2014

Associated Reports Fourth Quarter Earnings of $0.26 per share Full year net income to common shareholders up 51% from a year ago

GREEN BAY, Wis., Jan. 17, 2013 /PRNewswire/ -- Associated Banc-Corp (NASDAQ: ASBC) today reported net income to common shareholders of $45 million, or $0.26 per common share, for the quarter ended December 31, 2012. This compares to net income to common shareholders of $40 million, or $0.23 per common share, for the quarter ended December 31, 2011.

For the year ended December 31, 2012, the Company reported net income to common shareholders of $174 million, or $1.00 per common share.  This compares to net income to common shareholders of $115 million, or $0.66 per common share for the year ended December 31, 2011.

"This year's strong performance was the result of the commitment of our colleagues to serving the needs of customers across the footprint," said President and CEO Philip B. Flynn.  "We are proud to have restored Associated to its position as a strong Upper Midwestern franchise and we are pleased to have been able to deliver value for our shareholders over the course of 2012.  We continue to be encouraged by the momentum throughout the company and we look forward to the opportunity to continue to grow Associated."

HIGHLIGHTS   

  • Full year 2012 net income to common shareholders of $174 million, up 51% from a year ago
    • Fourth quarter net income to common shareholders of $45 million
  • Return on Tier 1 common equity for full year 2012 of 9.5%, compared to 6.7% for full year 2011
  • Loan balances have grown by $1.4 billion, or 10%, from a year ago to $15.4 billion
    • Loans increased by $445 million, or 3%, during the fourth quarter
    • Total commercial loan balances grew by $426 million, or 5% from the third quarter and accounted for the majority of the quarter's net loan growth
  • Average deposits for the fourth quarter increased by $1.8 billion, or 12% from a year ago to $16.7 billion
    • Average deposits increased by $1.0 billion, or 7%, from the third quarter
  • Credit quality continued to improve with net charge offs, nonaccrual loans, and potential problem loans all declining from the prior year
  • Quarterly dividend increased to $0.08 per common share in the fourth quarter, up from $0.05 per common share
  • During the fourth quarter, the Company repurchased $30 million, or approximately 2 million shares, of common stock at an average cost of $12.70
  • Capital ratios remain very strong with a Tier 1 common equity ratio of 11.58%

FOURTH QUARTER 2012 FINANCIAL RESULTS

Loans

At December 31, 2012, the Company's loan portfolio was $15.4 billion, up $445 million, or 3%, from $15.0 billion at September 30, 2012.  For full year 2012, loans increased by $1.4 billion, or 10%, from $14.0 billion a year ago. 

Commercial and business lending balances increased by $262 million, or 5% from the prior quarter.  Commercial real estate lending balances grew by $164 million, or 5% on a linked-quarter basis.  The residential mortgage portfolio grew by $172 million, or 5%, during the quarter while the retail portfolio, which includes home equity and installment loan balances, experienced net run-off of $153 million during the quarter.

Deposits

Average deposits of $16.7 billion were up $1.0 billion, or 7%, from the third quarter.  On a full year basis, average deposits increased by $1.2 billion, or 8%, from a year ago. 

Total deposits of $16.9 billion at the end of the fourth quarter were up $489 million, or 3%, compared to third quarter levels.  Period-end noninterest-bearing account balances grew by $439 million, or 10%, from the third quarter, and have increased by $831 million, or 21%, from a year ago.  The increase in fourth quarter noninterest-bearing deposit balances was partially the result of customers' seasonal year-end account activity.  Interest-bearing demand balances increased by $324 million, or 15%, from the third quarter, and have increased by $257 million, or 11%, from a year ago.  During the quarter, the Company continued to reduce its reliance on higher cost funding sources, including term repurchase agreements, which were down $334 million, and brokered and other CD balances, which were down $103 million from the prior quarter.

Net Interest Income and Net Interest Margin

Fourth quarter net interest income of $161 million increased by $6 million, or 4%, compared to the prior quarter and was up 6% compared to the year-ago quarter.  Net interest income for the fourth quarter included $2 million of interest related to a tax refund.  For the full year, net interest income of $626 million increased by $13 million, or 2% from the prior year.

The net interest margin for the fourth quarter was 3.32%, which included a 3 basis point benefit related to interest received on the tax refund.  On a full year basis, the net interest margin was 3.30% compared to 3.26% for full year 2011. 

Fourth quarter net interest margin benefited from an 11 basis point decline in the cost of deposits and interest-bearing liabilities, partially offset by a 4 basis point decline in loan yields, contributing to a net increase in overall net interest margin of 6 basis points compared to the prior quarter. 

Noninterest Income and Expense

Noninterest income for the quarter was $78 million, down $3 million, or 4%, from the third quarter.  Noninterest income for the full year was $313 million, up 15% from full year 2011.

The decline in fourth quarter fee income was primarily attributable to the establishment of a $3 million repurchase reserve against previously sold mortgage loans that reduced net mortgage banking income during the quarter.

Total noninterest expense for the quarter ended December 31, 2012 was $176 million, up $7 million, or 4%, from the third quarter.  For the full year, noninterest expense increased by 5% to $682 million

Personnel and occupancy expenses increased by $6 million during the fourth quarter which included $4 million of severance cost and lease breakage expense related to the Company's recently announced efficiency initiatives. 

Credit

The Company reported another quarter of improving credit quality with nonaccrual loans down 9%, to $253 million compared to the third quarter, and down 29% from a year ago.  Nonaccrual loans to total loans now stand at 1.64% and have improved for the 11th consecutive quarter.  Nonperforming assets declined 8% from the prior quarter to $288 million, and have declined 28% from a year ago. 

Net charge offs of $21 million for the fourth quarter were up $3 million from the third quarter, and were $2 million lower than a year ago.  For the full year, net charge offs declined by 44% to $84 million.

Fourth quarter provision for loan losses was $3 million.  The Company's allowance for loan losses was $297 million, representing an allowance equal to 1.93% of loans and representing a coverage ratio of over 117% of nonaccrual loans at December 31, 2012.

Taxes

Income tax expense was lower by $7 million compared to the third quarter, due to a net $5 million income tax benefit recorded during the period, primarily related to the reversal of certain prior years' tax reserves.

Capital Ratios

The Company's capital position remains very strong, with a Tier 1 common equity ratio of 11.58% at December 31, 2012.  The Company's capital ratios continue to be well in excess of both current and proposed "well-capitalized" regulatory benchmarks.

FOURTH QUARTER 2012 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 17, 2013.  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 888-317-6016. 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 412-317-6016. Participants should ask the operator for the Associated Banc-Corp fourth quarter 2012 earnings call.

An audio archive of the webcast will be available on the Company's website.  A telephone replay will be available two hours after the completion of the call through 8:00 a.m. CT on February 18, 2013, by dialing 877-344-7529 and entering the conference ID number 10022452. The replay number for international callers is 412-317-0088.

ABOUT ASSOCIATED BANC-CORP

Associated Banc-Corp (NASDAQ: ASBC) has total assets of $24 billion and is one of the top 50, publicly traded, U.S. bank holding companies.  Headquartered in Green Bay, Wis., Associated is a leading Midwest banking franchise, offering a full range of financial products and services through more than 250 banking locations serving more than 150 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. 

Investor Contact:

Tim Sedabres, VP of Finance, Investor Relations

920-491-7059

 

Media Contact:

Autumn Latimore, Senior Vice President, Public Relations Director

414-278-1860

 

Consolidated Balance Sheets (Unaudited)









Associated Banc-Corp















December 31,


September 30,


Seql Qtr


June 30,


March 31,


December 31,


Comp Qtr

(in thousands)


2012


2012


$ Change


2012


2012


2011


$ Change

Assets















Cash and due from banks


$        563,304


$         419,529


$    143,775


$        414,760


$        360,728


$        454,958


$     108,346

Interest-bearing deposits in other financial institutions


147,434


531,303


(383,869)


180,050


344,148


154,562


(7,128)

Federal funds sold and securities purchased under agreements to resell


27,135


2,460


24,675


3,800


7,100


7,075


20,060

Securities held to maturity, at amortized cost


39,877


21,852


18,025


-


-


-


39,877

Securities available for sale, at fair value


4,926,758


4,496,198


430,560


4,521,436


4,669,100


4,937,483


(10,725)

Federal Home Loan Bank and Federal 















   Reserve Bank stocks, at cost


166,774


166,100


674


176,041


177,808


191,188


(24,414)

Loans held for sale


261,410


157,093


104,317


157,481


196,570


249,195


12,215

Loans


15,411,022


14,966,214


444,808


14,698,902


14,253,725


14,031,071


1,379,951

Allowance for loan losses


(297,409)


(315,150)


17,741


(332,658)


(356,298)


(378,151)


80,742

    Loans, net


15,113,613


14,651,064


462,549


14,366,244


13,897,427


13,652,920


1,460,693

Premises and equipment, net


253,958


238,756


15,202


225,245


225,164


223,736


30,222

Goodwill


929,168


929,168


-


929,168


929,168


929,168


-

Other intangible assets, net


61,176


61,294


(118)


64,812


68,374


67,574


(6,398)

Trading assets


70,711


76,159


(5,448)


73,484


69,081


73,253


(2,542)

Other assets


970,472


987,378


(16,906)


968,579


969,002


983,105


(12,633)

    Total assets


$   23,531,790


22,738,354


$    793,436


$   22,081,100


$   21,913,670


$   21,924,217


$  1,607,573
















Liabilities and Stockholders' Equity















Noninterest-bearing demand deposits


$     4,759,556


4,320,437


$    439,119


$     3,874,429


$     3,989,156


$     3,928,792


$     830,764

Interest-bearing deposits


12,180,309


12,130,155


50,154


11,232,442


11,664,220


11,161,863


1,018,446

    Total deposits


16,939,865


16,450,592


489,273


15,106,871


15,653,376


15,090,655


1,849,210

Federal funds purchased and securities sold under agreements to repurchase


750,455


1,138,027


(387,572)


1,253,270


1,236,219


1,514,485


(764,030)

Other short-term funding


1,576,484


615,258


961,226


1,400,000


700,000


1,000,000


576,484

Long-term funding


1,015,346


1,305,422


(290,076)


1,150,729


1,176,736


1,177,071


(161,725)

Trading liabilities


76,343


82,861


(6,518)


80,107


75,130


80,046


(3,703)

Accrued expenses and other liabilities


236,898


195,742


41,156


180,502


171,336


196,166


40,732

    Total liabilities


20,595,391


19,787,902


807,489


19,171,479


19,012,797


19,058,423


1,536,968

Stockholders' Equity















  Preferred equity


63,272


63,272


-


63,272


63,272


63,272


-

  Common stock


1,750


1,750


-


1,750


1,750


1,746


4

  Surplus


1,602,136


1,599,070


3,066


1,594,995


1,590,336


1,586,401


15,735

  Retained earnings


1,281,811


1,250,189


31,622


1,213,735


1,181,247


1,148,773


133,038

  Accumulated other comprehensive income 


48,603


67,303


(18,700)


66,579


65,278


65,602


(16,999)

  Treasury stock


(61,173)


(31,132)


(30,041)


(30,710)


(1,010)


-


(61,173)

    Total stockholders' equity


2,936,399


2,950,452


(14,053)


2,909,621


2,900,873


2,865,794


70,605

    Total liabilities and stockholders' equity


$   23,531,790


22,738,354


$    793,436


$   22,081,100


$   21,913,670


$   21,924,217


$  1,607,573

 

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)


2012


2011


$ Change

% Change


2012


2011


$ Change

% Change

Interest Income















Interest and fees on loans


$       150,107


$     149,832


$         275

0.2%


$        595,965


$      582,739


$        13,226

2.3%

Interest and dividends on investment securities:















  Taxable


20,368


22,855


(2,487)

(10.9%)


86,945


123,371


(36,426)

(29.5%)

  Tax-exempt


7,119


7,344


(225)

(3.1%)


28,655


29,937


(1,282)

(4.3%)

Other interest 


2,876


1,251


1,625

129.9%


6,719


5,575


1,144

20.5%

    Total interest income


180,470


181,282


(812)

(0.4%)


718,284


741,622


(23,338)

(3.1%)

Interest Expense















Interest on deposits 


9,091


14,954


(5,863)

(39.2%)


41,431


65,748


(24,317)

(37.0%)

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


558


1,278


(720)

(56.3%)


2,687


6,196


(3,509)

(56.6%)

Interest on other short-term funding


226


879


(653)

(74.3%)


3,294


6,215


(2,921)

(47.0%)

Interest on long-term funding


9,140


12,346


(3,206)

(26.0%)


44,880


50,632


(5,752)

(11.4%)

    Total interest expense


19,015


29,457


(10,442)

(35.4%)


92,292


128,791


(36,499)

(28.3%)

Net Interest Income


161,455


151,825


9,630

6.3%


625,992


612,831


13,161

2.1%

Provision for loan losses


3,000


1,000


2,000

200.0%


3,000


52,000


(49,000)

(94.2%)

Net interest income after provision for loan losses


158,455


150,825


7,630

5.1%


622,992


560,831


62,161

11.1%

Noninterest Income















Trust service fees


10,429


9,511


918

9.7%


40,737


39,145


1,592

4.1%

Service charges on deposit accounts


16,817


17,783


(966)

(5.4%)


68,917


75,908


(6,991)

(9.2%)

Card-based and other nondeposit fees


12,690


11,269


1,421

12.6%


47,862


57,905


(10,043)

(17.3%)

Insurance commissions


10,862


11,216


(354)

(3.2%)


47,014


45,554


1,460

3.2%

Brokerage and annuity commissions


3,678


3,665


13

0.4%


15,643


17,230


(1,587)

(9.2%)

  Total core fee-based revenue


54,476


53,444


1,032

1.9%


220,173


235,742


(15,569)

(6.6%)

Mortgage banking, net


13,530


9,677


3,853

39.8%


63,500


12,723


50,777

399.1%

Capital market fees, net


4,243


3,950


293

7.4%


14,241


8,711


5,530

63.5%

Bank owned life insurance income


3,206


3,820


(614)

(16.1%)


13,952


14,896


(944)

(6.3%)

Asset losses, net


(209)


(1,799)


1,590

(88.4%)


(12,096)


(12,199)


103

(0.8%)

Investment securities gains (losses), net


152


(310)


462

(149.0%)


4,261


(1,112)


5,373

483.2%

Other


2,507


2,750


(243)

(8.8%)


9,259


14,358


(5,099)

(35.5%)

    Total noninterest income


77,905


71,532


6,373

8.9%


313,290


273,119


40,171

14.7%

Noninterest Expense















Personnel expense


98,073


90,306


7,767

8.6%


381,404


360,144


21,260

5.9%

Occupancy 


17,273


13,796


3,477

25.2%


60,794


55,939


4,855

8.7%

Equipment 


6,444


5,286


1,158

21.9%


23,566


19,873


3,693

18.6%

Data processing


11,706


9,080


2,626

28.9%


43,548


32,475


11,073

34.1%

Business development and advertising


5,395


6,904


(1,509)

(21.9%)


21,303


23,038


(1,735)

(7.5%)

Other intangible amortization


1,049


1,179


(130)

(11.0%)


4,195


4,714


(519)

(11.0%)

Loan expense


3,130


3,469


(339)

(9.8%)


12,285


12,008


277

2.3%

Legal and professional fees


8,174


4,651


3,523

75.7%


31,232


18,205


13,027

71.6%

Losses other than loans


3,071


11,890


(8,819)

(74.2%)


12,258


17,921


(5,663)

(31.6%)

Foreclosure/OREO expense


3,293


5,169


(1,876)

(36.3%)


15,069


21,393


(6,324)

(29.6%)

FDIC expense


4,813


6,136


(1,323)

(21.6%)


19,478


28,484


(9,006)

(31.6%)

Other


13,907


14,461


(554)

(3.8%)


56,691


56,329


362

0.6%

    Total noninterest expense


176,328


172,327


4,001

2.3%


681,823


650,523


31,300

4.8%

Income before income taxes


60,032


50,030


10,002

20.0%


254,459


183,427


71,032

38.7%

Income tax expense 


13,404


8,905


4,499

50.5%


75,486


43,728


31,758

72.6%

Net income


46,628


41,125


5,503

13.4%


178,973


139,699


$        39,274

28.1%

Preferred stock dividends and discount


1,300


1,300


-

0.0%


5,200


24,830


(19,630)

(79.1%)

Net income available to common equity


$         45,328


$       39,825


$      5,503

13.8%


$        173,773


$      114,869


$        58,904

51.3%
















Earnings Per Common Share:















  Basic


$             0.26


$           0.23


$        0.03

13.0%


$              1.00


$            0.66


$            0.34

51.5%

  Diluted


$             0.26


$           0.23


$        0.03

13.0%


$              1.00


$            0.66


$            0.34

51.5%
















Average Common Shares Outstanding:















  Basic


170,707


173,523


(2,816)

(1.6%)


172,255


173,370


(1,115)

(0.6%)

  Diluted


170,896


173,523


(2,627)

(1.5%)


172,357


173,372


(1,015)

(0.6%)
















N/M = Not meaningful.














 

Consolidated Statements of Income (Unaudited) - Quarterly Trend


Associated Banc-Corp






















Sequential Qtr








Comparable Qtr

(in thousands, except per share amounts)


4Q12


3Q12


$ Change

% Change


2Q12


1Q12


4Q11


$ Change

% Change

Interest Income

















Interest and fees on loans


$      150,107


$      149,647


$         460

0.3%


$      147,188


$      149,023


$      149,832


$         275

0.2%

Interest and dividends on investment securities:

















  Taxable


20,368


20,548


(180)

(0.9%)


23,000


23,029


22,855


(2,487)

(10.9%)

  Tax-exempt


7,119


7,127


(8)

(0.1%)


7,135


7,274


7,344


(225)

(3.1%)

Other interest 


2,876


1,334


1,542

115.6%


1,262


1,247


1,251


1,625

129.9%

    Total interest income


180,470


178,656


1,814

1.0%


178,585


180,573


181,282


(812)

(0.4%)

Interest Expense

















Interest on deposits 


9,091


9,751


(660)

(6.8%)


10,553


12,036


14,954


(5,863)

(39.2%)

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


558


750


(192)

(25.6%)


612


767


1,278


(720)

(56.3%)

Interest on other short-term funding


226


815


(589)

(72.3%)


1,197


1,056


879


(653)

(74.3%)

Interest on long-term funding


9,140


11,738


(2,598)

(22.1%)


11,956


12,046


12,346


(3,206)

(26.0%)

    Total interest expense


19,015


23,054


(4,039)

(17.5%)


24,318


25,905


29,457


(10,442)

(35.4%)

Net Interest Income


161,455


155,602


5,853

3.8%


154,267


154,668


151,825


9,630

6.3%

Provision for loan losses


3,000


-


3,000



-


-


1,000


2,000

200.0%

Net interest income after provision for loan losses


158,455


155,602


2,853

1.8%


154,267


154,668


150,825


7,630

5.1%

Noninterest Income

















Trust service fees


10,429


10,396


33

0.3%


10,125


9,787


9,511


918

9.7%

Service charges on deposit accounts


16,817


17,290


(473)

(2.7%)


16,768


18,042


17,783


(966)

(5.4%)

Card-based and other nondeposit fees


12,690


12,209


481

3.9%


12,084


10,879


11,269


1,421

12.6%

Insurance commissions


10,862


11,650


(788)

(6.8%)


12,912


11,590


11,216


(354)

(3.2%)

Brokerage and annuity commissions


3,678


3,632


46

1.3%


4,206


4,127


3,665


13

0.4%

  Total core fee-based revenue


54,476


55,177


(701)

(1.3%)


56,095


54,425


53,444


1,032

1.9%


















Mortgage banking, net


13,530


15,581


(2,051)

(13.2%)


16,735


17,654


9,677


3,853

39.8%

Capital market fees, net


4,243


3,609


634

17.6%


2,673


3,716


3,950


293

7.4%

Bank owned life insurance income


3,206


3,290


(84)

(2.6%)


3,164


4,292


3,820


(614)

(16.1%)

Asset losses, net


(209)


(3,309)


3,100

(93.7%)


(4,984)


(3,594)


(1,799)


1,590

(88.4%)

Investment securities gains (losses), net


152


3,506


(3,354)

(95.7%)


563


40


(310)


462

(149.0%)

Other


2,507


3,134


(627)

(20.0%)


1,705


1,913


2,750


(243)

(8.8%)

    Total noninterest income


77,905


80,988


(3,083)

(3.8%)


75,951


78,446


71,532


6,373

8.9%

Noninterest Expense

















Personnel expense


98,073


95,231


2,842

3.0%


93,819


94,281


90,306


7,767

8.6%

Occupancy 


17,273


14,334


2,939

20.5%


14,008


15,179


13,796


3,477

25.2%

Equipment 


6,444


5,935


509

8.6%


5,719


5,468


5,286


1,158

21.9%

Data processing


11,706


11,022


684

6.2%


11,304


9,516


9,080


2,626

28.9%

Business development and advertising


5,395


5,059


336

6.6%


5,468


5,381


6,904


(1,509)

(21.9%)

Other intangible amortization


1,049


1,048


1

0.1%


1,049


1,049


1,179


(130)

(11.0%)

Loan expense


3,130


3,297


(167)

(5.1%)


2,948


2,910


3,469


(339)

(9.8%)

Legal and professional fees


8,174


7,686


488

6.3%


5,657


9,715


4,651


3,523

75.7%

Losses other than loans


3,071


3,577


(506)

(14.1%)


2,060


3,550


11,890


(8,819)

(74.2%)

Foreclosure/OREO expense


3,293


4,071


(778)

(19.1%)


4,343


3,362


5,169


(1,876)

(36.3%)

FDIC expense


4,813


5,017


(204)

(4.1%)


4,778


4,870


6,136


(1,323)

(21.6%)

Other


13,907


13,426


481

3.6%


14,877


14,481


14,461


(554)

(3.8%)

    Total noninterest expense


176,328


169,703


6,625

3.9%


166,030


169,762


172,327


4,001

2.3%

Income before income taxes


60,032


66,887


(6,855)

(10.2%)


64,188


63,352


50,030


10,002

20.0%

Income tax expense 


13,404


20,492


(7,088)

(34.6%)


20,871


20,719


8,905


4,499

50.5%

Net income


46,628


46,395


233

0.5%


43,317


42,633


41,125


5,503

13.4%

Preferred stock dividends and discount


1,300


1,300


-

0.0%


1,300


1,300


1,300


-

0.0%

Net income available to common equity


$        45,328


$        45,095


$         233

0.5%


$        42,017


$        41,333


$        39,825


$      5,503

13.8%


















Earnings Per Common Share:

















  Basic


$            0.26


$            0.26


$            -

0.0%


$            0.24


$            0.24


$            0.23


$        0.03

13.0%

  Diluted


$            0.26


$            0.26


$            -

0.0%


$            0.24


$            0.24


$            0.23


$        0.03

13.0%


















Average Common Shares Outstanding:

















  Basic


170,707


171,650


(943)

(0.5%)


172,839


173,846


173,523


(2,816)

(1.6%)

  Diluted


170,896


171,780


(884)

(0.5%)


172,841


173,848


173,523


(2,627)

(1.5%)


















N/M = Not meaningful.

















Selected Quarterly Information

Associated Banc-Corp













(in thousands, except per share, full time equivalent employee data and otherwise noted)

YTD 2012


YTD 2011


4th Qtr 2012


3rd Qtr 2012


2nd Qtr 2012


1st Qtr 2012


4th Qtr 2011

Summary of Operations














Net interest income

$           625,992


$           612,831


$           161,455


$           155,602


$           154,267


$           154,668


$           151,825

Provision for loan losses

3,000


52,000


3,000


-


-


-


1,000

Asset losses, net

(12,096)


(12,199)


(209)


(3,309)


(4,984)


(3,594)


(1,799)

Investment securities gains (losses), net

4,261


(1,112)


152


3,506


563


40


(310)

Noninterest income (excluding securities & asset gains)

321,125


286,430


77,962


80,791


80,372


82,000


73,641

Noninterest expense

681,823


650,523


176,328


169,703


166,030


169,762


172,327

Income before income taxes

254,459


183,427


60,032


66,887


64,188


63,352


50,030

Income tax expense

75,486


43,728


13,404


20,492


20,871


20,719


8,905

Net income

178,973


139,699


46,628


46,395


43,317


42,633


41,125

Net income available to common equity

173,773


114,869


45,328


45,095


42,017


41,333


39,825

Taxable equivalent adjustment

21,046


21,374


5,221


5,268


5,254


5,303


5,307















Per Common Share Data 














Net income:














  Basic

$                 1.00


$                 0.66


$                 0.26


$                 0.26


$                 0.24


$                 0.24


$                 0.23

  Diluted

1.00


0.66


0.26


0.26


0.24


0.24


0.23

Dividends

0.23


0.04


0.08


0.05


0.05


0.05


0.01

Market Value:














  High

$               14.63


$               15.36


$               13.54


$               13.79


$               13.97


$               14.63


$               11.78

  Low

11.43


8.95


12.19


12.04


11.76


11.43


9.15

  Close

13.12


11.17


13.12


13.16


13.19


13.96


11.17

Book value

16.97


16.15


16.97


16.82


16.59


16.32


16.15

Tier 1 common equity / share

11.08


10.28


11.08


10.89


10.66


10.46


10.28

Tangible book value

11.39


10.68


11.39


11.31


11.07


10.87


10.68















Performance Ratios (annualized)














Earning assets yield

3.77%


3.92%


3.70%


3.73%


3.80%


3.85%


3.81%

Interest-bearing liabilities rate

0.62


0.85


0.51


0.62


0.65


0.70


0.78

Net interest margin

3.30


3.26


3.32


3.26


3.30


3.31


3.21

Return on average assets

0.81


0.65


0.83


0.84


0.80


0.79


0.75

Return on average tangible common equity

8.96


6.45


9.15


9.32


8.87


8.85


8.57

Return on average Tier 1 common equity (1)

9.45


6.71


9.61


9.69


9.26


9.23


8.96

Efficiency ratio (2)

70.42


70.66


72.08


70.22


69.21


70.16


74.67

Effective tax rate

29.67


23.84


22.33


30.64


32.52


32.70


17.80

Dividend payout ratio (3)

23.00


6.06


30.77


19.23


20.83


20.83


4.35















Average Balances














Assets

$      21,976,357


$      21,588,620


$      22,461,886


$      22,016,748


$      21,684,600


$      21,659,139


$      21,755,870

Earning assets

19,613,777


19,442,263


20,032,432


19,659,796


19,386,046


19,371,729


19,506,627

Interest-bearing liabilities

14,905,735


15,120,824


14,840,162


14,940,697


14,922,006


14,920,413


15,095,689

Loans (4)

14,741,785


13,278,848


15,131,102


14,916,793


14,602,602


14,310,441


14,043,585

Deposits

15,582,369


14,401,127


16,650,268


15,615,856


15,050,684


15,000,567


14,893,469

Short and long-term funding

3,272,212


4,100,825


2,638,661


3,286,943


3,566,346


3,603,700


3,857,252

Common stockholders' equity

2,885,716


2,730,643


2,915,346


2,870,438


2,852,050


2,826,913


2,792,823

Stockholders' equity

2,948,988


2,997,290


2,978,618


2,933,710


2,915,322


2,890,185


2,856,095

Average Tier 1 common equity (5)

1,838,424


1,713,155


1,876,686


1,850,610


1,825,441


1,801,649


1,763,522















At Period End














Assets





$      23,531,790


$      22,738,354


$      22,081,100


$      21,913,670


$      21,924,217

Loans





15,411,022


14,966,214


14,698,902


14,253,725


14,031,071

Allowance for loan losses





297,409


315,150


332,658


356,298


378,151

Goodwill





929,168


929,168


929,168


929,168


929,168

Mortgage servicing rights, net





45,949


45,018


47,488


50,001


48,152

Other intangible assets, net





15,227


16,276


17,324


18,373


19,422

Deposits





16,939,865


16,450,592


15,106,871


15,653,376


15,090,655

Loans / deposits





90.97%


90.98%


97.30%


91.06%


92.98%

Risk weighted assets ($ in millions) (6)





16,194


15,575


15,188


14,570


14,568

Tier 1 common equity (5)





1,875,534


1,869,931


1,828,529


1,819,782


1,783,515

Stockholders' equity / assets





12.48%


12.98%


13.18%


13.24%


13.07%

Tangible common equity / tangible assets (7)





8.54%


8.91%


8.99%


9.01%


8.84%

Tangible equity / tangible assets (8)





8.82%


9.20%


9.29%


9.32%


9.14%

Tier 1 common equity / risk-weighted assets (6)





11.58%


12.01%


12.04%


12.49%


12.24%

Tier 1 leverage ratio (6)





8.98%


9.99%


9.95%


10.03%


9.81%

Tier 1 risk-based capital ratio (6)





11.97%


13.57%


13.64%


14.33%


14.08%

Total risk-based capital ratio (6)





13.39%


15.00%


15.08%


15.78%


15.53%

Shares outstanding, end of period





169,304


171,657


171,611


173,923


173,575















Selected trend information














Average full time equivalent employees





4,915


4,965


4,951


5,045


5,056

Trust assets under management, at market value ($ in millions)





$               6,454


$               6,163


$               5,934


$               5,983


$               5,616

Mortgage loans originated for sale during period





780,469


715,184


738,091


563,688


843,614

Mortgage portfolio serviced for others ($ in millions)





7,453


7,547


7,511


7,284


7,321

Mortgage servicing rights, net / Portfolio serviced for others





0.62%


0.60%


0.63%


0.69%


0.66%















(1) Return on average Tier 1 common equity = Net income available to common equity divided by average Tier 1 common equity.  This is a non-GAAP financial measure.

(2) Efficiency ratio = Noninterest expense divided by sum of taxable equivalent net interest income plus noninterest income, excluding investment securities gains, net, and asset gains, net. This is a non-GAAP financial measure.

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

(4) Loans held for sale have been included in the average balances.

(5) Tier 1 common equity (period end and average) is Tier 1 capital excluding qualifying perpetual preferred stock and qualifying trust preferred securities.

(6) December 31, 2012 data is estimated.

(7) 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.

(8) Tangible equity to tangible assets = Stockholders' equity excluding goodwill and other intangible assets divided by assets excluding goodwill and other intangible assets. This is a non-GAAP financial measure.

 

Selected Asset Quality Information






Associated Banc-Corp












Dec12 vs Sep12





Dec12 vs Dec11

(in thousands)


Dec 31, 2012

Sep 30, 2012

% Change


Jun 30, 2012

Mar 31, 2012

Dec 31, 2011

% Change

Allowance for Loan Losses










Beginning balance


$             315,150

$             332,658

(5.3%)


$           356,298

$        378,151

$        399,723

(21.2%)

Provision for loan losses


3,000

-

0.0%


-

-

1,000

200.0%

Charge offs


(30,417)

(25,030)

21.5%


(30,340)

(31,259)

(34,056)

(10.7%)

Recoveries


9,676

7,522

28.6%


6,700

9,406

11,484

(15.7%)

Net charge offs


(20,741)

(17,508)

18.5%


(23,640)

(21,853)

(22,572)

(8.1%)

Ending balance


$             297,409

$             315,150

(5.6%)


$           332,658

$        356,298

$        378,151

(21.4%)











Reserve for losses on unfunded commitments


$               21,800

$               19,800

10.1%


$             18,900

$          15,600

$          14,700

48.3%





















Net Charge Offs




Dec12 vs Sep12





Dec12 vs Dec11



Dec 31, 2012

Sep 30, 2012

% Change


Jun 30, 2012

Mar 31, 2012

Dec 31, 2011

% Change

Commercial and industrial


$                 2,630

$                 3,831

(31.3%)


$             14,544

$            3,872

$               231

N/M

Commercial real estate - owner occupied


2,056

(8)

N/M


1,164

415

539

N/M

Lease financing


754

(20)

N/M


-

(1,836)

19

N/M

  Commercial and business lending


5,440

3,803

43.0%


15,708

2,451

789

N/M

Commercial real estate - investor


(232)

1,905

(112.2%)


177

7,354

2,394

(109.7%)

Real estate construction


858

(187)

N/M


558

230

7,088

(87.9%)

  Commercial real estate lending


626

1,718

(63.6%)


735

7,584

9,482

(93.4%)

    Total commercial


6,066

5,521

9.9%


16,443

10,035

10,271

(40.9%)

Home equity


8,071