SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
(X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2002
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the transition period from to
----------- -----------
Commission file number 0-5519 (Associated Banc-Corp)
A. Full title of the plan and the address of the plan, if different from that
of the issuer named below:
ASSOCIATED BANC-CORP PROFIT SHARING & 401(k) PLAN
B. Name of issuer of the securities held pursuant to the plan and the address
of its principal executive officer:
ASSOCIATED BANC-CORP
1200 Hansen Road
Green Bay, Wisconsin 54304
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Associated Banc-Corp Retirement Program Committee has duly caused this Annual
Report to be signed on its behalf by the undersigned hereunto duly authorized.
ASSOCIATED BANC-CORP
PROFIT SHARING & 401(k) PLAN
/s/ James A. Noffke
------------------------------------
James A. Noffke, Chairman
Retirement Program Committee
ASSOCIATED BANC-CORP
PROFIT SHARING & 401(k) PLAN
Financial Statements and Schedule
December 31, 2002 and 2001
(With Independent Auditors' Report Thereon)
ASSOCIATED BANC-CORP
PROFIT SHARING & 401(k) PLAN
TABLE OF CONTENTS
Page(s)
- -------------------------------------------------------------------------------
Independent Auditors' Report 1
Statements of Net Assets Available for Plan Benefits,
December 31, 2002 and 2001 2
Statements of Changes in Net Assets Available for Plan Benefits,
Years Ended December 31, 2002 and 2001 3
Notes to Financial Statements 4-11
Schedule H, line 4i - Schedule of Assets (Held at End of Year),
December 31, 2002 12-13
Independent Auditors' Report
The Plan Administrator
Associated Banc-Corp
Profit Sharing & 401(k) Plan:
We have audited the accompanying statements of net assets available for plan
benefits of the Associated Banc-Corp Profit Sharing & 401(k) Plan (Plan) as of
December 31, 2002 and 2001, and the related statements of changes in net assets
available for plan benefits for each of the years in the two year period ended
December 31, 2002. These financial statements are the responsibility of the
Plan's administrator. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by the Plan administrator, as well as evaluating the
overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for plan benefits of the Plan as
of December 31, 2002 and 2001, and the changes in net assets available for plan
benefits for each of the years in the two year period ended December 31, 2002,
in conformity with accounting principles generally accepted in the United States
of America.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental Schedule H, line 4i -
Schedule of Assets (Held at End of Year) is presented for the purpose of
additional analysis and is not a required part of the basic financial
statements, but is supplementary information required by the Department of
Labor's Rules and Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974. The supplemental schedule is the
responsibility of the Plan's administrator. The supplemental schedule has been
subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
/s/KPMG LLP
Chicago, Illinois
June 5, 2003
ASSOCIATED BANC-CORP
PROFIT SHARING & 401(k) PLAN
Statements of Net Assets Available for Plan Benefits
December 31, 2002 and 2001
2002 2001
- --------------------------------------------------------------------------------
Assets:
Investments, at fair value:
Common/collective trust funds $102,889,136 $117,985,785
Common stocks 99,954,166 98,594,263
Mutual funds 21,829,208 14,600,367
Loans to participants 986,811 1,008,842
- --------------------------------------------------------------------------------
Total Investments 225,659,321 232,189,257
Cash and cash equivalents 88,999 147,948
Accrued interest and dividends receivable 25 137
Cash surrender value of life insurance 230,088 246,586
Employer contribution receivable 10,837,143 9,591,312
Other, net 0 28
- --------------------------------------------------------------------------------
Net assets available for plan benefits $236,815,576 $242,175,268
================================================================================
See accompanying notes to financial statements.
ASSOCIATED BANC-CORP
PROFIT SHARING & 401(k) PLAN
Notes to Financial Statements
December 31, 2002 and 2001
Statements of Changes in Net Assets Available for Plan Benefits
Years Ended December 31, 2002 and 2001
2002 2001
- --------------------------------------------------------------------------------
Additions:
Investment Income (loss):
Appreciation (depreciation) in fair value
of investments $(14,087,363) $ 5,420,876
Interest and dividends 3,829,023 3,765,186
- --------------------------------------------------------------------------------
Total investment income (loss) (10,258,340) 9,186,062
Participant contributions 8,082,512 7,108,065
Employer contributions 10,837,143 9,591,312
Rollover contributions 1,526,769 738,340
Other 152 0
- --------------------------------------------------------------------------------
Total additions 10,188,236 26,623,779
Deductions:
Distribution to participants 14,859,492 26,877,762
Insurance premiums 29,448 33,770
Other 0 769
Administrative expenses 658,988 626,159
- --------------------------------------------------------------------------------
Total deductions 15,547,928 27,538,460
Net decrease in net
assets available for plan benefits (5,359,692) (914,681)
Net assets available for plan benefits:
Beginning of year 242,175,268 243,089,949
- --------------------------------------------------------------------------------
End of year $236,815,576 $242,175,268
- --------------------------------------------------------------------------------
See accompanying notes to financial statements.
ASSOCIATED BANC-CORP
PROFIT SHARING & 401(k) PLAN
Notes to Financial Statements
December 31, 2002 and 2001
(1) Description of the Plan
The following brief description of the Associated Banc-Corp Profit Sharing
& 401(k) Plan (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 (Company) has established the Associated Banc-Corp
Profit Sharing & 401(k) 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).
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 ($11,000 for
2002) 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 ($1,000 for 2002) 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.
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.
ASSOCIATED BANC-CORP
PROFIT SHARING & 401(k) PLAN
Notes to Financial Statements
December 31, 2002 and 2001
Vesting
Participants are 100% vested at all times in their benefits 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 contributions and the
earnings thereon become subject to forfeiture. Forfeitures were
approximately $346,500 and $627,000 in 2002 and 2001, respectively. These
forfeitures were allocated to remaining active participants based on
compensation. Under certain circumstances, the forfeited portion of a
participant's account will be restored if the participant is re-employed by
the Company.
Investment of Plan Assets
Participants have the right to direct that investments be made in the
Balanced Lifestage Fund, Growth Lifestage Fund, Money Market Fund,
Intermediate Term Bond Fund, Common Stock Fund, Foreign Equity Fund,
Emerging Growth Fund, Equity Income Fund, Associated Banc-Corp Common Stock
Fund, Berger Small Cap Value Fund, Dodge & Cox Stock Fund, Invesco Dynamics
Fund Investor, Janus Overseas Fund, RS Diversified Growth Fund, Vanguard
500 Index Fund, Weitz Value Fund or a combination of funds. Plan assets are
held in trust with a subsidiary of the Company (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 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 company stocks but including small 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 stocks, but will also include
mid-cap, small-cap, and foreign stocks.
ASSOCIATED BANC-CORP
PROFIT SHARING & 401(k) PLAN
Notes to Financial Statements
December 31, 2002 and 2001
Money Market Fund - The fund is designed to provide safety of principal.
Actual investments made by the trustee are into the Associated Trust
Company, N.A. Cash Management Fund.
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.
Berger Small Cap Value Fund - The fund invests primarily in common stocks
of small companies the Advisor believes are undervalued.
Dodge & Cox Stock Fund - The fund is designed to pursue long-term growth of
principal and income. Fund intends to remain fully invested in equities
with at least 65% of assets in common stocks.
Invesco Dynamics Fund Investor - The fund is designed to pursue capital
appreciation. The fund invests primarily in common stocks of domestic
companies.
Janus Overseas Fund - The fund is designed to achieve long-term growth by
investing in a diversified portfolio of primarily foreign stocks. The fund
seeks fast growing companies in fast growing industries.
RS Diversified Growth Fund - The fund is designed to achieve long-term
capital growth. The fund invests primarily in common and preferred stocks
and warrants.
ASSOCIATED BANC-CORP
PROFIT SHARING & 401(k) PLAN
Notes to Financial Statements
December 31, 2002 and 2001
Vanguard 500 Index Fund - The fund seeks to track the S&P 500 Index as
closely as possible by investing in each of the Index 500 stocks according
to each stock's weighting 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 in the Plan can receive a loan for emergency conditions which
result from medical expenses in the participant's immediate family,
establishing or preserving the home in which the participant resides, or
for the purpose of providing an education for the participant, spouse, and
children of the participant. 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.
Valuation of Plan Assets
Plan assets are valued daily. Under a daily valued plan, participants can
verify account balances daily utilizing the VRU (Voice Response Unit) or
Internet access, contributions are allocated to participant accounts upon
receipt, and income and changes in asset values are immediately updated.
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.
ASSOCIATED BANC-CORP
PROFIT SHARING & 401(k) PLAN
Notes to Financial Statements
December 31, 2002 and 2001
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. The significant
accounting policies of the Plan are as follows:
Investments and Income Recognition
Investment securities are valued at quoted market prices. The investments
in units of the collective trust funds are valued at the amount at which
shares in the funds can be withdrawn, which approximates fair value.
Securities for which no quoted market price is available are valued at
estimated fair value. Short-term investments are stated at cost plus
accrued interest, which approximates fair value. Participant loans are
valued at cost. Plan assets are held with the trustee. Purchases and sales
of securities are recorded on a trade-date basis. Realized gains and losses
on the sale of investments are determined through the use of specific
identification. The Plan's funds record interest income on the accrual
basis and dividends on the ex-dividend date.
The Plan's investments are exposed to various risks, such as interest rate,
market and credit risks. Due to the level of risk associated with certain
investments and the level of uncertainty related to changes in the values
of investments, it is at least reasonably possible that changes in risks in
the near term could materially affect participant account balances and the
amounts reported in the financial statements of the Plan.
Payment of Benefits
Benefits are recorded when paid.
Use of Estimates
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires plan
administrator estimates and assumptions that affect the reported amounts of
assets available for benefits and plan benefit
ASSOCIATED BANC-CORP
PROFIT SHARING & 401(k) PLAN
Notes to Financial Statements
December 31, 2002 and 2001
obligations and disclosure of contingent assets and liabilities at the date
of the financial statements. Actual results could differ from those
estimates.
(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:
2002 2001
-----------------------------------------------------------------------------------------
Associated Banc-Corp Common Stock Fund $99,954,166 $98,594,263
Associated Trust Company, N.A. Balanced Lifestage Fund 30,559,377 0
Associated Trust Company, N.A. Growth Lifestage Fund 26,933,587 0
Associated Trust Company, N.A. Cash Management Fund 21,455,946 18,906,063
Associated Trust Company, N.A. Intermediate Term Bond Fund 16,353,788 12,828,771
Associated Trust Company, N.A. Diversified Stock Fund 0 40,917,044
Associated Trust Company, N.A. Balanced Fund 0 35,645,549
-----------------------------------------------------------------------------------------
During 2002 and 2001, the Plan's investments, including gains and losses on
investments purchased and sold, as well as held during the year,
(depreciated) appreciated in value by $(14,087,363) and $5,420,876
respectively, as follows:
2002 2001
---- ----
Associated Banc-Corp Common Stock $ 5,290,604 $ 15,415,012
Common Trust Funds (13,373,750) (8,445,979)
Mutual Funds (6,004,217) (1,548,157)
------------- ------------
Total $(14,087,363) $ 5,420,876
============= =============
(4) Transactions with Related Parties
The Associated Banc-Corp Common Stock Fund at December 31, 2002 and 2001
included 2,906,742 shares and 2,758,480 shares, respectively, of common
stock of the Company with fair values of $98,654,813 and $97,346,759,
respectively. Dividend income from Company stock totaled $3,543,612 and
$3,623,043 in 2002 and 2001, respectively.
Associated Trust Company, N.A. performs asset management and participant
recordkeeping for the Plan. Asset management and recordkeeping fees totaled
$658,988 and $626,159 in 2002 and 2001, respectively.
ASSOCIATED BANC-CORP
PROFIT SHARING & 401(k) PLAN
Notes to Financial Statements
December 31, 2002 and 2001
The Plan invests in various Associated Trust Company, N.A.
common/collective trust funds. As of December 31, 2002 and 2001,
$102,889,136 and $117,985,785, 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 benefits per
the financial statements at December 31, 2002 and 2001 to Form 5500:
2002 2001
Net assets available for benefits per
the financial statements $236,815,576 $242,175,268
Amounts allocated to withdrawing
participants (584,305) (1,153,829)
-----------------------------
Net Assets available for benefits per
the Form 5500 $236,231,271 $241,021,439
=============================
The following is a reconciliation of benefits paid to participants per the
financial statements for the years ended December 31, 2002 and 2001 to Form
5500:
2002 2001
Benefits paid to participants per the
financial statements $ 14,859,492 $ 26,877,762
Add: Amounts allocated to withdrawing
participants at December 31,
2002 and 2001, respectively 584,305 1,153,829
Less: Amounts allocated to withdrawing
participants at December 31,
2001 and 2000, respectively (1,153,829) (1,848,406)
Benefits paid to participants per
Form 5500 $ 14,289,968 $ 26,183,185
==============================
(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. 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.
ASSOCIATED BANC-CORP
PROFIT SHARING & 401(k) PLAN
Notes to Financial Statements
December 31, 2002 and 2001
(7) Subsequent Events
On January 2, 2003, certain net assets of Signal Financial Corporation
401(k) Profit Sharing Plan totaling $21,818,108 were merged into the Plan.
ASSOCIATED BANC-CORP
PROFIT SHARING & 401(k) PLAN
Schedule H, line 4i - Schedule of Assets (Held at End of Year) December 31, 2002
- -----------------------------------------------------------------------------------------------
Description of investment,
including maturity date,
Identity of issue, borrower, rate of interest, collateral par, Current
Lessor, or similar party or maturity value Value
- -----------------------------------------------------------------------------------------------
* Associated Trust Company, N.A. 38,813 units $ 4,006,490
Common Stock Fund
* Associated Trust Company, N.A. 121,481 units 1,730,793
Emerging Growth Fund
* Associated Trust Company, N.A. Growth 2,810,430 units 26,933,587
Lifestage Fund
* Associated Trust Company, N.A. Balanced 3,031,691 units 30,559,377
Lifestage Fund
* Associated Trust Company, N.A. Equity 14,207 units 714,303
Income Fund
* Associated Trust Company, N.A. Cash 17,543,415 units 21,455,946
Management Fund
* Associated Trust Company, N.A. Foreign 35,975 units 1,134,852
Equity Fund
* Associated Trust Company, N.A. 695,659 units 16,353,788
Intermediate Term Bond Fund
- -----------------------------------------------------------------------------------------------
Total Common Trust Funds $102,889,136
* Associated Banc-Corp Common Stock Fund 2,504,586 units $ 99,954,166
- -----------------------------------------------------------------------------------------------
Total Common Stocks $ 99,954,166
Berger Small Cap Value Fund 178,109 shares $ 4,062,668
Dodge & Cox Stock Fund 55,425 shares 4,880,193
Invesco Dynamics Fund Investor 127,699 shares 1,361,272
ASSOCIATED BANC-CORP
PROFIT SHARING & 401(k) PLAN
Schedule H, line 4i - Schedule of Assets (Held at End of Year) December 31, 2002
- -----------------------------------------------------------------------------------------------
Description of investment,
including maturity date,
Identity of issue, borrower, rate of interest, collateral par, Current
Lessor, or similar party or maturity value Value
- -----------------------------------------------------------------------------------------------
Janus Overseas Fund 72,335 shares 1,105,995
RS Diversified Growth Fund 125,344 shares 1,774,865
Vanguard Index 500 Fund, Inv. Shares 75,543 shares 6,130,291
Weitz Value Fund 90,040 shares 2,513,924
- -----------------------------------------------------------------------------------------------
Total Mutual Funds $ 21,829,208
- -----------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------
Loans to Participants (127 participant
loans with interest rates ranging from
4.25% to 10.50% and maturity dates
ranging from January 24, 2003 to June 30,
2017) $ 986,811
- -----------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------
Total Investments and Loans $225,659,321
Cash Surrender Value:
Penn Mutual Life Insurance Co. $ 127,152
The Guardian Insurance and Annuity Co. 21,241
General American Life Ins. Co. 81,695
- -----------------------------------------------------------------------------------------------
Total Cash Surrender Value $ 230,088
- -----------------------------------------------------------------------------------------------
* Denotes a party-in-interest
See accompanying independent auditors' report.
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors
Associated Banc-Corp:
We consent to incorporation by reference in the registration statement on Form
S-8 of Associated Banc-Corp of our report dated June 5, 2003 relating to the
statements of net assets available for plan benefits of the Associated Banc-Corp
Profit Sharing & 401(k) Plan as of December 31, 2002 and 2001, and the related
statements of changes in net assets available for plan benefits for each of the
years in the two year period ended December 31, 2002, and the Schedule H, line
4i - Schedule of Assets (Held at End of Year) as of December 31, 2002, which
report appears in the December 31, 2002 annual report on Form 11-K of the
Associated Banc-Corp Profit Sharing & 401(k) Plan.
/s/ KPMG LLP
Chicago, Illinois
June 23, 2003
