-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Shpyzn1VQVKfPfkCQjHPn7Z2X2VF7wFBLmxUD0CVNacTMCQtp1a0IfQ/2o5qfIR2 1+Zw/5dm+KCw9yOfd0rMUA== 0000007789-96-000020.txt : 19960515 0000007789-96-000020.hdr.sgml : 19960515 ACCESSION NUMBER: 0000007789-96-000020 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960331 FILED AS OF DATE: 19960514 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: ASSOCIATED BANC-CORP CENTRAL INDEX KEY: 0000007789 STANDARD INDUSTRIAL CLASSIFICATION: STATE COMMERCIAL BANKS [6022] IRS NUMBER: 391098068 STATE OF INCORPORATION: WI FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-05519 FILM NUMBER: 96563505 BUSINESS ADDRESS: STREET 1: 112 NORTH ADAMS ST STREET 2: P O BOX 13307 CITY: GREEN BAY STATE: WI ZIP: 54301 BUSINESS PHONE: 4144333166 MAIL ADDRESS: STREET 1: 112 NORTH ADAMS STREET STREET 2: P O BOX 13307 CITY: GREEN BAY STATE: WI ZIP: 54307-3307 FORMER COMPANY: FORMER CONFORMED NAME: ASSOCIATED BANK SERVICES INC DATE OF NAME CHANGE: 19770626 10-Q 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES _________ EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 1996 OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES _________ EXCHANGE ACT OF 1934 For the transition period from to Commission File 0-5519 ASSOCIATED BANC-CORP (Exact Name of Registrant as Specified in Its Charter) Wisconsin 39-1098068 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) identification No.) 112 North Adams Street, Green Bay, Wisconsin 54301 (Address of principal executive offices) (414) 433-3166 (Registrant's telephone number, including area code) (Former name, former address and former fiscal year, if changed since last report) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes X No ------- ------- APPLICABLE ONLY TO CORPORATE ISSUERS: The number of shares outstanding of registrant's common stock, par value $0.01 per share, at March 31, 1996, was 16,861,945 shares. ASSOCIATED BANC-CORP TABLE OF CONTENTS Page No. PART I. Financial Information Item 1. Financial Statements: Consolidated Statements of Financial Condition - March 31, 1996, and December 31, 1995 Consolidated Statements of Income - Three Months Ended March 31, 1996, and 1995 Consolidated Statements of Cash Flows - Three Months Ended March 31, 1996, and 1995 Notes to Consolidated Financial Statements Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations PART II. Other Information Item 6. Exhibits and Reports on Form 8-K Signatures PART I - FINANCIAL INFORMATION ITEM 1. Financial Statements: ASSOCIATED BANC-CORP Consolidated Statements of Financial Condition (Unaudited) March 31 December 31 1996 1995 (In Thousands) ASSETS Cash and due from banks $ 152,856 $ 206,469 Interest-bearing deposits in other financial institutions 658 652 Federal funds sold and securities purchased under agreements to resell 4,943 43,000 Investment securities: Held to maturity (Fair value of approximately $393,759 and $383,129 at March 31, 1996, and December 31, 1995, respectively) 394,876 381,645 Available for sale-stated at fair value 357,656 358,983 Loans, net of unearned income 2,702,973 2,611,227 Less: Allowance for possible loan losses (41,112) (39,067) --------- --------- Loans, net 2,661,861 2,572,160 Premises and equipment 56,771 54,142 Other assets 90,581 80,791 --------- --------- Total assets $3,720,202 $3,697,842 LIABILITIES AND STOCKHOLDERS' EQUITY Noninterest-bearing deposits $ 524,688 $ 595,178 Interest-bearing deposits 2,461,426 2,377,930 --------- --------- Total deposits 2,986,114 2,973,108 Short-term borrowings 338,776 346,799 Accrued expenses and other liabilities 34,446 34,272 Long-term borrowings 21,049 18,067 --------- --------- Total liabilities 3,380,385 3,372,246 Commitments and contingent liabilities --- --- Stockholders' equity Preferred stock --- --- Common stock (Par value $0.01 per share, authorized 48,000,000 shares, issued 17,073,899 and 16,728,061 shares, respectively) 171 167 PART I - FINANCIAL INFORMATION ITEM 1. Financial Statements continued: ASSOCIATED BANC-CORP Consolidated Statements of Financial Condition (Unaudited) March 31 December 31 1996 1995 (In Thousands) Surplus 158,235 152,042 Retained earnings 180,403 171,026 Net unrealized gains on securities available for sale 4,770 6,148 Less: Treasury stock (211,954 and 212,673 shares at cost) (3,762) (3,787) --------- --------- Total stockholders' equity 339,817 325,596 --------- --------- Total liabilities and stockholders' equity $3,720,202 $3,697,842 ========= ========= (See accompanying notes to Consolidated Financial Statements.) ITEM 1. Financial Statements continued: ASSOCIATED BANC-CORP Consolidated Statements of Income (Unaudited) Three Months Ended March 31 1996 1995 (In Thousands) INTEREST INCOME Interest and fees on loans $58,173 $51,263 Interest and dividends on investment securities: Taxable 9,272 9,315 Tax-exempt 1,821 1,536 Interest on deposits in other financial institutions 5 5 Interest on federal funds sold and securities purchased under agreements to resell 263 463 ------ ------ Total interest income 69,534 62,582 ------ ------ INTEREST EXPENSE Interest on deposits 27,016 22,002 Interest on short-term borrowings 4,218 4,692 Interest on long-term borrowings 326 88 ------ ------ Total interest expense 31,560 26,782 ------ ------ NET INTEREST INCOME 37,974 35,800 Provision for possible loan losses 1,172 931 ------ ------ Net interest income after provision for possible loan losses 36,802 34,869 ------ ------ NONINTEREST INCOME Trust service fees 6,160 5,509 Service charges on deposit accounts 2,800 2,744 Investment securities gains, net 340 21 Loan servicing fees 1,412 955 Residential real estate loan origination fees 493 80 Retail investment income 656 450 Other 2,607 3,004 ------ ------ Total noninterest income 14,468 12,763 ------ ------ NONINTEREST EXPENSE Salaries and employee benefits 17,724 16,018 Net occupancy expense 2,568 2,555 Equipment rentals, depreciation and maintenance 1,760 1,614 ITEM 1. Financial Statements continued: ASSOCIATED BANC-CORP Consolidated Statements of Income (Unaudited) Three Months Ended March 31 1996 1995 (In Thousands) Data processing expense $ 1,957 $ 1,865 Stationery and supplies 774 805 Business development and advertising 844 891 FDIC expense 11 1,533 Other 6,520 5,597 ------ ------ Total noninterest expense 32,158 30,878 ------ ------ Income before income taxes 19,112 16,754 Income tax expense 6,867 5,985 ------ ------ NET INCOME $ 12,245 $ 10,769 ====== ====== Per share Net income .73 0.65 Dividends .27 0.22 Weighted average shares outstanding 16,852 16,500 (See accompanying notes to Consolidated Financial Statements.) ITEM 1. Financial Statements continued: ASSOCIATED BANC-CORP Consolidated Statements of Cash Flows (Unaudited) Three Months Ended March 31 1996 1995 (In Thousands) OPERATING ACTIVITIES Net income $ 12,245 $ 10,769 Adjustments to reconcile net income to net cash used by operating activities: Provision for possible loan losses 1,172 931 Depreciation and amortization 1,895 1,762 Amortization of mortgage servicing rights 540 108 Amortization of goodwill 671 591 Net amortization and accretion of premiums and discounts 13 237 Gain on sales of investment securities, net (340) (21) Increase in interest receivable and other assets (7,917) (2,492) Increase (decrease) in interest payable and other liabilities (107) 2,157 Amortization of loan fees and costs (376) (392) Net increase in mortgage loans acquired for resale (7,282) (2,312) Gain on sales of mortgage loans held for resale (973) (34) Other, net (4) (288) ------ ------ Net cash provided by (used in) operating activities (453) 11,016 INVESTING ACTIVITIES Net decrease in federal funds sold and securities purchased under agreements to resell 41,183 40,625 Net increase in interest-bearing deposits in other financial institutions (6) --- Purchases of held to maturity securities (36,862) (23,882) Purchases of available for sale securities (32,743) (28,184) Proceeds from sales of available for sale securities 620 84 Maturities of held to maturity securities 32,279 24,955 Maturities of available for sale securities 36,736 33,403 Net increase in loans (35,005) (42,100) Proceeds from sales of other real estate 633 726 Purchases of premises and equipment, net of disposals (3,100) (1,611) Capitalized mortgage servicing rights (1,866) (153) Net cash from acquisition 2,944 --- ----- ----- Net cash provided by investing activities 4,813 3,863 ITEM 1. Financial Statements continued: ASSOCIATED BANC-CORP Consolidated Statements of Cash Flows (Unaudited) Three Months Ended March 31 1996 1995 (In Thousands) FINANCING ACTIVITIES Net decrease in deposits (48,191) (111,876) Net increase (decrease) in short-term borrowings (8,023) 34,957 Cash dividends (4,460) (3,404) Proceeds from issuance of long-term borrowings 2,500 --- Proceeds from exercise of stock options 201 208 Purchase of treasury stock --- (541) ------ ------ Net cash used by financing activities (57,973) (80,656) ------ ------ Net decrease in cash and cash equivalents (53,613) (65,777) Cash and cash equivalents beginning of period 206,469 204,578 ------- ------- Cash and cash equivalents at end of period 152,856 138,801 Supplemental disclosures of cash flow information: Cash paid during the period for: Interest 31,402 23,944 Income taxes 2,810 2,905 Supplemental schedule of noncash investing activities: Loans transferred to other real estate 91 195 Loans made in connection with the disposition of other real estate --- 46 (See accompanying notes to Consolidated Financial Statements.) ITEM 1. Financial Statements continued: ASSOCIATED BANC-CORP Notes to Consolidated Financial Statements NOTE 1: In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments necessary to present fairly Associated Banc-Corp's ( Corporation) financial position, results of its operations and cash flows for the periods presented. All adjustments necessary to the fair presentation of the financial statements are of a normal recurring nature. The results of operations for the interim periods are not necessarily indicative of the results to be expected for the full year. NOTE 2: The consolidated financial statements include the accounts of all subsidiaries. All material intercompany transactions and balances are eliminated. The Corporation has not changed its accounting and reporting policies from those stated in the Corporation's 1995 Annual Report on Form 10-K. NOTE 3: Business Combinations The following table summarizes completed transactions:
Consideration Paid -------------------- Cash Shares of Total Date Method of (In Common Assets (In Intangibles Name of Acquired Acquired Accounting Millions) Stock Millions) (In Millions) - ---------------------------------------------------------------------------------------------- Great Northern 7/95 Purchase $1.2 --- (A) $1.5 Mortgage Company Rolling Meadows, Illinois GN Bancorp, Inc. 8/95 Pooling of --- 747,626 130 --- Chicago, interests Illinois (B) SBL Capital Bank 3/96 Pooling of --- 332,957 68 --- Shares, Inc. (C) interests
(A) The Corporation acquired approximately $535 million in mortgage servicing as part of this acquisition. The consolidated financial statements include the results of operations since the date of acquisition. (B) The GN Bancorp acquisition was accounted for as a pooling of interests. All consolidated financial information has been restated as if the transaction had been effected as of the beginning of the earliest period presented. (C) The transaction, accounted for using the pooling-of-interests method, was not material to prior years' reported operating results and, accordingly, previously reported results were not restated. On April 5, 1996, the Corporation completed its merger with Greater Columbia Bancshares, Inc. The transaction was accounted for as a pooling of interests with the issuance of 967,634 shares of the Corporation's common stock. Pro forma results of operations of the Corporation and Greater Columbia Bancshares, Inc. for the periods prior to the acquisition date are as follows:
Corporation as Originally Reported Corporation Restated - --------------------------------------------------------------------------------------------- Three Months Three Months Ended March 31, Ended March 31, (In Thousands, except per share amounts) 1996 1995 1996 1995 - --------------------------------------------------------------------------------------------- Net interest income $37,974 $35,800 $39,995 $37,750 Other income $14,468 $12,763 $14,782 $13,010 Net income $12,245 $10,769 $12,961 $11,271 Earnings per common share $ .73 $ .65 $ .73 $ .65 - ---------------------------------------------------------------------------------------------
In 1995, the Corporation announced a merger agreement with F&M Bankshares of Reedsburg, Inc. and its $140 million asset subsidiary, Farmers & Merchants Bank. The transaction, which is expected to be completed in the second quarter of 1996, will be accounted for as a pooling of interests with the issuance of approximately 535,000 shares of the Corporation's common stock. NOTE 4: INVESTMENT SECURITIES The amortized cost and fair values of investment securities held to maturity and securities available for sale for the periods indicated were as follows: Investment Securities Held to Maturity - ------------------------------------------------------------------------------- (In thousands) March 31, 1996 - ------------------------------------------------------------------------------- Amortized Cost Fair Value - ------------------------------------------------------------------------------- U.S. Treasury and federal agency securities $165,203 $164,532 Obligations of states and political subdivisions 155,948 155,022 Other securities 73,725 74,205 - ------------------------------------------------------------------------------- Total $394,876 $393,759 =============================================================================== (In thousands) December 31, 1995 - ------------------------------------------------------------------------------- Amortized Cost Fair Value - ------------------------------------------------------------------------------- U.S. Treasury and federal agency securities $172,548 $172,484 Obligations of states and political subdivisions 139,988 140,699 Other securities 69,109 69,946 - ------------------------------------------------------------------------------- Total $381,645 $383,129 =============================================================================== Investment Securities Available for Sale - ------------------------------------------------------------------------------- (In thousands) March 31, 1996 - ------------------------------------------------------------------------------- Amortized Cost Fair Value - ------------------------------------------------------------------------------- U.S. Treasury and federal agency securities $345,754 $346,240 Other securities 4,300 11,416 - ------------------------------------------------------------------------------- Total $350,054 $357,656 =============================================================================== (In thousands) December 31, 1995 - ------------------------------------------------------------------------------- Amortized Cost Fair Value - ------------------------------------------------------------------------------- U.S. Treasury and federal agency securities $346,448 $349,704 Other securities 2,724 9,279 - ------------------------------------------------------------------------------- Total $349,172 $358,983 =============================================================================== NOTE 5: ALLOWANCE FOR POSSIBLE LOAN LOSSES A summary of the changes in the allowance for possible loan losses for the periods indicated is as follows: For the Three For the Year Months Ended Ended March 31, December 31, 1996 1995 (In Thousands) Balance at beginning of period $ 39,067 $ 37,963 Balance related to acquisition 822 --- Provisions charged to operating expense 1,172 3,156 Loan losses net of recoveries 51 (2,052) ------ ------ Balance at end of period $ 41,112 $ 39,069 ====== ====== NOTE 6: Mortgage Servicing Rights Effective January 1, 1996, the Corporation adopted Statement of Financial Accounting Standards No. 122, "Accounting for Mortgage Servicing Rights, an amendment of FASB Statement No. 65". Accordingly, the Corporation recognizes as separate assets (capitalized) the rights to service mortgage loans for others whether the servicing rights are acquired through purchases or loan origination. The fair value of capitalized mortgage servicing rights is based upon the present value of estimated expected future cash flows. Based upon current fair values, capitalized mortgage servicing rights are assessed periodically for impairment, which is recognized in the statement of income during the period in which impairment occurs by establishing a corresponding valuation allowance. For purposes of performing its impairment evaluation, the Corporation stratifies its portfolio of capitalized mortgage servicing rights on the basis of certain risk characteristics. Changes in capitalized mortgage servicing rights for the three months ended March 31, 1996, were: Balance at 12/31/95 $7,239,053 Capitalized mortgage servicing rights 1,865,598 Amortization (540,063) Sales of servicing rights --- Allowance for impairment --- --------- Balance at 3/31/96 $8,564,588 ========= NOTE 7: PER SHARE COMPUTATIONS Per share computations are computed based on the weighted average number of common shares outstanding for the three months ended March 31, 1996, and 1995. ITEM 2. Management's Discussion and Analysis of Financial Condition and the Results of Operations The purpose of this discussion is to focus on information about the Corporation's financial condition and results of operations that are not otherwise apparent from the consolidated financial statements included in this report. Reference should be made to those statements presented elsewhere in this report for an understanding of the following discussion and analysis. EARNINGS On March 1, 1996, SBL Capital Bankshares ( Lodi ) was acquired. This acquisition was accounted for using the pooling-of-interests method. This transaction was not material to prior years reported operating results and, accordingly, previously reported results are not restated. The operating results of Associated Banc-Corp include Lodi since January 1, 1996. In July 1995, Great Northern Mortgage was acquired. This transaction was accounted for as a purchase. Thus, the first quarter of 1995 does not include the results of this acquisition. In August, 1995, the Corporation acquired GN Bancorp, parent company of the $130 million Gladstone-Norwood Trust & Savings Bank in northwest Chicago. The GN Bancorp acquisition was accounted for as a pooling of interests. All consolidated financial information has been restated as if the transaction had been effected as of the beginning of the earliest period presented. Net income for the first quarter of 1996 increased to $12.245 million, up 13.7% over 1995 first quarter net income of $10.769 million. Earnings per share increased to $.73 for the first quarter of 1996, an increase of 12.3% over earnings per share of $.65 in the first quarter of 1995. Net Income Quarterly Trends ($ in Thousands) - ------------------------------------------------------------------------------- 1st Qtr. 4th Qtr. 3rd Qtr. 2nd Qtr. 1st Qtr. 1996 1995 1995 1995 1995 - ------------------------------------------------------------------------------- Net Income $12,245 $12,530 $12,208 $11,145 $10,769 E.P.S. .73 .76 .74 .68 .65 Return on Average Equity - Quarter 14.68% 15.49% 15.65% 14.85% 15.16% Return on Average Equity - Year 14.68% 15.30% 15.23% 15.00% 15.16% Return on Average Assets - Quarter 1.34% 1.40% 1.39% 1.32% 1.31% Return on Average Assets - Year 1.34% 1.35% 1.34% 1.31% 1.31% - ------------------------------------------------------------------------------- Return on average assets (ROA) for the first quarter of 1996 was 1.34%, up from 1.31% during the same period last year. The 3 basis point increase in ROA was achieved as net income grew 13.7%, outpacing average asset growth of 10.2% as compared to the first quarter last year. ROA declined when comparing the first quarter of 1996 to the fourth quarter of 1995, as net income declined slightly by 2.3% while average assets increased 3.5%. Return on average equity (ROE) for the first quarter of 1996 was 14.68%, down from the 15.16% reported during the same period last year. Adjusted for the equity component of the SFAS 115, ROE would have been 14.89% and 14.95% in the first quarter of 1996 and 1995, respectively. ROE also decreased when compared to the fourth quarter of 1995. The decrease was attributable to the lower reported net income and higher average equity. NET INTEREST INCOME Tax equivalent net interest income in the first quarter of 1996 was $39.1 million, a slight increase of $245,000 or .6% over the fourth quarter net interest income of $38.8 million. Excluding Lodi, net interest income would have decreased by $473,000 when compared to the fourth quarter of 1995. Net Interest Income Tax Equivalent Basis ($ in Thousands) - ------------------------------------------------------------------------------- 1st Qtr. 4th Qtr. 3rd Qtr. 2nd Qtr. 1st Qtr. 1996 1995 1995 1995 1995 - ------------------------------------------------------------------------------- Interest Income $69,534 $68,908 $67,508 $65,382 $62,582 Tax Equivalent Adjustment 1,107 975 1,041 950 968 ------ ------ ------ ------ ------ Tax Equivalent Interest Income 70,641 69,883 68,549 66,332 63,550 Interest Expense 31,560 31,047 30,575 29,410 26,782 ------ ------ ------ ------ ------ Tax Equivalent Net Interest Income $39,081 $38,836 $37,974 $36,922 $36,768 - ------------------------------------------------------------------------------- The net interest margin for the first quarter of 1996 was 4.58% compared with 4.64% in the fourth quarter of 1995. This decline is primarily attributable to net free funds. The interest rate spread (difference between yield on earning assets and rate on interest-bearing liabilities) remained unchanged from the fourth quarter at 3.76%. Both the yield on earning assets and the rate on interest-bearing liabilities decreased by 7 basis points in the first quarter. The decline in the net interest margin was attributable to both a lower average balance of net free funds and the 7 basis point reduction in the value of these funds as the rate on interest-bearing liabilities decreased. Average earning assets increased $112 million in the first quarter of 1996. Earning asset growth continues to be concentrated in loans as the average loans to average deposits ratio climbed to 90.13% in the first quarter of 1996, up from 88.61% in the fourth quarter of 1995. Net Interest Margin Quarterly Trends (Quarterly Info Only) - ------------------------------------------------------------------------------- 1st Qtr. 4th Qtr. 3rd Qtr. 2nd Qtr. 1st Qtr. 1996 1995 1995 1995 1995 - ------------------------------------------------------------------------------- Yield on Earning Assets 8.27% 8.34% 8.35% 8.38% 8.25% Cost of Interest-Bearing Liabilities 4.51 4.58 4.57 4.56 4.29 ---- ---- ---- ---- ---- Interest Rate Spread 3.76 3.76 3.78 3.82 3.96 Net Free Funds Contribution .82 .88 .85 .84 .81 Net Interest Margin 4.58 4.64 4.63 4.66 4.77 ==== ==== ==== ==== ==== Average Earning Assets to Average Assets 93.19 93.34 93.22 93.63 93.45 Free Funds Ratio 18.02 19.03 18.41 18.52 19.03 - ------------------------------------------------------------------------------- The net interest margin for the first quarter of 1996 was 4.58% compared with 4.77% in the first quarter of 1995. This decrease is primarily attributable to balance sheet growth. The interest rate spread (difference between yield on earning assets and rate on interest-bearing liabilities) decreased 20 basis points to 3.76% from the first quarter of 1995 at 3.96%. The yield on earning assets increased slightly by 2 basis points while the rate on interest-bearing liabilities increased by 22 basis points over the first quarter of 1995. The contribution from net free funds was essentially unchanged from the first quarter of 1995, contributing 1 basis point more. Earning Asset and Interest-Bearing Liability Volumes Quarterly Trends ($ in Thousands) - ------------------------------------------------------------------------------- 1st Qtr. 4th Qtr. 3rd Qtr. 2nd Qtr. 1st Qtr. 1996 1995 1995 1995 1995 - ------------------------------------------------------------------------------- Average Loans $2,667,954 $2,549,886 $2,486,157 $2,429,665 $2,356,384 Average Earning Assets 3,435,594 3,323,723 3,256,544 3,175,731 3,125,145 Average Noninterest- Bearing Deposits 499,401 512,064 491,325 474,128 497,429 Average Interest- Bearing Deposits 2,460,588 2,365,619 2,352,448 2,278,575 2,193,117 Average Deposits 2,959,989 2,877,683 2,843,773 2,752,703 2,690,546 Average Interest- Bearing Liabilities 2,816,591 2,691,171 2,657,031 2,587,591 2,530,277 - ------------------------------------------------------------------------------- LOAN LOSS The loan loss provision for the first quarter of 1996 was $1,172,000, an increase of $241,000 from the same period in 1995 and $384,000 higher than the fourth quarter of 1995. As of March 31, 1996, the allowance for possible loan losses of $41.1 million represented 1.52% of total loans, up slightly from 1.50% at December 31, 1995, but down from 1.63% at March 31, 1995. Provision for Possible Loan Losses Quarterly Trends ($ in Thousands) - ------------------------------------------------------------------------------- 1st Qtr. 4th Qtr. 3rd Qtr. 2nd Qtr. 1st Qtr. 1996 1995 1995 1995 1995 - ------------------------------------------------------------------------------- Provision - Quarter $ 1,172 $ 788 $ 672 $ 765 $ 931 Provision - Year 1,172 3,156 2,368 1,696 931 Net Charge-offs- (Recoveries) - Quarter (51) 918 768 255 111 Net Charge-offs- (Recoveries) - Year (51) 2,052 1,134 366 111 Allowance at Period End 41,112 39,067 39,197 39,293 38,783 Allowance to Period End Loans 1.52% 1.50% 1.54% 1.59% 1.63% Net Charge-offs (Recoveries) to Average Loans (Annualized) - Quarter (.01%) .14% .12% .04% .02% Net Charge-offs (Recoveries) to Average Loans (Annualized) - Year (.01%) .08% .06% .03% .02% - ------------------------------------------------------------------------------- Charge-offs for the quarter ending March 31, 1996, of $782,000 were reduced by recoveries of $833,000, creating net recoveries of $51,000. This activity compares with first quarter 1995 net charge-offs of $111,000 and fourth quarter 1995 net charge-offs of $918,000. The small annualized net recovery position of .01% in the first quarter of 1996 compares to net charge-offs of .02% and .14% in the first and fourth quarters of 1995. NON-PERFORMING LOANS Management is committed to an aggressive non-accrual and problem loan identification philosophy. This philosophy is embodied through the monitoring and reviewing of credit policies and procedures to ensure that all problem loans are identified quickly and the risk of loss is minimized. Non-performing loans are considered a leading indicator of future loan losses. Non-performing loans are defined as non-accrual loans, loans 90 days or more past due but still accruing and restructured loans. Loans are normally placed in non-accrual status when contractually past due 90 days or more as to interest or principal payments. Additionally, whenever management becomes aware of facts or circumstances that may adversely impact on the collectibility of principal or interest on loans, it is management's practice to place such loans on non-accrual status immediately, rather than delaying such action until the loans become 90 days past due. Previously accrued and uncollected interest on such loans is reversed and income is recorded only to the extent that interest payments are subsequently received in cash and a determination has been made that the principal balance of the loan is collectible. If collectibility of the principal is in doubt, payments received are applied to loan principal. Loans past due 90 days or more but still accruing interest are also included in non-performing loans. Loans past due 90 days or more but still accruing are classified as such where the underlying loans are both well-secured (the collateral value is sufficient to cover principal and accrued interest) and in the process of collection. Also included in non-performing loans are "restructured" loans. Restructured loans involve the granting of some concession to the borrower involving the modification of terms of the loan, such as changes in payment schedule or interest rate. Total nonperforming loans at March 31, 1996, were $17.8 million, an increase of $0.3 million from December 31, 1995. The ratio of nonperforming loans to total loans at March 31, 1996, was .66% compared to .67% at December 31, 1995, and .61% at March 31, 1995. Non-Performing Loans and Other Real Estate ($ in Thousands) - ------------------------------------------------------------------------------- 3/31/96 12/31/95 9/30/95 6/30/95 3/31/95 ------- -------- ------- ------- ------- Nonaccrual Loans $14,491 $14,431 $15,489 $16,487 $12,366 Accruing Loans Past Due 90 Days or More 2,114 1,307 1,680 649 1,064 Restructured Loans 1,180 1,704 1,228 1,158 1,190 ------ ------ ------ ------ ------ Total Nonperforming Loans $17,785 $17,442 $18,397 $18,294 $14,620 Nonperforming Loans as a Percent of Loans .66% .67% .72% .74% .61% Other Real Estate Owned $ 998 $ 1,540 $ 1,886 $ 1,401 $ 2,117 - ------------------------------------------------------------------------------- Impaired loans are defined, by SFAS 114 and SFAS 118 adopted in the first quarter of 1995, as those loans where it is probable that all amounts due according to contractual terms, including principal and interest, will not be collected. The Corporation has determined that nonaccrual and restructured loans meet this definition. Impaired loans are measured at the fair value of the collateral, if the loan is collateral dependent, or alternatively at the present value of expected future cash flows. Interest income on impaired loans is recognized only at the time that cash is received, unless applied to reduce principal. At March 31, 1996, the recorded investment in impaired loans totaled $15.7 million. Included in this amount is $13.1 million of impaired loans that do not require a related allowance for possible loan losses and $2.6 million of impaired loans for which the related allowance for possible loan losses totaled $1.4 million. The average recorded investment in impaired loans during the three months ended March 31, 1996, was approximately $13.0 million. Interest income recognized on a cash basis on impaired loans during the first three months of 1996 totaled $177,000. The following table shows, for those loans accounted for on a non-accrual basis and restructured loans for the three months ended March 31, 1996, the gross interest that would have been recorded if the loans had been current in accordance with their original terms and the amount of interest income that was included in net income for the period. - ------------------------------------------------------------------------------- For the Three Months Ended March 31, 1996 -------------- ($ In Thousands) - ------------------------------------------------------------------------------- Interest income in accordance with original terms $ 496 Interest income recognized (177) --- Reduction in interest income $ 319 === - ------------------------------------------------------------------------------- Potential problem loans are loans where there are doubts as to the ability of the borrower to comply with present repayment terms. The decision of management to place loans in this category does not necessarily mean that the Corporation expects losses to occur, but that management recognizes that a higher degree of risk is associated with these performing loans. Potential Problem Loans ($ in Thousands) - ------------------------------------------------------------------------------- 3/31/96 12/31/95 9/30/95 6/30/95 3/31/95 ------- -------- ------- ------- ------- Potential Problem Loans $42,716 $34,835 $33,916 $41,375 $45,127 - ------------------------------------------------------------------------------- At March 31, 1996, potential problem loans totaled $42.7 million compared to $34.8 million at the end of 1995. The loans that have been reported as potential problem loans are not concentrated in a particular industry, but rather cover a diverse range of businesses, e.g. communications, wholesale trade, manufacturing, finance/insurance/real estate, and services. Management does not presently expect significant losses for credits in this category. Other real estate owned totaled $1.0 million at March 31, 1996, compared with $2.1 million at March 31, 1995. LOAN CONCENTRATIONS Loan concentrations are considered to exist when there are amounts loaned to a multiple number of borrowers engaged in similar activities that would cause them to be similarly impacted by economic or other conditions. The Corporation's loans are widely diversified by borrower, industry group and area. At March 31, 1996, no concentrations existed in the Corporation's loan portfolio in excess of 10% of total loans. Real estate construction loans at March 31, 1996, totaled $151.0 million or only 5.6% of loans while agricultural loans were 1.1% of total loans. As of March 31, 1996, the Corporation did not have any cross-border outstandings to borrowers in any foreign country where such outstandings exceeded 1% of total assets. NONINTEREST INCOME Noninterest income increased $1.7 million or 13.4% in the first quarter of 1996 when compared to the first quarter of 1995. Excluding investment security gains, noninterest income increased $1.4 million, or 10.9% during the same time period. The largest contributors to this increase were trust fees ($651,000), Loan servicing fees ($457,000), residential real estate loan origination fees ($413,000) and retail investment income ($206,000) offset by a decrease in other miscellaneous income of $397,000. Trust fees were up 11.8% for the first quarter of 1996 compared with the same period in 1995. These increases are reflective of the general market conditions prevalent during the last 12 months. Noninterest Income Quarterly Trends ($ in Thousands) - ------------------------------------------------------------------------------- 1st Qtr. 4th Qtr. 3rd Qtr. 2nd Qtr. 1st Qtr. 1996 1995 1995 1995 1995 - ------------------------------------------------------------------------------- Trust Servicing Fees $ 6,160 $ 5,897 $ 5,460 $ 5,377 $ 5,509 Service Charges on Deposit Accounts 2,800 2,779 2,863 2,777 2,744 Loan Servicing Fees 1,412 1,546 1,293 896 955 Residential Real Estate Loan Origination Fees 493 320 512 188 80 Retail Investment Income 656 554 514 548 450 Other 2,607 2,510 3,082 2,865 3,004 ----- ----- ----- ----- ----- Non-interest income excluding securities gains 14,128 13,606 13,724 12,651 12,742 Investment Security Gains, Net 340 104 92 102 21 ------ ------ ------ ------ ------ Total $14,468 $13,710 $13,816 $12,753 $12,763 - ------------------------------------------------------------------------------- Net investment security gains recognized in the first quarter of 1996 were $340,000 following net security gains of $104,000 in the fourth quarter of 1995. Residential real estate loan origination fees in the first quarter increased 516% from the first quarter of 1995. The increase reflects the acquisition of GN Mortgage in July of 1995, and increased loan origination volume. Retail investment income increased $206,000 or 45.8% during the first quarter of 1996 compared to the same period in 1995. The addition of new offices and staff helped account for this large increase. Other noninterest income declined $397,000 in the first quarter of 1996 compared with the same period in 1995, but decreased $97,000 from the fourth quarter of 1995. This increase is primarily a result of increased underwriting fees. NONINTEREST EXPENSE Total noninterest expense increased $1.3 million, or 4.1% in the first quarter of 1996 when compared to the first quarter of 1995. Categories showing the largest increases were salaries and employee benefits ($1,706,000), other miscellaneous expense ($923,000) and equipment rentals, depreciation and maintenance ($146,000). Offsetting these increases were significantly lower FDIC insurance premiums ($1,522,000). Salaries and employee benefits were up 10.7% or $1.7 million over the first quarter of 1995. This increase reflects merit increases and the impact of 1995 additions to staff relating to new business, affiliate services support, and newly acquired subsidiaries. Noninterest Expense Quarterly Trends ($ in Thousands) - ------------------------------------------------------------------------------- 1st Qtr. 4th Qtr. 3rd Qtr. 2nd Qtr. 1st Qtr. 1996 1995 1995 1995 1995 - ------------------------------------------------------------------------------- Salaries and Employee Benefits $17,724 $16,566 $16,655 $15,781 $16,018 Net Occupancy Expense 2,568 2,384 2,508 2,472 2,555 Equipment Rentals, Depreciation and Maintenance 1,760 1,571 1,571 1,544 1,614 Data Processing Expense 1,957 1,805 1,984 1,871 1,865 Stationery and Supplies 774 789 713 756 805 Business Development and Advertising 844 773 692 784 891 FDIC Expense 11 315 46 1,539 1,533 Other 6,520 6,644 6,606 5,832 5,597 ----- ----- ----- ----- ----- Total $32,158 $30,847 $30,775 $30,579 $30,878 - ------------------------------------------------------------------------------- Equipment rentals, depreciation and maintenance increased from the first quarter of 1995 by $146,000, or 9.0%. The increase is attributable to higher depreciation and maintenance costs associated with the equipment purchased as part of technology and customer service enhancements currently in progress. Other noninterest expense increased $923,000 in the first quarter of 1996 when compared to the first quarter of 1995. The increase is primarily attributable to increased mortgage servicing rights amortization of $432,000, lower gain on sale of ORE by $309,000, increased consulting and professional fees relating to the technology and customer service enhancement projects, and expenses from acquisitions included in the first quarter of 1996 but not in the first quarter of 1995. The significant decrease in FDIC expense from the first quarter of 1995 reflects the reduced FDIC premium ($500 per bank, except for SAIF deposits) compared to $.23 per $100 of deposits. The efficiency ratio improved to 60.44% for the first quarter of 1996 compared with 62.37% for the same period last year. The ratio increased during the first quarter of 1996 compared with 58.82% for the fourth quarter of 1995. The change from the fourth quarter of 1995 was due to noninterest expense growth of 4.3%, while net tax-equivalent revenue grew by only 1.5%. Expense Control Quarterly Trends - ------------------------------------------------------------------------------- 1st Qtr. 4th Qtr. 3rd Qtr. 2nd Qtr. 1st Qtr. 1996 1995 1995 1995 1995 - ------------------------------------------------------------------------------- Efficiency Ratio - Quarter 60.44% 58.82% 59.53% 61.68% 62.37% Efficiency Ratio - Year 60.44% 60.56% 61.17% 62.03% 62.37% Expense Ratio - Quarter 2.11% 2.07% 2,09% 2.26% 2.32% Expense Ratio - Year 2.11% 2,18% 2.22% 2.29% 2.32% - ------------------------------------------------------------------------------- The expense ratio improved to 2.11% for the first quarter of 1996 compared to 2.32% at the first quarter 1995. However, the first quarter of 1996 was up from the expense ratio of 2.07% in the fourth quarter of 1995. The increase in the expense ratio since the fourth quarter was attributable to noninterest expenses growing (4.3%) slightly faster than average earning assets (3.4%) in the first quarter of 1996. INCOME TAXES Income tax expense increased 14.7% over the first quarter of 1995, essentially parallelling the increase of 14.1% in income before taxes. The effective tax rate remained fairly consistent with previous quarters at approximately 36%. Income Tax Expense Quarterly Trends ($ in Thousands) - ------------------------------------------------------------------------------- 1st Qtr. 4th Qtr. 3rd Qtr. 2nd Qtr. 1st Qtr. 1996 1995 1995 1995 1995 - ------------------------------------------------------------------------------- Income Before Taxes $19,112 $19,936 $19,302 $17,381 $16,754 ====== ====== ====== ====== ====== State Tax Expense $ 1,139 $ 1,285 $ 1,164 $ 1,007 $ 995 Federal Tax Expense 5,728 6,121 5,930 5,229 4,990 ----- ----- ----- ----- ----- Total Income Tax Expense 6,867 7,406 7,094 6,236 5,985 Effective Tax Rate 35.9% 37.1% 36.8% 35.9% 35.7% - ------------------------------------------------------------------------------- BALANCE SHEET Consolidated assets totaled $3.72 billion as of March 31, 1996, up 10.9% from one year ago. Loans, net of unearned income, were $2.7 billion as of March 31, 1996, up 13.6% from the $2.4 billion of a year earlier. Total deposits at March 31, 1996, were $3.0 billion, an increase of 11.9% from one year ago. Total assets at March 31, 1996, increased by $22.4 million from December 31, 1995. Loans increased $91.7 million while cash and due from banks and funds sold decreased $53.6 million and $38.1 million, respectively. Total period-end deposits increased by $13.0 million during the first quarter of 1996. The change was comprised of a $83.5 million increase in interest- bearing deposits and an $70.5 million decrease in noninterest-bearing deposits. Average loan growth of $118 million, average investment growth of $20 million, $14 million lower average net free funds and lower average savings balances of $14 million were funded during the first quarter of 1996 by increased average NOW balances ($17 million), increased average MMA balances ($23 million), increased average time deposits ($69 million), increased average short-term and long-term borrowings ($31 million) and lower funds sold of $26 million. LIQUIDITY Liquidity refers to the ability of the Corporation to generate adequate amounts of cash to meet the Corporation's needs for cash. The subsidiary banks and the parent company of the Corporation have different liquidity considerations. Banking subsidiaries meet their cash flow requirements by having funds available to satisfy customer credit needs as well as having available funds to satisfy deposit withdrawal requests. Liquidity at banking subsidiaries is derived from deposit growth, money market assets, maturing loans, the maturity of securities, access to other funding sources and markets, and a strong capital position. Deposit growth is the primary source of liquidity at the banking subsidiaries. Interest-bearing deposits increased $83 million, while non-interest bearing deposits fell $70 million from the seasonally high year-end balance. As of March 31, 1996, the securities portfolio contained $345.8 million at amortized cost of U.S. Treasury and federal agency securities available for sale, representing 46.4 % of the total securities portfolio. These government securities are highly marketable and had a market value equal to 100.1% of amortized cost at quarter end. Money market investments, consisting of federal funds sold, securities purchased under agreements to resell, and interest-bearing deposits in other financial institutions, averaged $21.0 million in the first quarter of 1996 compared to $32.4 million during the same period in 1995. Being short-term and liquid by nature, money market investments generally provide a lower yield than other earning assets. The Corporation has a strategy of maintaining a sufficient level of liquidity to accommodate fluctuations in funding sources and will periodically take advantage of specific opportunities to temporarily invest excess funds at narrower than normal rate spreads while still generating additional net interest income. At March 31, 1996, the Corporation had $5.6 million outstanding in short-term money market investments, serving as an essential source of liquidity. The amount at quarter end represents .2% of total assets compared to 1.2% at December 31, 1995. Short-term borrowings totaled $338.8 million at March 31, 1996, compared with $346.8 million at the end of 1995. Within the classification of short-term borrowings are federal funds purchased and securities sold under agreements to repurchase. Federal funds are purchased from a sizeable network of correspondent banks while securities sold under agreements to repurchase are obtained from a base of individual, business and public entity customers. Deposit growth will continue to be the primary source of bank subsidiary liquidity on a long-term basis, along with stable earnings, the resulting cash generated by operating activities and strong capital positions. Shorter-term liquidity needs will mainly be derived from growth in short-term borrowings, maturing securities and money market assets, loan maturities and access to other funding sources. Liquidity is also necessary at the parent company level. The parent company's primary sources of funds are dividends and service fees from subsidiaries, borrowings and proceeds from the issuance of equity. The parent company manages its liquidity position to provide the funds necessary to pay dividends to shareholders, service debt, invest in subsidiaries and satisfy other operating requirements. Dividends received from subsidiaries totaled $12.2 million in the first quarter of 1996 and will continue to be the parent's main source of long-term liquidity. At March 31, 1996, the parent company had $105 million of established lines of credit with non-affiliated banks, of which $69 million was in use. The parent company also has access to funds from the issuance of the Corporation's commercial paper, although such funds are also downstreamed to the nonbank subsidiaries. Commercial paper outstanding at March 31, 1996, totaled $2.5 million. The parent company's long-term debt to equity ratio at March 31, 1996, was 0.9%, the same as the level at December 31, 1995. Management believes that, in the current economic environment, the corpo- ration's subsidiary and parent company liquidity positions are adequate. There are no known trends nor any known demands, commitments, events or uncertainties that will result or are reasonably likely to result in a material increase or decrease in the Corporation's liquidity. CAPITAL Stockholders' equity at March 31, 1996, increased 4.4% to $339.8 million or $20.15 per share compared with $325.6 million, or $19.71 per share at December 31, 1995. Equity to assets at March 31, 1996, remains strong at 9.13%, with the Tier 1 leverage ratio climbing to 8.42%. The increase in equity of $14.2 million since December 31, 1995, is attributable to $7.6 million from the Lodi acquisition, $7.8 million of retained earnings, $201,000 from the exercise of stock options reduced by $1.4 million for the change in the equity portion of the SFAS 115 adjustment. Capital Quarterly Trends ($ in Thousands) - ------------------------------------------------------------------------------- 1st Qtr. 4th Qtr. 3rd Qtr. 2nd Qtr. 1st Qtr. 1996 1995 1995 1995 1995 - ------------------------------------------------------------------------------- Stockholders' Equity $339,817 $325,596 $315,063 $308,124 $295,965 Average Equity to Average Assets 9.10% 9.01% 8.86% 8.87% 8.61% Equity to Assets - Period End 9.13% 8.81% 8.90% 8.84% 8.82% Tier 1 Capital to Risk Weighted Assets - Period End 10.82% 10.76% 10.76% 10.68% 10.81% Total Capital to Risk Weighted Assets - Period End 12.08% 12.02% 12.01% 11.94% 12.08% Tier 1 Leverage Ratio - Period End 8.42% 8.26% 8.16% 8.21% 8.19% Market Value Per Share - Period End $ 37.75 $ 40.94 $ 36.75 $ 30.38 $ 28.90 Book Value Per Share - Period End $ 20.15 $ 19.71 $ 19.09 $ 18.66 $ 17.94 Market Value Per Share to Book Value Per Share 187.3% 207.7% 192.5% 162.8% 161.1% Dividends Per Share - This Quarter $ .27 $ .27 $ .27 $ .22 $ .22 Dividends Per Share - Year to Date $ .27 $ .97 $ .70 $ .43 $ .22 Earnings Per Share - This Quarter $ .73 $ .76 $ .74 $ .68 $ .65 Earnings Per Share - Year to Date $ .73 $ 2.83 $ 2.07 $ 1.33 $ .65 Dividend Payout Ratio - This Quarter 36.99% 35.53% 36.49% 32.35% 33.85% Dividend Payout Ratio - Year to Date 36.99% 34.28% 33.82% 32.33% 33.85% - ------------------------------------------------------------------------------- Cash dividends during the first quarter were $.27 per share, up 18.5% from one year ago. The year-to-date dividend payout ratio represents 37.0% of 1996 earnings per share. The adequacy of the Corporation's capital is regularly reviewed to ensure that sufficient capital is available for current and future needs and is in compliance with regulatory guidelines. The assessment of overall capital adequacy depends on a variety of factors, including asset quality, liquidity, stability of earnings, changing competitive forces, economic conditions in markets served and strength of management. As of March 31, 1996, the Corporation's tier 1 risk-based capital ratio, total risk-based capital (tier 1 and tier 2) ratio and tier 1 leverage ratio were well in excess of regulatory minimums. Management of the Corporation expects to continue to exceed the minimum standards in the future. Similar capital guidelines are also required of the individual banking subsidiaries of the Corporation. As of March 31, 1996, each banking subsidiary exceeded the minimum ratios for tier 1 capital, total capital and the tier 1 leverage ratio. Management actively reviews capital strategies for the Corporation and each of its subsidiaries to ensure that capital levels are appropriate based on the perceived business risks, future growth opportunities, industry standards and regulatory requirements. RECENT DEVELOPMENTS On April 5, 1996, the Corporation completed its merger with Greater Columbia Bancshares, Inc. Greater Columbia is a Wisconsin bank holding company with $211 million in assets, including its commercial bank subsidiary, First National Bank of Portage (Wisconsin). In 1995, the Corporation announced a merger agreement with F&M Bankshares of Reedsburg, Inc. and its $140 million asset subsidiary, Farmers & Merchants Bank. The transaction is expected to be completed in the second quarter of 1996. On March 20, 1996, the Corporation announced the signing of a definitive agreement under which the Corporation would acquire Mid-America National Bancorp, and its $39 million asset subsidiary, Mid-America National Bank of Chicago, in a cash transaction. The transaction, which is contingent on approval by regulatory authorities and the shareholders of Mid-America National Bancorp, is expected to be completed in the third quarter of 1996. On April 10, 1996, the Corporation announced the signing of a letter of intent under which the Corporation would acquire Centra Financial, Inc., and its subsidiary, Central Bank of West Allis, in a stock-for-stock merger transaction. The transaction, which is contingent on completion of a definitive agreement and approval by regulatory authorities and the shareholders of Centra Financial, Inc. is expected to be completed in the third quarter of 1996. At the annual shareholders' meeting on April 24, 1996, the Corporation announced a $.02 per share (2 cents) increase in its regular quarterly cash dividend. The previous quarterly cash dividend was $.27 (27 cents) per share. With the increase, shareholders will receive $.29 (29 cents) per share. The dividends anticipated to be paid in 1996 represent an increase of 17.5% over those paid in 1995. ACCOUNTING DEVELOPMENTS In March 1995, the Financial Accounting Standards Board (FASB) issued SFAS No. 121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of. The Statement prescribes the accounting for the impairment of long-lived assets and goodwill related to those assets. The new rules specify when assets should be reviewed for impairment, how to determine whether an asset or group of assets is impaired, how to measure an impairment loss, and what financial statement disclosures are necessary. Also prescribed is the accounting for long-lived assets and identifiable intangibles that a company plans to dispose of, other than those that are a part of a discontinued operation. Any impairment of a long-lived asset resulting from management s review is to be recognized as a component of noninterest expense. The Corporation adopted SFAS 121 on January 1, 1996. The impact of adoption did not have a material effect on the consolidated financial statements of the Corporation. In October 1995, FASB issued SFAS No. 123, Accounting for Stock-Based Compensation, which is effective in 1996. The statement requires that a fair value-based method be used to value employee compensation plans that include stock-based awards. The statement permits a company to recognize compensation expense under SFAS 123 or continue to use the prior accounting rules which did not consider the market value of stock in certain award plans. If adoption of the statement s fair value procedures are not used in the computation of compensation expense in the income statement, the company must disclose in a footnote to the financial statements the pro forma impact of adoption. The Corporation will be adopting the disclosure method of the statement. ASSOCIATED BANC-CORP PART II - OTHER INFORMATION Page No. ITEM 6: Exhibits and Reports on Form 8-K (a) Exhibits: (11) Statements re Computation of Per Share Earnings (b) Reports on Form 8-K: There were no reports on Form 8-K filed for the three months ended March 31, 1996. ASSOCIATED BANC-CORP EXHIBIT (11) Statement Re Computation of Per Share Earnings March 31, 1996 March 31, 1995 As Reported: Net income $12,244,650 $10,769,482 Weighted average common shares 16,852,065 16,500,129 outstanding Net income per share $ 0.73 $ 0.65 Primary: Net income $12,214,650 $10,769,482 Weighted average common shares outstanding 16,852,065 16,500,129 Common stock equivalents 259,594 181,246 Adjusted weighted average common shares outstanding 17,111,659 16,681,375 Net income per share $ 0.72 $ 0.65 Fully Diluted: Net income $12,244,650 $10,769,482 Weighted average common shares outstanding 16,852,065 16,500,129 Common stock equivalents 266,620 184,245 Adjusted weighted average common shares outstanding 17,118,685 16,684,374 Net income per share $ 0.72 $ 0.65 Note: The primary and fully diluted numbers are not disclosed in the reported financials because any dilution that is less than 3% of earnings per common shares outstanding is not considered to be material. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. ASSOCIATED BANC-CORP (Registrant) Date: May 14, 1996 /s/ Harry B. Conlon --------------------------------------- Harry B. Conlon Chairman & Chief Executive Officer Date: May 14, 1996 /s/ Joseph B. Selner --------------------------------------- Joseph B. Selner Principal Financial Officer INDEX TO EXHIBITS Exhibit No. Page No. (11) Computations of Earnings Per Share and Average Number of Common Shares Outstanding EX-27 2
9 0000007789 ASSOCIATED BANC-CORP 1,000 3-MOS DEC-31-1996 MAR-31-1996 152,856 658 4,943 0 357,656 394,876 386,759 2,702,973 41,112 3,720,202 2,986,114 338,776 34,446 21,049 0 0 171 339,646 3,720,202 58,173 11,093 268 69,534 27,016 31,560 37,974 1,172 340 32,158 19,112 19,112 0 0 12,245 .73 .73 8.27 14,491 2,114 1,180 42,716 39,067 782 833 41,112 41,112 0 0
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