þ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED) |
A. | Full title of the plan and the address of the plan, if different from that of the issuer named below: |
B. | Name of issuer of the securities held pursuant to the plan and the address of its principal executive officer: |
Page(s) | ||||
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4-12 | ||||
13-15 |
2005 | 2004 | |||||||
Assets: |
||||||||
Investments, at fair value: |
||||||||
Common/collective trust funds |
$ | 169,313,476 | $ | 154,413,966 | ||||
Associated Banc-Corp common stock fund |
166,158,334 | 146,561,109 | ||||||
Associated Banc-Corp common stock |
0 | 35,945,323 | ||||||
Mutual funds |
80,646,693 | 62,730,734 | ||||||
Fixed Income Securities |
98,578 | 0 | ||||||
Loans to participants |
1,427,265 | 1,811,079 | ||||||
Total Investments |
417,644,346 | 401,462,211 | ||||||
Cash and cash equivalents |
26,555 | 11,454 | ||||||
Accrued interest, dividends and capital
gains distributions receivable |
1,132,505 | 6,047 | ||||||
Receivable for investments sold |
0 | 26,503,874 | ||||||
Contributions receivable from merged plans |
0 | 561,205 | ||||||
Cash surrender value of life insurance |
171,152 | 193,765 | ||||||
Participant contribution receivable/(payable) |
(1,536 | ) | 162 | |||||
Employer contribution receivable |
11,184,127 | 12,340,411 | ||||||
Net assets available for plan benefits |
$ | 430,157,149 | $ | 441,079,129 | ||||
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2005 | 2004 | |||||||
Additions: |
||||||||
Investment Income: |
||||||||
Net Appreciation in fair value of investments |
$ | 11,200,944 | $ | 39,774,160 | ||||
Interest and dividends |
6,738,004 | 5,122,640 | ||||||
Total investment income |
17,938,948 | 44,896,800 | ||||||
Participant contributions |
12,973,695 | 10,511,581 | ||||||
Employer contributions |
11,194,742 | 12,340,411 | ||||||
Rollover contributions |
2,779,874 | 2,110,565 | ||||||
Other |
8,991 | 1,437 | ||||||
Transfer of Net Assets From merged plans |
0 | 73,777,836 | ||||||
Total additions |
44,896,250 | 143,638,630 | ||||||
Deductions: |
||||||||
Distributions to participants |
54,815,821 | 27,602,431 | ||||||
Insurance premiums |
24,749 | 26,992 | ||||||
Administrative expenses |
977,660 | 825,354 | ||||||
Total deductions |
55,818,230 | 28,454,777 | ||||||
Net increase/(decrease) in net assets available
for plan benefits |
(10,921,980 | ) | 115,183,853 | |||||
Net assets available for plan benefits: |
||||||||
Beginning of year |
441,079,129 | 325,895,276 | ||||||
End of year |
$ | 430,157,149 | $ | 441,079,129 | ||||
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(1) | Description of the Plan | |
The following brief description of the Associated Banc-Corp 401(k) Profit Sharing & Employee Stock Ownership Plan, formerly known as the Associated Banc-Corp Profit Sharing & 401(k) Plan, (the “Plan”) is provided for general information. The Plan contains both profit sharing provisions and 401(k) provisions. Participants should refer to the summary plan description for a more complete description of the Plan’s provisions. | ||
Background | ||
Associated Banc-Corp (the Company) has established the Associated Banc-Corp 401(k) Profit Sharing & Employee Stock Ownership Plan, a defined contribution plan. The profit sharing provisions of the Plan provide for discretionary employer contributions. The 401(k) provisions of the Plan provide for employee contributions complying with the provisions of Internal Revenue Code (Code) Section 401(k) as well as discretionary employer matching contributions. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA). | ||
Plan Mergers | ||
Effective December 31, 2004, all net assets of the First Federal Capital Bank Savings Investment Plan totaling $37,670,510 and the First Federal Capital Bank Employee Stock Ownership Plan totaling $29,365,927 were merged into the Plan. In January 2004 all net assets of CFG Salary Savings Plan and Trust totaling $6,741,399 were transferred into the Plan. | ||
Participants | ||
Employees of the Company and its subsidiaries that have adopted the Plan are eligible to participate in the profit sharing provisions and in the discretionary employer 401(k) contribution provisions of the Plan on January 1 of the year in which 1,000 hours of service are completed. Employees are eligible to participate in the employee 401(k) contribution portion of the Plan upon completion of 30 days employment if they are reasonably expected to complete 1,000 hours of service annually. Otherwise, employees are eligible to participate in the Plan immediately after completing 1,000 hours of service in a Plan year. | ||
Contributions | ||
In conjunction with the 401(k) provisions of the Plan, participants can elect to contribute an amount between 1% and the limitations ($14,000 for 2005 and $13,000 for 2004) of Section 402(g) of the Code of their compensation in multiples of 1% to the Plan by means of regular payroll deductions. Participants who have attained age 50 are eligible to make catch-up contributions in accordance with, and subject to the limitations ($4,000 for 2005 and $3,000 for 2004) of, Code section 414(v). Participants are also allowed to contribute amounts qualifying as rollover contributions under Section 402(c)(4) of the Code. | ||
The Plan provides for a discretionary Company matching contribution equal to a percentage of compensation to match all or part of the employee contribution for plan participants who have met the service requirements. |
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The Plan provides for discretionary Company contributions under the profit sharing provision of the Plan. Such contributions are allocated to each participant’s account based upon total participant’s compensation, as defined by the Plan for the year. | ||
Vesting | ||
Participants are 100% vested at all times in both employee and matching contributions under the 401(k) portion of the Plan. The following is a schedule of vesting in the Company’s discretionary profit sharing contribution: |
Years of Service | Vested Percentage | |||
Less than three |
0 | % | ||
Three but less than four |
50 | % | ||
Four but less than five |
75 | % | ||
Five or more |
100 | % | ||
Forfeitures | ||
Upon termination, the non-vested portion of Company discretionary profit sharing contributions and the earnings thereon become subject to forfeiture. Forfeitures were $1,374,222 and $889,657 in 2005 and 2004, respectively. All forfeitures are used to reduce employer contributions in the next calendar year. Under certain circumstances, the forfeited portion of a participant’s account will be restored if the participant is re-employed by the Company within a five-year period. | ||
Investment of Plan Assets | ||
Participants have the right to direct that investments be made in the Balanced Lifestage Fund, Growth Lifestage Fund, Growth Balanced Lifestage Fund, Conservative Balanced Lifestage Fund, Associated Money Market Account, Intermediate Term Bond Fund, Common Stock Fund, Foreign Equity Fund, Emerging Growth Fund, Equity Income Fund, Associated Banc-Corp Common Stock Fund, Dodge & Cox Stock Fund, EuroPacific Growth Fund, Goldman Sachs Growth Opportunities Fund, Janus Small Cap Value Fund, Growth Fund of America, Vanguard Institutional Index Fund, Weitz Value Fund or a combination of funds. Plan assets are held in trust with a subsidiary of the Company, Associated Trust Company, N.A. (the trustee). The following is a brief description of each fund: | ||
Balanced Lifestage Fund – The fund is designed to put equal emphasis on the pursuit of capital growth through investments in stocks, along with the stability and income generation provided by fixed income securities. Approximately one-half of the portfolio will consist of investment grade bonds with the remaining one-half consisting of a diversified mix of stocks, with an emphasis on large capitalization stocks, but will also include mid-cap, small-cap, and foreign stocks. | ||
Growth Lifestage Fund – The fund is designed to achieve growth of capital through investment in a broadly diversified portfolio of common stocks. The portfolio will emphasize large capitalization |
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stocks, but will also include mid-cap, small-cap, and foreign stocks. | ||
Growth Balanced Lifestage Fund – The fund is designed to seek both long term growth of capital and a modest amount of income and stability through a mix of stocks and bonds. The portfolio will largely emphasize the pursuit of capital growth through investments in large capitalization stocks, but will also include mid-cap, small-cap, and foreign stocks with the remainder primarily consisting of investment grade bonds. | ||
Conservative Balanced Lifestage Fund – The fund is designed to emphasize stability of principal and income through investments in fixed income securities with a smaller emphasis on capital growth through investment stocks. The portfolio will primarily consist of investment grade bonds with the equity portion consisting primarily of large capitalization stocks, but will also include mid-cap, small-cap, and foreign stocks. | ||
Associated Money Market Account – The investment alternative is designed to provide safety of principal through use of a money market account. | ||
Intermediate Term Bond Fund – The fund is designed to earn a competitive total return through diversified investment in high-quality fixed income securities issued by the United States Government, federal agencies, and public corporations, as well as mortgage-backed and asset-backed issues and certificates of deposit. | ||
Common Stock Fund – The fund is designed to achieve long-term growth through investment in large cap companies with good growth prospects. The majority of the assets in this portfolio are included in the S&P 500 Index. | ||
Foreign Equity Fund – The fund is designed to provide exposure to investment opportunities outside the United States. The fund invests primarily in attractively valued foreign common stocks. | ||
Emerging Growth Fund – The fund is designed to maximize long-term stock returns by diversifying stock ownership into numerous industries. The fund invests in equities issued by small capitalization, fast growing, companies. | ||
Equity Income Fund – The fund is designed to pursue growth of capital while providing above average dividend yield. The fund invests in common stocks believed to be undervalued. | ||
Associated Banc-Corp Common Stock Fund – The fund is designed to share in the performance of Associated Banc-Corp. The fund invests in Associated Banc-Corp common stock and cash equivalents. | ||
Dodge & Cox Stock Fund – The fund is designed to pursue long-term growth of principal and income. The Fund intends to remain fully invested in equities with at least 65% of assets in common stocks. | ||
EuroPacific Growth Fund – The fund is designed to pursue long-term growth of capital. The fund |
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invests in at least 80% of assets in equity securities of issuers from Europe and the pacific Basin. | ||
Goldman Sachs Growth Opportunities Institutional Fund – The fund is designed to achieve long-term growth of capital. The fund invests in at least 90% of assets in equity securities with a primary focus on mid-cap companies. | ||
Janus Small Cap Value Fund – The fund is designed to achieve capital appreciation. The fund invests in at least 80% of assets in equity securities of undervalued small companies with market capitalization within the 12-month average of the capitalization range of the Russell 2000 index. | ||
Growth Fund of America – The fund is designed to achieve long-term capital growth. The fund invests primarily in common stocks. | ||
Vanguard Institutional Index Fund – The fund is designed to replicate the aggregate price and yield performance of the S&P 500 Index. The fund invests in all 500 stocks listed in the S&P 500 in approximately the same proportion as they are represented in the Index. | ||
Weitz Value Fund – The fund is designed to achieve capital appreciation by investing primarily in equity securities. The advisor seeks securities trading at prices lower than their intrinsic values. | ||
Participants can elect to invest in one of the aforementioned funds or in 1% increments in two or more funds. Participants can change the allocation of the Plan accounts on a daily basis. | ||
Participant Loans | ||
A participant may request a loan for one or a combination of the following reasons: (a) purchase or preservation of a participant-owned principal residence, (b) education expenses for the participant or their dependent, (c) extensive medical expenses in the participant’s immediate family, or (d) severe financial hardship. Loans are limited to the lesser of (1) $50,000, reduced by the excess of the highest outstanding balance of loans from the Plan during the one-year period ending on the day before the date on which such loan was made over the outstanding balance of loans from the Plan on the date on which such loan was made or (2) 50% of the vested benefit of the participant’s account balance. A participant may not request a loan for less than $1,000. | ||
A commercially reasonable fixed rate of interest will be assessed on the loan with the current rate set at the prime rate offered by Associated Bank, N.A. The loan will provide bi-weekly payments under a level amortization schedule of not greater than 5 years or 15 years if a loan is used to acquire a principal residence. The plan may also hold grandfathered or inherited loans with maturity dates extended beyond the 15 years allowed by the plan document. | ||
Participant Accounts | ||
The Plan is a defined contribution plan under which a separate individual account is established for each participant. Plan investments are valued daily. Due to daily valuation, contributions are |
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allocated to participant accounts upon receipt, and income and changes in asset values are immediately allocated to the participants’ accounts. Under a daily valued plan, participants can verify account balances daily utilizing the VRU (Voice Response Unit) or Internet access. | ||
Distributions | ||
Distributions are made in the form of lump-sum payments or payments over a period in monthly, quarterly, semi-annual or annual installments. Distributions must begin no later than 60 days after the close of the plan year in which the later of the participant’s attainment of age 65 or the termination date occurs, unless the participant elects to delay commencement of the distribution until the April 1 following the attainment of age 70 1/2. Participants may withdraw amounts for any reason upon reaching age 59 1/2. Earnings are credited to a participant’s account through the date of distribution. | ||
Termination of Plan | ||
While the Company has not expressed any intent to terminate the Plan, it is free to do so at any time subject to the provisions of ERISA. In the event of termination, participants become fully vested to the extent of the balance in their account, including investment income through the termination date. | ||
(2) | Summary of Significant Accounting Policies | |
Basis of Presentation | ||
The accompanying financial statements have been prepared on the accrual basis of accounting and present the net assets available for plan benefits and changes in those net assets in accordance with accounting principles generally accepted in the United States of America. |
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(3) | Investments | |
The fair value of investments that represent 5% or more of the Plan’s net assets at December 31 are presented in the following table: |
2005 | 2004 | |||||||
Associated Banc-Corp Common Stock Fund |
$ | 166,158,334 | $ | 146,561,109 | ||||
Associated Banc-Corp Common Stock |
0 | 35,945,323 | ||||||
Associated Trust Company, N.A. Growth Lifestage Fund |
46,874,661 | 45,166,637 | ||||||
Associated Trust Company, N.A. Balanced Lifestage Fund |
45,278,042 | 44,198,035 | ||||||
Associated Trust Company, N.A. Money Market Account |
27,822,646 | 25,489,598 | ||||||
Dodge & Cox Stock Fund |
24,344,212 | 17,740,544 | ||||||
2005 | 2004 | |||||||
Associated Banc-Corp Common
Stock Fund |
$ | (3,795,213 | ) | $ | 20,659,519 | |||
Common/Collective Trust
Funds |
9,660,772 | 12,923,714 | ||||||
Mutual Funds |
5,335,864 | 6,190,927 | ||||||
Fixed Income Securities |
(479 | ) | 0 | |||||
Total |
$ | 11,200,944 | $ | 39,774,160 |
(4) | Transactions with Related Parties | |
The Associated Banc-Corp Common Stock Fund at December 31, 2005 and 2004 included 5,062,370 shares and 4,377,360 shares, respectively, of common stock of the Company with fair values of $164,780,144 and $145,372,126, respectively. Dividend income from Company stock totaled $5,645,416 and $4,264,181 in 2005 and 2004, respectively. Also included in the Associated Banc-Corp Common Stock Fund at December 31, 2005 and 2004 were 1,375,270 units and 1,188,983 units, respectively, of Goldman Sachs Financial Square Prime Obligations Fund with fair values of $1,378,190 and $1,188,983, respectively. Goldman Sachs Financial Square Prime Obligations Fund is an unrelated party. | ||
Associated Trust Company, N.A. performs asset management and participant recordkeeping for the Plan. Asset management and recordkeeping fees paid to Associated Trust Company totaled $908,829 and $798,189 in 2005 and 2004, respectively. |
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The Plan invests in various Associated Trust Company, N.A. common/collective trust funds. As of December 31, 2005 and 2004, $169,313,476 and $154,413,966, respectively, were invested in Associated Trust Company, N.A. common/collective trust funds. | ||
(5) | Benefits Payable | |
The following is a reconciliation of net assets available for plan benefits per the financial statements at December 31, 2005 and 2004 to Form 5500: |
2005 | 2004 | |||||||
Net assets available for plan benefits per the
financial statements |
$ | 430,157,149 | $ | 441,079,129 | ||||
Amounts
allocated to benefit claims payable |
(2,366,284 | ) | (1,631,634 | ) | ||||
Net Assets available for plan benefits per the Form 5500 |
$ | 427,790,865 | $ | 439,447,495 | ||||
2005 | 2004 | |||||||
Benefits paid to participants per the financial statements |
$ | 54,815,821 | $ | 27,602,431 | ||||
Add: Amounts allocated to benefit claims payable at
December 31, 2005 and 2004, respectively |
2,366,284 | 1,631,634 | ||||||
Less: Amounts allocated to benefit claims payable at
December 31, 2004 and 2003, respectively |
(1,631,634 | ) | (1,303,349 | ) | ||||
Benefits paid to participants per Form 5500 |
$ | 55,550,471 | $ | 27,930,716 | ||||
(6) | Income Taxes | |
The Plan administrator has received a favorable tax determination letter, dated July 18, 2002, from the Internal Revenue Service indicating that the Plan qualifies under the provisions of Section 401(a) of the Code, and the related trust is, therefore, exempt from tax under Section 501(a). Therefore, a provision for income taxes has not been included in the Plan’s financial statements. The Plan has been amended since receiving the determination letter. However, in the opinion of the Plan Administrator, the Plan and its underlying trust have operated within the terms of the Plan and remain qualified under the applicable provisions of the Code. | ||
Participants in the Plan are not subject to federal income taxes until they receive a distribution from the Plan. |
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(7) | Subsequent Events | |
On January 26, 2006, the net assets of The State Financial 401(k) Profit Sharing Plan totaling $12,448,495 were transferred into the Plan. |
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Description of investment, | ||||||||
including maturity date, | ||||||||
Identity of issue, borrower, | rate of interest, collateral | Current | ||||||
Lessor, or similar party | par, or maturity value | Value | ||||||
* Associated Trust Company, N.A. Emerging Growth Fund |
465,968 units | $ | 11,270,022 | |||||
* Associated Trust Company, N.A. Common Stock Fund |
61,884 units | 10,040,793 | ||||||
* Associated Trust Company, N.A. Equity Income Fund |
31,948 units | 2,266,898 | ||||||
* Associated Trust Company, N.A. Foreign Equity Fund |
89,494 units | 5,482,273 | ||||||
* Associated Trust Company, N.A. Balanced Lifestage Fund |
3,318,124 units | 45,278,042 | ||||||
* Associated Trust Company, N.A. Growth Balanced Lifestage Fund |
276,584 units | 3,935,718 | ||||||
* Associated Trust Company, N.A. Growth Lifestage Fund |
3,026,500 units | 46,874,661 | ||||||
* Associated Trust Company, N.A. Intermediate Term Bond Fund |
568,316 units | 14,815,523 | ||||||
* Associated Trust Company, N.A. Short Term Bond Fund (Used only in two segregated accounts) |
35,950 units | 613,066 | ||||||
* Associated Trust Company, N.A. Conservative Balanced Lifestage Fund |
74,777 units | 913,834 | ||||||
* Associated Money Market Account (Holding Identified as: Cash Management Fund) |
26,446,478 units | 27,822,646 | ||||||
Total Common/Collective Trust Funds |
$ | 169,313,476 | ||||||
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Description of investment, | ||||||||
including maturity date, | ||||||||
Identity of issue, borrower, | rate of interest, collateral | Current | ||||||
Lessor, or similar party | par, or maturity value | Value | ||||||
* Associated Banc-Corp Common Stock Fund |
2,906,492 units | $ | 166,158,334 | |||||
Dodge & Cox Stock Fund |
177,410 units | $ | 24,344,212 | |||||
Euro Pac Growth Fund |
169,429 units | 6,883,887 | ||||||
Goldman Sachs Growth Opportunity
Institutional Fund |
432,416 units | 9,578,020 | ||||||
Growth Fund of America |
149,049 units | 4,572,830 | ||||||
Janus Small Cap Value Fund |
431,905 units | 12,071,736 | ||||||
Vanguard Institutional Index Fund |
139,548 units | 15,909,841 | ||||||
Weitz Value Fund |
205,708 units | 7,286,167 | ||||||
Total Mutual Funds |
$ | 80,646,693 | ||||||
Federal Home Loan Banks |
10/05/2011 | $ | 49,265 | |||||
(Used only in one segregated account) |
Callable 10/05/2006 @ |
|||||||
par value |
||||||||
5.00% |
||||||||
50,000 par | ||||||||
SLM Corp Medium Term Note (Used only |
1/15/2009 |
24,329 | ||||||
in one segregated account) |
4.00% |
|||||||
25,000 par |
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Description of investment, | ||||||||
including maturity date, | ||||||||
Identity of issue, borrower, | rate of interest, collateral | Current | ||||||
Lessor, or similar party | par, or maturity value | Value | ||||||
UnitedHealth Group Inc Note (Used only in one segregated account) |
1/17/2007 |
24,984 | ||||||
5.20% |
||||||||
25,000 par | ||||||||
Total Fixed Income |
$ | 98,578 | ||||||
Loans to Participants (229 participant loans with interest rates
ranging from 4.00% to 10.50% and
maturity dates ranging from January
10, 2006 to
October 15, 2025) |
$ | 1,427,265 | ||||||
Total Investments |
$ | 417,644,346 | ||||||
Cash Surrender Value: |
||||||||
Penn Mutual Life Insurance Co. |
$ | 67,896 | ||||||
The Guardian Insurance and Annuity Co. |
36,261 | |||||||
General American Life Ins. Co. |
66,995 | |||||||
Total Cash Surrender Value |
$ | 171,152 | ||||||
* | Denotes a party-in-interest |
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ASSOCIATED BANC-CORP | ||||||
401(k) PROFIT SHARING & EMPLOYEE STOCK | ||||||
OWNERSHIP PLAN | ||||||
/s/ Karen L. Garvey | ||||||
Karen L. Garvey, Chairperson | ||||||
Retirement Program Committee | ||||||
Dated: June 29, 2006 |
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