EX-99.1 2 c52325exv99w1.htm EX-99.1 EX-99.1
Exhibit 99.1
     
(ASSOCIATED BANC-CORP LOGO)
   NEWS RELEASE
  For more information:
Investors: Joseph B. Selner, Chief Financial Officer, 920-491-7120
Media: Janet L. Ford, SVP of Public Relations, 414-207-5070
 
 
Associated announces Second Quarter 2009 Results
  •   Net loss to common shareholders of $24.7 million for the second quarter compared to net income of $35.4 million for the first quarter of 2009
 
  •   Net income available to common shareholders of $10.7 million for the six months ended June 30, 2009
 
  •   Provision for loan losses of $155.0 million exceeded net charge offs of $61.1 million by $93.9 million, increasing the allowance for loan losses to 2.66% of loans at June 30, 2009, up from 1.97% at March 31, 2009
 
  •   FDIC special assessment expense of $11.3 million was recorded during the quarter
 
  •   Total deposits grew by 7.7% to $16.3 billion at June 30, 2009 compared to $15.2 billion at December 31, 2008 and were up 22.0% from $13.4 billion at June 30, 2008
 
  •   Tangible common equity ratio of 6.09% compared to 6.10% at March 31, 2009
GREEN BAY, Wis. — July 16, 2009 — Associated Banc-Corp (NASDAQ: ASBC) today reported a 2009 second quarter net loss to common shareholders of $24.7 million, or $0.19 per common share after including a $7.3 million dividend to preferred shareholders. This compares to net income of $35.4 million, or $0.28 per common share for the first quarter of 2009, and net income of $47.4 million, or $0.37 per common share, for the second quarter of 2008.
Net income available to common shareholders was $10.7 million, or $0.08 per common share, for the six months ended June 30, 2009, compared to net income of $113.8 million, or $0.89 per common share, for the first half of 2008.
The provision for loan losses for the quarter was $155.0 million compared to $105.4 million for the first quarter of 2009, and $59.0 million for the same period one year ago. Net charge offs for the quarter were $61.1 million compared to $57.6 million for the first quarter of 2009, and $37.0 million for the second quarter of 2008. Nonperforming loans were $733.4 million at June 30, 2009 compared to $452.2 million at March 31, 2009. The higher provision is primarily due to further deterioration of existing construction and commercial real estate credits and declining commercial real estate collateral values.
“The higher than anticipated provision is a result of the continued weakness in the economy and related stress on our customers,” said Associated Chairman and CEO Paul S. Beideman. “While we believe loan loss provisions and charge offs will remain elevated, we expect the pace of deterioration to moderate in future quarters.”
Net interest income for the quarter was $179.1 million compared to $189.3 million for the first quarter of 2009 and $172.7 million for the same quarter a year ago. The company’s net interest margin was 3.40% compared to 3.59% at March 31, 2009 and 3.65% at June 30, 2008. The challenging economic climate had a negative impact on the company’s net interest margin during the quarter. Specifically, the lower net interest margin was due to an increase in the level of nonperforming loans along with lower loan balances and higher investment securities prepayments which were reinvested at lower spreads. These factors were partially offset by improved deposit pricing and higher spreads on new and renewed loans.
— more —

 

ASBC 2Q ’09 page 2 of 2
On average, loans were $16.1 billion for the second quarter of 2009 compared to $16.4 billion for the first quarter of 2009 as the company continues to experience declines in both commercial and retail balances. Deposits, on average, were $16.1 billion for the second quarter of 2009, up $1.1 billion compared to first quarter 2009 and up $2.6 billion for the same period one year ago.
Mortgage loans originated for sale during the second quarter continued to be strong at $1.3 billion, an increase of $255.4 million from the first quarter of 2009 and up $903.4 million from the second quarter of 2008. For the second quarter 2009, net mortgage banking income was $28.3 million compared to $4.3 million for the first quarter of 2009. Second quarter mortgage banking results included a $9.6 million valuation recovery related to mortgage servicing rights, compared to a $12.3 million valuation charge in the first quarter of 2009.
Core fee-based revenue was $64.9 million for the second quarter of 2009 compared to $61.4 million for the first quarter of 2009 and $68.5 million in second quarter 2008. Year-over-year reductions occurred in consumer fee-based revenue due to weaker consumer activity, and equity market declines resulted in lower asset management and brokerage revenue.
Total noninterest expenses were $170.0 million, up $28.8 million from $141.3 million in the first quarter 2009. Second quarter 2009 noninterest expenses were higher in several categories, including FDIC insurance costs which increased $12.3 million largely due to an $11.3 million special assessment imposed by the Federal Deposit Insurance Corporation (FDIC). Other significant increases include foreclosure and OREO expenses, up $8.6 million primarily due to a $7 million write-down on a foreclosed property, and a $1.3 million increase in legal expenses due to an increased level of loan work outs. The efficiency ratio increased to 58.65% in the second quarter of 2009, up from 51.31% in the previous quarter and 50.75% in the second quarter 2008.
Total income tax benefit was $26.6 million for the second quarter of 2009, an increase of $15.5 million from the $11.1 million benefit in the first quarter of 2009. The increase in income tax benefit is primarily due to the level of pretax income (loss) between quarters. In addition, the company recorded a $17.0 million net decrease in the valuation allowance on and changes to State deferred tax assets in the first quarter of 2009. In the second quarter, the company recorded a $5 million decrease in the valuation allowance on deferred tax assets.
Associated Banc-Corp (NASDAQ: ASBC) will host a conference call for investors and analysts at 3 p.m. Central Time (CT) Thursday, July 16, 2009. The toll-free dial-in number for the live call is 800-762-8779. The number for international callers is 480-248-5081. Participants should ask the operator for the Associated Banc-Corp second quarter 2009 earnings call, or for call ID number 4102400. A replay of the call will be available starting at 6 p.m. CT on July 16, 2009 through 12:00 midnight CT on August 16, 2009 by calling 800-406-7325 (toll-free) domestically or 303-590-3030 internationally. The call ID number (replay pin number), 4102400, is required to access the replay.
Associated Banc-Corp, headquartered in Green Bay, Wis., is a diversified bank holding company with total assets of $24 billion. Associated has approximately 300 banking offices serving approximately 160 communities in Wisconsin, Illinois, and Minnesota. The company offers a full range of traditional banking services and a variety of other financial products and services. More information about Associated Banc-Corp is available at www.associatedbank.com.
Statements made in this document that 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. Forward-looking statements are based on current management expectations and, by their nature, are subject to risks and uncertainties. These statements may be identified by the use of words such as “believe,” “expect,” “anticipate,” “plan,” “estimate,” “should,” “will,” “intend,” or similar expressions. Outcomes related to such statements are subject to numerous risk factors and uncertainties including those listed in the company’s Annual Report filed on Form 10-K.

 

Consolidated Balance Sheets (Unaudited)
Associated Banc-Corp
                                         
    June 30,     December 31,     Jun09 vs Dec08     June 30,     Jun09 vs Jun08  
(in thousands)   2009     2008     % Change     2008     % Change  
 
Assets
                                        
Cash and due from banks
   $ 463,477     $ 533,338       (13.1 %)   $ 600,972       (22.9 %)
Interest-bearing deposits in other financial institutions
     12,910       12,649       2.1 %     24,448       (47.2 %)
Federal funds sold and securities purchased under agreements to resell
     34,679       24,741       40.2 %     35,852       (3.3 %)
Securities available for sale, at fair value
     6,000,491       5,349,417       12.2 %     3,574,373       67.9 %
Loans held for sale
     424,833       87,084       387.8 %     52,058       716.1 %
Loans
     15,310,107       16,283,908       (6.0 %)     16,149,327       (5.2 %)
Allowance for loan losses
     (407,167 )     (265,378 )     53.4 %     (229,605 )     77.3 %
 
                                  
Loans, net
     14,902,940       16,018,530       (7.0 %)     15,919,722       (6.4 %)
Premises and equipment, net
     185,794       190,942       (2.7 %)     191,634       (3.0 %)
Goodwill
     929,168       929,168       0.0 %     929,168       0.0 %
Other intangible assets, net
     91,588       80,165       14.2 %     92,621       (1.1 %)
Other assets
     967,687       966,033       0.2 %     881,856       9.7 %
 
                                  
Total assets
   $ 24,013,567     $ 24,192,067       (0.7 %)   $ 22,302,704       7.7 %
 
                                  
 
                                        
Liabilities and Stockholders’ Equity
                                        
Noninterest-bearing deposits
   $ 2,846,570     $ 2,814,079       1.2 %   $ 2,602,026       9.4 %
Interest-bearing deposits, excluding Brokered CDs
     12,543,239       11,551,181       8.6 %     10,378,285       20.9 %
Brokered CDs
     930,582       789,536       17.9 %     398,423       133.6 %
 
                                  
Total deposits
     16,320,391       15,154,796       7.7 %     13,378,734       22.0 %
Short-term borrowings
     2,712,962       3,703,936       (26.8 %)     4,923,462       (44.9 %)
Long-term funding
     1,761,580       1,861,647       (5.4 %)     1,436,349       22.6 %
Accrued expenses and other liabilities
     344,866       595,185       (42.1 %)     210,277       64.0 %
 
                                  
Total liabilities
     21,139,799       21,315,564       (0.8 %)     19,948,822       6.0 %
Stockholders’ Equity
                                        
Preferred equity
     509,535       508,008       0.3 %     —       N/M  
Common stock
     1,284       1,281       0.2 %     1,279       0.4 %
Surplus
     1,078,633       1,073,218       0.5 %     1,048,158       2.9 %
Retained earnings
     1,262,047       1,293,941       (2.5 %)     1,324,476       (4.7 %)
Accumulated other comprehensive income (loss)
     23,352       55       N/M       (20,031 )     (216.6 %)
Treasury stock
     (1,083 )     —       N/M       —       N/M  
 
                                  
Total stockholders’ equity
     2,873,768       2,876,503       (0.1 %)     2,353,882       22.1 %
 
                                  
Total liabilities and stockholders’ equity
   $ 24,013,567     $ 24,192,067       (0.7 %)   $ 22,302,704       7.7 %
 
                                  
 
N/M = Not meaningful.

 

 

Consolidated Statements of Income (Unaudited)
Associated Banc-Corp
                                                 
    For The Three Months Ended             For The Six Months Ended,        
    June 30,     Quarter     June 30,     Year-to-Date  
(in thousands, except per share amounts)   2009     2008     % Change     2009     2008     % Change  
           
Interest Income
                                                
Interest and fees on loans
   $ 194,352     $ 237,727       (18.2 %)   $ 396,377     $ 492,780       (19.6 %)
Interest and dividends on investment securities and deposits in other financial institutions:
                                                
Taxable
     46,688       31,878       46.5 %     97,591       63,230       54.3 %
Tax-exempt
     8,819       9,776       (9.8 %)     18,313       20,035       (8.6 %)
Interest on federal funds sold and securities purchased under agreements to resell
     51       213       (76.1 %)     114       419       (72.8 %)
 
                                        
Total interest income
     249,910       279,594       (10.6 %)     512,395       576,464       (11.1 %)
Interest Expense
                                                
Interest on deposits
     44,993       63,655       (29.3 %)     91,592       145,161       (36.9 %)
Interest on short-term borrowings
     5,088       24,363       (79.1 %)     10,242       52,536       (80.5 %)
Interest on long-term funding
     20,691       18,844       9.8 %     42,145       40,918       3.0 %
 
                                        
Total interest expense
     70,772       106,862       (33.8 %)     143,979       238,615       (39.7 %)
 
                                        
Net Interest Income
     179,138       172,732       3.7 %     368,416       337,849       9.0 %
Provision for loan losses
     155,022       59,001       162.7 %     260,446       82,003       217.6 %
 
                                        
Net interest income after provision for loan losses
     24,116       113,731       (78.8 %)     107,970       255,846       (57.8 %)
Noninterest Income
                                                
Trust service fees
     8,569       10,078       (15.0 %)     17,046       20,152       (15.4 %)
Service charges on deposit accounts
     29,671       30,129       (1.5 %)     56,876       53,813       5.7 %
Card-based and other nondeposit fees
     11,858       12,301       (3.6 %)     22,032       23,726       (7.1 %)
Retail commissions
     14,829       16,004       (7.3 %)     30,341       32,119       (5.5 %)
Mortgage banking, net
     28,297       5,395       424.5 %     32,564       12,340       163.9 %
Treasury management fees, net
     2,393       3,502       (31.7 %)     5,019       5,488       (8.5 %)
Bank owned life insurance income
     3,161       4,997       (36.7 %)     8,933       9,858       (9.4 %)
Asset sale (losses), net
     (1,287 )     (731 )     76.1 %     (2,394 )     (1,187 )     101.7 %
Investment securities gains (losses), net
     (1,385 )     (718 )     92.9 %     9,211       (3,658 )     N/M  
Other
     5,835       5,668       2.9 %     11,290       16,602       (32.0 %)
 
                                        
Total noninterest income
     101,941       86,625       17.7 %     190,918       169,253       12.8 %
Noninterest Expense
                                                
Personnel expense
     81,171       78,066       4.0 %     158,269       153,709       3.0 %
Occupancy
     12,341       12,026       2.6 %     25,222       25,290       (0.3 %)
Equipment
     4,670       4,653       0.4 %     9,259       9,250       0.1 %
Data processing
     8,126       8,250       (1.5 %)     15,723       15,371       2.3 %
Business development and advertising
     4,943       5,137       (3.8 %)     9,680       10,178       (4.9 %)
Other intangible amortization
     1,385       1,568       (11.7 %)     2,771       3,137       (11.7 %)
Legal and professional fees
     5,586       2,944       89.7 %     9,827       5,717       71.9 %
Foreclosure/OREO expense
     13,576       2,573       427.6 %     18,589       4,542       309.3 %
FDIC expense
     18,090       397       N/M       23,865       803       N/M  
Other
     20,143       20,207       (0.3 %)     38,090       44,136       (13.7 %)
 
                                        
Total noninterest expense
     170,031       135,821       25.2 %     311,295       272,133       14.4 %
 
                                        
Income (loss) before income taxes
     (43,974 )     64,535       (168.1 %)     (12,407 )     152,966       (108.1 %)
Income tax expense (benefit)
     (26,633 )     17,176       (255.1 %)     (37,791 )     39,142       (196.5 %)
 
                            
Net income (loss)
     (17,341 )     47,359       (136.6 %)   $ 25,384     $ 113,824       (77.7 %)
Preferred stock dividends and discount
     7,331       —       N/M       14,652       —       N/M  
 
                                        
Net income (loss) available to common equity
   $ (24,672 )   $ 47,359       (152.1 %)   $ 10,732     $ 113,824       (90.6 %)
 
                                        
 
                                                
Earnings (Loss) Per Common Share:
                                                
Basic
   $ (0.19 )   $ 0.37       (151.4 %)   $ 0.08     $ 0.89       (91.0 %)
Diluted
   $ (0.19 )   $ 0.37       (151.4 %)   $ 0.08     $ 0.89       (91.0 %)
 
                                                
Average Common Shares Outstanding:
                                                
Basic
     127,861       127,433       0.3 %     127,850       127,365       0.4 %
Diluted
     127,861       127,909       (0.0 %)     127,856       127,849       0.0 %
 
N/M = Not meaningful.

 

 

Consolidated Statements of Income (Unaudited) — Quarterly Trend
Associated Banc-Corp
                                         
(in thousands, except per share amounts)   2Q09     1Q09     4Q08     3Q08     2Q08  
 
Interest Income
                                        
Interest and fees on loans
   $ 194,352     $ 202,025     $ 230,872     $ 229,001     $ 237,727  
Interest and dividends on investment securities and deposits in other financial institutions:
                                        
Taxable
     46,688       50,903       38,032       32,209       31,878  
Tax-exempt
     8,819       9,494       9,811       9,887       9,776  
Interest on federal funds sold and securities purchased under agreements to resell
     51       63       154       279       213  
 
                              
Total interest income
     249,910       262,485       278,869       271,376       279,594  
Interest Expense
                                        
Interest on deposits
     44,993       46,599       56,402       61,743       63,655  
Interest on short-term borrowings
     5,088       5,154       10,090       23,958       24,363  
Interest on long-term funding
     20,691       21,454       20,595       19,158       18,844  
 
                              
Total interest expense
     70,772       73,207       87,087       104,859       106,862  
 
                              
Net Interest Income
     179,138       189,278       191,782       166,517       172,732  
Provision for loan losses
     155,022       105,424       65,044       55,011       59,001  
 
                              
Net interest income after provision for loan losses
     24,116       83,854       126,738       111,506       113,731  
Noninterest Income
                                        
Trust service fees
     8,569       8,477       8,248       10,020       10,078  
Service charges on deposit accounts
     29,671       27,205       30,946       33,609       30,129  
Card-based and other nondeposit fees
     11,858       10,174       12,297       12,517       12,301  
Retail commissions
     14,829       15,512       15,541       14,928       16,004  
 
                              
Total core fee-based revenue
     64,927       61,368       67,032       71,074       68,512  
Mortgage banking, net
     28,297       4,267       (1,227 )     3,571       5,395  
Treasury management fees, net
     2,393       2,626       (33 )     1,935       3,502  
Bank owned life insurance income
     3,161       5,772       4,711       5,235       4,997  
Asset sale gains (losses), net
     (1,287 )     (1,107 )     (1,054 )     573       (731 )
Investment securities gains (losses), net
     (1,385 )     10,596       (35,298 )     (13,585 )     (718 )
Other
     5,835       5,455       6,943       6,520       5,668  
 
                              
Total noninterest income
     101,941       88,977       41,074       75,323       86,625  
Noninterest Expense
                                        
Personnel expense
     81,171       77,098       77,374       78,395       78,066  
Occupancy
     12,341       12,881       13,134       12,037       12,026  
Equipment
     4,670       4,589       4,785       5,088       4,653  
Data processing
     8,126       7,597       7,446       7,634       8,250  
Business development and advertising
     4,943       4,737       6,047       5,175       5,137  
Other intangible amortization
     1,385       1,386       1,564       1,568       1,568  
Legal and professional fees
     5,586       4,241       5,311       3,538       2,944  
Foreclosure/OREO expense
     13,576       5,013       6,716       2,427       2,573  
FDIC expense
     18,090       5,775       930       791       397  
Other
     20,143       17,947       25,443       19,924       20,207  
 
                              
Total noninterest expense
     170,031       141,264       148,750       136,577       135,821  
 
                              
Income (loss) before income taxes
     (43,974 )     31,567       19,062       50,252       64,535  
Income tax expense (benefit)
     (26,633 )     (11,158 )     2,203       12,483       17,176  
             
Net income (loss)
     (17,341 )     42,725       16,859       37,769       47,359  
Preferred stock dividends and discount
     7,331       7,321       3,250       —       —  
 
                              
Net income (loss) available to common equity
   $ (24,672 )   $ 35,404     $ 13,609     $ 37,769     $ 47,359  
 
                              
 
                                        
Earnings (Loss) Per Common Share:
                                        
Basic
   $ (0.19 )   $ 0.28     $ 0.11     $ 0.30     $ 0.37  
Diluted
   $ (0.19 )   $ 0.28     $ 0.11     $ 0.30     $ 0.37  
 
                                        
Average Common Shares Outstanding:
                                        
Basic
     127,861       127,839       127,717       127,553       127,433  
Diluted
     127,861       127,845       127,810       127,622       127,909  

 

Selected Quarterly Information
Associated Banc-Corp
                                                         
(in thousands, except per share and full time equivalent employee data)   YTD 2009   YTD 2008   2nd Qtr 2009   1st Qtr 2009   4th Qtr 2008   3rd Qtr 2008   2nd Qtr 2008
 
Summary of Operations
                                                        
Net interest income
   $ 368,416     $ 337,849     $ 179,138     $ 189,278     $ 191,782     $ 166,517     $ 172,732  
Provision for loan losses
     260,446       82,003       155,022       105,424       65,044       55,011       59,001  
Asset sale gains (losses), net
     (2,394 )     (1,187 )     (1,287 )     (1,107 )     (1,054 )     573       (731 )
Investment securities gains (losses), net
     9,211       (3,658 )     (1,385 )     10,596       (35,298 )     (13,585 )     (718 )
Noninterest income (excluding securities & asset gains)
     184,101       174,098       104,613       79,488       77,426       88,335       88,074  
Noninterest expense
     311,295       272,133       170,031       141,264       148,750       136,577       135,821  
Income before income taxes
     (12,407 )     152,966       (43,974 )     31,567       19,062       50,252       64,535  
Income tax expense (benefit)
     (37,791 )     39,142       (26,633 )     (11,158 )     2,203       12,483       17,176  
Net income (loss)
     25,384       113,824       (17,341 )     42,725       16,859       37,769       47,359  
Net income (loss) available to common equity
     10,732       113,824       (24,672 )     35,404       13,609       37,769       47,359  
Taxable equivalent adjustment
     12,694       13,910       6,150       6,544       6,902       6,899       6,814  
 
Per Common Share Data
                                                        
Net income (loss):
                                                        
Basic
   $ 0.08     $ 0.89     $ (0.19 )   $ 0.28     $ 0.11     $ 0.30     $ 0.37  
Diluted
     0.08       0.89       (0.19 )     0.28       0.11       0.30       0.37  
Dividends
     0.37       0.63       0.05       0.32       0.32       0.32       0.32  
Market Value:
                                                        
High
   $ 21.39     $ 29.23     $ 19.00     $ 21.39     $ 24.21     $ 25.92     $ 29.23  
Low
     10.60       19.29       12.50       10.60       15.72       14.85       19.29  
Close
     12.50       19.29       12.50       15.45       20.93       19.95       19.29  
Book value
     18.49       18.46       18.49       18.68       18.54       18.52       18.46  
 
Performance Ratios (annualized)
                                                        
Earning assets yield
     4.82 %     6.07 %     4.70 %     4.94 %     5.57 %     5.58 %     5.82 %
Interest-bearing liabilities rate
     1.59       2.86       1.57       1.61       2.00       2.44       2.53  
Net interest margin
     3.49       3.61       3.40       3.59       3.88       3.48       3.65  
Return on average assets
     0.21       1.05       (0.29 )     0.71       0.30       0.68       0.87  
Return on average equity
     1.76       9.67       (2.40 )     5.98       2.58       6.38       8.01  
Return on average tangible common equity (1)
     1.51       16.36       (6.88 )     10.05       3.83       10.83       13.51  
Efficiency ratio (2)
     55.08       51.75       58.65       51.31       53.87       52.18       50.75  
Effective tax rate
     304.59       25.59       60.57       (35.35 )     11.56       24.84       26.61  
Dividend payout ratio (3)
     462.50       70.79       N/M       114.29       290.91       106.67       86.49  
 
Average Balances
                                                        
Assets
   $ 24,159,647     $ 21,712,707     $ 24,064,567     $ 24,255,783     $ 22,646,421     $ 22,072,948     $ 21,975,451  
Earning assets
     21,902,825       19,515,429       21,847,191       21,959,077       20,436,483       19,884,434       19,754,651  
Interest-bearing liabilities
     18,290,716       16,801,778       18,125,389       18,457,879       17,363,481       17,107,551       16,992,508  
Loans
     16,275,353       15,914,526       16,122,063       16,430,347       16,285,881       16,203,717       16,120,732  
Deposits
     15,576,244       13,568,535       16,100,686       15,045,976       14,395,626       13,710,297       13,493,511  
Wholesale funding
     5,484,245       5,622,248       4,876,970       6,098,266       5,496,248       5,876,051       5,950,699  
Common stockholders’ equity
     2,396,020       2,367,799       2,400,664       2,391,325       2,376,639       2,353,606       2,377,841  
Stockholders’ equity
     2,904,679       2,367,799       2,909,700       2,899,603       2,602,917       2,353,606       2,377,841  
Common stockholders’ equity/assets
     9.92 %     10.91 %     9.98 %     9.86 %     10.49 %     10.66 %     10.82 %
Stockholders’ equity / assets
     12.02 %     10.91 %     12.09 %     11.95 %     11.49 %     10.66 %     10.82 %
 
At Period End
                                                        
Assets
                   $ 24,013,567     $ 24,349,725     $ 24,192,067     $ 22,487,394     $ 22,302,704  
Loans
                     15,310,107       15,917,952       16,283,908       16,272,487       16,149,327  
Allowance for loan losses
                     407,167       313,228       265,378       246,189       229,605  
Goodwill
                     929,168       929,168       929,168       929,168       929,168  
Mortgage servicing rights, net
                     59,762       39,754       45,568       53,977       54,725  
Other intangible assets
                     31,826       33,211       34,597       36,161       37,896  
Deposits
                     16,320,391       15,873,189       15,154,796       14,245,667       13,378,734  
Wholesale funding
                     4,474,542       5,326,734       5,565,583       5,667,737       6,359,811  
Stockholders’ equity
                     2,873,768       2,897,169       2,876,503       2,364,247       2,353,882  
Stockholders’ equity / assets
                     11.97 %     11.90 %     11.89 %     10.51 %     10.55 %
Tangible common equity / tangible assets (4)
                     6.09 %     6.10 %     6.05 %     6.50 %     6.50 %
Tangible equity/tangible assets (5)
                     8.30 %     8.27 %     8.23 %     6.50 %     6.50 %
Shares outstanding, end of period
                     127,861       127,860       127,762       127,646       127,537  
 
Selected trend information
                                                        
Average full time equivalent employees
                     5,116       5,143       5,109       5,141       5,179  
Trust assets under management, at market value
                   $ 5,000,000     $ 4,800,000     $ 5,100,000     $ 5,600,000     $ 5,900,000  
Mortgage loans originated for sale during period
                     1,335,175       1,079,732       247,465       217,993       431,757  
Mortgage portfolio serviced for others
                     6,904,000       6,582,000       6,606,000       6,596,000       6,584,000  
Mortgage servicing rights, net / Portfolio serviced for others
                     0.87 %     0.60 %     0.69 %     0.82 %     0.83 %
 
 
N/M = Not meaningful.
 
(1)   Return on average tangible common equity = Net income available to common equity divided by average common equity excluding average goodwill and other intangible assets. This is a non-GAAP financial measure.
 
(2)   Efficiency ratio = Noninterest expense divided by sum of taxable equivalent net interest income plus noninterest income, excluding investment securities gains, net, and asset sales gains, net. This is a non-GAAP financial measure.
 
(3)   Ratio is based upon basic earnings per common share.
 
(4)   Tangible common equity to tangible assets = Common stockholders’ equity excluding goodwill and other intangible assets divided by assets excluding goodwill and other intangible assets. This is a non-GAAP financial measure.
 
(5)   Tangible equity to tangible assets = Stockholders’ equity excluding goodwill and other intangible assets divided by assets excluding goodwill and other intangible assets. This is a non-GAAP financial measure.

 

 

Financial Summary and Comparison
Associated Banc-Corp
                                                 
    Three months ended   Six months ended
    June 30,   June 30,
(in thousands)   2009   2008   % Change   2009   2008   % Change
Allowance for Loan Losses
                                                
Beginning balance
   $ 313,228     $ 207,602       50.9 %   $ 265,378     $ 200,570       32.3 %
Provision for loan losses
     155,022       59,001       162.7 %     260,446       82,003       217.6 %
Charge offs
     (63,325 )     (38,238 )     65.6 %     (123,499 )     (57,732 )     113.9 %
Recoveries
     2,242       1,240       80.8 %     4,842       4,764       1.6 %
                         
Net charge offs
     (61,083 )     (36,998 )     65.1 %     (118,657 )     (52,968 )     124.0 %
                         
Ending balance
   $ 407,167     $ 229,605       77.3 %   $ 407,167     $ 229,605       77.3 %
                         
Credit Quality
                                                         
                    Jun09 vs Mar09                           Jun09 vs Jun08
    Jun 30, 2009   Mar 31, 2009   % Change   Dec 31, 2008   Sept 30, 2008   Jun 30, 2008   % Change
         
Nonaccrual loans
   $ 700,514     $ 433,246       61.7 %   $ 326,857     $ 290,039     $ 277,100       152.8 %
Loans 90 or more days past due and still accruing
     19,785       16,002       23.6 %     13,811       14,631       11,762       68.2 %
Restructured loans
     13,089       2,927       347.2 %     —       —       —       N/M  
                         
Total nonperforming loans
     733,388       452,175       62.2 %     340,668       304,670       288,862       153.9 %
Other real estate owned (OREO)
     51,633       54,883       (5.9 %)     48,710       46,473       46,579       10.9 %
                         
Total nonperforming assets
   $ 785,021     $ 507,058       54.8 %   $ 389,378     $ 351,143     $ 335,441       134.0 %
                         
Provision for loan losses
     155,022       105,424       47.0 %     65,044       55,011       59,001       162.7 %
Net charge offs
     61,083       57,574       6.1 %     45,855       38,427       36,998       65.1 %
 
                                                        
Allowance for loan losses / loans
     2.66 %     1.97 %             1.63 %     1.51 %     1.42 %        
Allowance for loan losses / nonperforming loans
     55.52       69.27               77.90       80.81       79.49          
Nonperforming loans / total loans
     4.79       2.84               2.09       1.87       1.79          
Nonperforming assets / total loans plus OREO
     5.11       3.17               2.38       2.15       2.07          
Nonperforming assets / total assets
     3.27       2.08               1.61       1.56       1.50          
Net charge offs / average loans (annualized)
     1.52       1.42               1.12       0.94       0.92          
Year-to-date net charge offs / average loans
     1.47       1.42               0.85       0.76       0.67          
 
                                                        
Nonperforming loans by type:
                                                        
Commercial, financial & agricultural
   $ 187,943     $ 102,257       83.8 %   $ 104,664     $ 85,995     $ 78,731       138.7 %
Commercial real estate
     165,929       100,838       64.6 %     62,423       52,875       42,280       292.5 %
Real estate — construction
     264,402       152,008       73.9 %     90,048       98,205       110,717       138.8 %
Lease financing
     1,929       1,707       13.0 %     187       83       522       269.5 %
                         
Total commercial
     620,203       356,810       73.8 %     257,322       237,158       232,250       167.0 %
Home equity
     38,474       35,224       9.2 %     31,035       25,372       23,555       63.3 %
Installment
     7,545       6,755       11.7 %     7,155       6,035       5,184       45.5 %
                         
Total retail
     46,019       41,979       9.6 %     38,190       31,407       28,739       60.1 %
Residential mortgage
     67,166       53,386       25.8 %     45,156       36,105       27,873       141.0 %
                         
Total nonperforming loans
   $ 733,388     $ 452,175       62.2 %   $ 340,668     $ 304,670     $ 288,862       153.9 %
                         
Period End Loan Composition
                                                         
                    Jun09 vs Mar09                           Jun09 vs Jun08
    Jun 30, 2009   Mar 31, 2009   % Change   Dec 31, 2008   Sept 30, 2008   Jun 30, 2008   % Change
         
Commercial, financial & agricultural
   $ 3,904,925     $ 4,160,274       (6.1 %)   $ 4,388,691     $ 4,343,208     $ 4,423,192       (11.7 %)
Commercial real estate
     3,737,749       3,575,301       4.5 %     3,566,551       3,534,791       3,583,877       4.3 %
Real estate — construction
     1,963,919       2,228,090       (11.9 %)     2,260,888       2,363,116       2,351,401       (16.5 %)
Lease financing
     110,262       116,100       (5.0 %)     122,113       125,907       124,661       (11.6 %)
                         
Total commercial
     9,716,855       10,079,765       (3.6 %)     10,338,243       10,367,022       10,483,131       (7.3 %)
Home equity
     2,656,747       2,784,248       (4.6 %)     2,883,317       2,892,952       2,757,684       (3.7 %)
Installment
     844,065       853,214       (1.1 %)     827,303       842,741       826,895       2.1 %
                         
Total retail
     3,500,812       3,637,462       (3.8 %)     3,710,620       3,735,693       3,584,579       (2.3 %)
Residential mortgage
     2,092,440       2,200,725       (4.9 %)     2,235,045       2,169,772       2,081,617       0.5 %
                         
Total loans
   $ 15,310,107     $ 15,917,952       (3.8 %)   $ 16,283,908     $ 16,272,487     $ 16,149,327       (5.2 %)
                         
Period End Deposit Composition
                                                         
                    Jun09 vs Mar09                           Jun09 vs Jun08
    Jun 30, 2009   Mar 31, 2009   % Change   Dec 31, 2008   Sept 30, 2008   Jun 30, 2008   % Change
         
Demand
   $ 2,846,570     $ 2,818,088       1.0 %   $ 2,814,079     $ 2,545,779     $ 2,602,026       9.4 %
Savings
     898,527       895,310       0.4 %     841,129       888,731       921,000       (2.4 %)
Interest-bearing demand
     2,242,800       1,796,724       24.8 %     1,796,405       1,667,640       1,697,910       32.1 %
Money market
     5,410,498       5,410,095       0.0 %     4,926,088       4,608,686       3,917,505       38.1 %
Brokered CDs
     930,582       922,491       0.9 %     789,536       579,607       398,423       133.6 %
Other time deposits
     3,991,414       4,030,481       (1.0 %)     3,987,559       3,955,224       3,841,870       3.9 %
                         
Total deposits
   $ 16,320,391     $ 15,873,189       2.8 %   $ 15,154,796     $ 14,245,667     $ 13,378,734       22.0 %
                         
 
                                                        
Network transaction deposits included above in interest-bearing demand and money market
   $ 1,605,722     $ 1,759,656       (8.7 %)   $ 1,530,675     $ 1,356,616     $ 620,440       158.8 %
Customer repo sweeps (a)
   $ 269,809     $ 333,706       (19.1 %)   $ 505,788     $ 657,032     $ 667,720       (59.6 %)
 
(a)   Included within short-term borrowings.
 
N/M -   Not meaningful.

 

 

Net Interest Income Analysis — Taxable Equivalent Basis
Associated Banc-Corp
                                                 
    Six months ended June 30, 2009     Six months ended June 30, 2008  
    Average     Interest     Average     Average     Interest     Average  
(in thousands)   Balance     Income / Expense     Yield / Rate     Balance     Income / Expense     Yield / Rate  
         
Earning assets:
                                                
Loans: (1) (2) (3)
                                                
Commercial
   $ 10,083,205     $ 228,424       4.57 %   $ 10,412,253     $ 314,859       6.08 %
Residential mortgage
     2,553,037       68,231       5.36       2,215,641       66,325       6.00  
Retail
     3,639,111       101,428       5.61       3,286,632       113,484       6.93  
                         
Total loans
     16,275,353       398,083       4.92       15,914,526       494,668       6.24  
Investments and other
     5,627,472       127,006       4.51       3,600,903       95,706       5.32  
                         
Total earning assets
     21,902,825       525,089       4.82       19,515,429       590,374       6.07  
Other assets, net
     2,256,822                       2,197,278                  
 
                                            
Total assets
   $ 24,159,647                     $ 21,712,707                  
 
                                            
 
                                                
Interest-bearing liabilities:
                                                
Savings deposits
   $ 882,533     $ 681       0.16 %   $ 885,883     $ 2,091       0.47 %
Interest-bearing demand deposits
     1,836,187       1,867       0.21       1,802,280       9,765       1.09  
Money market deposits
     5,178,848       23,977       0.93       3,919,573       42,000       2.15  
Time deposits, excluding Brokered CDs
     4,004,253       58,277       2.93       3,968,095       80,970       4.10  
                         
Total interest-bearing deposits, excluding Brokered CDs
     11,901,821       84,802       1.44       10,575,831       134,826       2.56  
Brokered CDs
     904,650       6,790       1.51       603,699       10,335       3.44  
                         
Total interest-bearing deposits
     12,806,471       91,592       1.44       11,179,530       145,161       2.61  
Wholesale funding
     5,484,245       52,387       1.92       5,622,248       93,454       3.34  
                         
Total interest-bearing liabilities
     18,290,716       143,979       1.59       16,801,778       238,615       2.86  
Noninterest-bearing demand deposits
     2,769,773                       2,389,005                  
Other liabilities
     194,479                       154,125                  
Stockholders’ equity
     2,904,679                       2,367,799                  
 
                                            
Total liabilities and stockholders’ equity
   $ 24,159,647                     $ 21,712,707                  
 
                                            
 
 
                                            
Net interest income and rate spread (1)
           $ 381,110       3.23 %           $ 351,759       3.21 %
 
                                            
Net interest margin (1)
                     3.49 %                     3.61 %
Taxable equivalent adjustment
           $ 12,694                     $ 13,910          
 
                                            
                                                 
    Three months ended June 30, 2009     Three months ended June 30, 2008  
    Average     Interest     Average     Average     Interest     Average  
    Balance     Income / Expense     Yield / Rate     Balance     Income / Expense     Yield / Rate  
         
Earning assets:
                                                
Loans: (1) (2) (3)
                                                
Commercial
   $ 9,940,732     $ 111,760       4.51 %   $ 10,501,226     $ 150,134       5.75 %
Residential mortgage
     2,605,638       34,363       5.28       2,195,007       32,530       5.94  
Retail
     3,575,693       49,088       5.50       3,424,499       56,010       6.57  
                         
Total loans
     16,122,063       195,211       4.85       16,120,732       238,674       5.95  
Investments and other
     5,725,128       60,849       4.25       3,633,919       47,734       5.25  
                         
Total earning assets
     21,847,191       256,060       4.70       19,754,651       286,408       5.82  
Other assets, net
     2,217,376                       2,220,800                  
 
                                            
Total assets
   $ 24,064,567                     $ 21,975,451                  
 
                                            
 
Interest-bearing liabilities:
                                                
Savings deposits
   $ 907,677     $ 359       0.16 %   $ 910,930     $ 1,009       0.45 %
Interest-bearing demand deposits
     1,970,889       1,038       0.21       1,796,373       3,774       0.84  
Money market deposits
     5,409,953       12,412       0.92       3,864,739       17,546       1.83  
Time deposits, excluding Brokered CDs
     4,015,230       28,220       2.82       3,892,910       37,229       3.85  
                         
Total interest-bearing deposits, excluding Brokered CDs
     12,303,749       42,029       1.37       10,464,952       59,558       2.29  
Brokered CDs
     944,670       2,964       1.26       576,857       4,097       2.86  
                         
Total interest-bearing deposits
     13,248,419       44,993       1.36       11,041,809       63,655       2.32  
Wholesale funding
     4,876,970       25,779       2.12       5,950,699       43,207       2.92  
                         
Total interest-bearing liabilities
     18,125,389       70,772       1.57       16,992,508       106,862       2.53  
Noninterest-bearing demand deposits
     2,852,267                       2,451,702                  
Other liabilities
     177,211                       153,400                  
Stockholders’ equity
     2,909,700                       2,377,841                  
 
                                            
Total liabilities and stockholders’ equity
   $ 24,064,567                     $ 21,975,451                  
 
                                            
 
 
                                            
Net interest income and rate spread (1)
           $ 185,288       3.13 %           $ 179,546       3.29 %
 
                                            
Net interest margin (1)
                     3.40 %                     3.65 %
Taxable equivalent adjustment
           $ 6,150                     $ 6,814          
 
                                            
 
(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.