

454

2.3

%

19,133

18,803

16,337

3,614

22.1

%

Net Interest Income

171,468

170,509

959

0.6

%

166,488

167,813

174,661

(3,193)

(1.8)

%

Provision for credit losses

20,000

8,000

12,000

150.0

%

5,000

4,500

5,000

15,000

300.0

%

Net interest income after provision for credit losses

151,468

162,509

(11,041)

(6.8)

%

161,488

163,313

169,661

(18,193)

(10.7)

%

Noninterest Income

Trust service fees

11,965

12,273

(308)

(2.5)

%

12,515

12,087

12,457

(492)

(3.9)

%

Service charges on deposit accounts

16,577

17,385

(808)

(4.6)

%

15,703

15,806

17,006

(429)

(2.5)

%

Card-based and other nondeposit fees

12,694

12,618

76

0.6

%

13,597

12,416

12,019

675

5.6

%

Insurance commissions

17,997

17,561

436

2.5

%

20,077

19,728

10,593

7,404

69.9

%

Brokerage and annuity commissions

3,694

3,809

(115)

(3.0)

%

4,192

3,683

3,496

198

5.7

%

Total core fee-based revenue

62,927

63,646

(719)

(1.1)

%

66,084

63,720

55,571

7,356

13.2

%

Mortgage banking, net

8,271

6,643

1,628

24.5

%

9,941

7,408

2,928

5,343

182.5

%

Capital market fees, net

3,423

2,170

1,253

57.7

%

2,692

2,467

2,613

810

31.0

%

Bank owned life insurance income

2,092

2,448

(356)

(14.5)

%

2,381

2,875

2,739

(647)

(23.6)

%

Asset gains (losses), net

(1,492)

95

(1,587)

N/M

1,893

1,096

3,727

(5,219)

(140.0)

%

Investment securities gains, net

4,095

2,796

1,299

46.5

%

1,242

25

4,070

N/M

Other

2,580

2,118

462

21.8

%

2,288

2,510

2,040

540

26.5

%

Total noninterest income

81,896

79,916

1,980

2.5

%

86,521

80,076

69,643

12,253

17.6

%

Noninterest Expense

Personnel expense

100,469

101,134

(665)

(0.7)

%

102,986

100,152

97,258

3,211

3.3

%

Occupancy

14,718

14,187

531

3.7

%

14,308

17,683

14,589

129

0.9

%

Equipment

5,695

6,003

(308)

(5.1)

%

5,739

5,772

6,148

(453)

(7.4)

%

Technology

13,953

14,748

(795)

(5.4)

%

16,354

15,558

14,581

(628)

(4.3)

%

Business development and advertising

7,652

5,964

1,688

28.3

%

6,829

5,327

8,538

(886)

(10.4)

%

Other intangible amortization

520

885

(365)

(41.2)

%

888

801

775

(255)

(32.9)

%

Loan expense

4,120

3,305

815

24.7

%

3,681

2,996

3,646

474

13.0

%

Legal and professional fees

3,963

4,207

(244)

(5.8)

%

4,344

4,538

4,257

(294)

(6.9)

%

Foreclosure / OREO expense

1,270

496

774

156.0

%

1,303

1,425

1,168

102

8.7

%

FDIC expense

7,500

6,000

1,500

25.0

%

6,000

6,500

6,956

544

7.8

%

Other

15,032

14,507

525

3.6

%

14,384

13,503

13,889

1,143

8.2

%

Total noninterest expense

174,892

171,436

3,456

2.0

%

176,816

174,255

171,805

3,087

1.8

%

Income before income taxes

58,472

70,989

(12,517)

(17.6)

%

71,193

69,134

67,499

(9,027)

(13.4)

%

Income tax expense

15,681

21,551

(5,870)

(27.2)

%

21,793

22,462

18,761

(3,080)

(16.4)

%

Net income

42,791

49,438

(6,647)

(13.4)

%

49,400

46,672

48,738

(5,947)

(12.2)

%

Preferred stock dividends

2,198

2,184

14

0.6

%

1,545

1,228

1,225

973

79.4

%

Net income available to common equity

$

40,593

$

47,254

$

(6,661)

(14.1)

%

$

47,855

$

45,444

$

47,513

$

(6,920)

(14.6)

%

Earnings Per Common Share:

Basic

$

0.27

$

0.31

$

(0.04)

(12.9)

%

$

0.32

$

0.30

$

0.31

$

(0.04)

(12.9)

%

Diluted

$

0.27

$

0.31

$

(0.04)

(12.9)

%

$

0.31

$

0.30

$

0.31

$

(0.04)

(12.9)

%

Average Common Shares Outstanding:

Basic

148,834

148,614

220

0.1

%

149,903

150,070

151,931

(3,097)

(2.0)

%

Diluted

150,163

149,799

364

0.2

%

151,108

151,164

153,083

(2,920)

(1.9)

%

N/M = Not meaningful

Associated Banc-Corp Selected Quarterly Information

($ in millions, except per share, full time equivalent employee data and branch count)

YTD 2015

YTD 2014

4Q15

3Q15

2Q15

1Q15

4Q14

Per Common Share Data

Dividends

$

0.41

$

0.37

$

0.11

$

0.10

$

0.10

$

0.10

$

0.10

Market value:

High

20.84

19.37

20.61

20.55

20.84

19.07

19.37

Low

16.62

15.58

17.98

17.17

18.50

16.62

16.75

Close

18.75

18.63

18.75

17.97

20.27

18.60

18.63

Book value

18.62

18.32

18.62

18.77

18.44

18.38

18.32

Tangible book value / share

$

12.10

$

12.06

$

12.10

$

12.23

$

11.90

$

11.95

$

12.06

Performance Ratios (annualized)

Return on average assets

0.70

%

0.76

%

0.62

%

0.72

%

0.74

%

0.71

%

0.75

%

Effective tax rate

30.20

%

30.99

%

26.82

%

30.36

%

30.61

%

32.49

%

27.79

%

Dividend payout ratio (1)

34.17

%

31.62

%

40.74

%

32.26

%

31.25

%

33.33

%

32.26

%

Selected Trend Information

Average full time equivalent employees

4,421

4,406

4,378

4,421

4,465

4,422

4,320

Branch count

215

225

228

227

226

Trust assets under management, at market value

$

7,729

$

7,626

$

8,068

$

8,138

$

7,993

Mortgage loans originated for sale during period

$

317

$

292

$

351

$

268

$

292

Mortgage portfolio serviced for others

$

7,915

$

7,907

$

7,898

$

7,920

$

7,999

Mortgage servicing rights, net / portfolio serviced for others

0.77

%

0.78

%

0.77

%

0.75

%

0.75

%

Selected Quarterly Ratios

Loans / deposits

89.08

%

90.11

%

94.99

%

90.57

%

93.77

%

Stockholders' equity / assets

10.60

%

10.75

%

10.68

%

10.65

%

10.44

%

Shares outstanding, end of period

151,239

150,928

150,862

153,567

149,560

(1)   Ratio is based upon basic earnings per common share.

 

Associated Banc-Corp Selected Asset Quality Information

(in thousands)

Dec 31, 2015

Sep 30, 2015

Seql Qtr % Change

Jun 30, 2015

Mar 31, 2015

Dec 31, 2014

Comp Qtr % Change

Allowance for Loan Losses

Beginning balance

$

262,536

$

261,538

0.4

%

$

265,268

$

266,302

$

266,262

(1.4)

%

Provision for loan losses

19,500

9,000

116.7

%

5,000

4,500

4,500

333.3

%

Charge offs

(12,741)

(11,732)

8.6

%

(14,537)

(13,270)

(8,778)

45.1

%

Recoveries

4,969

3,730

33.2

%

5,807

7,736

4,318

15.1

%

Net charge offs

(7,772)

(8,002)

(2.9)

%

(8,730)

(5,534)

(4,460)

74.3

%

Ending balance

$

274,264

$

262,536

4.5

%

$

261,538

$

265,268

$

266,302

3.0

%

Allowance for Unfunded Commitments

Beginning balance

$

23,900

$

24,900

(4.0)

%

$

24,900

$

24,900

$

24,400

(2.0)

%

Provision for unfunded commitments

500

(1,000)

(150.0)

%

500

%

Ending balance

$

24,400

$

23,900

2.1

%

$

24,900

$

24,900

$

24,900

(2.0)

%

Allowance for credit losses

$

298,664

$

286,436

4.3

%

$

286,438

$

290,168

$

291,202

2.6

%

Net Charge Offs

Dec 31, 2015

Sep 30, 2015

Seql Qtr % Change

Jun 30, 2015

Mar 31, 2015

Dec 31, 2014

Comp Qtr % Change

Commercial and industrial

$

4,612

$

4,709

(2.1)

%

$

3,921

$

4,650

$

1,323

248.6

%

Commercial real estate—owner occupied

291

(504)

(157.7)

%

1,198

739

134

117.2

%

Lease financing

(26)

N/M

9

(388.9)

%

Commercial and business lending

4,877

4,205

16.0

%

5,119

5,389

1,466

232.7

%

Commercial real estate—investor

665

496

34.1

%

1,856

(2,529)

(132)

N/M

Real estate construction

(140)

38

(468.4)

%

(673)

(743)

(116)

20.7

%

Commercial real estate lending

525

534

(1.7)

%

1,183

(3,272)

(248)

(311.7)

%

Total commercial

5,402

4,739

14.0

%

6,302

2,117

1,218

343.5

%

Home equity revolving lines of credit

294

533

(44.8)

%

246

1,220

1,094

(73.1)

%

Home equity loans junior liens

623

358

74.0

%

118

423

457

36.3

%

Home equity

917

891

2.9

%

364

1,643

1,551

(40.9)

%

Installment and credit cards

739

810

(8.8)

%

786

769

990

(25.4)

%

Residential mortgage

714

1,562

(54.3)

%

1,278

1,005

701

1.9

%

Total consumer

2,370

3,263

(27.4)

%

2,428

3,417

3,242

(26.9)

%

Total net charge offs

$

7,772

$

8,002

(2.9)

%

$

8,730

$

5,534

$

4,460

74.3

%

Net Charge Offs to Average Loans (in basis points) *

Dec 31, 2015

Sep 30, 2015

Jun 30, 2015

Mar 31, 2015

Dec 31, 2014

Commercial and industrial

31

31

26

32

9

Commercial real estate—owner occupied

12

(21)

48

30

5

Lease financing

(24)

-

-

7

Commercial and business lending

28

24

29

31

9

Commercial real estate—investor

8

6

24

(33)

(2)

Real estate construction

(5)

1

(26)

(30)

(5)

Commercial real estate lending

5

5

11

(32)

(2)

Total commercial

19

17

22

8

4

Home equity revolving lines of credit

13

24

11

56

49

Home equity loans junior liens

195

104

32

108

107

Home equity

36

35

14

64

58

Installment and credit cards

69

75

73

70

86

Residential mortgage

5

11

9

8

5

Total consumer

13

18

14

21

19

Total net charge offs

17

17

19

13

10

Credit Quality

Dec 31, 2015

Sep 30, 2015

Seql Qtr % Change

Jun 30, 2015

Mar 31, 2015

Dec 31, 2014

Comp Qtr % Change

Nonaccrual loans

$

178,258

$

147,454

20.9

%

$

160,361

$

174,346

$

177,413

0.5

%

Other real estate owned (OREO)

14,569

13,740

6.0

%

13,557

14,926

16,732

(12.9)

%

Total nonperforming assets

$

192,827

$

161,194

19.6

%

$

173,918

$

189,272

$

194,145

(0.7)

%

Loans 90 or more days past due and still accruing

$

1,648

$

1,484

11.1

%

$

1,662

$

1,715

$

1,623

1.5

%

Allowance for loan losses / loans

1.47

%

1.42

%

1.43

%

1.48

%

1.51

%

Allowance for loan losses / nonaccrual loans

153.86

178.05

163.09

152.15

150.10

Nonaccrual loans / total loans

0.95

0.80

0.88

0.97

1.01

Nonperforming assets / total loans plus OREO

1.03

0.87

0.95

1.05

1.10

Nonperforming assets / total assets

0.70

0.59

0.64

0.70

0.72

Net charge offs / average loans *

0.17

0.17

0.19

0.13

0.10

Year-to-date net charge offs / average loans *

0.16

0.16

0.16

0.13

0.09

* Annualized

N/M = Not meaningful

 

Associated Banc-Corp Selected Asset Quality Information (continued)

(in thousands)

Dec 31, 2015

Sep 30, 2015

Seql Qtr % Change

Jun 30, 2015

Mar 31, 2015

Dec 31, 2014

Comp Qtr % Change

Nonaccrual loans by type:

Commercial and industrial

$

91,941

$

58,421

57.4

%

$

64,738

$

61,620

$

49,663

85.1

%

Commercial real estate—owner occupied

8,049

13,368

(39.8)

%

18,821

21,861

25,825

(68.8)

%

Lease financing

1,634

1,763

(7.3)

%

1,656

1,720

1,801

(9.3)

%

Commercial and business lending

101,624

73,552

38.2

%

85,215

85,201

77,289

31.5

%

Commercial real estate—investor

8,643

6,921

24.9

%

6,090

13,742

22,685

(61.9)

%

Real estate construction

940

997

(5.7)

%

2,906

5,423

5,399

(82.6)

%

Commercial real estate lending

9,583

7,918

21.0

%

8,996

19,165

28,084

(65.9)

%

Total commercial

111,207

81,470

36.5

%

94,211

104,366

105,373

5.5

%

Home equity revolving lines of credit

9,917

8,060

23.0

%

8,420

9,171

9,853

0.6

%

Home equity loans junior liens

5,327

5,581

(4.6)

%

5,356

6,145

6,598

(19.3)

%

Home equity

15,244

13,641

11.8

%

13,776

15,316

16,451

(7.3)

%

Installment and credit cards

325

386

(15.8)

%

454

515

613

(47.0)

%

Residential mortgage

51,482

51,957

(0.9)

%

51,920

54,149

54,976

(6.4)

%

Total consumer

67,051

65,984

1.6

%

66,150

69,980

72,040

(6.9)

%

Total nonaccrual loans

$

178,258

$

147,454

20.9

%

$

160,361

$

174,346

$

177,413

0.5

%

Restructured loans (accruing)

Dec 31, 2015

Sep 30, 2015

Seql Qtr % Change

Jun 30, 2015

Mar 31, 2015

Dec 31, 2014

Comp Qtr % Change

Commercial and industrial

$

29,293

$

28,598

2.4

%

$

32,063

$

26,466

$

33,892

(13.6)

%

Commercial real estate—owner occupied

7,877

7,343

7.3

%

5,433

9,780

10,454

(24.7)

%

Commercial and business lending

37,170

35,941

3.4

%

37,496

36,246

44,346

(16.2)

%

Commercial real estate—investor

21,915

18,580

17.9

%

22,009

22,775

23,127

(5.2)

%

Real estate construction

510

485

5.2

%

714

717

727

(29.8)

%

Commercial real estate lending

22,425

19,065

17.6

%

22,723

23,492

23,854

(6.0)

%

Total commercial

59,595

55,006

8.3

%

60,219

59,738

68,200

(12.6)

%

Home equity revolving lines of credit

1,332

1,121

18.8

%

1,222

1,251

1,508

(11.7)

%

Home equity loans junior liens

5,737

5,824

(1.5)

%

6,610

6,642

6,701

(14.4)

%

Home equity

7,069

6,945

1.8

%

7,832

7,893

8,209

(13.9)

%

Installment and credit cards

829

804

3.1

%

796

891

974

(14.9)

%

Residential mortgage

19,870

20,054

(0.9)

%

21,373

20,295

20,833

(4.6)

%

Total consumer

27,768

27,803

(0.1)

%

30,001

29,079

30,016

(7.5)

%

Total restructured loans (accruing)

$

87,363

$

82,809

5.5

%

$

90,220

$

88,817

$

98,216

(11.1)

%

Restructured loans in nonaccrual loans (not included above)

$

37,684

$

36,583

3.0

%

$

43,699

$

53,553

$

57,656

(34.6)

%

Loans Past Due 30-89 Days

Dec 31, 2015

Sep 30, 2015

Seql Qtr % Change

Jun 30, 2015

Mar 31, 2015

Dec 31, 2014

Comp Qtr % Change

Commercial and industrial

$

1,011

$

2,921

(65.4)

%

$

6,357

$

1,717

$

14,747

(93.1)

%

Commercial real estate—owner occupied

7,142

2,018

253.9

%

1,090

1,849

10,628

(32.8)

%

Lease financing

375

(100.0)

%

N/M

Commercial and business lending

8,153

5,314

53.4

%

7,447

3,566

25,375

(67.9)

%

Commercial real estate—investor

291

1,218

(76.1)

%

19,843

2,215

1,208

(75.9)

%

Real estate construction

296

373

(20.6)

%

312

317

984

(69.9)

%

Commercial real estate lending

587

1,591

(63.1)

%

20,155

2,532

2,192

(73.2)

%

Total commercial

8,740

6,905

26.6

%

27,602

6,098

27,567

(68.3)

%

Home equity revolving lines of credit

5,559

6,142

(9.5)

%

5,157

7,150

6,725

(17.3)

%

Home equity loans junior liens

2,360

2,423

(2.6)

%

1,894

1,905

2,058

14.7

%

Home equity

7,919

8,565

(7.5)

%

7,051

9,055

8,783

(9.8)

%

Installment and credit cards

1,870

1,723

8.5

%

1,655

1,818

1,932

(3.2)

%

Residential mortgage

4,930

4,811

2.5

%

6,602

4,356

4,846

1.7

%

Total consumer

14,719

15,099

(2.5)

%

15,308

15,229

15,561

(5.4)

%

Total loans past due 30-89 days

$

23,459

$

22,004

6.6

%

$

42,910

$

21,327

$

43,128

(45.6)

%

Potential Problem Loans

Dec 31, 2015

Sep 30, 2015

Seql Qtr % Change

Jun 30, 2015

Mar 31, 2015

Dec 31, 2014

Comp Qtr % Change

Commercial and industrial

$

230,680

$

191,941

20.2

%

$

125,643

$

138,403

$

108,522

112.6

%

Commercial real estate—owner occupied

35,706

41,466

(13.9)

%

41,997

43,114

48,695

(26.7)

%

Lease financing

2,450

233

N/M

1,385

2,009

2,709

(9.6)

%

Commercial and business lending

268,836

233,640

15.1

%

169,025

183,526

159,926

68.1

%

Commercial real estate—investor

25,944

23,633

9.8

%

23,543

26,026

24,043

7.9

%

Real estate construction

3,919

2,354

66.5

%

1,327

1,487

1,776

120.7

%

Commercial real estate lending

29,863

25,987

14.9

%

24,870

27,513

25,819

15.7

%

Total commercial

298,699

259,627

15.0

%

193,895

211,039

185,745

60.8

%

Home equity revolving lines of credit

48

141

(66.0)

%

202

247

204

(76.5)

%

Home equity loans junior liens

174

86

102.3

%

230

711

676

(74.3)

%

Home equity

222

227

(2.2)

%

432

958

880

(74.8)

%

Installment and credit cards

N/M

2

(100.0)

%

Residential mortgage

2,796

3,966

(29.5)

%

5,341

6,621

3,781

(26.1)

%

Total consumer

3,018

4,193

(28.0)

%

5,773

7,579

4,663

(35.3)

%

Total potential problem loans

$

301,717

$

263,820

14.4

%

$

199,668

$

218,618

$

190,408

58.5

%

N/M = Not meaningful

 

Associated Banc-Corp Net Interest Income Analysis—Taxable Equivalent Basis — Sequential Quarter

Three months ended December 31, 2015

Three months ended September 30, 2015

(in thousands)

Average Balance

Interest Income /Expense

Average Yield /Rate

Average Balance

Interest Income /Expense

Average Yield /Rate

Earning assets:

 Loans: (1) (2) (3)

  Commercial and business lending

$

6,892,162

$

55,451

3.19

%

$

7,089,664

$

55,944

3.13

%

  Commercial real estate lending

4,373,460

37,587

3.41

%

4,260,329

36,694

3.42

%

 Total commercial

11,265,622

93,038

3.28

%

11,349,993

92,638

3.24

%

  Residential mortgage

5,845,557

47,305

3.24

%

5,658,253

47,004

3.32

%

  Retail

1,431,509

16,673

4.65

%

1,444,503

16,913

4.67

%

 Total loans

18,542,688

157,016

3.37

%

18,452,749

156,555

3.38

%

 Investment securities

  Taxable

5,205,033

26,395

2.03

%

4,968,609

24,937

2.01

%

  Tax-exempt (1)

1,016,329

11,909

4.69

%

997,489

12,112

4.86

%

  Other short-term investments

259,053

1,639

2.53

%

415,496

1,489

1.43

%

 Investments and other

6,480,415

39,943

2.47

%

6,381,594

38,538

2.42

%

Total earning assets

25,023,103

$

196,959

3.14

%

24,834,343

$

195,093

3.13

%

   Other assets, net

2,437,653

2,445,733

Total assets

$

27,460,756

$

27,280,076

Liabilities and stockholder's equity

Interest-bearing liabilities:

  Interest-bearing deposits:

 Savings deposits

$

1,358,141

$

249

0.07

%

$

1,357,677

$

254

0.07

%

 Interest-bearing demand deposits

3,150,628

1,217

0.15

%

3,199,391

962

0.12

%

 Money market deposits

9,534,551

4,351

0.18

%

9,538,030

4,350

0.18

%

 Time deposits

1,604,864

3,027

0.75

%

1,624,661

2,955

0.72

%

 Total interest-bearing deposits

15,648,184

8,844

0.22

%

15,719,759

8,521

0.22

%

 Federal funds purchased and securities sold under agreements to repurchase

605,026

229

0.15

%

649,891

248

0.15

%

 Other short-term funding

368,752

186

0.20

%

154,811

83

0.21

%

 Total short-term funding

973,778

415

0.17

%

804,702

331

0.16

%

 Long-term funding

2,679,472

10,692

1.60

%

3,024,774

10,645

1.41

%

 Total short and long-term funding

3,653,250

11,107

1.22

%

3,829,476

10,976

1.15

%

  Total interest-bearing liabilities

19,301,434

$

19,951

0.41

%

19,549,235

$

19,497

0.40

%

  Noninterest-bearing demand deposits

4,967,719

4,573,840

  Other liabilities

250,957

237,725

  Stockholders' equity

2,940,646

2,919,276

Total liabilities and stockholders' equity

$

27,460,756

$

27,280,076

Interest rate spread

2.73

%

2.73

%

Net free funds

0.09

%

0.09

%

Net interest income, tax-equivalent, and net interest margin

$

177,008

2.82

%

$

175,596

2.82

%

Fully tax-equivalent adjustment

5,540

5,087

Net interest income

$

171,468

$

170,509

Net Interest Income Analysis—Taxable Equivalent Basis — Comparable Quarter

Three months ended December 31, 2015

Three months ended December 31, 2014

(in thousands)

Average Balance

Interest Income /Expense

Average Yield /Rate

Average Balance

Interest Income /Expense

Average Yield /Rate

Earning assets:

 Loans: (1) (2) (3)

  Commercial and business lending

$

6,892,162

$

55,451

3.19

%

$

6,720,893

$

59,197

3.50

%

  Commercial real estate lending

4,373,460

37,587

3.41

%

4,066,143

37,122

3.62

%

 Total commercial

11,265,622

93,038

3.28

%

10,787,036

96,319

3.54

%

  Residential mortgage

5,845,557

47,305

3.24

%

5,091,794

43,370

3.40

%

  Retail

1,431,509

16,673

4.65

%

1,508,425

17,800

4.70

%

 Total loans

18,542,688

157,016

3.37

%

17,387,255

157,489

3.60

%

Investment securities

  Taxable

5,205,033

26,395

2.03

%

4,780,268

25,061

2.10

%

  Tax-exempt (1)

1,016,329

11,909

4.69

%

917,330

11,597

5.06

%

  Other short-term investments

259,053

1,639

2.53

%

407,644

1,821

1.78

%

 Investments and other

6,480,415

39,943

2.47

%

6,105,242

38,479

2.52

%

Total earning assets

25,023,103

$

196,959

3.14

%

23,492,497

$

195,968

3.32

%

  Other assets, net

2,437,653

2,388,268

Total assets

$

27,460,756

$

25,880,765

Liabilities and stockholder's equity

Interest-bearing liabilities:

 Interest-bearing deposits:

  Savings deposits

$

1,358,141

$

249

0.07

%

$

1,264,195

$

253

0.08

%

  Interest-bearing demand deposits

3,150,628

1,217

0.15

%

3,142,537

1,220

0.15

%

  Money market deposits

9,534,551

4,351

0.18

%

8,209,091

3,547

0.17

%

  Time deposits

1,604,864

3,027

0.75

%

1,549,565

2,299

0.59

%

 Total interest-bearing deposits

15,648,184

8,844

0.22

%

14,165,388

7,319

0.20

%

  Federal funds purchased and securities sold under agreements to repurchase

605,026

229

0.15

%

600,969

218

0.14

%

  Other short-term funding

368,752

186

0.20

%

464,866

156

0.13

%

 Total short-term funding

973,778

415

0.17

%

1,065,835

374

0.14

%

  Long-term funding

2,679,472

10,692

1.60

%

3,221,574

8,644

1.07

%

 Total short and long-term funding

3,653,250

11,107

1.22

%

4,287,409

9,018

0.84

%

 Total interest-bearing liabilities

19,301,434

$

19,951

0.41

%

18,452,797

$

16,337

0.35

%

 Noninterest-bearing demand deposits

4,967,719

4,367,031

 Other liabilities

250,957

228,600

 Stockholders' equity

2,940,646

2,832,337

Total liabilities and stockholders' equity

$

27,460,756

$

25,880,765

Interest rate spread

2.73

%

2.97

%

Net free funds

0.09

%

0.07

%

Net interest income, tax-equivalent, and net interest margin

$

177,008

2.82

%

$

179,631

3.04

%

Fully tax-equivalent adjustment

5,540

4,970

Net interest income

$

171,468

$

174,661

 

Associated Banc-Corp Net Interest Income Analysis—Taxable Equivalent Basis — Year Over Year

Year ended December 31, 2015

Year ended December 31, 2014

(in thousands)

Average Balance

Interest Income /Expense

Average Yield /Rate

Average Balance

Interest Income /Expense

Average Yield /Rate

Earning assets:

Loans: (1) (2) (3)

Commercial and business lending

$

7,035,449

$

223,639

3.18

%

$

6,495,338

$

219,386

3.38

%

Commercial real estate lending

4,222,218

146,372

3.47

%

3,990,675

146,802

3.68

%

Total commercial

11,257,667

370,011

3.29

%

10,486,013

366,188

3.49

%

Residential mortgage

5,538,690

182,228

3.29

%

4,864,054

168,830

3.47

%

Retail

1,455,907

67,524

4.64

%

1,488,927

67,382

4.53

%

Total loans

18,252,264

619,763

3.40

%

16,838,994

602,400

3.58

%

Investment securities

Taxable

4,936,065

100,292

2.03

%

4,726,511

102,464

2.17

%

Tax-exempt (1)

976,784

47,663

4.88

%

867,721

44,467

5.12

%

Other short-term investments

405,974

6,591

1.62

%

326,902

6,635

2.03

%

Investments and other

6,318,823

154,546

2.45

%

5,921,134

153,566

2.59

%

Total earning assets

24,571,087

$

774,309

3.15

%

22,760,128

$

755,966

3.32

%

Other assets, net

2,451,923

2,351,469

Total assets

$

27,023,010

$

25,111,597

Liabilities and stockholder's equity

Interest-bearing liabilities:

Interest-bearing deposits:

Savings deposits

$

1,336,755

$

1,000

0.07

%

$

1,249,452

$

968

0.08

%

Interest-bearing demand deposits

3,201,085

4,266

0.13

%

2,983,747

4,124

0.14

%

Money market deposits

9,210,179

16,574

0.18

%

7,614,042

12,452

0.16

%

Time deposits

1,613,547

11,285

0.70

%

1,587,641

8,750

0.55

%

Total interest-bearing deposits

15,361,566

33,125

0.22

%

13,434,882

26,294

0.20

%

Federal funds purchased and securities sold under agreements to repurchase

625,736

943

0.15

%

795,257

1,219

0.15

%

Other short-term funding

220,321

465

0.21

%

573,460

785

0.14

%

Total short-term funding

846,057

1,408

0.17

%

1,368,717

2,004

0.15

%

Long-term funding

3,127,018

42,851

1.37

%

3,022,787

27,480

0.91

%

Total short and long-term funding

3,973,075

44,259

1.11

%

4,391,504

29,484

0.67

%

Total interest-bearing liabilities

19,334,641

$

77,384

0.40

%

17,826,386

$

55,778

0.31

%

Noninterest-bearing demand deposits

4,541,521

4,212,202

Other liabilities

251,690

201,077

Stockholders' equity

2,895,158

2,871,932

Total liabilities and stockholders' equity

$

27,023,010

$

25,111,597

Interest rate spread

2.75

%

3.01

%

Net free funds

0.09

%

0.07

%

Net interest income, tax-equivalent, and net interest margin

$

696,925

2.84

%

$

700,188

3.08

%

Fully tax-equivalent adjustment

20,647

19,221

Net interest income

$

676,278

$

680,967

(1)

The yield on tax exempt loans and securities is computed on a fully tax-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.

 

Associated Banc-Corp

Financial Summary and Comparison

(in thousands)

Period End Loan Composition

Dec 31, 2015

Sep 30, 2015

Seql Qtr % Change

Jun 30, 2015

Mar 31, 2015

Dec 31, 2014

Comp Qtr % Change

Commercial and industrial

$

6,147,440

$

6,085,473

1.0

%

$

6,208,192

$

6,140,420

$

5,905,902

4.1

%

Commercial real estate—owner occupied

918,212

966,689

(5.0)

%

978,183

1,003,885

1,007,937

(8.9)

%

Lease financing

43,243

42,607

1.5

%

46,900

49,496

51,529

(16.1)

%

Commercial and business lending

7,108,895

7,094,769

0.2

%

7,233,275

7,193,801

6,965,368

2.1

%

Commercial real estate—investor

3,234,266

3,183,352

1.6

%

3,126,440

3,086,980

3,056,485

5.8

%

Real estate construction

1,162,145

1,124,280

3.4

%

1,092,308

1,019,571

1,008,956

15.2

%

Commercial real estate lending

4,396,411

4,307,632

2.1

%

4,218,748

4,106,551

4,065,441

8.1

%

Total commercial

11,505,306

11,402,401

0.9

%

11,452,023

11,300,352

11,030,809

4.3

%

Home equity revolving lines of credit

883,759

883,573

%

880,628

879,827

887,779

(0.5)

%

Home equity loans junior liens

122,043

130,892

(6.8)

%

141,344

154,120

164,148

(25.7)

%

Home equity

1,005,802

1,014,465

(0.9)

%

1,021,972

1,033,947

1,051,927

(4.4)

%

Installment and credit cards

419,968

425,729

(1.4)

%

430,823

436,492

454,219

(7.5)

%

Residential mortgage

5,783,267

5,682,178

1.8

%

5,398,434

5,208,241

5,056,891

14.4

%

Total consumer

7,209,037

7,122,372

1.2

%

6,851,229

6,678,680

6,563,037

9.8

%

Total loans

$

18,714,343

$

18,524,773

1.0

%

$

18,303,252

$

17,979,032

$

17,593,846

6.4

%

Period End Deposit and Customer Funding Composition

Dec 31, 2015

Sep 30, 2015

Seql Qtr % Change

Jun 30, 2015

Mar 31, 2015

Dec 31, 2014

Comp Qtr % Change

Noninterest-bearing demand

$

5,562,466

$

4,657,261

19.4

%

$

4,332,171

$

4,570,872

$

4,505,272

23.5

%

Savings

1,334,420

1,346,407

(0.9)

%

1,359,478

1,337,643

1,235,277

8.0

%

Interest-bearing demand

3,445,000

3,416,429

0.8

%

3,576,311

3,525,870

3,126,854

10.2

%

Money market

9,102,977

9,516,503

(4.3)

%

8,374,186

8,781,206

8,324,646

9.3

%

Brokered CDs

42,443

42,689

(0.6)

%

39,760

40,699

42,556

(0.3)

%

Other time

1,520,359

1,579,106

(3.7)

%

1,587,657

1,595,302

1,528,899

(0.6)

%

Total deposits

21,007,665

20,558,395

2.2

%

19,269,563

19,851,592

18,763,504

12.0

%

Customer repo sweeps

383,568

524,630

(26.9)

%

433,044

528,572

384,221

(0.2)

%

Total deposits and customer funding

$

21,391,233

$

21,083,025

1.5

%

$

19,702,607

$

20,380,164

$

19,147,725

11.7

%

Network transaction deposits included above in interest-bearing demand & money market

$

3,174,911

$

3,207,867

(1.0)

%

$

2,920,939

$

2,900,325

$

2,852,943

11.3

%

Brokered CDs

42,443

42,689

(0.6)

%

39,760

40,699

42,556

(0.3)

%

Total network and brokered funding

3,217,354

3,250,556

(1.0)

%

2,960,699

2,941,024

2,895,499

11.1

%

Net customer deposits and funding (1)

$

18,173,879

$

17,832,469

1.9

%

$

16,741,908

$

17,439,140

$

16,252,226

11.8

%

Quarter Average Loan Composition

Dec 31, 2015

Sep 30, 2015

Seql Qtr % Change

Jun 30, 2015

Mar 31, 2015

Dec 31, 2014

Comp Qtr % Change

Commercial and industrial

$

5,905,034

$

6,074,168

(2.8)

%

$

6,122,864

$

5,944,152

$

5,665,396

4.2

%

Commercial real estate—owner occupied

944,223

970,112

(2.7)

%

995,981

998,293

1,003,179

(5.9)

%

Lease financing

42,905

45,384

(5.5)

%

48,470

50,724

52,318

(18.0)

%

Commercial and business lending

6,892,162

7,089,664

(2.8)

%

7,167,315

6,993,169

6,720,893

2.5

%

Commercial real estate—investor

3,266,008

3,134,454

4.2

%

3,110,637

3,106,965

3,062,427

6.6

%

Real estate construction

1,107,452

1,125,875

(1.6)

%

1,038,318

995,768

1,003,716

10.3

%

Commercial real estate lending

4,373,460

4,260,329

2.7

%

4,148,955

4,102,733

4,066,143

7.6

%

Total commercial

11,265,622

11,349,993

(0.7)

%

11,316,270

11,095,902

10,787,036

4.4

%

Home equity revolving lines of credit

882,599

880,660

0.2

%

881,036

882,869

883,580

(0.1)

%

Home equity loans junior liens

126,658

136,254

(7.0)

%

147,391

159,378

169,845

(25.4)

%

Home equity

1,009,257

1,016,914

(0.8)

%

1,028,427

1,042,247

1,053,425

(4.2)

%

Installment and credit cards

422,252

427,589

(1.2)

%

432,415

445,268

455,000

(7.2)

%

Residential mortgage

5,845,557

5,658,253

3.3

%

5,411,193

5,231,698

5,091,794

14.8

%

Total consumer

7,277,066

7,102,756

2.5

%

6,872,035

6,719,213

6,600,219

10.3

%

Total loans

$

18,542,688

$

18,452,749

0.5

%

$

18,188,305

$

17,815,115

$

17,387,255

6.6

%

Quarter Average Deposit Composition

Dec 31, 2015

Sep 30, 2015

Seql Qtr % Change

Jun 30, 2015

Mar 31, 2015

Dec 31, 2014

Comp Qtr % Change

Noninterest-bearing demand

$

4,967,719

$

4,573,840

8.6

%

$

4,290,567

$

4,326,557

$

4,367,031

13.8

%

Savings

1,358,141

1,357,677

%

1,352,616

1,277,469

1,264,195

7.4

%

Interest-bearing demand

3,150,628

3,199,391

(1.5)

%

3,251,196

3,203,727

3,142,537

0.3

%

Money market

9,534,551

9,538,030

%

9,101,589

8,653,260

8,209,091

16.1

%

Time deposits

1,604,864

1,624,661

(1.2)

%

1,630,242

1,594,183

1,549,565

3.6

%

Total deposits

$

20,615,903

$

20,293,599

1.6

%

$

19,626,210

$

19,055,196

$

18,532,419

11.2

%

(1) Total deposits and customer funding excluding total network and brokered funding.

 

Associated Banc-Corp Non-GAAP Financial Measures  Reconciliation

($ in millions)

YTD 2015

YTD 2014

4Q15

3Q15

2Q15

1Q15

4Q14

Common Equity Tier 1 Reconciliation (1)

Common equity

$

2,816

$

2,832

$

2,782

$

2,823

$

2,740

Goodwill and other intangible assets

(985)

(986)

(987)

(987)

(937)

Tangible common equity

1,831

1,846

1,795

1,836

1,803

Accumulated other comprehensive income

33

(15)

(2)

(25)

5

Deferred tax assets / deferred tax liabilities, net

34

34

32

27

Common equity Tier 1

$

1,898

$

1,865

$

1,825

$

1,838

$

1,808

Average Common Equity Tier 1 Reconciliation (1)

Common equity

$

2,819

$

2,798

$

2,794

$

2,785

$

2,772

Goodwill and other intangible assets

(985)

(986)

(987)

(971)

(937)

Tangible common equity

1,834

1,812

1,807

1,814

1,835

Accumulated other comprehensive income

4

(7)

(16)

(18)

(14)

Deferred tax assets / deferred tax liabilities, net

34

32

29

8

Average common equity Tier 1

$

1,872

$

1,837

$

1,820

$

1,804

$

1,821

Risk-based Capital (1) (2)

Risk-weighted assets

$

19,933

$

19,866

$

19,629

$

19,565

$

18,568

Common equity Tier 1 / risk-weighted assets

9.52

%

9.39

%

9.30

%

9.39

%

9.74

%

Tier 1 leverage ratio

7.60

%

7.53

%

7.53

%

7.39

%

7.48

%

Tier 1 risk-based capital ratio

10.12

%

9.98

%

9.89

%

9.70

%

10.06

%

Total risk-based capital ratio

12.62

%

12.49

%

12.41

%

12.21

%

12.66

%

Selected Equity and Performance Ratios (1) (3)

Tangible common equity / tangible assets

6.85

%

6.97

%

6.85

%

7.04

%

6.97

%

Tangible equity / tangible assets

7.30

%

7.43

%

7.32

%

7.27

%

7.20

%

Return on average tangible common equity

9.97

%

9.91

%

8.78

%

10.35

%

10.62

%

10.16

%

10.27

%

Return on average common equity Tier 1

9.88

%

9.92

%

8.60

%

10.20

%

10.55

%

10.22

%

10.35

%

Efficiency Ratio Reconciliation (4)

Federal Reserve efficiency ratio

69.93

%

70.28

%

70.36

%

68.83

%

70.23

%

70.30

%

70.54

%

Taxable equivalent adjustment

(1.42)

%

(1.36)

%

(1.53)

%

(1.39)

%

(1.34)

%

(1.42)

%

(1.41)

%

Other intangible amortization

(0.30)

%

(0.39)

%

(0.20)

%

(0.35)

%

(0.35)

%

(0.32)

%

(0.31)

%

Fully tax-equivalent efficiency ratio

68.21

%

68.53

%

68.63

%

67.09

%

68.54

%

68.56

%

68.82

%

(1)

The Federal Reserve establishes regulatory capital requirements, including well-capitalized standards for the Corporation. Prior to 2015, the regulatory capital requirements effective for the Corporation followed the Capital Accord of the Basel Committee on Banking Supervision ("Basel I"). Beginning January 1, 2015, the regulatory capital requirements effective for the Corporation follow Basel III, subject to certain transition provisions. These regulatory capital measurements are used by management, regulators, investors, and analysts to assess, monitor and compare the quality and composition of our capital with the capital of other financial services companies.

(2)

December 31, 2015 data is estimated.

(3)

The ratios tangible common equity to tangible assets and tangible equity to tangible assets exclude goodwill and other intangible assets, which is a non-GAAP financial measure. These financial measures have been included as they are considered to be critical metrics with which to analyze and evaluate financial condition and capital strength.

(4)

The efficiency ratio as defined by the Federal Reserve guidance is noninterest expense (which includes the provision for unfunded commitments) divided by the sum of net interest income plus noninterest income, excluding investment securities gains / losses, net. The fully tax-equivalent efficiency ratio is noninterest expense (which includes the provision for unfunded commitments), excluding other intangible amortization, divided by the sum of taxable equivalent net interest income plus noninterest income, excluding investment securities gains / losses, net.  Management believes the fully tax-equivalent efficiency ratio, which adjusts net interest income for the tax-favored status of certain loans and investment securities, to be the preferred industry measurement as it enhances the comparability of net interest income arising from taxable and tax-exempt sources.

SOURCE Associated Banc-Corp



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