Associated Reports Second Quarter Earnings of $0.31 per share

Earnings per share up 11% from prior year

Jul 16, 2015, 16:05 ET from Associated Banc-Corp

GREEN BAY, Wis., July 16, 2015 /PRNewswire/ -- Associated Banc-Corp (NYSE: ASB) today reported net income to common shareholders of $48 million, or $0.31 per common share, for the quarter ended June 30, 2015.   This compares to net income to common shareholders of $45 million, or $0.28 per common share, for the quarter ended June 30, 2014.

"Steady loan growth, strong fee revenues, and a benign credit environment have all contributed to this quarter's solid performance," said President and CEO Philip B. Flynn.  "We continue to optimize our delivery strategies, in terms of branches and digital channels, in response to evolving customer preferences. We are investing in more digital and mobile solutions, while being capital and expense disciplined."

HIGHLIGHTS  

  • Average loans grew $373 million, or 2% from the first quarter
    • Average Total Commercial loans grew $220 million, or 2% from the first quarter
    • Average Total Consumer loans grew $153 million, or 2% from the first quarter
  • Average deposits grew $571 million, or 3% from the first quarter
    • Average money market and savings balances grew a combined $523 million, or 5% from the first quarter
  • Net interest margin of 2.83% declined 6 basis points from the first quarter
  • Noninterest income of $87 million increased $6 million, or 8% from the first quarter
    • Mortgage banking revenue increased $3 million from the first quarter
  • Noninterest expenses of $177 million increased $3 million, or 1% from the first quarter
    • Personnel expense increased $3 million which included $2 million in severance
  • Pretax income of $71 million increased $2 million, or 3% from the first quarter
  • During the second quarter, the Company repurchased 3.2 million shares of common stock
  • Return on average Tier 1 common equity was 10.55% for the second quarter
  • Capital ratios remain strong with a Tier 1 common equity ratio of 9.30% at June 30, 2015

SECOND QUARTER 2015 FINANCIAL RESULTS

Loans

Average loans of $18.2 billion increased $373 million, or 2% from the first quarter, and have increased $1.5 billion, or 9% from the year ago quarter.  Commercial and business lending average balances grew $174 million, or 2% from the first quarter.   Within commercial and business lending, the mortgage warehouse portfolio grew an average of $130 million during the quarter and was the largest contributor to commercial loan growth.  Commercial real estate lending average balances grew $46 million, or 1% from the first quarter.  Total consumer average loans were up $153 million compared to the prior quarter.  Residential lending growth of $219 million was the largest contributor of loan growth for the quarter. Growth in total consumer lending was partially offset by continued run off in home equity and installment loans.

Deposits

Average deposits of $19.6 billion for the second quarter were up $571 million, or 3% compared to the first quarter and have increased $2.5 billion, or 14% from the year ago quarter.  Money market average balances increased $448 million, or 5% from the first quarter.  Savings average balances increased $75 million, or 6% from the prior quarter. Time deposits grew an average of $36 million during the quarter, continuing the growth trend experienced in the first quarter.  Average checking balances were also slightly improved from the first quarter. 

Net Interest Income and Net Interest Margin

Second quarter net interest income of $166 million was down $1 million, or 1% from the first quarter and down $2 million from the year ago quarter. During the quarter, the Company restructured its investment portfolio and sold over $1 billion of Fannie Mae and Freddie Mac mortgage backed securities and reinvested into Ginnie Mae securities, contributing to $1 million in lower portfolio income and generating a $1 million net gain on sale. This restructuring lowered our risk weighted assets and related capital requirements, while improving the liquidity of our portfolio and not materially changing its duration or income profile going forward.

Second quarter net interest margin was 2.83%, a decrease of 6 basis points from the 2.89% reported in the first quarter.   The second quarter yield on earning assets declined 5 basis points to 3.15% from 3.20% in the prior quarter.  The decline is primarily attributable to continued loan yield compression in the commercial real estate portfolio, payoffs in the home equity portfolio, and the previously mentioned investment portfolio restructuring.   Second quarter deposit expense was unchanged at 21 basis points while overall funding costs increased 1 basis point to 40 basis points.

Noninterest Income and Expense

Noninterest income for the second quarter was $87 million, up $6 million or 8% from the first quarter, and up $14 million or 20% from the year ago quarter. In the second quarter, core fee-based revenues increased $2 million on higher trust, insurance, brokerage, and syndication fees. Mortgage banking income increased $3 million from the prior quarter on higher realized gains on sale. Second quarter net asset gains of $2 million were up $1 million from the prior quarter. 

Noninterest income growth from the year ago quarter is primarily attributable to the Ahmann & Martin Co. insurance agency acquisition and improving mortgage banking income.

Total noninterest expense was $177 million, up $3 million or 1% from the first quarter, and up $9 million or 5% from the year ago quarter.  In the second quarter, personnel expense increased $3 million which included $2 million in severance related to the restructuring of our securities brokerage business and the planned closure of thirteen branches. Occupancy expenses were lower in the current quarter due to a lease termination charge recorded in the first quarter.   Business development and advertising expenses increased $2 million driven by the launch of a multifaceted advertising campaign in the second quarter.

The Company announced plans to close thirteen branches in the second half of 2015. The branch closures reflect changing customer branch usage patterns and a continuing shift to digital banking solutions. These branch closures will generate approximately $3 million in expense to be recognized by year end 2015, and should result in net savings in 2016 and beyond.

Taxes

Second quarter income taxes were $22 million, with an effective tax rate of 31%, compared to $22 million and an effective tax rate of 32% in the year ago period.

Credit

Net charge offs of $9 million were up $3 million from the first quarter, and up $6 million from the year ago quarter.  Potential problem loans of $200 million were down 9% compared to the first quarter, and down 31% from the year ago quarter. The second quarter provision was essentially flat from the prior quarter at $5 million and reflects a benign credit environment.

Nonaccrual loans of $160 million were down 8% compared to the first quarter, and down 11% from the year ago quarter.  The nonaccrual loans to total loans ratio improved to 0.88% in the second quarter, down from 0.97% in the prior quarter and down from 1.05% in the year ago quarter.

The Company's allowance for loan losses of $262 million was down $4 million from first quarter, and down $10 million from the year ago quarter. The allowance for loan losses to total nonaccrual loans ratio improved to 163% in the second quarter, up from 152% in the prior and year ago quarters.

Capital Ratios

The Company's capital position remains strong, with a Tier 1 common equity ratio of 9.30% at June 30, 2015. 

During the second quarter, the Company issued $65 million of preferred stock with a 6.125% dividend rate for net proceeds of $63 million. Also during the quarter, the Company repurchased $63 million, or 3.2 million shares, of common stock at an average cost of $19.51 per share.

The Company's capital ratios continue to be in excess of the Basel III "well-capitalized" regulatory benchmarks on a fully phased in basis.

SECOND QUARTER 2015 EARNINGS RELEASE CONFERENCE CALL

The Company will host a conference call for investors and analysts at 4:00 p.m. Central Time (CT) today, July 16, 2015.  Interested parties can listen to the call live on the internet through the investor relations section of the company's website, http://investor.associatedbank.com or by dialing 877-407-8037. The slide presentation for the call will be available on the company's website just prior to the call. The number for international callers is 201-689-8037. Participants should ask the operator for the Associated Banc-Corp second quarter 2015 earnings call.

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

ABOUT ASSOCIATED BANC-CORP

Associated Banc-Corp (NYSE: ASB) has total assets of $27 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 in over 200 banking locations serving more than 100 communities throughout Wisconsin, Illinois and Minnesota, and commercial financial services in Indiana, Michigan, Missouri, Ohio and Texas. Associated Bank, N.A. is an Equal Housing Lender, Equal Opportunity Lender and Member FDIC. More information about Associated Banc-Corp is available at www.associatedbank.com.

FORWARD LOOKING STATEMENTS

Statements made in this document which are not purely historical are forward-looking statements, as defined in the Private Securities Litigation Reform Act of 1995. This includes any statements regarding management's plans, objectives, or goals for future operations, products or services, and forecasts of its revenues, earnings, or other measures of performance.  Such forward-looking statements may be identified by the use of words such as "believe", "expect", "anticipate", "plan", "estimate", "should", "will", "intend", "outlook", or similar expressions.  Forward-looking statements are based on current management expectations and, by their nature, are subject to risks and uncertainties. Actual results may differ materially from those contained in the forward-looking statements.  Factors which may cause actual results to differ materially from those contained in such forward-looking statements include those identified in the Company's most recent Form 10-K and subsequent SEC filings.  Such factors are incorporated herein by reference. 

NON-GAAP FINANCIAL MEASURES

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

 

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

 

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

 

 

Associated Banc-Corp Consolidated Balance Sheets (Unaudited)

(in thousands)

June 30, 2015

March 31, 2015

Seql Qtr $ Change

December 31, 2014

September 30, 2014

June 30, 2014

Comp Qtr $ Change

Assets

Cash and due from banks

$

375,369

$

355,541

$

19,828

$

444,113

$

381,287

$

549,883

$

(174,514)

Interest-bearing deposits in other financial institutions

101,573

488,426

(386,853)

571,924

74,945

78,233

23,340

Federal funds sold and securities purchased under agreements to resell

39,850

3,380

36,470

16,030

18,320

18,135

21,715

Securities held to maturity, at amortized cost

532,382

438,047

94,335

404,455

301,941

246,050

286,332

Securities available for sale, at fair value

5,407,998

5,358,310

49,688

5,396,812

5,345,422

5,506,379

(98,381)

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

160,765

189,222

(28,457)

189,107

188,875

186,247

(25,482)

Loans held for sale

151,146

159,963

(8,817)

154,935

141,672

78,657

72,489

Loans

18,303,252

17,979,032

324,220

17,593,846

17,159,090

17,045,052

1,258,200

Allowance for loan losses

(261,538)

(265,268)

3,730

(266,302)

(266,262)

(271,851)

10,313

Loans, net

18,041,714

17,713,764

327,950

17,327,544

16,892,828

16,773,201

1,268,513

Premises and equipment, net

274,338

274,591

(253)

274,688

272,283

264,735

9,603

Goodwill

968,844

968,774

70

929,168

929,168

929,168

39,676

Other intangible assets, net

79,055

77,984

1,071

67,582

69,201

70,538

8,517

Trading assets

35,386

42,336

(6,950)

35,163

34,005

40,630

(5,244)

Other assets

1,016,725

998,402

18,323

1,010,253

1,003,875

985,930

30,795

Total assets

$

27,185,145

$

27,068,740

$

116,405

$

26,821,774

$

25,653,822

$

25,727,786

$

1,457,359

Liabilities and Stockholders' Equity

Noninterest-bearing demand deposits

$

4,332,171

$

4,570,872

$

(238,701)

$

4,505,272

$

4,302,454

$

4,211,057

$

121,114

Interest-bearing deposits

14,937,392

15,280,720

(343,328)

14,258,232

13,898,804

13,105,202

1,832,190

Total deposits

19,269,563

19,851,592

(582,029)

18,763,504

18,201,258

17,316,259

1,953,304

Federal funds purchased and securities sold under agreements to repurchase

689,699

587,272

102,427

493,991

765,641

959,051

(269,352)

Other short-term funding

905,837

75,265

830,572

574,297

664,539

1,378,120

(472,283)

Long-term funding

3,179,734

3,429,925

(250,191)

3,930,117

2,931,547

2,931,809

247,925

Trading liabilities

37,169

44,730

(7,561)

37,329

36,003

43,311

(6,142)

Accrued expenses and other liabilities

198,752

197,818

934

222,285

185,256

169,290

29,462

Total liabilities

24,280,754

24,186,602

94,152

24,021,523

22,784,244

22,797,840

1,482,914

Stockholders' Equity

Preferred equity

122,015

59,727

62,288

59,727

61,024

61,024

60,991

Common stock

1,642

1,674

(32)

1,665

1,719

1,750

(108)

Surplus

1,450,200

1,505,170

(54,970)

1,484,933

1,583,032

1,628,356

(178,156)

Retained earnings

1,538,684

1,509,967

28,717

1,497,818

1,466,525

1,432,518

106,166

Accumulated other comprehensive income (loss)

2,594

24,800

(22,206)

(4,850)

(1,725)

10,494

(7,900)

Treasury stock

(210,744)

(219,200)

8,456

(239,042)

(240,997)

(204,196)

(6,548)

Total stockholders' equity

2,904,391

2,882,138

22,253

2,800,251

2,869,578

2,929,946

(25,555)

Total liabilities and stockholders' equity

$

27,185,145

$

27,068,740

$

116,405

$

26,821,774

$

25,653,822

$

25,727,786

$

1,457,359

 

Associated Banc-Corp Consolidated Statements of Income (Unaudited)

For The Three Months Ended, June 30

Quarter

For The Six Months Ended, June 30

Year-to-Date

(in thousands, except per share amounts)

2015

2014

$ Change

% Change

2015

2014

$ Change

% Change

Interest Income

Interest and fees on loans

$152,417

$

146,629

$

5,788

3.9%

$

304,362

$

290,016

$

14,346

4.9%

Interest and dividends on investment securities:

Taxable

23,868

26,109

(2,241)

(8.6)%

48,960

52,366

(3,406)

(6.5)%

Tax-exempt

7,565

7,030

535

7.6%

15,452

14,001

1,451

10.4%

Other interest

1,771

1,862

(91)

(4.9)%

3,463

3,311

152

4.6%

Total interest income

185,621

181,630

3,991

2.2%

372,237

359,694

12,543

3.5%

Interest Expense

Interest on deposits

8,141

6,195

1,946

31.4%

15,760

12,354

3,406

27.6%

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

235

306

(71)

(23.2)%

466

611

(145)

(23.7)%

Interest on other short-term funding

115

280

(165)

(58.9)%

196

396

(200)

(50.5)%

Interest on long-term funding

10,642

6,146

4,496

73.2%

21,514

12,657

8,857

70.0%

Total interest expense

19,133

12,927

6,206

48.0%

37,936

26,018

11,918

45.8%

Net Interest Income

166,488

168,703

(2,215)

(1.3)%

334,301

333,676

625

0.2%

Provision for credit losses

5,000

5,000

—%

9,500

10,000

(500)

(5.0)%

Net interest income after provision for credit losses

161,488

163,703

(2,215)

(1.4)%

324,801

323,676

1,125

0.3%

Noninterest Income

Trust service fees

12,515

12,017

498

4.1%

24,602

23,728

874

3.7%

Service charges on deposit accounts

15,703

17,412

(1,709)

(9.8)%

31,509

33,812

(2,303)

(6.8)%

Card-based and other nondeposit fees

13,597

12,577

1,020

8.1%

26,013

25,086

927

3.7%

Insurance commissions

20,077

13,651

6,426

47.1%

39,805

25,968

13,837

53.3%

Brokerage and annuity commissions

4,192

4,520

(328)

(7.3)%

7,875

8,553

(678)

(7.9)%

Total core fee-based revenue

66,084

60,177

5,907

9.8%

129,804

117,147

12,657

10.8%

Mortgage banking, net

9,941

5,362

4,579

85.4%

17,349

11,723

5,626

48.0%

Capital market fees, net

2,692

2,099

593

28.3%

5,159

4,421

738

16.7%

Bank owned life insurance income

2,381

3,011

(630)

(20.9)%

5,256

7,331

(2,075)

(28.3)%

Asset gains, net

1,893

899

994

110.6%

2,989

1,627

1,362

83.7%

Investment securities gains, net

1,242

34

1,208

N/M

1,242

412

830

201.5%

Other

2,288

665

1,623

244.1%

4,798

3,107

1,691

54.4%

Total noninterest income

86,521

72,247

14,274

19.8%

166,597

145,768

20,829

14.3%

Noninterest Expense

Personnel expense

102,986

97,793

5,193

5.3%

203,138

195,491

7,647

3.9%

Occupancy

14,308

13,785

523

3.8%

31,991

29,345

2,646

9.0%

Equipment

5,739

6,227

(488)

(7.8)%

11,511

12,503

(992)

(7.9)%

Technology

16,354

14,594

1,760

12.1%

31,912

27,318

4,594

16.8%

Business development and advertising

6,829

5,077

1,752

34.5%

12,156

10,139

2,017

19.9%

Other intangible amortization

888

991

(103)

(10.4)%

1,689

1,982

(293)

(14.8)%

Loan expense

3,681

3,620

61

1.7%

6,677

6,407

270

4.2%

Legal and professional fees

4,344

4,436

(92)

(2.1)%

8,882

8,624

258

3.0%

Foreclosure / OREO expense

1,303

1,575

(272)

(17.3)%

2,728

3,471

(743)

(21.4)%

FDIC expense

6,000

4,945

1,055

21.3%

12,500

9,946

2,554

25.7%

Other

14,384

14,882

(498)

(3.3)%

27,887

30,357

(2,470)

(8.1)%

Total noninterest expense

176,816

167,925

8,891

5.3%

351,071

335,583

15,488

4.6%

Income before income taxes

71,193

68,025

3,168

4.7%

140,327

133,861

6,466

4.8%

Income tax expense

21,793

21,660

133

0.6%

44,255

42,297

1,958

4.6%

Net income

49,400

46,365

3,035

6.5%

96,072

91,564

4,508

4.9%

Preferred stock dividends

1,545

1,278

267

20.9%

2,773

2,522

251

10.0%

Net income available to common equity

$

47,855

$

45,087

$

2,768

6.1%

$

93,299

$

89,042

$

4,257

4.8%

Earnings Per Common Share:

Basic

$

0.32

$

0.28

$

0.04

14.3%

$

0.62

$

0.55

$

0.07

12.7%

Diluted

$

0.31

$

0.28

$

0.03

10.7%

$

0.61

$

0.55

$

0.06

10.9%

Average Common Shares Outstanding:

Basic

149,903

159,940

(10,037)

(6.3)%

149,986

160,699

(10,713)

(6.7)%

Diluted

151,108

160,838

(9,730)

(6.0)%

151,129

161,513

(10,384)

(6.4)%

N/M=Not  meaningful

 

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

Sequential Qtr

Comparable Qtr

(in thousands, except per share amounts)

2Q15

1Q15

$ Change

% Change

4Q14

3Q14

2Q14

$ Change

% Change

Interest Income

Interest and fees on loans

$

152,417

$

151,945

$

472

0.3%

$

156,536

$

152,030

$

146,629

$

5,788

3.9%

Interest and dividends on investment securities:

Taxable

23,868

25,092

(1,224)

(4.9)%

25,061

25,037

26,109

(2,241)

(8.6)%

Tax-exempt

7,565

7,887

(322)

(4.1)%

7,580

7,483

7,030

535

7.6%

Other interest

1,771

1,692

79

4.7%

1,821

1,503

1,862

(91)

(4.9)%

Total interest income

185,621

186,616

(995)

(0.5)%

190,998

186,053

181,630

3,991

2.2%

Interest Expense

Interest on deposits

8,141

7,619

522

6.9%

7,319

6,621

6,195

1,946

31.4%

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

235

231

4

1.7%

218

390

306

(71)

(23.2)%

Interest on other short-term funding

115

81

34

42.0%

156

233

280

(165)

(58.9)%

Interest on long-term funding

10,642

10,872

(230)

(2.1)%

8,644

6,179

6,146

4,496

73.2%

Total interest expense

19,133

18,803

330

1.8%

16,337

13,423

12,927

6,206

48.0%

Net Interest Income

166,488

167,813

(1,325)

(0.8)%

174,661

172,630

168,703

(2,215)

(1.3)%

Provision for credit losses

5,000

4,500

500

11.1%

5,000

1,000

5,000

—%

Net interest income after provision for credit losses

161,488

163,313

(1,825)

(1.1)%

169,661

171,630

163,703

(2,215)

(1.4)%

Noninterest Income

Trust service fees

12,515

12,087

428

3.5%

12,457

12,218

12,017

498

4.1%

Service charges on deposit accounts

15,703

15,806

(103)

(0.7)%

17,006

17,961

17,412

(1,709)

(9.8)%

Card-based and other nondeposit fees

13,597

12,416

1,181

9.5%

12,019

12,407

12,577

1,020

8.1%

Insurance commissions

20,077

19,728

349

1.8%

10,593

7,860

13,651

6,426

47.1%

Brokerage and annuity commissions

4,192

3,683

509

13.8%

3,496

4,040

4,520

(328)

(7.3)%

Total core fee-based revenue

66,084

63,720

2,364

3.7%

55,571

54,486

60,177

5,907

9.8%

Mortgage banking, net

9,941

7,408

2,533

34.2%

2,928

6,669

5,362

4,579

85.4%

Capital market fees, net

2,692

2,467

225

9.1%

2,613

2,939

2,099

593

28.3%

Bank owned life insurance income

2,381

2,875

(494)

(17.2)%

2,739

3,506

3,011

(630)

(20.9)%

Asset gains, net

1,893

1,096

797

72.7%

3,727

4,934

899

994

110.6%

Investment securities gains, net

1,242

1,242

N/M

25

57

34

1,208

N/M

Other

2,288

2,510

(222)

(8.8)%

2,040

2,317

665

1,623

244.1%

Total noninterest income

86,521

80,076

6,445

8.0%

69,643

74,908

72,247

14,274

19.8%

Noninterest Expense

Personnel expense

102,986

100,152

2,834

2.8%

97,258

97,650

97,793

5,193

5.3%

Occupancy

14,308

17,683

(3,375)

(19.1)%

14,589

13,743

13,785

523

3.8%

Equipment

5,739

5,772

(33)

(0.6)%

6,148

6,133

6,227

(488)

(7.8)%

Technology

16,354

15,558

796

5.1%

14,581

13,573

14,594

1,760

12.1%

Business development and advertising

6,829

5,327

1,502

28.2%

8,538

7,467

5,077

1,752

34.5%

Other intangible amortization

888

801

87

10.9%

775

990

991

(103)

(10.4)%

Loan expense

3,681

2,996

685

22.9%

3,646

3,813

3,620

61

1.7%

Legal and professional fees

4,344

4,538

(194)

(4.3)%

4,257

4,604

4,436

(92)

(2.1)%

Foreclosure / OREO expense

1,303

1,425

(122)

(8.6)%

1,168

2,083

1,575

(272)

(17.3)%

FDIC expense

6,000

6,500

(500)

(7.7)%

6,956

6,859

4,945

1,055

21.3%

Other

14,384

13,503

881

6.5%

13,889

14,938

14,882

(498)

(3.3)%

Total noninterest expense

176,816

174,255

2,561

1.5%

171,805

171,853

167,925

8,891

5.3%

Income before income taxes

71,193

69,134

2,059

3.0%

67,499

74,685

68,025

3,168

4.7%

Income tax expense

21,793

22,462

(669)

(3.0)%

18,761

24,478

21,660

133

0.6%

Net income

49,400

46,672

2,728

5.8%

48,738

50,207

46,365

3,035

6.5%

Preferred stock dividends

1,545

1,228

317

25.8%

1,225

1,255

1,278

267

20.9%

Net income available to common equity

$

47,855

$

45,444

$

2,411

5.3%

$

47,513

$

48,952

$

45,087

$

2,768

6.1%

Earnings Per Common Share:

Basic

$

0.32

$

0.30

$

0.02

6.7%

$

0.31

$

0.31

$

0.28

$

0.04

14.3%

Diluted

$

0.31

$

0.30

$

0.01

3.3%

$

0.31

$

0.31

$

0.28

$

0.03

10.7%

Average Common Shares Outstanding:

Basic

149,903

150,070

(167)

(0.1)%

151,931

155,925

159,940

(10,037)

(6.3)%

Diluted

151,108

151,164

(56)

—%

153,083

156,991

160,838

(9,730)

(6.0)%

N/M=Not meaningful

 

Associated Banc-Corp

Selected Quarterly Information

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

YTD 2015

YTD 2014

2Q15

1Q15

4Q14

3Q14

2Q14

Per Common Share Data

Dividends

$

0.20

$

0.18

$

0.10

$

0.10

$

0.10

$

0.09

$

0.09

Market Value:

High

20.84

18.39

20.84

19.07

19.37

18.90

18.39

Low

16.62

15.58

18.50

16.62

16.75

17.42

16.82

Close

20.27

18.08

20.27

18.60

18.63

17.42

18.08

Book value

18.44

17.99

18.44

18.38

18.32

18.15

17.99

Tier 1 common equity / share (1) (6)

12.10

12.04

12.10

11.97

12.09

12.10

12.04

Tangible book value / share

$

11.90

$

12.11

$

11.90

$

11.95

$

12.06

$

12.09

$

12.11

Performance Ratios (annualized)

Return on average assets

0.73%

0.75%

0.74%

0.71%

0.75%

0.78%

0.75%

Return on average tangible common equity

10.39

9.51

10.62

10.16

10.27

10.35

9.56

Return on average Tier 1 common equity (1) (6)

10.38

9.52

10.55

10.22

10.35

10.38

9.56

Effective tax rate

31.54

31.60

30.61

32.49

27.79

32.77

31.84

Dividend payout ratio (2)

32.26

32.73

31.25

33.33

32.26

29.03

32.14

Average Balances

Common stockholders' equity

$

2,790

$

2,828

$

2,794

$

2,785

$

2,772

$

2,815

$

2,830

Average Tier 1 common equity (1) (6)

$

1,812

$

1,896

$

1,820

$

1,804

$

1,821

$

1,871

$

1,892

Selected Trend Information

Average full time equivalent employees

4,443

4,474

4,465

4,422

4,320

4,359

4,431

Trust assets under management, at market value

$

8,068

$

7,720

$

8,068

$

8,138

$

7,993

$

7,700

$

7,720

Total revenue (3)

$

511

$

489

$

258

$

253

$

249

$

252

$

246

Core fee-based revenue (4)

$

130

$

117

$

66

$

64

$

56

$

54

$

60

Mortgage loans originated for sale during period

$

619

$

479

$

351

$

268

$

292

$

298

$

276

Mortgage portfolio serviced for others

$

7,898

$

8,052

$

7,898

$

7,920

$

7,999

$

8,012

$

8,052

Mortgage servicing rights, net / Portfolio serviced for others

0.77%

0.76%

0.77%

0.75%

0.75%

0.76%

0.76%

At Period End

Loans / deposits

94.99%

90.57%

93.77%

94.27%

98.43%

Stockholders' equity / assets

10.68%

10.65%

10.44%

11.19%

11.39%

Tangible common equity / tangible assets (5)

6.85%

7.04%

6.97%

7.57%

7.79%

Tangible equity / tangible assets (5)

7.32%

7.27%

7.20%

7.82%

8.03%

Shares outstanding, end of period

150,862

153,567

149,560

154,743

159,480

Capital (6)

Risk weighted assets (7) (8)

$

19,629

$

19,565

$

18,568

$

18,031

$

17,911

Tier 1 common equity (1)

$

1,825

$

1,838

$

1,808

$

1,873

$

1,920

Tier 1 common equity / risk-weighted assets (7) (8)

9.30%

9.39%

9.74%

10.39%

10.72%

Tier 1 leverage ratio (7) (8)

7.53%

7.39%

7.48%

7.87%

8.26%

Tier 1 risk-based capital ratio (7) (8)

9.89%

9.70%

10.06%

10.73%

11.06%

Total risk-based capital ratio (7) (8)

12.41%

12.21%

12.66%

11.98%

12.31%

Non-GAAP Financial Measures Reconciliation

Common Equity Tier 1 Reconciliation (1):

Stockholders' Equity

$

2,904

$

2,882

$

2,800

$

2,870

$

2,930

Accumulated other comprehensive income (AOCI)

$

(2)

$

(25)

$

5

$

1

$

(11)

Preferred equity

$

(122)

$

(59)

$

(60)

$

(61)

$

(61)

Intangible assets

$

(951)

$

(951)

$

(937)

$

(937)

$

(938)

Deferred tax assets (DTAs) / Disallowed servicing assets

$

(4)

$

(9)

$

$

$

Common Equity Tier 1

$

1,825

$

1,838

$

1,808

$

1,873

$

1,920

Efficiency Ratio Reconciliation:

Efficiency ratio (9)

70.26%

70.05%

70.23%

70.30%

70.33%

69.44%

69.70%

Taxable equivalent adjustment

(1.38)%

(1.34)%

(1.34)%

(1.42)%

(1.40)%

(1.36)%

(1.32)%

Asset gains, net

0.41%

0.24%

0.51%

0.30%

1.05%

1.36%

0.26%

Other intangible amortization

(0.34)%

(0.41)%

(0.35)%

(0.32)%

(0.32)%

(0.40)%

(0.41)%

Efficiency ratio, fully taxable equivalent (9)

68.95%

68.54%

69.05%

68.86%

69.66%

69.04%

68.23%

(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 with the 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)

Ratio is based upon basic earnings per common share.

(3)

Total revenue, a non-GAAP financial measure, is the sum of taxable equivalent net interest income, core fee-based revenues, and other noninterest income categories, as presented on Page 2 in the Consolidated Statements of Income and Page 7 in the Net Interest Income Analysis.

(4)

Core fee-based revenue, a non-GAAP financial measure, is the sum of trust service fees, service charges on deposit accounts, card-based and other nondeposit fees, insurance commissions, and brokerage and annuity commissions, as presented on Page 2 in the Consolidated Statements of Income.

(5)

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.

(6)

Prior to 2015, the regulatory capital requirements effective for the Corporation followed the Capital Accord of the Basel Committee on Banking Supervision ("Basel I"). Beginning January 1, 2015, the regulatory capital requirements effective for the Corporation follow Basel III, subject to certain transition provisions from Basel I over the next three years to full implementation by January 1, 2018.

(7)

June 30, 2015 data is estimated.

(8)

The Federal Reserve establishes capital adequacy requirements, including well-capitalized standards for the Corporation. The OCC establishes similar 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.

(9)

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 enhances 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).

 

Associated Banc-Corp Selected Asset Quality Information

(in thousands)

Jun 30, 2015

Mar 31, 2015

Jun15 vs Mar15 % Change

Dec 31, 2014

Sep 30, 2014

Jun 30, 2014

Jun15 vs Jun14 % Change

Allowance for Loan Losses

Beginning balance

$

265,268

$

266,302

(0.4)%

$

266,262

$

271,851

$

267,916

(1.0)%

Provision for loan losses

5,000

4,500

11.1%

4,500

(3,000)

6,500

(23.1)%

Charge offs

(14,537)

(13,270)

9.5%

(8,778)

(14,850)

(9,107)

59.6%

Recoveries

5,807

7,736

(24.9)%

4,318

12,261

6,542

(11.2)%

Net charge offs

(8,730)

(5,534)

57.8%

(4,460)

(2,589)

(2,565)

240.4%

Ending balance

$

261,538

$

265,268

(1.4)%

$

266,302

$

266,262

$

271,851

(3.8)%

Allowance for Unfunded Commitments

Beginning balance

$

24,900

$

24,900

—%

$

24,400

$

20,400

$

21,900

13.7%

Provision for unfunded commitments

N/M

500

4,000

(1,500)

(100.0)%

Ending balance

$

24,900

$

24,900

—%

$

24,900

$

24,400

$

20,400

22.1%

Allowance for credit losses

$

286,438

$

290,168

(1.3)%

$

291,202

$

290,662

$

292,251

(2.0)%

Net Charge Offs

Jun 30, 2015

Mar 31, 2015

Jun15 vs Mar15 % Change

Dec 31, 2014

Sep 30, 2014

Jun 30, 2014

Jun15 vs Jun14 % Change

Commercial and industrial

$

3,921

$

4,650

(15.7)%

$

1,323

$

572

$

(1,377)

(384.7)%

Commercial real estate—owner occupied

1,198

739

62.1%

134

2,210

(550)

(317.8)%

Lease financing

N/M

9

(6)

29

(100.0)%

Commercial and business lending

5,119

5,389

(5.0)%

1,466

2,776

(1,898)

(369.7)%

Commercial real estate—investor

1,856

(2,529)

(173.4)%

(132)

(4,065)

(239)

(876.6)%

Real estate construction

(673)

(743)

(9.4)%

(116)

350

795

(184.7)%

Commercial real estate lending

1,183

(3,272)

(136.2)%

(248)

(3,715)

556

112.8%

Total commercial

6,302

2,117

197.7%

1,218

(939)

(1,342)

(569.6)%

Home equity revolving lines of credit

246

1,220

(79.8)%

1,094

1,098

1,380

(82.2)%

Home equity loans 1st liens

169

362

(53.3)%

206

118

448

(62.3)%

Home equity loans junior liens

118

423

(72.1)%

457

728

948

(87.6)%

Home equity

533

2,005

(73.4)%

1,757

1,944

2,776

(80.8)%

Installment and credit cards

786

769

2.2%

990

910

247

218.2%

Residential mortgage

1,109

643

72.5%

495

674

884

25.5%

Total consumer

2,428

3,417

(28.9)%

3,242

3,528

3,907

(37.9)%

Total net charge offs

$

8,730

$

5,534

57.8%

$

4,460

$

2,589

$

2,565

240.4%

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

Jun 30, 2015

Mar 31, 2015

Dec 31, 2014

Sep 30, 2014

Jun 30, 2014

Commercial and industrial

26

32

9

4

(10)

Commercial real estate—owner occupied

48

30

5

84

(20)

Lease financing

7

(5)

22

Commercial and business lending

29

31

9

17

(12)

Commercial real estate—investor

24

(33)

(2)

(54)

(3)

Real estate construction

(26)

(30)

(5)

14

33

Commercial real estate lending

11

(32)

(2)

(37)

6

Total commercial

22

8

4

(3)

(5)

Home equity revolving lines of credit

11

56

49

50

64

Home equity loans 1st liens

13

26

14

7

26

Home equity loans junior liens

32

108

107

159

196

Home equity

14

51

42

45

64

Installment and credit cards

73

70

86

78

25

Residential mortgage

9

6

4

6

9

Total consumer

14

21

19

22

25

Total net charge offs

19

13

10

6

6

Credit Quality

Jun 30, 2015

Mar 31, 2015

Jun15 vs Mar15 % Change

Dec 31, 2014

Sep 30, 2014

Jun 30, 2014

Jun15 vs Jun14 % Change

Nonaccrual loans

$

160,361

$

174,346

(8.0)%

$

177,413

$

184,138

$

179,226

(10.5)%

Other real estate owned (OREO)

13,557

14,926

(9.2)%

16,732

16,840

17,729

(23.5)%

Total nonperforming assets

$

173,918

$

189,272

(8.1)%

$

194,145

$

200,978

$

196,955

(11.7)%

Loans 90 or more days past due and still accruing

$

1,662

$

1,715

(3.1)%

$

1,623

$

1,690

$

1,776

(6.4)%

Allowance for loan losses / loans

1.43%

1.48%

1.51%

1.55%

1.59%

Allowance for loan losses / nonaccrual loans

163.09

152.15

150.10

144.60

151.68

Nonaccrual loans / total loans

0.88

0.97

1.01

1.07

1.05

Nonperforming assets / total loans plus OREO

0.95

1.05

1.10

1.17

1.15

Nonperforming assets / total assets

0.64

0.70

0.72

0.78

0.77

Net charge offs / average loans (annualized)

0.19

0.13

0.10

0.06

0.06

Year-to-date net charge offs / average loans

0.16

0.13

0.09

0.08

0.10

Nonaccrual loans by type:

Commercial and industrial

$

64,738

$

61,620

5.1%

$

49,663

$

51,143

$

40,846

58.5%

Commercial real estate—owner occupied

18,821

21,861

(13.9)%

25,825

24,340

31,725

(40.7)%

Lease financing

1,656

1,720

(3.7)%

1,801

1,947

1,541

7.5%

Commercial and business lending

85,215

85,201

—%

77,289

77,430

74,112

15.0%

Commercial real estate—investor

6,090

13,742

(55.7)%

22,685

25,106

28,135

(78.4)%

Real estate construction

2,906

5,423

(46.4)%

5,399

8,187

6,988

(58.4)%

Commercial real estate lending

8,996

19,165

(53.1)%

28,084

33,293

35,123

(74.4)%

Total commercial

94,211

104,366

(9.7)%

105,373

110,723

109,235

(13.8)%

Home equity revolving lines of credit

8,420

9,171

(8.2)%

9,853

10,154

10,056

(16.3)%

Home equity loans 1st liens

4,630

5,111

(9.4)%

5,290

4,664

4,634

(0.1)%

Home equity loans junior liens

5,356

6,145

(12.8)%

6,598

6,443

6,183

(13.4)%

Home equity

18,406

20,427

(9.9)%

21,741

21,261

20,873

(11.8)%

Installment and credit cards

454

515

(11.8)%

613

653

771

(41.1)%

Residential mortgage

47,290

49,038

(3.6)%

49,686

51,501

48,347

(2.2)%

Total consumer

66,150

69,980

(5.5)%

72,040

73,415

69,991

(5.5)%

Total nonaccrual loans

$

160,361

$

174,346

(8.0)%

$

177,413

$

184,138

$

179,226

(10.5)%

* Annualized

N/M = Not meaningful

 

Associated Banc-Corp Selected Asset Quality Information (continued)

(in thousands)

Jun 30, 2015

Mar 31, 2015

Jun15 vs Mar15 % Change

Dec 31, 2014

Sep 30, 2014

Jun 30, 2014

Jun15 vs Jun14 % Change

Restructured loans (accruing)

Commercial and industrial

$

32,063

$

26,466

21.1%

$

33,892

$

36,955

$

28,849

11.1%

Commercial real estate—owner occupied

5,433

9,780

(44.4)%

10,454

11,574

12,168

(55.4)%

Commercial and business lending

37,496

36,246

3.4%

44,346

48,529

41,017

(8.6)%

Commercial real estate—investor

22,009

22,775

(3.4)%

23,127

24,440

41,758

(47.3)%

Real estate construction

714

717

(0.4)%

727

805

1,224

(41.7)%

Commercial real estate lending

22,723

23,492

(3.3)%

23,854

25,245

42,982

(47.1)%

Total commercial

60,219

59,738

0.8%

68,200

73,774

83,999

(28.3)%

Home equity revolving lines of credit

1,222

1,251

(2.3)%

1,508

1,531

1,527

(20.0)%

Home equity loans 1st liens

1,769

1,846

(4.2)%

1,857

1,867

1,674

5.7%

Home equity loans junior liens

6,610

6,642

(0.5)%

6,701

7,184

7,243

(8.7)%

Home equity

9,601

9,739

(1.4)%

10,066

10,582

10,444

(8.1)%

Installment and credit cards

796

891

(10.7)%

974

1,106

1,185

(32.8)%

Residential mortgage

19,604

18,449

6.3%

18,976

19,141

18,753

4.5%

Total consumer

30,001

29,079

3.2%

30,016

30,829

30,382

(1.3)%

Total restructured loans (accruing)

$

90,220

$

88,817

1.6%

$

98,216

$

104,603

$

114,381

(21.1)%

Restructured loans in nonaccrual loans (not included above)

$

43,699

$

53,553

(18.4)%

$

57,656

$

63,314

$

72,388

(39.6)%

Loans Past Due 30-89 Days

Jun 30, 2015

Mar 31, 2015

Jun15 vs Mar15 % Change

Dec 31, 2014

Sep 30, 2014

Jun 30, 2014

Jun15 vs Jun14 % Change

Commercial and industrial

$

6,357

$

1,717

270.2%

$

14,747

$

3,947

$

2,519

152.4%

Commercial real estate—owner occupied

1,090

1,849

(41.0)%

10,628

2,675

6,323

(82.8)%

Lease financing

N/M

556

(100.0)%

Commercial and business lending

7,447

3,566

108.8%

25,375

6,622

9,398

(20.8)%

Commercial real estate—investor

19,843

2,215

795.8%

1,208

15,869

2,994

562.8%

Real estate construction

312

317

(1.6)%

984

399

258

20.9%

Commercial real estate lending

20,155

2,532

696.0%

2,192

16,268

3,252

519.8%

Total commercial

27,602

6,098

352.6%

27,567

22,890

12,650

118.2%

Home equity revolving lines of credit

5,157

7,150

(27.9)%

6,725

6,739

6,986

(26.2)%

Home equity loans 1st liens

1,688

953

77.1%

1,800

1,503

1,685

0.2%

Home equity loans junior liens

1,894

1,905

(0.6)%

2,058

2,496

2,138

(11.4)%

Home equity

8,739

10,008

(12.7)%

10,583

10,738

10,809

(19.2)%

Installment and credit cards

1,655

1,818

(9.0)%

1,932

1,818

1,734

(4.6)%

Residential mortgage

4,914

3,403

44.4%

3,046

3,231

7,070

(30.5)%

Total consumer

15,308

15,229

0.5%

15,561

15,787

19,613

(21.9)%

Total loans past due 30-89 days

$

42,910

$

21,327

101.2%

$

43,128

$

38,677

$

32,263

33.0%

Potential Problem Loans

Jun 30, 2015

Mar 31, 2015

Jun15 vs Mar15 % Change

Dec 31, 2014

Sep 30, 2014

Jun 30, 2014

Jun15 vs Jun14 % Change

Commercial and industrial

$

125,643

$

138,403

(9.2)%

$

108,522

$

133,416

$

187,251

(32.9)%

Commercial real estate—owner occupied

41,997

43,114

(2.6)%

48,695

49,008

57,757

(27.3)%

Lease financing

1,385

2,009

(31.1)%

2,709

3,787

2,280

(39.3)%

Commercial and business lending

169,025

183,526

(7.9)%

159,926

186,211

247,288

(31.6)%

Commercial real estate—investor

23,543

26,026

(9.5)%

24,043

28,474

31,903

(26.2)%

Real estate construction

1,327

1,487

(10.8)%

1,776

2,227

4,473

(70.3)%

Commercial real estate lending

24,870

27,513

(9.6)%

25,819

30,701

36,376

(31.6)%

Total commercial

193,895

211,039

(8.1)%

185,745

216,912

283,664

(31.6)%

Home equity revolving lines of credit

202

247

(18.2)%

204

224

277

(27.1)%

Home equity loans junior liens

230

711

(67.7)%

676

687

822

(72.0)%

Home equity

432

958

(54.9)%

880

911

1,099

(60.7)%

Installment and credit cards

N/M

2

4

844

(100.0)%

Residential mortgage

5,341

6,621

(19.3)%

3,781

2,166

2,445

118.4%

Total consumer

5,773

7,579

(23.8)%

4,663

3,081

4,388

31.6%

Total potential problem loans

$

199,668

$

218,618

(8.7)%

$

190,408

$

219,993

$

288,052

(30.7)%

N/M = Not meaningful.

 

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

Three months ended June 30, 2015

Three months ended March 31, 2015

(in thousands)

Average Balance

Interest Income /Expense

Average Yield /Rate

Average Balance

Interest Income /Expense

Average Yield /Rate

Earning assets:

Loans: (1) (2) (3)

Commercial and business lending

$

7,167,315

$

56,329

3.15%

$

6,993,169

$

55,915

3.24%

Commercial real estate lending

4,148,955

35,688

3.45

4,102,733

36,403

3.60

Total commercial

11,316,270

92,017

3.26

11,095,902

92,318

3.37

Residential mortgage

4,882,700

38,232

3.13

4,663,849

36,885

3.17

Retail

1,989,335

23,072

4.65

2,055,364

23,668

4.64

Total loans

18,188,305

153,321

3.38

17,815,115

152,871

3.46

Investment securities (1)

5,703,477

35,443

2.49

5,754,747

37,159

2.58

Other short-term investments

374,585

1,771

1.89

578,164

1,692

1.18

Investments and other

6,078,062

37,214

2.45

6,332,911

38,851

2.45

Total earning assets

24,266,367

$

190,535

3.15

24,148,026

$

191,722

3.20

Other assets, net

2,465,707

2,458,899

Total assets

$

26,732,074

$

26,606,925

Interest-bearing liabilities:

Savings deposits

$

1,352,616

$

259

0.08%

$

1,277,469

$

238

0.08%

Interest-bearing demand deposits

3,251,196

1,037

0.13

3,203,727

1,050

0.13

Money market deposits

9,101,589

4,088

0.18

8,653,260

3,785

0.18

Time deposits

1,630,242

2,757

0.68

1,594,183

2,546

0.65

Total interest-bearing deposits

15,335,643

8,141

0.21

14,728,639

7,619

0.21

Federal funds purchased and securities sold under agreements to repurchase

662,047

235

0.14

585,498

231

0.16

Other short-term funding

236,459

115

0.20

119,240

81

0.27

Long-term funding

3,080,954

10,642

1.38

3,735,602

10,872

1.17

Total short and long-term funding

3,979,460

10,992

1.11

4,440,340

11,184

1.01

Total interest-bearing liabilities

19,315,103

$

19,133

0.40

19,168,979

$

18,803

0.39

Noninterest-bearing demand deposits

4,290,567

4,326,557

Other liabilities

251,743

266,660

Stockholders' equity

2,874,661

2,844,729

Total liabilities and stockholders' equity

$

26,732,074

$

26,606,925

Net interest income and rate spread

$

171,402

2.75%

$

172,919

2.81%

Net interest margin

2.83%

2.89%

Taxable equivalent adjustment

$

4,914

$

5,106

Net Interest Income Analysis—Taxable Equivalent Basis Comparable Quarter

Three months ended June 30, 2015

Three months ended June 30, 2014

(in thousands)

Average Balance

Interest Income /Expense

Average Yield /Rate

Average Balance

Interest Income /Expense

Average Yield /Rate

Earning assets:

Loans: (1) (2) (3)

Commercial and business lending

$

7,167,315

$

56,329

3.15%

$

6,468,844

$

53,519

3.32%

Commercial real estate lending

4,148,955

35,688

3.45

3,967,848

36,309

3.67

Total commercial

11,316,270

92,017

3.26

10,436,692

89,828

3.45

Residential mortgage

4,882,700

38,232

3.13

4,077,617

33,575

3.29

Retail

1,989,335

23,072

4.65

2,132,080

24,157

4.54

Total loans

18,188,305

153,321

3.38

16,646,389

147,560

3.55

Investment securities (1)

5,703,477

35,443

2.49

5,606,279

36,865

2.63

Other short-term investments

374,585

1,771

1.89

284,847

1,862

2.62

Investments and other

6,078,062

37,214

2.45

5,891,126

38,727

2.63

Total earning assets

24,266,367

$

190,535

3.15

22,537,515

$

186,287

3.31

Other assets, net

2,465,707

2,320,557

Total assets

$

26,732,074

$

24,858,072

Interest-bearing liabilities:

Savings deposits

$

1,352,616

$

259

0.08%

$

1,267,297

$

242

0.08%

Interest-bearing demand deposits

3,251,196

1,037

0.13

2,894,446

969

0.13

Money market deposits

9,101,589

4,088

0.18

7,340,244

2,928

0.16

Time deposits

1,630,242

2,757

0.68

1,597,535

2,056

0.52

Total interest-bearing deposits

15,335,643

8,141

0.21

13,099,522

6,195

0.19

Federal funds purchased and securities sold under agreements to repurchase

662,047

235

0.14

847,756

306

0.14

Other short-term funding

236,459

115

0.20

832,299

280

0.13

Long-term funding

3,080,954

10,642

1.38

2,931,957

6,146

0.84

Total short and long-term funding

3,979,460

10,992

1.11

4,612,012

6,732

0.58

Total interest-bearing liabilities

19,315,103

$

19,133

0.40

17,711,534

$

12,927

0.29

Noninterest-bearing demand deposits

4,290,567

4,073,310

Other liabilities

251,743

182,110

Stockholders' equity

2,874,661

2,891,118

Total liabilities and stockholders' equity

$

26,732,074

$

24,858,072

Net interest income and rate spread

$

171,402

2.75%

$

173,360

3.02%

Net interest margin

2.83%

3.08%

Taxable equivalent adjustment

$

4,914

$

4,657

(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.

 

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

Six months ended June 30, 2015

Six months ended June 30, 2014

(in thousands)

Average Balance

Interest Income /Expense

Average Yield /Rate

Average Balance

Interest Income /Expense

Average Yield /Rate

Earning assets:

Loans: (1) (2) (3)

Commercial and business lending

$

7,080,723

$

112,244

3.19%

$

6,300,948

$

105,199

3.37%

Commercial real estate lending

4,125,972

72,091

3.52

3,937,772

71,900

3.68

Total commercial

11,206,695

184,335

3.32

10,238,720

177,099

3.49

Residential mortgage

4,773,879

75,117

3.15

4,002,592

66,239

3.31

Retail

2,022,167

46,740

4.64

2,165,522

48,570

4.51

Total loans

18,002,741

306,192

3.42

16,406,834

291,908

3.58

Investment securities (1)

5,728,970

72,602

2.53

5,528,604

73,788

2.67

Other short-term investments

475,812

3,463

1.46

281,353

3,311

2.36

Investments and other

6,204,782

76,065

2.45

5,809,957

77,099

2.65

Total earning assets

24,207,523

$

382,257

3.17

22,216,791

$

369,007

3.34

Other assets, net

2,462,322

2,320,633

Total assets

$

26,669,845

$

24,537,424

Interest-bearing liabilities:

Savings deposits

$

1,315,250

$

497

0.08%

$

1,231,516

$

462

0.08%

Interest-bearing demand deposits

3,227,593

2,087

0.13

2,845,618

1,792

0.13

Money market deposits

8,878,663

7,873

0.18

7,257,137

5,752

0.16

Time deposits

1,612,312

5,303

0.66

1,628,235

4,348

0.54

Total interest-bearing deposits

15,033,818

15,760

0.21

12,962,506

12,354

0.19

Federal funds purchased and securities sold under agreements to repurchase

623,984

466

0.15

826,589

611

0.15

Other short-term funding

178,173

196

0.22

581,799

396

0.14

Long-term funding

3,406,469

21,514

1.26

2,968,038

12,657

0.85

Total short and long-term funding

4,208,626

22,176

1.05

4,376,426

13,664

0.63

Total interest-bearing liabilities

19,242,444

$

37,936

0.40

17,338,932

$

26,018

0.30

Noninterest-bearing demand deposits

4,308,463

4,119,551

Other liabilities

259,160

188,992

Stockholders' equity

2,859,778

2,889,949

Total liabilities and stockholders' equity

$

26,669,845

$

24,537,424

Net interest income and rate spread

$

344,321

2.77%

$

342,989

3.04%

Net interest margin

2.86%

3.10%

Taxable equivalent adjustment

$

10,020

$

9,313

(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.

 

Associated Banc-Corp

Financial Summary and Comparison

(in thousands)

Period End Loan Composition

Jun 30, 2015

Mar 31, 2015

Jun15 vs Mar15 % Change

Dec 31, 2014

Sep 30, 2014

Jun 30, 2014

Jun15 vs Jun14 % Change

Commercial and industrial

$

6,208,192

$

6,140,420

1.1%

$

5,905,902

$

5,603,899

$

5,616,205

10.5%

Commercial real estate—owner occupied

978,183

1,003,885

(2.6)%

1,007,937

1,014,335

1,070,463

(8.6)%

Lease financing

46,900

49,496

(5.2)%

51,529

52,600

51,873

(9.6)%

Commercial and business lending

7,233,275

7,193,801

0.5%

6,965,368

6,670,834

6,738,541

7.3%

Commercial real estate—investor

3,126,440

3,086,980

1.3%

3,056,485

3,043,361

2,990,732

4.5%

Real estate construction

1,092,308

1,019,571

7.1%

1,008,956

982,426

1,000,421

9.2%

Commercial real estate lending

4,218,748

4,106,551

2.7%

4,065,441

4,025,787

3,991,153

5.7%

Total commercial

11,452,023

11,300,352

1.3%

11,030,809

10,696,621

10,729,694

6.7%

Home equity revolving lines of credit

880,628

879,827

0.1%

887,779

880,435

866,042

1.7%

Home equity loans 1st liens

508,491

549,667

(7.5)%

584,131

619,774

659,598

(22.9)%

Home equity loans junior liens

141,344

154,120

(8.3)%

164,148

176,316

187,732

(24.7)%

Home equity

1,530,463

1,583,614

(3.4)%

1,636,058

1,676,525

1,713,372

(10.7)%

Installment and credit cards

430,823

436,492

(1.3)%

454,219

459,682

469,203

(8.2)%

Residential mortgage

4,889,943

4,658,574

5.0%

4,472,760

4,326,262

4,132,783

18.3%

Total consumer

6,851,229

6,678,680

2.6%

6,563,037

6,462,469

6,315,358

8.5%

Total loans

$

18,303,252

$

17,979,032

1.8%

$

17,593,846

$

17,159,090

$

17,045,052

7.4%

Period End Deposit and Customer Funding Composition

Jun 30, 2015

Mar 31, 2015

Jun15 vs Mar15 % Change

Dec 31, 2014

Sep 30, 2014

Jun 30, 2014

Jun15 vs Jun14 % Change

Noninterest-bearing demand

$

4,332,171

$

4,570,872

(5.2)%

$

4,505,272

$

4,302,454

$

4,211,057

2.9%

Savings

1,359,478

1,337,643

1.6%

1,235,277

1,256,567

1,275,493

6.6%

Interest-bearing demand

3,576,311

3,525,870

1.4%

3,126,854

3,637,411

2,918,900

22.5%

Money market

8,374,186

8,781,206

(4.6)%

8,324,646

7,491,460

7,348,650

14.0%

Brokered CDs

39,760

40,699

(2.3)%

42,556

9,242

44,809

(11.3)%

Other time

1,587,657

1,595,302

(0.5)%

1,528,899

1,504,124

1,517,350

4.6%

Total deposits

19,269,563

19,851,592

(2.9)%

18,763,504

18,201,258

17,316,259

11.3%

Customer repo sweeps

433,044

528,572

(18.1)%

384,221

493,451

489,886

(11.6)%

Total deposits and customer funding

$

19,702,607

$

20,380,164

(3.3)%

$

19,147,725

$

18,694,709

$

17,806,145

10.7%

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

$

2,920,939

$

2,900,325

0.7%

$

2,852,943

$

2,207,055

$

2,238,923

30.5%

Brokered CDs

39,760

40,699

(2.3)%

42,556

9,242

44,809

(11.3)%

Total network and brokered funding

2,960,699

2,941,024

0.7%

2,895,499

2,216,297

2,283,732

29.6%

Net customer deposits and funding (1)

$

16,741,908

$

17,439,140

(4.0)%

$

16,252,226

$

16,478,412

$

15,522,413

7.9%

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

Quarter Average Loan Composition

Jun 30, 2015

Mar 31, 2015

Jun15 vs Mar15 % Change

Dec 31, 2014

Sep 30, 2014

Jun 30, 2014

Jun15 vs Jun14 % Change

Commercial and industrial

$

6,122,864

$

5,944,152

3.0%

$

5,665,396

$

5,558,135

$

5,335,488

14.8%

Commercial real estate—owner occupied

995,981

998,293

(0.2)%

1,003,179

1,043,001

1,081,552

(7.9)%

Lease financing

48,470

50,724

(4.4)%

52,318

51,091

51,804

(6.4)%

Commercial and business lending

7,167,315

6,993,169

2.5%

6,720,893

6,652,227

6,468,844

10.8%

Commercial real estate—investor

3,110,637

3,106,965

0.1%

3,062,427

3,013,210

3,014,827

3.2%

Real estate construction

1,038,318

995,768

4.3%

1,003,716

1,006,076

953,021

9.0%

Commercial real estate lending

4,148,955

4,102,733

1.1%

4,066,143

4,019,286

3,967,848

4.6%

Total commercial

11,316,270

11,095,902

2.0%

10,787,036

10,671,513

10,436,692

8.4%

Home equity revolving lines of credit

881,036

882,869

(0.2)%

883,580

875,388

866,952

1.6%

Home equity loans 1st liens

528,493

567,849

(6.9)%

601,719

638,592

681,607

(22.5)%

Home equity loans junior liens

147,391

159,378

(7.5)%

169,845

181,880

193,727

(23.9)%

Home equity

1,556,920

1,610,096

(3.3)%

1,655,144

1,695,860

1,742,286

(10.6)%

Installment and credit cards

432,415

445,268

(2.9)%

455,000

464,467

389,794

10.9%

Residential mortgage

4,882,700

4,663,849

4.7%

4,490,075

4,309,121

4,077,617

19.7%

Total consumer

6,872,035

6,719,213

2.3%

6,600,219

6,469,448

6,209,697

10.7%

Total loans

$

18,188,305

$

17,815,115

2.1%

$

17,387,255

$

17,140,961

$

16,646,389

9.3%

Quarter Average Deposit Composition

Jun 30, 2015

Mar 31, 2015

Jun15 vs Mar15 % Change

Dec 31, 2014

Sep 30, 2014

Jun 30, 2014

Jun15 vs Jun14 % Change

Noninterest-bearing demand

$

4,290,567

$

4,326,557

(0.8)%

$

4,367,031

$

4,239,654

$

4,073,310

5.3%

Savings

1,352,616

1,277,469

5.9%

1,264,195

1,269,994

1,267,297

6.7%

Interest-bearing demand

3,251,196

3,203,727

1.5%

3,142,537

3,096,712

2,894,446

12.3%

Money market

9,101,589

8,653,260

5.2%

8,209,091

7,721,167

7,340,244

24.0%

Time deposits

1,630,242

1,594,183

2.3%

1,549,565

1,545,851

1,597,535

2.0%

Total deposits

$

19,626,210

$

19,055,196

3.0%

$

18,532,419

$

17,873,378

$

17,172,832

14.3%

 

SOURCE Associated Banc-Corp



RELATED LINKS

http://www.associatedbank.com