News Release
CONTACTS:
Investors:
Joe Selner, Chief Financial Officer,
920-491-7120
Media:
Cindy Moon-Mogush, Corporate Communications,
920-431-8034
Associated third quarter earnings per diluted share $.63
* EPS up 11% over 3Q ‘04
* Deposits excluding brokered CDs up 5.7% (annualized) over 2Q ‘05
* Net charge-offs .09% of average loans (annualized)
* Efficiency ratio improves to 47.9%
* Fee income growth continues
GREEN BAY, Wis. — Oct. 20, 2005 — Associated Banc-Corp (NASDAQ: ASBC) earned $.63 per diluted share in the quarter ended Sept. 30, 2005, up 10.5 percent compared to $.57 per diluted share for both the second quarter of 2005 and the third quarter of 2004. For the nine months ended Sept. 30, 2005, diluted earnings per share were $1.79, up 6.5 percent from $1.68 per diluted share in the same period in 2004.
For the third quarter of 2005, return on average assets (ROAA) was 1.56 percent, return on average tangible equity (ROATE) was 24.55 percent and book value per share was $16.12, compared to 1.44 percent, 22.65 percent, and $15.80, respectively, for the second quarter of 2005. Comparatively, for the third quarter of 2004 ROAA was 1.60 percent, ROATE was 21.69 percent, and book value per share was $13.19. For the first nine months of 2005, ROAA was 1.51 percent and ROATE was 23.78 percent, compared to 1.62 percent and 21.98 percent, respectively, for the nine months ended Sept. 30, 2004.
“Noninterest income remained strong in the third quarter. While our net interest income continued to be under pressure from a challenging interest rate environment, we experienced solid growth in commercial and industrial loans and in retail loans. We achieved this growth while maintaining excellent credit quality, and our focus on expense management continues to deliver positive operating leverage,” Associated President and CEO Paul S. Beideman said. Two acquisitions significantly affect comparisons with 2004 periods.
1) Associated’s acquisition of First Federal Capital Corp on Oct. 29, 2004. 2005 results include the balance sheet and operations of the $4 billion thrift, while the comparable 2004 periods do not. First Federal’s operations were successfully integrated onto Associated’s systems in February 2005.
2) The April 1, 2004, acquisition of Jabas Group, Inc., an employee benefits firm, affects the year-to-date comparison of retail commission income and noninterest expenses.
Net income was $81.0 million for the third quarter of 2005. This compares to $74.0 million for the quarter ended June 30, 2005, and $63.4 million for the third quarter of 2004. On a year-to-date basis, net income was $232.5 million, up 24 percent from $187.4 million for the comparable period of 2004.
Associated’s net interest income for the third quarter of 2005 was $164.1 million, compared to $166.7 million for the second quarter of 2005, and $133.2 million in the year-earlier quarter. For the first nine months of 2005, net interest income was $496.7 million, up from $394.2 million for the comparable year-to-date period of 2004.
Net interest margin for the third quarter was 3.56 percent, compared to 3.63 percent for the second quarter of 2005 and 3.76 percent for the third quarter of 2004. On a year-to-date basis, the net interest margin was 3.62 percent, versus 3.79 percent for the comparable period last year.
“Last quarter we indicated that based on our balance sheet dynamics and the current interest rate environment, the margin would compress in the third quarter and then stabilize and show improvement for the fourth quarter of 2005,” said Beideman. “We remain confident that this improvement will occur.
“Additionally, we are undertaking a new initiative that applies cash flows from maturing investments to reduce wholesale borrowings by $1.0 to $1.5 billion over the next 12 months, resulting in further improvement to the margin. We intend to use capital that is freed up from this initiative to buy back shares so that our efforts are accretive to shareholders. A measured approach to reducing borrowed funds affords management the flexibility to respond to changing market conditions and deliver the greatest value for our shareholders,” Beideman explained.
“We experienced growth in most core deposit categories in the third quarter and we see this trend continuing in the fourth quarter. Deposit growth is key to improving our margin and increasing net interest income,” he said.
Period end loans at Sept. 30, 2005, were $14.1 billion, up slightly from June 30, and up 30 percent over a year earlier, including the First Federal acquisition. Since June 30, both home equity loans and commercial and industrial loans grew 16 percent, annualized. Sequential quarter growth in these areas was offset by lower real estate construction and residential mortgage loan balances. Average loan balances for the third quarter of 2005 yielded 6.22 percent, 18 basis points higher than in the second quarter of 2005 and 97 basis points above the year-earlier quarter.
Deposits at Sept. 30, 2005, were $12.2 billion. Deposits, excluding brokered CDs, increased by 5.7 percent, annualized, since June 30, 2005, across most deposit categories. Deposits were up 26 percent over a year earlier, including the acquisition of First Federal. In the third quarter of 2005, average non-brokered interest-bearing deposits cost 2.08 percent, 16 basis points more than in the previous quarter and 70 basis points more than in the year-earlier quarter.
Asset quality remained steady, with third quarter net charge-offs of $3.3 million, compared to net charge-offs of $3.6 million for the second quarter of 2005 and $3.0 million for the third quarter of 2004. For the first nine months of 2005, net charge-offs were $9.0 million (0.09 percent of average loans, annualized), versus $13.7 million (0.17 percent of average loans, annualized) for the first nine months of 2004. The provision for loan losses tracked with the related net charge-off levels for each of the comparative periods, except in the third quarter of 2004 when no provision was recorded. Nonperforming loans at Sept. 30, 2005, were $110.7 million, representing 0.78 percent of loans, compared to $112.5 million or 0.80 percent of loans at June 30, 2005, and 0.84 percent of loans at Sept. 30, 2004. The allowance for loan losses was 1.35 percent of total loans at Sept. 30, 2005.
Noninterest income was $77.0 million for the third quarter of 2005, compared to $61.7 million for the second quarter of 2005, and $47.2 million for the third quarter of 2004, with year-to-date noninterest income at $210.0 million, or 39 percent higher than the same nine-month period in 2004.
Excluding net mortgage banking income and a $6.7 million net loss on derivatives from the second quarter of 2005, noninterest income was $65.0 million for the third quarter of 2005, compared to $66.1 million for the second quarter of 2005 and $46.5 million for the third quarter of 2004. For the nine months ended Sept. 30, 2005, noninterest income excluding net mortgage banking income and the second quarter derivative loss was $192.5 million, or 41 percent higher than $136.9 million for the first nine months of 2004. The derivative instruments that lost hedge accounting treatment were terminated in the third quarter of 2005, which will remove potential earnings volatility in the future.
Net mortgage banking income of $12.0 million for the third quarter of 2005 was $9.6 million higher than in the second quarter of 2005, with an additional $2.6 million in mortgage banking income and $7.0 million from improved value in the mortgage serving rights asset — that is, a $4.5 million valuation recovery in the third quarter, following a $2.5 million provision against the asset in the second quarter.
Service charges on deposit accounts of $22.8 million were up $0.6 million (11 percent annualized) over the second quarter of 2005. Trust service fees were $8.7 million in the third quarter of 2005, compared to $9.0 million in the second quarter of 2005. Retail commissions were $12.9 million, down from $15.4 million in the second quarter of 2005 and up from $11.9 million in the third quarter of 2004, reflecting the seasonality of insurance income.
Noninterest expense was $117.3 million for the third quarter of 2005, compared to $116.3 million for the second quarter of 2005 and $89.0 million for the third quarter of 2004. On a year-to-date basis, noninterest expense was $354.9 million, versus $267.9 million for the comparable nine-month period in 2004, largely due to the timing of the acquisitions mentioned earlier.
Personnel expense for the third quarter of 2005 was $66.4 million, down slightly ($0.5 million) from the second quarter of 2005, notably from lower severance costs following branch staffing reductions and back office efficiencies. All other noninterest expenses were $50.9 million, up $1.5 million or 3 percent over $49.4 million for the second quarter of 2005.
The efficiency ratio moved favorably, declining to 47.90 percent from 50.03 percent between the third and second quarters of 2005, and was 49.20 percent for the first nine months of 2005.
We anticipate we will meet consensus earnings estimates for 2005, based on our current trends and planned strategies,” Beideman added.
Associated closed its acquisition of State Financial Services Corp, a $1.5 billion financial services company based in Milwaukee, on Oct. 3, 2005.
During the third quarter, the company paid a dividend of 27 cents per share, up 8 percent from the year-earlier dividend.
Associated did not repurchase any shares during the third quarter. Year-to-date repurchases remain at 2.5 million shares at an average price of $33.05 per share, including 2 million shares repurchased in the second quarter under an accelerated share repurchase program.
Associated will host a conference call for investors and analysts at 3 p.m. CDT today. The toll-free dial-in number is 877-654-5513. Participants should ask the operator for the Associated Banc-Corp earnings call, or for call ID number 1466121. A taped play back of the call will be available through Oct. 28 by calling 800-642-1687.
Associated Banc-Corp, headquartered in Green Bay, Wis., is a diversified multibank holding company with total assets of $21 billion. With the acquisition of State Financial, Associated has more than 320 banking offices serving more than 170 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 to be filed on Form 10-K.
Six pages of tables attached.
Consolidated Balance Sheets (Unaudited)
Associated Banc-Corp
September 30, December 31, September 30,
(in thousands) 2005 2004 % Change 2004 % Change
- ---------------------------------------------------------------------------------------------------------------------
Assets
Cash and due from banks $ 386,151 $ 389,311 (0.8%) $ 286,799 34.6%
Interest-bearing deposits in other
financial institutions 14,598 13,321 9.6% 10,381 40.6%
Federal funds sold and securities purchased
under agreements to resell 103,481 55,440 86.7% 63,105 64.0%
Securities available for sale, at fair value 4,708,730 4,815,344 (2.2%) 4,166,760 13.0%
Loans held for sale 98,473 64,964 51.6% 72,266 36.3%
Loans 14,107,137 13,881,887 1.6% 10,830,627 30.3%
Allowance for loan losses (190,080) (189,762) 0.2% (175,007) 8.6%
--------------------------------- -----------------
Loans, net 13,917,057 13,692,125 1.6% 10,655,620 30.6%
Premises and equipment 174,086 184,944 (5.9%) 131,288 32.6%
Goodwill 679,993 679,993 0.0% 232,564 192.4%
Intangible assets 115,692 119,440 (3.1%) 69,863 65.6%
Other assets 543,470 505,254 7.6% 447,115 21.6%
--------------------------------- -----------------
Total assets $20,741,731 $20,520,136 1.1% $16,135,761 28.5%
================================= =================
Liabilities and Stockholders’ Equity
Noninterest-bearing deposits $ 2,256,774 $ 2,347,611 (3.9%) $ 1,867,905 20.8%
Interest-bearing deposits, excluding
Brokered CDs 9,516,792 10,077,069 (5.6%) 7,623,042 24.8%
Brokered CDs 407,459 361,559 12.7% 186,326 118.7%
--------------------------------- -----------------
Total deposits 12,181,025 12,786,239 (4.7%) 9,677,273 25.9%
Short-term borrowings 2,778,993 2,926,716 (5.0%) 2,956,626 (6.0%)
Long-term funding 3,545,458 2,604,540 36.1% 1,911,797 85.5%
Accrued expenses and other liabilities 173,690 185,222 (6.2%) 136,600 27.2%
--------------------------------- -----------------
Total liabilities 18,679,166 18,502,717 1.0% 14,682,296 27.2%
Stockholders' Equity
Preferred stock - - -
Common stock 1,281 1,300 (1.5%) 1,105 15.9%
Surplus 1,064,833 1,127,205 (5.5%) 585,274 81.9%
Retained earnings 978,489 858,847 13.9% 824,909 18.6%
Accumulated other comprehensive income 21,776 41,205 (47.2%)49,265 (55.8%)
Deferred compensation (3,814) (2,122) 79.7% (1,981) 92.5%
Treasury stock, at cost - (9,016) (100.0%) (5,107) (100.0%)
--------------------------------- -----------------
Total stockholders' equity 2,062,565 2,017,419 2.2% 1,453,465 41.9%
--------------------------------- -----------------
Total liabilities and stockholders' equity $ 20,741,731 $ 20,520,136 1.1% $ 16,135,761 28.5%
================================= =================
Consolidated Statements of Income (Unaudited)
Associated Banc-Corp
For The Three Months Ended, For The Nine Months Ended,
September 30, September 30,
--------------------------------- -------------------------------
(in thousands, except per share amounts) 2005 2004 % Change 2005 2004 % Change
- -------------------------------------------------------------------------------------------------------------------------------------
Interest Income
Interest and fees on loans $223,202 $142,389 56.8% $636,931 $415,090 53.4%
Interest and dividends on investment securities
and deposits with other financial institutions
Taxable 40,050 31,590 26.8% 122,918 93,389 31.6%
Tax-exempt 9,755 10,255 (4.9%) 28,985 30,757 (5.8%)
Interest on federal funds sold and securities
purchased under agreements to resell 384 241 59.3% 648 336 92.9%
--------------------------------- -------------------------------
Total interest income 273,391 184,475 48.2% 789,482 539,572 46.3%
Interest Expense
Interest on deposits 53,598 27,191 97.1% 146,118 81,401 79.5%
Interest on short-term borrowings 23,628 10,262 130.2% 62,528 24,042 160.1%
Interest on long-term funding 32,087 13,806 132.4% 84,176 39,959 110.7%
--------------------------------- -------------------------------
Total interest expense 109,313 51,259 113.3% 292,822 145,402 101.4%
--------------------------------- -------------------------------
Net Interest Income 164,078 133,216 23.2% 496,660 394,170 26.0%
Provision for loan losses 3,345 - N/M 9,343 11,065 (15.6%)
--------------------------------- -------------------------------
Net interest income after provision for
loan losses 160,733 133,216 20.7% 487,317 383,105 27.2%
Noninterest Income
Trust service fees 8,667 7,773 11.5% 25,962 23,684 9.6%
Service charges on deposit accounts 22,830 13,672 67.0% 63,710 39,210 62.5%
Mortgage banking, net 12,000 618 N/M 24,260 14,285 69.8%
Credit card and other nondeposit fees 9,505 6,253 52.0% 27,406 17,998 52.3%
Retail commissions 12,905 11,925 8.2% 42,980 34,444 24.8%
Bank owned life insurance income 2,441 3,580 (31.8%) 6,920 10,576 (34.6%)
Asset sale gains, net 942 309 N/M 1,179 749 N/M
Investment securities gains (losses), net 1,446 (6) N/M 2,937 1,356 N/M
Other 6,229 3,034 105.3% 14,688 8,908 64.9%
--------------------------------- -------------------------------
Total noninterest income 76,965 47,158 63.2% 210,042 151,210 38.9%
Noninterest Expense
Personnel expense 66,403 53,467 24.2% 206,322 159,355 29.5%
Occupancy 9,412 6,939 35.6% 28,674 21,275 34.8%
Equipment 4,199 3,022 38.9% 12,431 8,899 39.7%
Data processing 7,129 5,865 21.6% 20,150 17,666 14.1%
Business development and advertising 4,570 3,990 14.5% 12,662 10,704 18.3%
Stationery and supplies 1,599 1,214 31.7% 5,087 3,869 31.5%
Other intangible amortization 1,903 935 103.5% 6,189 2,651 133.5%
Other 22,133 13,599 62.8% 63,409 43,483 45.8%
--------------------------------- -------------------------------
Total noninterest expense 117,348 89,031 31.8% 354,924 267,902 32.5%
--------------------------------- -------------------------------
Income before income taxes 120,350 91,343 31.8% 342,435 266,413 28.5%
Income tax expense 39,315 27,977 40.5% 109,915 78,982 39.2%
--------------------------------- -------------------------------
Net Income $81,035 $63,366 27.9% $232,520 $187,431 24.1%
================================= ===============================
Earnings Per Share:
Basic $0.63 $0.58 8.6% $1.80 $1.70 5.9%
Diluted $0.63 $0.57 10.5% $1.79 $1.68 6.5%
Average Shares Outstanding:
Basic 127,875 110,137 16.1% 128,825 110,182 16.9%
Diluted 129,346 111,699 15.8% 130,252 111,614 16.7%
N/M - Not meaningful.
Consolidated Statements of Income (Unaudited) - Quarterly Trend
Associated Banc-Corp
(in thousands, except per share amounts) 3Q05 2Q05 1Q05 4Q04 3Q04
- ---------------------------------------------------------------------------------------------------------------
Interest Income
Interest and fees on loans $223,202 $213,420 $200,309 $179,612 $142,389
Interest and dividends on investment securities
and deposits in other financial institutions:
Taxable 40,050 41,834 41,034 37,631 31,590
Tax-exempt 9,755 9,507 9,723 10,047 10,255
Interest on federal funds sold and securities
purchased under agreements to resell 384 182 82 260 241
----------------------------------------------------------------
Total interest income 273,391 264,943 251,148 227,550 184,475
Interest Expense
Interest on deposits 53,598 48,087 44,433 36,835 27,191
Interest on short-term borrowings 23,628 21,731 17,169 14,898 10,262
Interest on long-term funding 32,087 28,451 23,638 17,360 13,806
----------------------------------------------------------------
Total interest expense 109,313 98,269 85,240 69,093 51,259
----------------------------------------------------------------
Net Interest Income 164,078 166,674 165,908 158,457 133,216
Provision for loan losses 3,345 3,671 2,327 3,603 -
----------------------------------------------------------------
Net interest income after provision for
loan losses 160,733 163,003 163,581 154,854 133,216
Noninterest Income
Trust service fees 8,667 8,967 8,328 8,107 7,773
Service charges on deposit accounts 22,830 22,215 18,665 16,943 13,672
Mortgage banking, net 12,000 2,376 9,884 6,046 618
Credit card and other nondeposit fees 9,505 8,790 9,111 8,183 6,253
Retail commissions 12,905 15,370 14,705 12,727 11,925
Bank owned life insurance income 2,441 2,311 2,168 2,525 3,580
Asset sale gains (losses), net 942 539 (302) 432 309
Investment securities gains (losses), net 1,446 1,491 - (719) (6)
Other 6,229 (355) 8,814 4,793 3,034
----------------------------------------------------------------
Total noninterest income 76,965 61,704 71,373 59,037 47,158
Noninterest Expense
Personnel expense 66,403 66,934 72,985 65,193 53,467
Occupancy 9,412 9,374 9,888 8,297 6,939
Equipment 4,199 4,214 4,018 3,855 3,022
Data processing 7,129 6,728 6,293 5,966 5,865
Business development and advertising 4,570 4,153 3,939 4,271 3,990
Stationery and supplies 1,599 1,644 1,844 1,567 1,214
Other intangible amortization 1,903 2,292 1,994 1,699 935
Other 22,133 20,995 20,281 19,119 13,599
----------------------------------------------------------------
Total noninterest expense 117,348 116,334 121,242 109,967 89,031
----------------------------------------------------------------
Income before income taxes 120,350 108,373 113,712 103,924 91,343
Income tax expense 39,315 34,358 36,242 33,069 27,977
----------------------------------------------------------------
Net Income $81,035 $ 74,015 $ 77,470 $ 70,855 $ 63,366
================================================================
Earnings Per Share:
Basic $0.63 $0.57 $0.60 $0.57 $0.58
Diluted $0.63 $0.57 $0.59 $0.57 $0.57
Average Shares Outstanding:
Basic 127,875 128,990 129,781 123,509 110,137
Diluted 129,346 130,463 131,358 125,296 111,699
Selected Quarterly Information
Associated Banc-Corp
(in thousands, except per share & full time equivalent employee data) YTD 2005 YTD 2004 3rd Qtr 2005 2nd Qtr 2005 1st Qtr 2005 4th Qtr 2004 3rd Qtr 2004
- ---------------------------------------------------------------------------------------------------------------------------------------------------------------------
Summary of Operations
Net interest income 496,660 394,170 164,078 166,674 165,908 158,457 133,216
Provision for loan losses 9,343 11,065 3,345 3,671 2,327 3,603 -
Asset sale gains (losses), net 1,179 749 942 539 (302) 432 309
Investment securities gains (losses), net 2,937 1,356 1,446 1,491 - (719) (6)
Noninterest income (excluding securities & asset gains) 205,926 149,105 74,577 59,674 71,675 59,324 46,855
Noninterest expense 354,924 267,902 117,348 116,334 121,242 109,967 89,031
Income before income taxes 342,435 266,413 120,350 108,373 113,712 103,924 91,343
Income taxes 109,915 78,982 39,315 34,358 36,242 33,069 27,977
Net income 232,520 187,431 81,035 74,015 77,470 70,855 63,366
Taxable equivalent adjustment 18,743 19,186 6,347 6,174 6,222 6,342 6,395
- ---------------------------------------------------------------------------------------------------------------------------------------------------------------------
Per Common Share Data (1)
Net income:
Basic $1.80 $1.70 $0.63 $0.57 $0.60 $0.57 $0.58
Diluted 1.79 1.68 0.63 0.57 0.59 0.57 0.57
Dividends 0.7900 0.7267 0.2700 0.2700 0.2500 0.2500 0.2500
Market Value:
High $34.74 $32.19 $34.74 $33.89 $33.50 $34.85 $32.19
Low 30.11 27.09 30.29 30.11 30.60 32.08 28.81
Close 30.48 32.07 30.48 33.58 31.23 33.23 32.07
Book value 16.12 13.19 16.12 15.80 15.62 15.56 13.19
- ---------------------------------------------------------------------------------------------------------------------------------------------------------------------
Performance Ratios (annualized)
Earning assets yield 5.68% 5.12% 5.83% 5.71% 5.51% 5.31% 5.14%
Interest-bearing liabilities rate 2.40 1.58 2.66 2.42 2.13 1.85 1.64
Net interest margin 3.62 3.79 3.56 3.63 3.68 3.74 3.76
Return on average assets 1.51 1.62 1.56 1.44 1.54 1.49 1.60
Return on average equity 15.33 18.00 15.85 14.62 15.52 15.46 17.76
Return on tangible average equity (2) 23.78 21.98 24.55 22.65 24.13 22.47 21.69
Efficiency ratio (3) 49.20 47.63 47.90 50.03 49.73 49.07 47.75
Effective tax rate 32.10 29.65 32.67 31.70 31.87 31.82 30.63
Dividend payout ratio (4) 43.89 42.75 42.86 47.37 41.67 43.86 43.10
- ---------------------------------------------------------------------------------------------------------------------------------------------------------------------
Average Balances
Assets $20,550,636 $15,495,898 $20,607,901 $20,574,770 $20,467,698 $18,956,445 $15,730,451
Earning assets 18,878,583 14,452,594 18,960,035 18,916,921 18,756,555 17,437,618 14,688,914
Interest-bearing liabilities 16,181,956 12,232,593 16,198,492 16,207,719 16,139,002 14,761,878 12,381,407
Loans 14,075,913 10,609,581 14,163,827 14,084,246 13,977,621 12,858,394 10,708,701
Deposits 12,186,667 9,636,138 12,133,719 12,069,719 12,359,040 11,658,646 9,621,557
Stockholders' equity 2,027,672 1,391,116 2,027,785 2,030,929 2,024,265 1,822,715 1,419,600
Stockholders' equity / assets 9.87% 8.98% 9.84% 9.87% 9.89% 9.62% 9.02%
- ---------------------------------------------------------------------------------------------------------------------------------------------------------------------
At Period End
Assets $20,741,731 $20,753,714 $20,502,442 $20,520,136 $16,135,761
Loans 14,107,137 14,054,506 13,923,196 13,881,887 10,830,627
Allowance for loan losses 190,080 190,024 189,917 189,762 175,007
Goodwill 679,993 679,993 679,993 679,993 232,564
Mortgage servicing rights, net 78,688 74,103 78,182 76,247 45,555
Other intangible assets 37,004 38,907 41,199 43,193 24,308
Deposits 12,181,025 12,098,631 12,193,904 12,786,239 9,677,273
Stockholders' equity 2,062,565 2,018,435 2,025,071 2,017,419 1,453,465
Stockholders' equity / assets 9.94% 9.73% 9.88% 9.83% 9.01%
Tangible equity / tangible assets (5) 6.72% 6.49% 6.59% 6.54% 7.54%
Shares outstanding, end of period 127,985 127,743 129,622 129,695 110,206
Shares repurchased during period - 2,111 411 376 -
Average per share cost of shares repurchased during period $- $33.10 $32.76 $33.25 $-
Year-to-date shares repurchased during period 2,522 2,522 411 1,073 697
YTD average per share cost of shares repurchased during period $33.05 $33.05 $32.76 $30.43 $28.91
- ---------------------------------------------------------------------------------------------------------------------------------------------------------------------
Selected trend information
Average full time equivalent employees 4,815 4,889 5,132 4,746 3,979
Trust assets under management, at market value $4,900,000 $4,800,000 $4,700,000 $4,600,000 $4,400,000
Mortgage loans originated for sale 498,343 385,677 337,406 427,951 253,917
Portfolio serviced for others 9,492,000 9,479,000 9,528,000 9,543,000 6,011,000
Mortgage servicing rights, net / Portfolio serviced for others 0.83% 0.78% 0.82% 0.80% 0.76%
- ---------------------------------------------------------------------------------------------------------------------------------------------------------------------
(1) Per share data adjusted retroactively for stock splits and stock dividends.
(2) Return on tangible average equity = Net income divided by average equity excluding average goodwill and other intangible assets. This is a non-GAAP financial
measure.
(3) 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.
(4) Ratio is based upon basic earnings per share.
(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 Nine months ended
September 30, September 30,
--------------------------------------------------------------------------------------------
(in thousands) 2005 2004 % Change 2005 2004 % Change
- --------------------------------------------------------------------------------------------------------------------------------------------
Allowance for Loan Losses
Beginning balance $190,024 $177,980 6.8% $189,762 $177,622 6.8%
Provision for loan losses 3,345 - N/M 9,343 11,065 (15.6%)
Charge offs (5,268) (3,770) 39.7% (16,601) (16,492) 0.7%
Recoveries 1,979 797 148.3% 7,576 2,812 169.4%
-------------------------------- -------------------------------
Net charge offs (3,289) (2,973) 10.6% (9,025) (13,680) (34.0%)
-------------------------------- -------------------------------
Ending Balance $190,080 $175,007 8.6% $190,080 $175,007 8.6%
================================ ===============================
- -----------------------------------------------------------------------------------------------------------------------------------------------------------
Credit Quality 3Q05 vs 2Q05 3Q05 vs 3Q04
Sept 30, 2005 June 30, 2005 % Change Mar 31, 2005 Dec 31, 2004 Sept 30, 2004 % Change
-----------------------------------------------------------------------------------------------------------
Nonaccrual loans $107,298 $109,698 (2.2%) $ 99,835 $112,761 $ 81,124 32.3%
Loans 90 or more days past due and still
accruing 3,354 2,806 19.5% 3,068 2,153 10,309 (67.5%)
Restructured loans 33 35 (5.7%) 36 37 39 (15.4%)
-------------------------------- ----------------------------------------------
Total nonperforming loans 110,685 112,539 (1.6%) 102,939 114,951 91,472 21.0%
Other real estate owned 10,017 3,685 171.8% 4,019 3,915 4,526 121.3%
-------------------------------- ----------------------------------------------
Total nonperforming assets 120,702 116,224 3.9% 106,958 118,866 95,998 25.7%
================================ ==============================================
Provision for loan losses 3,345 3,671 (8.9%) 2,327 3,603 - N/M
Net charge offs 3,289 3,564 (7.7%) 2,172 3,598 2,973 10.6%
Allowance for loan losses / loans 1.35% 1.35% 1.36% 1.37% 1.62%
Allowance for loan losses / nonperforming loans 171.73 168.85 184.49 165.08 191.32
Nonperforming loans / total loans 0.78 0.80 0.74 0.83 0.84
Nonperforming assets / total assets 0.58 0.56 0.52 0.58 0.59
Net charge offs / average loans (annualized) 0.09 0.10 0.06 0.11 0.11
Year-to-date net charge offs / average loans 0.09 0.08 0.06 0.15 0.17
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Period End Loan Composition 3Q05 vs 2Q05 3Q05 vs 3Q04
Sept 30, 2005 June 30, 2005 % Change Mar 31, 2005 Dec 31, 2004 Sept 30, 2004 % Change
-----------------------------------------------------------------------------------------------------------
Commercial, financial & agricultural $3,213,656 $3,086,663 4.1% $2,852,462 $2,803,333 $2,479,764 29.6%
Real estate - construction 1,519,681 1,640,941 (7.4%) 1,569,013 1,459,629 1,152,990 31.8%
Commercial real estate 3,648,169 3,650,726 (0.1%) 3,813,465 3,933,131 3,242,009 12.5%
Lease financing 57,270 53,270 7.5% 50,181 50,718 49,423 15.9%
-------------------------------- ----------------------------------------------
Commercial 8,438,776 8,431,600 0.1% 8,285,121 8,246,811 6,924,186 21.9%
Home equity (a) 1,878,436 1,806,236 4.0% 1,744,676 1,866,485 1,290,436 45.6%
Installment 1,024,356 1,025,621 (0.1%) 1,048,510 1,054,011 672,806 52.3%
-------------------------------- ----------------------------------------------
Retail 2,902,792 2,831,857 2.5% 2,793,186 2,920,496 1,963,242 47.9%
Residential mortgage 2,765,569 2,791,049 (0.9%) 2,844,889 2,714,580 1,943,199 42.3%
-------------------------------- ----------------------------------------------
Total loans $14,107,137 $14,054,506 0.4% $13,923,196 $13,881,887 $10,830,627 30.3%
================================ ==============================================
(a) Home equity includes home equity lines and residential mortgage junior liens.
Period End Deposit Composition 3Q05 vs 2Q05 3Q05 vs 3Q04
Sept 30, 2005 June 30, 2005 % Change Mar 31, 2005 Dec 31, 2004 Sept 30, 2004 % Change
---------------------------------------------------------------------------------------------------------
Demand $2,256,774 $2,250,482 0.3% $2,156,592 $2,347,611 $1,867,905 20.8%
Savings 1,074,234 1,117,922 (3.9%) 1,137,120 1,116,158 936,975 14.6%
Interest-bearing demand 2,252,711 2,227,188 1.1% 2,485,548 2,854,880 2,334,072 (3.5%)
Money market 2,240,606 2,094,796 7.0% 2,112,490 2,083,717 1,516,423 47.8%
Brokered CDs 407,459 491,781 (17.1%) 218,111 361,559 186,326 118.7%
Other time deposits 3,949,241 3,916,462 0.8% 4,084,043 4,022,314 2,835,572 39.3%
-------------------------------- -----------------------------------------------
Total deposits $12,181,025 $12,098,631 0.7% $12,193,904 $12,786,239 $9,677,273 25.9%
================================ ===============================================
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N/M - Not meaningful.
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Net Interest Income Analysis - Taxable
Equivalent Basis
Associated Banc-Corp Nine months ended September 30, 2005 Nine months ended September 30, 2004
---------------------------------------------------------------------------------------------------
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 $8,356,785 $375,704 5.93% $6,668,508 $246,765 4.86%
Residential mortgage 2,865,319 119,614 5.56 2,042,406 86,403 5.63
Retail 2,853,809 142,965 6.68 1,898,667 82,655 5.81
------------------------------------ -----------------------------------
Total loans 14,075,913 638,283 6.01 10,609,581 415,823 5.18
Investments and other 4,802,670 169,942 4.72 3,843,013 142,935 4.96
------------------------------------ -----------------------------------
Total earning assets 18,878,583 808,225 5.68 14,452,594 558,758 5.12
Other assets, net 1,672,053 1,043,304
---------------- ---------------
Total assets $20,550,636 $15,495,898
================ ===============
Interest-bearing liabilities:
Savings deposits $1,116,871 $3,077 0.37% $927,876 $2,528 0.36%
Interest-bearing demand deposits 2,380,397 19,530 1.10 2,366,312 14,186 0.80
Money market deposits 2,140,763 28,505 1.78 1,530,856 9,247 0.81
Time deposits, excluding Brokered CDs 3,996,324 86,545 2.90 2,844,147 53,227 2.50
------------------------------------ -----------------------------------
Total interest-bearing deposits, 9,634,355 137,657 1.91 7,669,191 79,188 1.38
excluding Brokered CDs
Brokered CDs 364,381 8,461 3.10 216,371 2,213 1.37
------------------------------------ -----------------------------------
Total interest-bearing deposits 9,998,736 146,118 1.95 7,885,562 81,401 1.38
Wholesale funding 6,183,220 146,704 3.13 4,347,031 64,001 1.94
------------------------------------ -----------------------------------
Total interest-bearing liabilities 16,181,956 292,822 2.40 12,232,593 145,402 1.58
Noninterest-bearing demand 2,187,931 1,750,576
Other liabilities 153,077 121,613
Stockholders' equity 2,027,672 1,391,116
---------------- ---------------
Total liabilities and stockholders'
equity $20,550,636 $15,495,898
================ ===============
--------------------- ---------------------
Net interest income and rate spread (1) $515,403 3.28% $413,356 3.54%
===================== =====================
Net interest margin (1) 3.62% 3.79%
Taxable equivalent adjustment $ 18,743 $ 19,186
===================== =====================
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Three months ended September 30, 2005 Three months ended September 30, 2004
---------------------------------------------------------------------------------------------------
Average Interest Average Average Interest Average
Balance Income / Expense Yield / Rate Balance Income / Expense Yield / Rate
---------------------------------------------------------------------------------------------------
Earning assets:
Loans: (1) (2) (3)
Commercial $8,411,678 $134,503 6.26% $6,787,476 $ 85,971 4.96%
Residential mortgage 2,880,685 40,253 5.56 1,982,929 27,993 5.62
Retail 2,871,464 48,940 6.78 1,938,296 28,668 5.88
------------------------------------ -----------------------------------
Total loans 14,163,827 223,696 6.22 10,708,701 142,632 5.25
Investments and other 4,796,208 56,042 4.67 3,980,213 48,238 4.85
------------------------------------ -----------------------------------
Total earning assets 18,960,035 279,738 5.83 14,688,914 190,870 5.14
Other assets, net 1,647,866 1,041,537
---------------- ---------------
Total assets $20,607,901 $15,730,451
================ ===============
Interest-bearing liabilities:
Savings deposits $1,097,955 $1,024 0.37% $945,881 $844 0.35%
Interest-bearing demand deposits 2,193,600 6,107 1.10 2,338,492 4,615 0.79
Money market deposits 2,198,538 11,822 2.13 1,516,812 3,294 0.86
Time deposits, excluding Brokered CDs 3,913,389 30,395 3.08 2,771,249 17,488 2.51
------------------------------------ -----------------------------------
Total interest-bearing deposits, 9,403,482 49,348 2.08 7,572,434 26,241 1.38
excluding Brokered CDs
Brokered CDs 487,305 4,250 3.46 235,844 950 1.60
------------------------------------ -----------------------------------
Total interest-bearing deposits 9,890,787 53,598 2.15 7,808,278 27,191 1.39
Wholesale funding 6,307,705 55,715 3.47 4,573,129 24,068 2.07
------------------------------------ -----------------------------------
Total interest-bearing liabilities 16,198,492 109,313 2.66 12,381,407 51,259 1.64
Noninterest-bearing demand 2,242,932 1,813,279
Other liabilities 138,692 116,165
Stockholders' equity 2,027,785 1,419,600
---------------- ---------------
Total liabilities and stockholders'
equity $20,607,901 $15,730,451
================ ===============
--------------------- ---------------------
Net interest income and rate spread (1) $170,425 3.17% $139,611 3.50%
===================== =====================
Net interest margin (1) 3.56% 3.76%
Taxable equivalent adjustment $6,347 $6,395
===================== =====================
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(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.
