Associated Reports Second Quarter Earnings of $0.28 per share Earnings per share up 16.7% from a year ago

GREEN BAY, Wis., July 18, 2013 /PRNewswire/ -- Associated Banc-Corp (NASDAQ: ASBC) today reported net income to common shareholders of $47 million, or $0.28 per common share, for the quarter ended June 30, 2013. This compares to net income to common shareholders of $42 million, or $0.24 per common share, for the quarter ended June 30, 2012.

"We are pleased to report another quarter of solid results and continue to look for opportunities to deliver value for our shareholders," said President and CEO Philip B. Flynn.  "Our mortgage banking business had a record quarter and we are encouraged by momentum being created in our other lines of business. We remain focused on strengthening our franchise and deploying our capital in a disciplined manner, consistent with our commitment to building long-term shareholder value at Associated."

HIGHLIGHTS   

  • Net income to common shareholders of $47 million, up 10.9% from the prior year period
    • Quarterly earnings have improved 10 consecutive quarters
  • Return on Tier 1 common equity for the quarter was 9.9%, compared to 9.3% for the prior year period
  • Average loan balances increased by $280 million, or 2% from the first quarter and have increased $1.1 billion, or 8% from a year ago
    • Average total commercial loan balances grew by 4% from the first quarter and accounted for the majority of this quarter's average loan growth
  • Average deposits for the second quarter increased by $2.1 billion, or 14% from a year ago to $17.1 billion
    • Checking and savings deposits continued to grow
  • Credit quality continued to improve with net charge offs, nonaccrual loans, and potential problem loans all declining quarter over quarter
  • During the second quarter, the Company repurchased $30 million, or approximately 2 million shares, of common stock at an average cost of $15.09.
  • Capital ratios remain very strong with a Tier 1 common equity ratio of 11.48%

SECOND QUARTER 2013 FINANCIAL RESULTS

Loans

Average loans of $15.7 billion increased by $280 million, or 2% from the first quarter and increased $1.1 billion, or 8%, from the year ago quarter. Commercial and business lending average balances increased by $245 million, or 4% from the prior quarter.  Commercial real estate lending average balances grew by $130 million, or 4% on a linked-quarter basis.  The residential mortgage portfolio average balances grew by $39 million, or 1%, during the quarter.  This growth was partially offset by continued run off in home equity and installment loan balances, which experienced an average balance decline of $135 million, or 5%, during the quarter.

Deposits

Average deposits of $17.1 billion were relatively flat compared to the first quarter but have increased by $2.1 billion, or 14%, from the year ago quarter.  During the second quarter, average balance growth in checking and savings deposits were offset by a 2% decline in money market deposits coupled with the continued decline in time deposits.

Net Interest Income and Net Interest Margin

Second quarter net interest income of $160 million increased $2 million, or 2% compared to the prior quarter and $6 million, or 4% compared to the year ago quarter. 

Second quarter net interest margin was 3.16%, a slight decrease of 1 basis point from the 3.17% reported in first quarter and a decrease of 14 basis points from a year ago.  The decrease from the first quarter was the result of a 5 basis point decline in asset yields which was offset by 4 basis points of liability cost management actions. 

Noninterest Income and Expense

Noninterest income for the quarter was $84 million, up $2 million, or 3%, from the first quarter and grew $8 million or 11% from the year ago quarter.   Trust fees, service charges, non-deposit fees, and brokerage commissions all improved during the quarter.  However, core fee revenue was flat to the prior quarter as these improvements were offset by a $3 million reserve related to third party insurance products sold in prior years.  Mortgage banking income increased $1 million from the prior quarter as an increase of $3 million in mortgage servicing rights valuation allowance recoveries ($8 million in second quarter compared to $5 million in the first quarter) was partially offset by $2 million in lower gain on sales.   The $1 million decline in asset gains and losses was primarily related to a $2 million real estate write down as the Company continues to identify cost efficiency opportunities within its footprint.

Total noninterest expense for the quarter ended June 30, 2013 was $170 million, up $3 million, or 2%, from the first quarter.  Personnel expense increased $2 million from the first quarter, including $1 million of severance charges related to our on-going consolidation and efficiency efforts.   Losses other than loans were $2 million higher than the first quarter due to increases in unfunded commitment reserves.    The efficiency ratio continued to improve during the period reflecting management's focus on expense management.

Credit

The Company reported another quarter of improving credit quality with nonaccrual loans down 4%, to $217 million compared to the first quarter, and down 32% from a year ago.  The ratio of nonaccrual loans to total loans now stands at 1.38% and has improved for the 13th consecutive quarter.

Net charge offs of $14 million for the second quarter were down slightly from the first quarter, and were $10 million lower than a year ago. 

Second quarter provision for loan losses was $4 million, equal to the first quarter.  The Company's allowance for loan losses was $277 million, representing an allowance equal to 1.76% of loans and representing a coverage ratio of over 127% of nonaccrual loans at June 30, 2013.

Capital Ratios

The Company's capital position remains very strong, with a Tier 1 common equity ratio of 11.48% at June 30, 2013.  The Company's capital ratios continue to be well in excess of both current and proposed "well-capitalized" regulatory benchmarks.

SECOND QUARTER 2013 EARNINGS RELEASE CONFERENCE CALL

The Company will host a conference call for investors and analysts at 4:00 p.m. Central Time (CT) today, July 18, 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 second quarter 2013 earnings call.

An audio archive of the webcast will be available on the company's website at http://investor.associatedbank.com.  A telephone replay will be available one hour after the completion of the call through 8:00 a.m. CT on August 19, 2013, by dialing 877-344-7529 and entering the conference ID number 10030196. 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 approximately 240 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:

Brian Klaus, Senior Vice President, Investor Relations

920-491-7059

 

Media Contact:

Autumn Latimore, Senior Vice President, Public Relations

414-278-1860




Consolidated Balance Sheets (Unaudited)













Associated Banc-Corp

















June 30,


March 31,


Seql Qtr


December 31,


September 30,


June 30,


Comp Qtr

(in thousands)


2013


2013


$ Change


2012


2012


2012


$ Change

Assets















Cash and due from banks


$      422,779


$    336,247


$    86,532


$      563,304


$      419,529


$      414,760


$        8,019

Interest-bearing deposits in other















 financial institutions


121,390


82,555


38,835


147,434


531,303


180,050


(58,660)

Federal funds sold and securities purchased















 under agreements to resell


10,800


8,600


2,200


27,135


2,460


3,800


7,000

Securities held to maturity, at amortized cost


75,946


54,123


21,823


39,877


21,852


-


75,946

Securities available for sale, at fair value


4,854,319


4,950,317


(95,998)


4,926,758


4,496,198


4,521,436


332,883

Federal Home Loan Bank and Federal 















   Reserve Bank stocks, at cost


181,008


152,490


28,518


166,774


166,100


176,041


4,967

Loans held for sale


203,576


173,389


30,187


261,410


157,093


157,481


46,095

Loans


15,746,599


15,551,562


195,037


15,411,022


14,966,214


14,698,902


1,047,697

Allowance for loan losses


(277,218)


(286,923)


9,705


(297,409)


(315,150)


(332,658)


55,440

    Loans, net


15,469,381


15,264,639


204,742


15,113,613


14,651,064


14,366,244


1,103,137

Premises and equipment, net


258,903


254,674


4,229


253,958


238,756


225,245


33,658

Goodwill


929,168


929,168


-


929,168


929,168


929,168


-

Other intangible assets, net


74,612


66,294


8,318


61,176


61,294


64,812


9,800

Trading assets


49,732


65,014


(15,282)


70,711


76,159


73,484


(23,752)

Other assets


965,330


940,258


25,072


926,417


987,378


968,579


(3,249)

    Total assets


$ 23,616,944


23,277,768


$  339,176


$ 23,487,735


$ 22,738,354


$ 22,081,100


$ 1,535,844
















Liabilities and Stockholders' Equity















Noninterest-bearing demand deposits


$   4,259,776


4,453,109


$(193,333)


$   4,759,556


$   4,320,437


$   3,874,429


$    385,347

Interest-bearing deposits


12,872,660


12,968,185


(95,525)


12,180,309


12,130,155


11,232,442


1,640,218

    Total deposits


17,132,436


17,421,294


(288,858)


16,939,865


16,450,592


15,106,871


2,025,565

Federal funds purchased and securities sold















 under agreements to repurchase


545,740


730,855


(185,115)


750,455


1,138,027


1,253,270


(707,530)

Other short-term funding


2,218,760


1,038,697


1,180,063


1,576,484


615,258


1,400,000


818,760

Long-term funding


614,822


915,063


(300,241)


1,015,346


1,305,422


1,150,729


(535,907)

Trading liabilities


52,598


70,236


(17,638)


76,343


82,861


80,107


(27,509)

Accrued expenses and other liabilities


175,612


165,358


10,254


192,843


195,742


180,502


(4,890)

    Total liabilities


20,739,968


20,341,503


398,465


20,551,336


19,787,902


19,171,479


1,568,489

Stockholders' Equity















  Preferred equity


63,272


63,272


-


63,272


63,272


63,272


-

  Common stock


1,750


1,750


-


1,750


1,750


1,750


-

  Surplus


1,610,243


1,605,966


4,277


1,602,136


1,599,070


1,594,995


15,248

  Retained earnings


1,330,737


1,297,692


33,045


1,281,811


1,250,189


1,213,735


117,002

  Accumulated other comprehensive income (loss)


(25,015)


42,991


(68,006)


48,603


67,303


66,579


(91,594)

  Treasury stock


(104,011)


(75,406)


(28,605)


(61,173)


(31,132)


(30,710)


(73,301)

    Total stockholders' equity


2,876,976


2,936,265


(59,289)


2,936,399


2,950,452


2,909,621


(32,645)

    Total liabilities and stockholders' equity


$ 23,616,944


23,277,768


$  339,176


$ 23,487,735


$ 22,738,354


$ 22,081,100


$ 1,535,844































Consolidated Statements of Income (Unaudited)













Associated Banc-Corp

















For The Three Months Ended





For The Six Months Ended






June 30,


Quarter


June 30,


Year-to-Date

(in thousands, except per share amounts)


2013


2012


$ Change

% Change


2013


2012


$ Change

% Change

Interest Income















Interest and fees on loans


$ 146,896


$ 147,188


$    (292)

(0.2%)


$ 292,423


$ 296,211


$ (3,788)

(1.3%)

Interest and dividends on investment securities:















  Taxable


21,446


23,000


(1,554)

(6.8%)


43,059


46,029


(2,970)

(6.5%)

  Tax-exempt


6,785


7,135


(350)

(4.9%)


13,750


14,409


(659)

(4.6%)

Other interest 


1,233


1,262


(29)

(2.3%)


2,480


2,509


(29)

(1.2%)

    Total interest income


176,360


178,585


(2,225)

(1.2%)


351,712


359,158


(7,446)

(2.1%)

Interest Expense















Interest on deposits 


7,769


10,553


(2,784)

(26.4%)


16,310


22,589


(6,279)

(27.8%)

Interest on Federal funds purchased and securities 















 sold under agreements to repurchase


333


612


(279)

(45.6%)


743


1,379


(636)

(46.1%)

Interest on other short-term funding


525


1,197


(672)

(56.1%)


857


2,253


(1,396)

(62.0%)

Interest on long-term funding


7,551


11,956


(4,405)

(36.8%)


15,967


24,002


(8,035)

(33.5%)

    Total interest expense


16,178


24,318


(8,140)

(33.5%)


33,877


50,223


(16,346)

(32.5%)

Net Interest Income


160,182


154,267


5,915

3.8%


317,835


308,935


8,900

2.9%

Provision for loan losses


4,000


-


4,000

N/M


8,000


-


8,000

N/M

Net interest income after provision for 















 loan losses


156,182


154,267


1,915

1.2%


309,835


308,935


900

0.3%

Noninterest Income















Trust service fees


11,405


10,125


1,280

12.6%


22,315


19,912


2,403

12.1%

Service charges on deposit accounts


17,443


16,768


675

4.0%


34,272


34,810


(538)

(1.5%)

Card-based and other nondeposit fees


12,591


12,084


507

4.2%


24,541


22,963


1,578

6.9%

Insurance commissions


9,631


12,912


(3,281)

(25.4%)


21,394


24,502


(3,108)

(12.7%)

Brokerage and annuity commissions


3,688


4,206


(518)

(12.3%)


7,204


8,333


(1,129)

(13.5%)

  Total core fee-based revenue


54,758


56,095


(1,337)

(2.4%)


109,726


110,520


(794)

(0.7%)
















Mortgage banking, net


19,263


16,735


2,528

15.1%


37,028


34,389


2,639

7.7%

Capital market fees, net


5,074


2,673


2,401

89.8%


7,657


6,389


1,268

19.8%

Bank owned life insurance income


3,281


3,164


117

3.7%


6,251


7,456


(1,205)

(16.2%)

Asset gains (losses), net


(44)


(4,984)


4,940

(99.1%)


792


(8,578)


9,370

(109.2%)

Investment securities gains, net


34


563


(529)

(94.0%)


334


603


(269)

(44.6%)

Other


1,944


1,705


239

14.0%


4,522


3,618


904

25.0%

    Total noninterest income


84,310


75,951


8,359

11.0%


166,310


154,397


11,913

7.7%

Noninterest Expense















Personnel expense


99,791


93,819


5,972

6.4%


197,698


188,100


9,598

5.1%

Occupancy 


14,305


14,008


297

2.1%


29,967


29,187


780

2.7%

Equipment 


6,462


5,719


743

13.0%


12,629


11,187


1,442

12.9%

Data processing


12,651


11,304


1,347

11.9%


24,159


20,820


3,339

16.0%

Business development and advertising


5,028


5,468


(440)

(8.0%)


9,565


10,849


(1,284)

(11.8%)

Other intangible amortization


1,011


1,049


(38)

(3.6%)


2,022


2,098


(76)

(3.6%)

Loan expense


3,044


2,948


96

3.3%


6,328


5,858


470

8.0%

Legal and professional fees


5,483


5,657


(174)

(3.1%)


10,828


15,372


(4,544)

(29.6%)

Losses other than loans


1,799


2,060


(261)

(12.7%)


1,483


5,610


(4,127)

(73.6%)

Foreclosure/OREO expense


2,302


4,343


(2,041)

(47.0%)


4,724


7,705


(2,981)

(38.7%)

FDIC expense


4,395


4,778


(383)

(8.0%)


9,827


9,648


179

1.9%

Other


13,725


14,877


(1,152)

(7.7%)


27,681


29,358


(1,677)

(5.7%)

    Total noninterest expense


169,996


166,030


3,966

2.4%


336,911


335,792


1,119

0.3%

Income before income taxes


70,496


64,188


6,308

9.8%


139,234


127,540


11,694

9.2%

Income tax expense 


22,608


20,871


1,737

8.3%


43,958


41,590


2,368

5.7%

Net income


47,888


43,317


4,571

10.6%


95,276


85,950


9,326

10.9%

Preferred stock dividends and discount


1,300


1,300


-

0.0%


2,600


2,600


-

0.0%

Net income available to common equity


$   46,588


$   42,017


4,571

10.9%


$   92,676


$   83,350


$  9,326

11.2%
















Earnings Per Common Share:















  Basic


$       0.28


$       0.24


$    0.04

16.7%


$       0.55


$       0.48


$    0.07

14.6%

  Diluted


$       0.28


$       0.24


$    0.04

16.7%


$       0.55


$       0.48


$    0.07

14.6%
















Average Common Shares Outstanding:















  Basic


166,605


172,839


(6,234)

(3.6%)


167,415


173,343


(5,928)

(3.4%)

  Diluted


166,748


172,841


(6,093)

(3.5%)


167,552


173,345


(5,793)

(3.3%)
















N/M = Not meaningful.















 

 









































Consolidated Statements of Income (Unaudited) - Quarterly Trend
















Associated Banc-Corp


























Sequential Qtr










Comparable Qtr


(in thousands, except per share amounts)


2Q13


1Q13


$ Change

% Change



4Q12


3Q12


2Q12



$ Change

% Change


Interest Income




















Interest and fees on loans


$ 146,896


$ 145,527


$  1,369

0.9%



$ 150,107


$ 149,647


$ 147,188



$    (292)

(0.2%)


Interest and dividends on investment securities:




















  Taxable


21,446


21,613


(167)

(0.8%)



20,368


20,548


23,000



(1,554)

(6.8%)


  Tax-exempt


6,785


6,965


(180)

(2.6%)



7,119


7,127


7,135



(350)

(4.9%)


Other interest 


1,233


1,247


(14)

(1.1%)



2,876


1,334


1,262



(29)

(2.3%)


    Total interest income


176,360


175,352


1,008

0.6%



180,470


178,656


178,585



(2,225)

(1.2%)


Interest Expense




















Interest on deposits 


7,769


8,541


(772)

(9.0%)



9,091


9,751


10,553



(2,784)

(26.4%)


Interest on Federal funds purchased and securities 




















 sold under agreements to repurchase


333


410


(77)

(18.8%)



558


750


612



(279)

(45.6%)


Interest on other short-term funding


525


332


193

58.1%



226


815


1,197



(672)

(56.1%)


Interest on long-term funding


7,551


8,416


(865)

(10.3%)



9,140


11,738


11,956



(4,405)

(36.8%)


    Total interest expense


16,178


17,699


(1,521)

(8.6%)



19,015


23,054


24,318



(8,140)

(33.5%)


Net Interest Income


160,182


157,653


2,529

1.6%



161,455


155,602


154,267



5,915

3.8%


Provision for loan losses


4,000


4,000


-

0.0%



3,000


-


-



4,000

N/M


Net interest income after provision for 




















 loan losses


156,182


153,653


2,529

1.6%



158,455


155,602


154,267



1,915

1.2%


Noninterest Income




















Trust service fees


11,405


10,910


495

4.5%



10,429


10,396


10,125



1,280

12.6%


Service charges on deposit accounts


17,443


16,829


614

3.6%



16,817


17,290


16,768



675

4.0%


Card-based and other nondeposit fees


12,591


11,950


641

5.4%



12,690


12,209


12,084



507

4.2%


Insurance commissions


9,631


11,763


(2,132)

(18.1%)



10,862


11,650


12,912



(3,281)

(25.4%)


Brokerage and annuity commissions


3,688


3,516


172

4.9%



3,678


3,632


4,206



(518)

(12.3%)


  Total core fee-based revenue


54,758


54,968


(210)

(0.4%)



54,476


55,177


56,095



(1,337)

(2.4%)






















Mortgage banking, net


19,263


17,765


1,498

8.4%



13,530


15,581


16,735



2,528

15.1%


Capital market fees, net


5,074


2,583


2,491

96.4%



4,243


3,609


2,673



2,401

89.8%


Bank owned life insurance income


3,281


2,970


311

10.5%



3,206


3,290


3,164



117

3.7%


Asset gains (losses), net


(44)


836


(880)

(105.3%)



(209)


(3,309)


(4,984)



4,940

(99.1%)


Investment securities gains, net


34


300


(266)

(88.7%)



152


3,506


563



(529)

(94.0%)


Other


1,944


2,578


(634)

(24.6%)



2,507


3,134


1,705



239

14.0%


    Total noninterest income


84,310


82,000


2,310

2.8%



77,905


80,988


75,951



8,359

11.0%


Noninterest Expense




















Personnel expense


99,791


97,907


1,884

1.9%



98,073


95,231


93,819



5,972

6.4%


Occupancy 


14,305


15,662


(1,357)

(8.7%)



17,273


14,334


14,008



297

2.1%


Equipment 


6,462


6,167


295

4.8%



6,444


5,935


5,719



743

13.0%


Data processing


12,651


11,508


1,143

9.9%



11,706


11,022


11,304



1,347

11.9%


Business development and advertising


5,028


4,537


491

10.8%



5,395


5,059


5,468



(440)

(8.0%)


Other intangible amortization


1,011


1,011


-

0.0%



1,049


1,048


1,049



(38)

(3.6%)


Loan expense


3,044


3,284


(240)

(7.3%)



3,130


3,297


2,948



96

3.3%


Legal and professional fees


5,483


5,345


138

2.6%



8,174


7,686


5,657



(174)

(3.1%)


Losses other than loans


1,799


(316)


2,115

N/M



3,071


3,577


2,060



(261)

(12.7%)


Foreclosure/OREO expense


2,302


2,422


(120)

(5.0%)



3,293


4,071


4,343



(2,041)

(47.0%)


FDIC expense


4,395


5,432


(1,037)

(19.1%)



4,813


5,017


4,778



(383)

(8.0%)


Other


13,725


13,956


(231)

(1.7%)



13,907


13,426


14,877



(1,152)

(7.7%)


    Total noninterest expense


169,996


166,915


3,081

1.8%



176,328


169,703


166,030



3,966

2.4%


Income before income taxes


70,496


68,738


1,758

2.6%



60,032


66,887


64,188



6,308

9.8%


Income tax expense 


22,608


21,350


1,258

5.9%



13,404


20,492


20,871



1,737

8.3%


Net income


47,888


47,388


500

1.1%



46,628


46,395


43,317



4,571

10.6%


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


$   46,588


$   46,088


$     500

1.1%



$   45,328


$   45,095


$   42,017



$  4,571

10.9%






















Earnings Per Common Share:




















  Basic


$       0.28


$       0.27


$    0.01

3.7%



$       0.26


$       0.26


$       0.24



$    0.04

16.7%


  Diluted


$       0.28


$       0.27


$    0.01

3.7%



$       0.26


$       0.26


$       0.24



$    0.04

16.7%






















Average Common Shares Outstanding:




















  Basic


166,605


168,234


(1,629)

(1.0%)



170,707


171,650


172,839



(6,234)

(3.6%)


  Diluted


166,748


168,404


(1,656)

(1.0%)



170,896


171,780


172,841



(6,093)

(3.5%)






















N/M = Not meaningful.




















 
















Selected Quarterly Information















Associated Banc-Corp















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

YTD 2013


YTD 2012


2nd Qtr 2013


1st Qtr 2013


4th Qtr 2012


3rd Qtr 2012


2nd Qtr 2012


Summary of Operations















Net interest income

$     317,835


$     308,935


$      60,182


$     157,653


$     161,455


$     155,602


$     154,267


Provision for loan losses

8,000


-


4,000


4,000


3,000


-


-


Asset gains (losses), net

792


(8,578)


(44)


836


(209)


(3,309)


(4,984)


Investment securities gains, net

334


603


34


300


152


3,506


563


Noninterest income (excluding securities & asset gains)

165,184


162,372


84,320


80,864


77,962


80,791


80,372


Noninterest expense

336,911


335,792


169,996


166,915


176,328


169,703


166,030


Income before income taxes

139,234


127,540


70,496


68,738


60,032


66,887


64,188


Income tax expense

43,958


41,590


22,608


21,350


13,404


20,492


20,871


Net income

95,276


85,950


47,888


47,388


46,628


46,395


43,317


Net income available to common equity

92,676


83,350


46,588


46,088


45,328


45,095


42,017


Taxable equivalent adjustment

10,086


10,557


4,996


5,090


5,221


5,268


5,254

















Per Common Share Data 















Net income:















  Basic

$           0.55


$           0.48


$           0.28


$           0.27


$           0.26


$           0.26


$           0.24


  Diluted

0.55


0.48


0.28


0.27


0.26


0.26


0.24


Dividends

0.16


0.10


0.08


0.08


0.08


0.05


0.05


Market Value:















  High

$         15.69


$         14.63


$         15.69


$         15.30


$         13.54


$         13.79


$         13.97


  Low

13.46


11.43


13.81


13.46


12.19


12.04


11.76


  Close

15.55


13.19


15.55


15.19


13.12


13.16


13.19


Book value

16.97


16.59


16.97


17.13


16.97


16.82


16.59


Tier 1 common equity / share

11.42


10.66


11.42


11.22


11.08


10.89


10.66


Tangible book value

11.28


11.07


11.28


11.51


11.39


11.31


11.07

















Performance Ratios (annualized)















Earning assets yield

3.49

%

3.83

%

3.47

%

3.52

%

3.70

%

3.73

%

3.80

%

Interest-bearing liabilities rate

0.43


0.68


0.41


0.45


0.51


0.62


0.65


Net interest margin

3.17


3.31


3.16


3.17


3.32


3.26


3.30


Return on average assets

0.83


0.80


0.82


0.83


0.83


0.84


0.80


Return on average tangible common equity

9.78


8.86


9.76


9.81


9.15


9.32


8.87


Return on average Tier 1 common equity (1)

10.00


9.25


9.94


10.07


9.61


9.69


9.26


Efficiency ratio (2)

69.64


72.57


69.54


69.74


73.71


72.81


72.30


Efficiency ratio, fully taxable equivalent (2)

67.91


69.25


67.73


68.10


71.65


69.79


68.77


Effective tax rate

31.57


32.61


32.07


31.06


22.33


30.64


32.52


Dividend payout ratio (3)

29.09

%

20.83

%

28.57

%

29.63

%

30.77

%

19.23

%

20.83

%
















Average Balances















Assets

$23,173,203


$21,671,870


$23,306,220


$23,038,708


$22,461,886


$22,016,748


$21,684,600


Earning assets

20,816,828


19,378,888


20,951,244


20,680,919


20,032,432


19,659,796


19,386,046


Interest-bearing liabilities

15,854,444


14,921,209


15,988,021


15,719,383


14,840,162


14,940,697


14,922,006


Loans (4)

15,588,752


14,456,522


15,727,807


15,448,152


15,131,102


14,916,793


14,602,602


Deposits

17,125,617


15,025,625


17,105,078


17,146,384


16,650,268


15,615,856


15,050,684


Short and long-term funding

2,917,657


3,585,023


3,074,647


2,758,923


2,638,661


3,286,943


3,566,346


Common stockholders' equity

2,853,995


2,839,482


2,857,722


2,850,227


2,915,346


2,870,438


2,852,050


Stockholders' equity

2,917,267


2,902,754


2,920,994


2,913,499


2,978,618


2,933,710


2,915,322


Average Tier 1 common equity (1)

1,868,696


1,812,684


1,880,826


1,856,431


1,876,686


1,850,610


1,825,441

















Reconciliation of non-GAAP financial measures















Efficiency ratio (2)

69.64

%

72.57

%

69.54

%

69.74

%

73.71

%

72.81

%

72.30

%

Taxable equivalent adjustment

(1.43)


(1.62)


(1.39)


(1.46)


(1.57)


(1.61)


(1.62)


Asset gain (losses), net

0.12


(1.26)


(0.01)


0.24


(0.06)


(0.98)


(1.47)


Other intangible amortization

(0.42)


(0.44)


(0.41)


(0.42)


(0.43)


(0.43)


(0.44)


Efficiency ratio, fully taxable equivalent (2)

67.91

%

69.25

%

67.73

%

68.10

%

71.65

%

69.79

%

68.77

%
















 

 













Selected Quarterly Information (continued)










Associated Banc-Corp












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


2nd Qtr 2013


1st Qtr 2013


4th Qtr 2012


3rd Qtr 2012


2nd Qtr 2012


At Period End












Assets


$23,616,944


$23,277,768


$23,487,735


$22,738,354


$22,081,100


Loans


15,746,599


15,551,562


15,411,022


14,966,214


14,698,902


Allowance for loan losses


277,218


286,923


297,409


315,150


332,658


Goodwill


929,168


929,168


929,168


929,168


929,168


Mortgage servicing rights, net


61,407


52,078


45,949


45,018


47,488


Other intangible assets, net


13,205


14,216


15,227


16,276


17,324


Deposits


17,132,436


17,421,294


16,939,865


16,450,592


15,106,871


Loans / deposits


91.91%


89.27%


90.97%


90.98%


97.30%


Risk weighted assets ($ in millions) (5) (7)


16,504


16,163


16,149


15,575


15,188


Tier 1 common equity (1)


1,893,875


1,881,410


1,875,534


1,869,931


1,828,529


Stockholders' equity / assets


12.18%


12.61%


12.50%


12.98%


13.18%


Tangible common equity / tangible assets (6)


8.25%


8.64%


8.56%


8.91%


8.99%


Tangible equity / tangible assets (6)


8.53%


8.92%


8.84%


9.20%


9.29%


Tier 1 common equity / risk-weighted assets (5) (7)


11.48%


11.64%


11.61%


12.01%


12.04%


Tier 1 leverage ratio (5) (7)


8.73%


8.78%


8.98%


9.99%


9.95%


Tier 1 risk-based capital ratio (5) (7)


11.86%


12.03%


12.01%


13.57%


13.64%


Total risk-based capital ratio (5) (7)


13.27%


13.45%


13.42%


15.00%


15.08%


Shares outstanding, end of period


165,837


167,673


169,304


171,657


171,611














Selected trend information












Average full time equivalent employees


4,790


4,841


4,915


4,965


4,951


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


$         6,894


$         6,913


$         6,454


$         6,163


$         5,934


Mortgage loans originated for sale during period


782,398


681,410


780,469


715,184


738,091


Mortgage portfolio serviced for others ($ in millions)


7,794


7,585


7,453


7,547


7,511


Mortgage servicing rights, net / Portfolio serviced for others


0.79%


0.69%


0.62%


0.60%


0.63%


























 

(1) Tier 1 common equity, a non-GAAP financial measure, is used by banking regulators, investors and analysts to assess and compare the quality and composition of our capital of other financial services companies. Management uses Tier 1 common equity, along with other capital measures, to assess and monitor our capital position. Tier 1 common equity (period end and average) is Tier 1 capital excluding qualifying perpetual preferred stock and qualifying trust preferred securities.

(2) Efficiency ratio is defined by the Federal Reserve guidance as noninterest expense divided by the sum of net interest income plus noninterest income, excluding investment securities gains / losses, net. Efficiency ratio, fully taxable equivalent, is noninterest expense, excluding other intangible amortization, divided by the sum of taxable equivalent net interest income plus noninterest income, excluding investment securities gains / losses, net and asset gains / losses, net. This efficiency ratio is presented on a taxable equivalent basis, which adjusts net interest income for the tax-favored status of certain loans and investment securities. Management believes this measure to be the preferred industry measurement of net interest income as it enchances the comparability of net interest income arising from taxable and tax-exempt sources and it excludes certain specific revenue items (such as investment securities gains / losses, net and asset gains / losses, net).

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

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

(5) June 30, 2013 data is estimated.

(6) Tangible equity, tangible common equity and 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.

(7) The Federal Reserve establishes capital adequacy requirements, including well-capitalized standards for the Corporation. The OCC establishes simliar capital adequacy requirements and standards for the Bank. Regulatory capital primarily consists of Tier 1 risk-based capital and Tier 2 risk-based capital. The sum of Tier 1 risk-based capital and Tier 2 risk-based capital equals our total risk-based capital. Risk-based capital guidelines require a minimum level of capital as a percentage of risk-weighted assets. Risk-weighted assets consist of total assets plus certain off-balance sheet and market items, subject to adjustment for predefined credit risk factors.

 











Selected Asset Quality Information










Associated Banc-Corp














Jun13 vs Mar13





Jun13 vs Jun12

(in thousands)


Jun 30, 2013

Mar 31, 2013

% Change


Dec 31, 2012

Sep 30, 2012

Jun 30, 2012

% Change

Allowance for Loan Losses










Beginning balance


$ 286,923

$ 297,409

(3.5%)


$ 315,150

$ 332,658

$ 356,298

(19.5%)

Provision for loan losses


4,000

4,000

N/M


3,000

-

-

N/M

Charge offs


(21,904)

(27,128)

(19.3%)


(30,417)

(25,030)

(30,340)

(27.8%)

Recoveries


8,199

12,642

(35.1%)


9,676

7,522

6,700

22.4%

Net charge offs


(13,705)

(14,486)

(5.4%)


(20,741)

(17,508)

(23,640)

(42.0%)

Ending balance


$ 277,218

$ 286,923

(3.4%)


$ 297,409

$ 315,150

$ 332,658

(16.7%)











Reserve for losses on unfunded commitments


$ 22,400

$ 21,100

6.2%


$ 21,800

$ 19,800

$ 18,900

18.5%





















Net Charge Offs




Jun13 vs Mar13





Jun13 vs Jun12



Jun 30, 2013

Mar 31, 2013

% Change


Dec 31, 2012

Sep 30, 2012

Jun 30, 2012

% Change

Commercial and industrial


$ 1,477

$ 696

112.2%


$ 2,630

$ 3,831

$ 14,544

(89.8%)

Commercial real estate - owner occupied


1,574

1,518

3.7%


2,056

(8)

1,164

35.2%

Lease financing


16

(12)

(233.3%)


754

(20)

-

N/M

Commercial and business lending


3,067

2,202

39.3%


5,440

3,803

15,708

(80.5%)

Commercial real estate - investor


2,999

163

N/M


(232)

1,905

177

N/M

Real estate construction


(95)

1,392

(106.8%)


858

(187)

558

(117.0%)

Commercial real estate lending


2,904

1,555

86.8%


626

1,718

735

295.1%

Total commercial


5,971

3,757

58.9%


6,066

5,521

16,443

(63.7%)

Home equity revolving lines of credit


2,512

3,615

(30.5%)


3,590

4,180

2,637

(4.7%)

Home equity loans 1st liens


954

765

24.7%


1,060

1,056

778

22.6%

Home equity loans junior liens


2,034

1,957

3.9%


3,421

2,686

1,869

8.8%

Home equity


5,500

6,337

(13.2%)


8,071

7,922

5,284

4.1%

Installment


66

177

(62.7%)


1,027

324

371

(82.2%)

Residential mortgage


2,168

4,215

(48.6%)


5,577

3,741

1,542

40.6%

Total consumer


7,734

10,729

(27.9%)


14,675

11,987

7,197

7.5%

Total net charge offs


$ 13,705

$ 14,486

(5.4%)


$ 20,741

$ 17,508

$ 23,640

(42.0%)











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


Jun 30, 2013

Mar 31, 2013



Dec 31, 2012

Sep 30, 2012

Jun 30, 2012


Commercial and industrial


13

6



25

37

151


Commercial real estate - owner occupied


54

51



69

(0)

43


Lease financing


12

(8)



480

(13)

-


Commercial and business lending


21

16



40

29

126


Commercial real estate - investor


41

2



(3)

27

3


Real estate construction


(5)

82



54

(12)

40


Commercial real estate lending


31

18



7

20

9


Total commercial


25

17



27

25

79


Home equity revolving lines of credit


112

159



148

167

104


Home equity loans 1st liens


42

32



40

38

28


Home equity loans junior liens


336

303



486

361

240


Home equity


108

119



140

132

86


Installment


6

16



86

26

28


Residential mortgage


24

47



64

45

19


Total consumer


50

70



93

77

46


Total net charge offs


35

38



55

47

65






















Credit Quality




Jun13 vs Mar13





Jun13 vs Jun12



Jun 30, 2013

Mar 31, 2013

% Change


Dec 31, 2012

Sep 30, 2012

Jun 30, 2012

% Change

Nonaccrual loans


$ 217,493

$ 225,436

(3.5%)


$ 252,868

$ 278,172

$ 317,872

(31.6%)

Other real estate owned (OREO)


27,407

35,156

(22.0%)


34,900

36,053

40,029

(31.5%)

Total nonperforming assets


$ 244,900

$ 260,592

(6.0%)


$ 287,768

$ 314,225

$ 357,901

(31.6%)











Loans 90 or more days past due and still accruing


1,548

5,690

(72.8%)


2,289

2,334

5,224

(70.4%)

Restructured loans (accruing)


119,066

120,093

(0.9%)


121,087

135,791

122,229

(2.6%)











Allowance for loan losses / loans


1.76%

1.84%



1.93%

2.11%

2.26%


Allowance for loan losses / nonaccrual loans


127.46

127.27



117.61

113.29

104.65


Nonaccrual loans / total loans


1.38

1.45



1.64

1.86

2.16


Nonperforming assets / total loans plus OREO


1.55

1.67



1.86

2.09

2.43


Nonperforming assets / total assets


1.04

1.12



1.23

1.38

1.62


Net charge offs / average loans (annualized)


0.35

0.38



0.55

0.47

0.65


Year-to-date net charge offs / average loans


0.36

0.38



0.57

0.58

0.63












Nonaccrual loans by type:










Commercial and industrial


$ 30,302

$ 33,242

(8.8%)


$ 39,182

$ 41,694

$ 46,111

(34.3%)

Commercial real estate - owner occupied


24,003

23,199

3.5%


24,254

27,161

33,417

(28.2%)

Lease financing


72

2,165

(96.7%)


3,031

5,927

8,260

(99.1%)

Commercial and business lending


54,377

58,606

(7.2%)


66,467

74,782

87,788

(38.1%)

Commercial real estate - investor


60,780

56,776

7.1%


58,687

71,522

88,806

(31.6%)

Real estate construction


21,419

22,166

(3.4%)


27,302

31,684

36,403

(41.2%)

Commercial real estate lending


82,199

78,942

4.1%


85,989

103,206

125,209

(34.4%)

Total commercial


136,576

137,548

(0.7%)


152,456

177,988

212,997

(35.9%)

Home equity revolving lines of credit


12,940

15,914

(18.7%)


20,446

19,242

22,651

(42.9%)

Home equity loans 1st liens


7,898

8,626

(8.4%)


8,717

9,425

7,870

0.4%

Home equity loans junior liens


7,296

9,405

(22.4%)


10,052

9,800

11,015

(33.8%)

Home equity


28,134

33,945

(17.1%)


39,215

38,467

41,536

(32.3%)

Installment


1,533

1,762

(13.0%)


1,838

2,893

3,047

(49.7%)

Residential mortgage


51,250

52,181

(1.8%)


59,359

58,824

60,292

(15.0%)

Total consumer


80,917

87,888

(7.9%)


100,412

100,184

104,875

(22.8%)

Total nonaccrual loans


$ 217,493

$ 225,436

(3.5%)


$ 252,868

$ 278,172

$ 317,872

(31.6%)





















* Annualized.










N/M = Not meaningful.










 

 











Selected Asset Quality Information (continued)








Associated Banc-Corp














Jun13 vs Mar13





Jun13 vs Jun12

(in thousands)


Jun 30, 2013

Mar 31, 2013

% Change


Dec 31, 2012

Sep 30, 2012

Jun 30, 2012

% Change

Restructured loans (accruing)










Commercial and industrial


$        30,970

$        29,251

5.9%


$        28,140

$        35,015

$        28,399

9.1%

Commercial real estate - owner occupied


14,336

12,888

11.2%


13,852

15,706

7,115

101.5%

Lease financing


-

-

N/M


-

-

-

N/M

  Commercial and business lending


45,306

42,139

7.5%


41,992

50,721

35,514

27.6%

Commercial real estate - investor


37,299

41,253

(9.6%)


41,660

49,249

49,325

(24.4%)

Real estate construction


5,365

5,540

(3.2%)


4,530

3,561

5,838

(8.1%)

  Commercial real estate lending


42,664

46,793

(8.8%)


46,190

52,810

55,163

(22.7%)

    Total commercial


87,970

88,932

(1.1%)


88,182

103,531

90,677

(3.0%)

Home equity revolving lines of credit


1,130

880

28.4%


867

803

759

48.9%

Home equity loans 1st liens


1,684

1,783

(5.6%)


1,930

1,904

2,182

(22.8%)

Home equity loans junior liens


7,119

6,893

3.3%


7,171

6,760

6,530

9.0%

  Home equity 


9,933

9,556

3.9%


9,968

9,467

9,471

4.9%

Installment


570

664

(14.2%)


653

672

779

(26.8%)

Residential mortgage


20,593

20,941

(1.7%)


22,284

22,121

21,302

(3.3%)

  Total consumer


31,096

31,161

(0.2%)


32,905

32,260

31,552

(1.4%)

        Total restructured loans (accruing)


$       119,066

$        120,093

(0.9%)


$       121,087

$       135,791

$       122,229

(2.6%)











Restructured loans in nonaccrual loans (not included above)


$         70,354

$          67,811

3.8%


$         80,590

$         74,251

$         86,395

(18.6%)





















Loans Past Due 30-89 Days




Jun13 vs Mar13





Jun13 vs Jun12



Jun 30, 2013

Mar 31, 2013

% Change


Dec 31, 2012

Sep 30, 2012

Jun 30, 2012

% Change

Commercial and industrial


$           8,516

$          10,263

(17.0%)


$         11,339

$           3,795

$           4,465

90.7%

Commercial real estate - owner occupied


8,105

6,804

19.1%


11,053

4,843

2,125

281.4%

Lease financing


57

283

(79.9%)


12

17

39

46.2%

  Commercial and business lending


16,678

17,350

(3.9%)


22,404

8,655

6,629

151.6%

Commercial real estate - investor


18,269

25,201

(27.5%)


13,472

8,809

12,854

42.1%

Real estate construction


797

2,287

(65.2%)


3,155

1,254

1,618

(50.7%)

  Commercial real estate lending


19,066

27,488

(30.6%)


16,627

10,063

14,472

31.7%

    Total commercial


35,744

44,838

(20.3%)


39,031

18,718

21,101

69.4%

Home equity revolving lines of credit


7,739

1,832

322.4%


7,829

9,543

7,298

6.0%

Home equity loans 1st liens


1,857

1,869

(0.6%)


1,457

1,535

3,906

(52.5%)

Home equity loans junior liens


2,709

2,848

(4.9%)


4,252

3,745

4,098

(33.9%)

  Home equity 


12,305

6,549

87.9%


13,538

14,823

15,302

(19.6%)

Installment


1,434

2,500

(42.6%)


2,109

1,693

1,558

(8.0%)

Residential mortgage


9,920

8,793

12.8%


9,403

6,878

9,836

0.9%

  Total consumer


23,659

17,842

32.6%


25,050

23,394

26,696

(11.4%)

        Total loans past due 30-89 days


$         59,403

$          62,680

(5.2%)


$         64,081

$         42,112

$         47,797

24.3%





















Potential Problem Loans




Jun13 vs Mar13





Jun13 vs Jun12



Jun 30, 2013

Mar 31, 2013

% Change


Dec 31, 2012

Sep 30, 2012

Jun 30, 2012

% Change

Commercial and industrial


$       127,382

$        127,367

0.0%


$       128,434

$       120,888

$       121,764

4.6%

Commercial real estate - owner occupied


75,074

93,098

(19.4%)


99,592

120,034

108,508

(30.8%)

Lease financing


279

251

11.2%


264

214

324

(13.9%)

  Commercial and business lending


202,735

220,716

(8.1%)


228,290

241,136

230,596

(12.1%)

Commercial real estate - investor


89,342

101,775

(12.2%)


107,068

133,046

142,453

(37.3%)

Real estate construction


9,184

10,040

(8.5%)


13,092

18,477

23,905

(61.6%)

  Commercial real estate lending


98,526

111,815

(11.9%)


120,160

151,523

166,358

(40.8%)

    Total commercial


301,261

332,531

(9.4%)


348,450

392,659

396,954

(24.1%)

Home equity revolving lines of credit


308

450

(31.6%)


520

518

919

(66.5%)

Home equity loans 1st liens


-

-

0.0%


-

-

-

0.0%

Home equity loans junior liens


2,307

2,871

(19.6%)


3,150

2,825

3,254

(29.1%)

  Home equity 


2,615

3,321

(21.3%)


3,670

3,343

4,173

(37.3%)

Installment


83

99

(16.2%)


111

131

127

(34.6%)

Residential mortgage


5,917

7,882

(24.9%)


8,762

8,197

8,658

(31.7%)

  Total consumer


8,615

11,302

(23.8%)


12,543

11,671

12,958

(33.5%)

        Total potential problem loans


$       309,876

$        343,833

(9.9%)


$       360,993

$       404,330

$       409,912

(24.4%)











N/M = Not meaningful.




















 













Net Interest Income Analysis - Taxable Equivalent Basis











Associated Banc-Corp


Three months ended June 30, 2013


Three months ended March 31, 2013





 Average 

Interest

Average


 Average 

Interest

Average



(in thousands)


 Balance 

 Income / Expense 

 Yield / Rate 


 Balance 

 Income / Expense 

 Yield / Rate 














Earning assets:











   Loans: (1) (2) (3)











      Commercial and business lending


$   5,860,416

$                  53,613

3.67%


$   5,615,036

$                  50,712

3.66%



      Commercial real estate lending


3,722,108

35,804

3.86


3,592,509

35,864

4.04



         Total commercial


9,582,524

89,417

3.74


$   9,207,545

$                   86,576

3.81



      Residential mortgage


3,661,742

30,113

3.29


3,622,455

30,481

3.37



      Retail


2,483,541

28,291

4.56


2,618,152

29,381

4.53



         Total loans


15,727,807

147,821

3.77


15,448,152

146,438

3.83



      Investment securities


4,917,671

32,303

2.63


4,891,714

32,757

2.68



      Other short-term investments


305,766

1,232

1.61


341,053

1,247

1.47



         Investments and other


5,223,437

33,535

2.57


5,232,767

34,004

2.60



Total earning assets


20,951,244

181,356

3.47


20,680,919

180,442

3.52



   Other assets, net


2,354,976




2,357,789





Total assets


$ 23,306,220




$ 23,038,708
















Interest-bearing liabilities:











   Savings deposits


$   1,207,959

$                        236

0.08%


$   1,141,781

$                        208

0.07%



   Interest-bearing demand deposits


2,867,524

1,190

0.17


2,779,929

1,179

0.17



   Money market deposits


6,930,554

3,239

0.19


7,044,344

3,615

0.21



   Time deposits


1,907,337

3,104

0.65


1,994,406

3,539

0.72



      Total interest-bearing deposits


12,913,374

7,769

0.24


12,960,460

8,541

0.27



   Federal funds purchased and securities sold under











   agreements to repurchase


677,489

333

0.20


779,550

410

0.21



   Other short-term funding


1,631,644

525

0.13


1,018,553

332

0.13



   Long-term funding


765,514

7,551

3.95


960,820

8,416

3.51



      Total short and long-term funding


3,074,647

8,409

1.09


2,758,923

9,158

1.33



Total interest-bearing liabilities


15,988,021

16,178

0.41


15,719,383

17,699

0.45



   Noninterest-bearing demand deposits


4,191,704




4,185,924





   Other liabilities


205,501




219,902





   Stockholders' equity


2,920,994




2,913,499





Total liabilities and stockholders' equity


$ 23,306,220




$ 23,038,708
















Net interest income and rate spread (1)



$                 165,178

3.06%



$                 162,743

3.07%



Net interest margin (1)




3.16%




3.17%



Taxable equivalent adjustment



$                     4,996




$                     5,090















Net Interest Income Analysis - Taxable Equivalent Basis











Associated Banc-Corp


Three months ended June 30, 2013


Three months ended June 30, 2012





 Average 

Interest

Average


 Average 

Interest

Average



(in thousands)


 Balance 

 Income / Expense 

 Yield / Rate 


 Balance 

 Income / Expense 

 Yield / Rate 














Earning assets:











   Loans: (1) (2) (3)











      Commercial and business lending


$   5,860,416

$                   53,613

3.67%


$   5,016,701

$                   48,584

3.89%



      Commercial real estate lending


3,722,108

35,804

3.86


3,320,186

34,843

4.22



         Total commercial


9,582,524

89,417

3.74


$   8,336,887

$                   83,427

4.02



      Residential mortgage


3,661,742

30,113

3.29


3,273,873

30,266

3.70



      Retail


2,483,541

28,291

4.56


2,991,842

34,468

4.63



         Total loans


15,727,807

147,821

3.77


14,602,602

148,161

4.07



      Investment securities


4,917,671

32,303

2.63


4,402,800

34,416

3.13



      Other short-term investments


305,766

1,232

1.61


380,644

1,262

1.33



         Investments and other


5,223,437

33,535

2.57


4,783,444

35,678

2.98



Total earning assets


20,951,244

181,356

3.47


19,386,046

183,839

3.80



   Other assets, net


2,354,976




2,298,554





Total assets


$ 23,306,220




$ 21,684,600
















Interest-bearing liabilities:











   Savings deposits


$   1,207,959

$                        236

0.08%


$   1,109,609

$                        211

0.08%



   Interest-bearing demand deposits


2,867,524

1,190

0.17


2,105,440

917

0.18



   Money market deposits


6,930,554

3,239

0.19


5,860,043

3,744

0.26



   Time deposits


1,907,337

3,104

0.65


2,280,568

5,681

1.00



      Total interest-bearing deposits


12,913,374

7,769

0.24


11,355,660

10,553

0.37



   Federal funds purchased and securities sold under











   agreements to repurchase


677,489

333

0.20


1,114,964

612

0.22



   Other short-term funding


1,631,644

525

0.13


1,279,319

1,197

0.38



   Long-term funding


765,514

7,551

3.95


1,172,063

11,956

4.08



      Total short and long-term funding


3,074,647

8,409

1.09


3,566,346

13,765

1.55



Total interest-bearing liabilities


15,988,021

16,178

0.41


14,922,006

24,318

0.65



   Noninterest-bearing demand deposits


4,191,704




3,695,024





   Other liabilities


205,501




152,248





   Stockholders' equity


2,920,994




2,915,322





Total liabilities and stockholders' equity


$ 23,306,220




$ 21,684,600
















Net interest income and rate spread (1)



$                 165,178

3.06%



$                 159,521

3.15%



Net interest margin (1)




3.16%




3.30%



Taxable equivalent adjustment



$                     4,996




$                     5,254















(1) The yield on tax exempt loans and securities is computed on a taxable equivalent basis using a tax rate of 35% for all periods presented and is net of the effects of certain disallowed interest deductions.

(2) Nonaccrual loans and loans held for sale have been included in the average balances.








(3) Interest income includes net loan fees.











 













Net Interest Income Analysis - Taxable Equivalent Basis











Associated Banc-Corp


Six months ended June 30, 2013


Six months ended June 30, 2012





 Average 

Interest

Average


 Average 

Interest

Average



(in thousands)


 Balance 

 Income / Expense 

 Yield / Rate 


 Balance 

 Income / Expense 

 Yield / Rate 














Earning assets:











   Loans: (1) (2) (3)











      Commercial and business lending


$   5,738,404

$                104,325

3.66%


$   4,922,827

$                  97,569

3.98%



      Commercial real estate lending


3,657,667

71,668

3.95


3,253,668

69,345

4.28



         Total commercial


9,396,071

175,993

3.77


$   8,176,495

$                 166,914

4.10



      Residential mortgage


3,642,207

60,595

3.33


3,256,480

61,230

3.76



      Retail


2,550,474

57,672

4.55


3,023,547

69,979

4.65



         Total loans


15,588,752

294,260

3.80


14,456,522

298,123

4.14



      Investment securities


4,904,764

65,058

2.65


4,507,200

69,083

3.07



      Other short-term investments


323,312

2,480

1.54


415,166

2,509

1.21



         Investments and other


5,228,076

67,538

2.58


4,922,366

71,592

2.91



Total earning assets


20,816,828

361,798

3.49


19,378,888

369,715

3.83



   Other assets, net


2,356,375




2,292,982





Total assets


$ 23,173,203




$ 21,671,870
















Interest-bearing liabilities:











   Savings deposits


$   1,175,053

$                        444

0.08%


$   1,069,499

$                        396

0.07%



   Interest-bearing demand deposits


2,823,969

2,369

0.17


2,109,947

1,861

0.18



   Money market deposits


6,987,134

6,854

0.20


5,774,305

7,302

0.25



   Time deposits


1,950,631

6,643

0.69


2,382,435

13,030

1.10



      Total interest-bearing deposits


12,936,787

16,310

0.25


11,336,186

22,589

0.40



   Federal funds purchased and securities sold under











   agreements to repurchase


728,238

743

0.21


1,228,842

1,379

0.23



   Other short-term funding


1,326,792

857

0.13


1,181,692

2,253

0.38



   Long-term funding


862,627

15,967

3.71


1,174,489

24,002

4.09



      Total short and long-term funding


2,917,657

17,567

1.21


3,585,023

27,634

1.54



Total interest-bearing liabilities


15,854,444

33,877

0.43


14,921,209

50,223

0.68



   Noninterest-bearing demand deposits


4,188,830




3,689,439





   Other liabilities


212,662




158,468





   Stockholders' equity


2,917,267




2,902,754





Total liabilities and stockholders' equity


$ 23,173,203




$ 21,671,870
















Net interest income and rate spread (1)



$                 327,921

3.06%



$                 319,492

3.15%



Net interest margin (1)




3.17%




3.31%



Taxable equivalent adjustment



$                   10,086




$                   10,557















(1) The yield on tax exempt loans and securities is computed on a taxable equivalent basis using a tax rate of 35% for all periods presented and is net of the effects of certain disallowed interest deductions.

(2) Nonaccrual loans and loans held for sale have been included in the average balances.









(3) Interest income includes net loan fees.

 

 











Financial Summary and Comparison










Associated Banc-Corp




















Period End Loan Composition




Jun13 vs Mar13





Jun13 vs Jun12



Jun 30, 2013

Mar 31, 2013

% Change


Dec 31, 2012

Sep 30, 2012

Jun 30, 2012

% Change

Commercial and industrial


$ 4,752,838

$ 4,651,143

2.2%


$ 4,502,021

$ 4,265,356

$ 4,076,370

16.6%

Commercial real estate - owner occupied


1,174,866

1,199,513

(2.1%)


1,219,747

1,197,517

1,116,815

5.2%

Lease financing


55,084

57,908

(4.9%)


64,196

60,818

62,750

(12.2%)

Commercial and business lending


5,982,788

5,908,564

1.3%


5,785,964

5,523,691

5,255,935

13.8%

Commercial real estate - investor


3,010,992

2,900,167

3.8%


2,906,759

2,787,158

2,810,521

7.1%

Real estate - construction


800,569

729,145

9.8%


655,381

611,186

612,556

30.7%

Commercial real estate lending


3,811,561

3,629,312

5.0%


3,562,140

3,398,344

3,423,077

11.3%

Total commercial


9,794,349

9,537,876

2.7%


9,348,104

8,922,035

8,679,012

12.9%

Home equity revolving lines of credit


888,162

904,187

(1.8%)


936,065

988,800

1,009,634

(12.0%)

Home equity loans 1st liens


863,779

940,017

(8.1%)


1,013,757

1,079,075

1,116,093

(22.6%)

Home equity loans junior liens


234,292

254,203

(7.8%)


269,672

289,025

303,867

(22.9%)

Home equity


1,986,233

2,098,407

(5.3%)


2,219,494

2,356,900

2,429,594

(18.2%)

Installment


434,029

447,445

(3.0%)


466,727

482,451

510,831

(15.0%)

Residential mortgage


3,531,988

3,467,834

1.8%


3,376,697

3,204,828

3,079,465

14.7%

Total consumer


5,952,250

6,013,686

(1.0%)


6,062,918

6,044,179

6,019,890

(1.1%)

Total loans


$ 15,746,599

$ 15,551,562

1.3%


$ 15,411,022

$ 14,966,214

$ 14,698,902

7.1%





















Period End Deposit and Customer Funding Composition




Jun13 vs Mar13





Jun13 vs Jun12



Jun 30, 2013

Mar 31, 2013

% Change


Dec 31, 2012

Sep 30, 2012

Jun 30, 2012

% Change

Noninterest-bearing demand


$ 4,259,776

$ 4,453,109

(4.3%)


$ 4,759,556

$ 4,320,437

$ 3,874,429

9.9%

Savings


1,211,567

1,197,134

1.2%


1,109,861

1,115,783

1,117,593

8.4%

Interest-bearing demand


2,802,277

2,966,934

(5.5%)


2,554,479

2,230,740

2,078,037

34.9%

Money market


7,040,317

6,836,678

3.0%


6,518,075

6,682,640

5,822,449

20.9%

Brokered CDs


59,206

49,919

18.6%


26,270

33,612

41,104

44.0%

Other time


1,759,293

1,917,520

(8.3%)


1,971,624

2,067,380

2,173,259

(19.0%)

Total deposits


17,132,436

17,421,294

(1.7%)


16,939,865

16,450,592

15,106,871

13.4%

Customer repo sweeps


489,700

617,038

(20.6%)


564,038

600,225

592,203

(17.3%)

Customer repo term


-

4,882

(100.0%)


115,032

448,782

619,897

(100.0%)

Total customer funding


489,700

621,920

(21.3%)


679,070

1,049,007

1,212,100

(59.6%)

Total deposits and customer funding


$ 17,622,136

$ 18,043,214

(2.3%)


$ 17,618,935

$ 17,499,599

$ 16,318,971

8.0%











Network transaction deposits included above in










interest-bearing demand and money market


2,135,306

2,054,714

3.9%


1,684,745

1,740,434

1,234,010

73.0%

Brokered CDs


59,206

49,919

18.6%


26,270

33,612

41,104

44.0%

Total network and brokered funding


2,194,512

2,104,633

4.3%


1,711,015

1,774,046

1,275,114

72.1%











Net customer deposits and funding (1)


15,427,624

15,938,581

(3.2%)


15,907,920

15,725,553

15,043,857

2.6%











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



























Average Loan Composition




Jun13 vs Mar13





Jun13 vs Jun12



Jun 30, 2013

Mar 31, 2013

% Change


Dec 31, 2012

Sep 30, 2012

Jun 30, 2012

% Change

Commercial and industrial


$ 4,635,892

$ 4,358,486

6.4%


$ 4,182,852

$ 4,110,122

$ 3,862,439

20.0%

Commercial real estate - owner occupied


1,169,124

1,196,912

(2.3%)


1,185,846

1,103,988

1,092,326

7.0%

Lease financing


55,400

59,638

(7.1%)


62,497

60,959

61,936

(10.6%)

Commercial and business lending


5,860,416

5,615,036

4.4%


5,431,195

5,275,069

5,016,701

16.8%

Commercial real estate - investor


2,951,524

2,899,930

1.8%


2,821,023

2,832,447

2,755,943

7.1%

Real estate construction


770,584

692,579

11.3%


630,081

607,773

564,243

36.6%

Commercial real estate lending


3,722,108

3,592,509

3.6%


3,451,104

3,440,220

3,320,186

12.1%

Total commercial


9,582,524

9,207,545

4.1%


8,882,299

8,715,289

8,336,887

14.9%

Home equity revolving lines of credit


896,931

922,084

(2.7%)


962,263

995,156

1,018,512

(11.9%)

Home equity loans 1st liens


902,554

976,466

(7.6%)


1,047,207

1,097,394

1,135,391

(20.5%)

Home equity loans junior liens


242,796

262,193

(7.4%)


280,051

296,021

313,661

(22.6%)

Total home equity


2,042,281

2,160,743

(5.5%)


2,289,521

2,388,571

2,467,564

(17.2%)

Installment


441,260

457,409

(3.5%)


473,563

492,721

524,278

(15.8%)

Residential mortgage


3,661,742

3,622,455

1.1%


3,485,719

3,320,212

3,273,873

11.8%

Total consumer


6,145,283

6,240,607

(1.5%)


6,248,803

6,201,504

6,265,715

(1.9%)

Total loans


$ 15,727,807

$ 15,448,152

1.8%


$ 15,131,102

$ 14,916,793

$ 14,602,602

7.7%





















Average Deposit Composition




Jun13 vs Mar13





Jun13 vs Jun12



Jun 30, 2013

Mar 31, 2013

% Change


Dec 31, 2012

Sep 30, 2012

Jun 30, 2012

% Change

Noninterest-bearing demand


$ 4,191,704

$ 4,185,924

0.1%


$ 4,448,767

$ 3,962,102

$ 3,695,024

13.4%

Savings


1,207,959

1,141,781

5.8%


1,129,983

1,117,194

1,109,609

8.9%

Interest-bearing demand


2,867,524

2,779,929

3.2%


2,236,826

2,136,280

2,105,440

36.2%

Money market


6,930,554

7,044,344

(1.6%)


6,797,306

6,240,596

5,860,043

18.3%

Time deposits


1,907,337

1,994,406

(4.4%)


2,037,386

2,159,684

2,280,568

(16.4%)

Total deposits


$ 17,105,078

$ 17,146,384

(0.2%)


$ 16,650,268

$ 15,615,856

$ 15,050,684

13.6%











 

SOURCE Associated Banc-Corp



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