Exhibit 99.1
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| NEWS RELEASE Investor Contact: Robb Timme, Vice President, Investor Relations 920-491-7059 Media Contact: Jennifer Kaminski, Vice President, Public Relations Senior Manager 920-491-7576 |
Associated Banc-Corp Reports Third Quarter Earnings of $0.48 Per Common Share, or $0.49 Per Common Share Excluding $3 million in Acquisition Related Costs1
Earnings per share up 17% from the prior year
GREEN BAY, Wis. -- October 18, 2018 -- Associated Banc-Corp (NYSE: ASB) ("Associated" or "Company") today reported net income available to common equity ("earnings") of $84 million, or $0.48 per common share for the quarter ended September 30, 2018. This compares to net income available to common equity of $63 million, or $0.41 per common share for the quarter ended September 30, 2017.
“Associated's customer deposit franchise continues to be strong. Data recently released by the FDIC shows that we grew our deposits 14% in Illinois and maintained our #3 ranking in Wisconsin with nearly 11% market share. Additionally, during the third quarter we saw robust deposit inflows from our municipal customers which allowed us to further reduce our higher cost network deposits." said President and CEO Philip B. Flynn. "We are also pleased with our year over year EPS growth. Our commercial and business lending portfolios had solid results and we continued to benefit from a benign credit environment that allowed us to further reduce our provision for credit loss."
THIRD QUARTER 2018 SUMMARY (all comparisons to the third quarter of 2017)
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| • | Average loans of $23.0 billion were up 10%, or $2.1 billion |
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| • | Average deposits of $24.7 billion were up 10%, or $2.3 billion |
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| • | Net interest income of $219 million increased $29 million, or 15% |
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| • | Net interest margin of 2.92% improved 8 basis points from 2.84% |
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| • | Provision for credit losses was negative $5 million, down from $5 million |
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| • | Noninterest income of $88 million was up $2 million, or 3% |
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| • | Noninterest expense of $204 million was up $27 million and included $2 million of acquisition related expenses |
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| • | Income before income taxes was up 16%, or $15 million |
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| • | During the quarter, the Company repurchased approximately 4 million shares, or $118 million, of common stock |
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| • | Total dividends paid per common share were $0.15, up 25% |
1This is a non-GAAP financial measure. Management believes these measures are meaningful because they reflect adjustments commonly made by management, investors, regulators, and analysts to evaluate the adequacy of earnings per common share, provide greater understanding of ongoing operations and enhance comparability of results with prior periods. See page 10 of the attached tables for a reconciliation of GAAP financial measures to non-GAAP financial measures which exclude acquisition related costs.
Loans
Third quarter 2018 average loans of $23.0 billion were up 10%, or $2.1 billion from the third quarter of 2017, and were essentially unchanged from the second quarter of 2018.
With respect to third quarter 2018 average balances by loan category:
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| • | Consumer lending increased $1.0 billion from the year ago quarter, and grew $12 million from the second quarter of 2018 to $9.6 billion. |
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| • | Commercial and business lending increased $620 million from the year ago quarter and increased $242 million from the second quarter of 2018 to $7.9 billion. C&I loan growth was spread across all specialized lines of business and in the general commercial portfolio. |
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| • | Commercial real estate lending increased $447 million from the third quarter of 2017, but decreased $285 million from the second quarter of 2018 to $5.4 billion. |
Deposits
Third quarter 2018 average deposits of $24.7 billion were up $2.3 billion, or 10% from the year ago quarter, and were up $1.0 billion compared to the second quarter of 2018 due to seasonal inflows from municipal customers.
With respect to third quarter 2018 average balances by deposit category:
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| • | Interest-bearing demand deposits increased $995 million from the year ago quarter and increased $253 million from the second quarter of 2018 to $5.0 billion. |
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| • | Money market deposits increased $929 million from the year ago quarter and increased $356 million from the second quarter of 2018 to $7.5 billion. |
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| • | Time deposits increased $790 million from the year ago quarter and increased $413 million from the second quarter of 2018 to $3.0 billion. |
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| • | Savings increased $356 million from the year ago quarter and increased $9 million from the second quarter of 2018 to $1.9 billion. |
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| • | Noninterest-bearing demand deposits increased $319 million from the year ago quarter and increased $179 million from the second quarter of 2018 to $5.3 billion. |
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| • | Network transaction deposits decreased $1.1 billion from the year ago quarter and decreased $161 million from the second quarter of 2018 to $2.0 billion. |
Net Interest Income and Net Interest Margin
Third quarter 2018 net interest income of $219 million was up 15%, or $29 million, with the net interest margin increasing 8 basis points to 2.92% from the year ago quarter. Third quarter 2018 net interest income decreased 3%, or $7 million, with the net interest margin decreasing 10 basis points from the prior quarter.
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| • | The average yield on total commercial loans for the third quarter of 2018 increased 80 basis points to 4.73% from the year ago quarter, but decreased 2 basis points from the prior quarter. |
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| • | The average cost of total interest-bearing deposits for the third quarter of 2018 increased 40 basis points to 1.03% from the year ago quarter and increased 20 basis points from the prior quarter. |
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| • | The net free funds benefit, the benefit of holding noninterest-bearing demand deposits, increased 10 basis points in the third quarter of 2018 compared to the year ago quarter and increased 5 basis points from the prior quarter. |
Noninterest Income
Third quarter 2018 total noninterest income of $88 million increased $2 million from the year ago quarter, but decreased $5 million from the prior quarter.
With respect to third quarter 2018 noninterest income line items:
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| • | Insurance commissions and fees were up $2 million from the year ago quarter, driven by the acquisitions of Diversified Insurance Solutions and Anderson Insurance, but were down $2 million from the prior quarter due to seasonal fluctuations of the employee benefits and property and casualty businesses. |
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| • | Mortgage banking fees were down $3 million from the year ago quarter and down $2 million from the prior quarter due to lower sales and refinancing volumes in the underlying housing market. |
Noninterest Expense
Third quarter 2018 total noninterest expense of $204 million increased 15%, or $27 million from the year ago quarter, but decreased $7 million from the prior quarter. Third quarter 2018 noninterest expense includes $2 million of Bank Mutual acquisition related costs.
With respect to third quarter 2018 noninterest expense line items:
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| • | Personnel expense increased $16 million from the year ago quarter, primarily driven by the additional cost of Bank Mutual staff. Personnel expense was essentially unchanged from the second quarter of 2018. |
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| • | Technology expense increased $2 million from the year ago quarter, but decreased by $2 million from the prior quarter. The changes were largely driven by the additional cost of Bank Mutual operations. |
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| • | Occupancy expense increased $2 million from the year ago quarter, with most of the increase coming from the additional expense of acquired Bank Mutual facilities. Occupancy expense was down slightly from the prior quarter. |
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| • | Acquisition related costs decreased $5 million from the prior quarter. |
Taxes
The third quarter 2018 effective tax rate was 21% compared to 31% in the year ago quarter. The decrease is primarily due to the Tax Cut and Jobs Act (TCJA) signed into law on December 22, 2017.
Credit
The third quarter provision for credit losses was negative $5 million, down from $5 million in the year ago quarter and down from $4 million in the prior quarter.
With respect to third quarter 2018 credit quality:
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| • | Potential problem loans of $236 million were down $22 million from the year ago quarter and were down $5 million from the prior quarter. |
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| • | Nonaccrual loans of $154 million were down $56 million from the year ago quarter and were down $50 million from the prior quarter. The decrease was primarily driven by credit upgrades and payoffs. The nonaccrual loans to total loans ratio was 0.67% in the third quarter, compared to 1.01% in the year ago quarter, and 0.89% in the prior quarter. |
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| • | Net charge offs of $12 million were up $2 million from the year ago quarter and were up $4 million from the prior quarter. Net oil and gas charge offs were $9 million in the third quarter. |
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| • | The allowance for loan losses of $236 million was down $40 million from the year ago quarter and was down $16 million from the prior quarter. The allowance for loan losses to total loans ratio was 1.03% in the third quarter of 2018, compared to 1.32% in the year ago quarter, and 1.10% in the prior quarter. |
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| • | The allowance related to the oil and gas portfolio was $10 million at September 30, 2018 and represented 1.4% of total oil and gas loans compared to 5.2% in the year ago quarter, and 2.5% in the prior quarter. |
Capital
The Company’s capital position remains strong, with a CET1 capital ratio of 10.4% at September 30, 2018. The Company’s capital ratios continue to be in excess of the Basel III “well-capitalized” regulatory benchmarks on a fully phased in basis.
During the quarter, the Company repurchased approximately 4 million shares, or $118 million, of common stock, at an average price of $27.09 per share.
THIRD QUARTER 2018 EARNINGS RELEASE CONFERENCE CALL
The Company will host a conference call for investors and analysts at 4:00 p.m. Central Time (CT) today, October 18, 2018. Interested parties can access the live webcast of the call through the Investor Relations section of the Company's website, http://investor.associatedbank.com. Parties may also dial into the call at 877-407-8037 (domestic) or 201-689-8037 (international) and request the Associated Banc-Corp third quarter 2018 earnings call. The third quarter 2018 financial tables with an accompanying slide presentation will be available on the Company's website just prior to the call. An audio archive of the webcast will be available on the Company's website approximately fifteen minutes after the call is over.
ABOUT ASSOCIATED BANC-CORP
Associated Banc-Corp (NYSE: ASB) has total assets of $33 billion and is one of the top 50 publicly traded U.S. bank holding companies. Headquartered in Green Bay, Wisconsin, Associated is a leading Midwest banking franchise, offering a full range of financial products and services from more than 230 banking locations serving more than 110 communities throughout Wisconsin, Illinois and Minnesota, and commercial financial services in Indiana, Michigan, Missouri, Ohio and Texas. Associated Bank, N.A. is an Equal Housing Lender, Equal Opportunity Lender and Member FDIC. More information about Associated Banc-Corp is available at www.associatedbank.com.
FORWARD-LOOKING STATEMENTS
Statements made in this document which 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. Such forward-looking statements may be identified by the use of words such as “believe,” “expect,” “anticipate,” “plan,” “estimate,” “should,” “will,” “intend,” "target," “outlook,” or similar expressions. Forward-looking statements are based on current management expectations and, by their nature, are subject to risks and uncertainties. Actual results may differ materially from those contained in the forward-looking statements. Factors which may cause actual results to differ materially from those contained in such forward-looking statements include those identified in the Company’s most recent Form 10-K and subsequent SEC filings. Such factors are incorporated herein by reference.
NON-GAAP FINANCIAL MEASURES
This press release and related materials may contain references to measures which are not defined in generally accepted accounting principles (“GAAP”). Information concerning these non-GAAP financial measures can be found in the financial tables. Management believes these measures are meaningful because they reflect adjustments commonly made by management, investors, regulators, and analysts to evaluate the adequacy of earnings per common share, provide a greater understanding of ongoing operations and enhance comparability of results with prior periods.
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Associated Banc-Corp
Consolidated Balance Sheets (Unaudited) | | | | | | |
| (In thousands) | Sep 30, 2018 | Jun 30, 2018 | Seql Qtr $ Change | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Comp Qtr $ Change |
| Assets | | | | | | | |
| Cash and due from banks | $ | 374,168 |
| $ | 396,761 |
| $ | (22,593 | ) | $ | 328,260 |
| $ | 483,666 |
| $ | 354,331 |
| $ | 19,837 |
|
| Interest-bearing deposits in other financial institutions | 147,848 |
| 71,462 |
| 76,386 |
| 94,918 |
| 199,702 |
| 109,596 |
| 38,252 |
|
| Federal funds sold and securities purchased under agreements to resell | 24,325 |
| 3,150 |
| 21,175 |
| 10,000 |
| 32,650 |
| 27,700 |
| (3,375 | ) |
| Investment securities held to maturity, at amortized cost | 2,661,755 |
| 2,602,247 |
| 59,508 |
| 2,443,203 |
| 2,282,853 |
| 2,233,579 |
| 428,176 |
|
| Investment securities available for sale, at fair value | 4,054,197 |
| 4,261,651 |
| (207,454 | ) | 4,485,875 |
| 4,043,446 |
| 3,801,699 |
| 252,498 |
|
| Federal Home Loan Bank and Federal Reserve Bank stocks, at cost | 220,825 |
| 249,040 |
| (28,215 | ) | 233,216 |
| 165,331 |
| 172,446 |
| 48,379 |
|
| Residential loans held for sale | 134,361 |
| 143,022 |
| (8,661 | ) | 103,953 |
| 85,544 |
| 113,064 |
| 21,297 |
|
| Commercial loans held for sale | 30,452 |
| — |
| 30,452 |
| 6,091 |
| — |
| 9,718 |
| 20,734 |
|
| Loans | 22,867,112 |
| 22,976,786 |
| (109,674 | ) | 22,810,491 |
| 20,784,991 |
| 20,931,460 |
| 1,935,652 |
|
| Allowance for loan losses | (236,250 | ) | (252,601 | ) | 16,351 |
| (257,058 | ) | (265,880 | ) | (276,551 | ) | 40,301 |
|
| Loans, net | 22,630,861 |
| 22,724,184 |
| (93,323 | ) | 22,553,433 |
| 20,519,111 |
| 20,654,909 |
| 1,975,952 |
|
| Bank and corporate owned life insurance | 661,009 |
| 659,592 |
| 1,417 |
| 657,841 |
| 591,057 |
| 589,093 |
| 71,916 |
|
| Tax credit and other investments | 132,355 |
| 137,051 |
| (4,696 | ) | 142,368 |
| 147,099 |
| 120,927 |
| 11,428 |
|
| Trading assets | 140,328 |
| 132,919 |
| 7,409 |
| 102,890 |
| 69,675 |
| 48,429 |
| 91,899 |
|
| Premises and equipment | 358,926 |
| 361,385 |
| (2,459 | ) | 381,327 |
| 330,963 |
| 330,065 |
| 28,861 |
|
| Goodwill | 1,168,922 |
| 1,166,665 |
| 2,257 |
| 1,153,156 |
| 976,239 |
| 972,006 |
| 196,916 |
|
| Mortgage servicing rights, net | 67,872 |
| 66,980 |
| 892 |
| 66,407 |
| 58,384 |
| 58,377 |
| 9,495 |
|
| Other intangible assets, net | 78,069 |
| 80,346 |
| (2,277 | ) | 79,714 |
| 15,580 |
| 14,080 |
| 63,989 |
|
| Other assets | 602,730 |
| 596,190 |
| 6,540 |
| 523,855 |
| 482,294 |
| 454,528 |
| 148,202 |
|
| Total assets | $ | 33,489,002 |
| $ | 33,652,647 |
| $ | (163,645 | ) | $ | 33,366,505 |
| $ | 30,483,594 |
| $ | 30,064,547 |
| $ | 3,424,455 |
|
| Liabilities and stockholders’ equity | | | | | | | |
| Noninterest-bearing demand deposits | $ | 5,421,270 |
| $ | 5,341,361 |
| $ | 79,909 |
| $ | 5,458,473 |
| $ | 5,478,416 |
| $ | 5,177,734 |
| $ | 243,536 |
|
| Interest-bearing deposits | 19,410,342 |
| 18,474,953 |
| 935,389 |
| 18,367,129 |
| 17,307,546 |
| 17,155,717 |
| 2,254,625 |
|
| Total deposits | 24,831,612 |
| 23,816,314 |
| 1,015,298 |
| 23,825,602 |
| 22,785,962 |
| 22,333,451 |
| 2,498,161 |
|
| Federal funds purchased and securities sold under agreements to repurchase | 166,556 |
| 203,733 |
| (37,177 | ) | 283,954 |
| 324,815 |
| 476,550 |
| (309,994 | ) |
| Commercial paper | 43,604 |
| 52,791 |
| (9,187 | ) | 82,420 |
| 67,467 |
| 68,067 |
| (24,463 | ) |
| FHLB advances | 3,332,655 |
| 4,797,857 |
| (1,465,202 | ) | 4,515,887 |
| 3,184,168 |
| 3,170,172 |
| 162,483 |
|
| Other long-term funding | 795,215 |
| 497,619 |
| 297,596 |
| 497,451 |
| 497,282 |
| 497,113 |
| 298,102 |
|
| Trading liabilities | 138,940 |
| 131,612 |
| 7,328 |
| 100,247 |
| 67,660 |
| 46,812 |
| 92,128 |
|
| Accrued expenses and other liabilities | 383,381 |
| 382,476 |
| 905 |
| 348,246 |
| 318,797 |
| 268,781 |
| 114,600 |
|
| Total liabilities | 29,691,963 |
| 29,882,403 |
| (190,440 | ) | 29,653,806 |
| 27,246,151 |
| 26,860,946 |
| 2,831,017 |
|
| Stockholders’ equity | | | | | | | |
| Preferred equity | 256,716 |
| 159,401 |
| 97,315 |
| 159,853 |
| 159,929 |
| 159,929 |
| 96,787 |
|
| Common equity | | | | | | | |
| Common stock | 1,752 |
| 1,751 |
| 1 |
| 1,741 |
| 1,618 |
| 1,615 |
| 137 |
|
| Surplus | 1,834,017 |
| 1,828,965 |
| 5,052 |
| 1,823,800 |
| 1,454,188 |
| 1,442,328 |
| 391,689 |
|
| Retained earnings | 1,977,925 |
| 1,920,579 |
| 57,346 |
| 1,859,068 |
| 1,819,230 |
| 1,792,184 |
| 185,741 |
|
| Accumulated other comprehensive income (loss) | (135,520 | ) | (119,888 | ) | (15,632 | ) | (107,673 | ) | (62,758 | ) | (54,288 | ) | (81,232 | ) |
| Treasury stock, at cost | (137,852 | ) | (20,564 | ) | (117,288 | ) | (24,089 | ) | (134,764 | ) | (138,167 | ) | 315 |
|
| Total common equity | 3,540,322 |
| 3,610,843 |
| (70,521 | ) | 3,552,847 |
| 3,077,514 |
| 3,043,672 |
| 496,650 |
|
| Total stockholders’ equity | 3,797,038 |
| 3,770,244 |
| 26,794 |
| 3,712,699 |
| 3,237,443 |
| 3,203,601 |
| 593,437 |
|
| Total liabilities and stockholders’ equity | $ | 33,489,002 |
| $ | 33,652,647 |
| $ | (163,645 | ) | $ | 33,366,505 |
| $ | 30,483,594 |
| $ | 30,064,547 |
| $ | 3,424,455 |
|
Numbers may not sum due to rounding.
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Associated Banc-Corp
Consolidated Statements of Income (Unaudited) | | | | | | | | | | | | |
| (In thousands, except per share data) | | | | Comp Qtr | | YTD | | YTD | | Comp YTD |
| | 3Q18 | | 3Q17 | | $ Change | | % Change | | Sep 2018 | | Sep 2017 | | $ Change | | % Change |
| Interest income | | | | | | | | | | | | | | | | |
| Interest and fees on loans | | $ | 249,649 |
| | $ | 196,972 |
| | $ | 52,677 |
| | 27 | % | | $ | 716,329 |
| | $ | 554,867 |
| | $ | 161,462 |
| | 29 | % |
| Interest and dividends on investment securities | | | | | | | | | | | | | | | | |
| Taxable | | 29,895 |
| | 24,162 |
| | 5,733 |
| | 24 | % | | 90,622 |
| | 71,295 |
| | 19,327 |
| | 27 | % |
| Tax-exempt | | 11,883 |
| | 8,268 |
| | 3,615 |
| | 44 | % | | 31,883 |
| | 24,540 |
| | 7,343 |
| | 30 | % |
| Other interest | | 4,036 |
| | 2,492 |
| | 1,544 |
| | 62 | % | | 9,366 |
| | 5,581 |
| | 3,785 |
| | 68 | % |
| Total interest income | | 295,464 |
| | 231,894 |
| | 63,570 |
| | 27 | % | | 848,201 |
| | 656,283 |
| | 191,918 |
| | 29 | % |
| Interest expense | | | | | | | | | | | | | | | | |
| Interest on deposits | | 50,116 |
| | 27,778 |
| | 22,338 |
| | 80 | % | | 121,959 |
| | 65,882 |
| | 56,077 |
| | 85 | % |
| Interest on Federal funds purchased and securities sold under agreements to repurchase | | 504 |
| | 768 |
| | (264 | ) | | (34 | )% | | 1,564 |
| | 2,107 |
| | (543 | ) | | (26 | )% |
| Interest on other short-term funding | | 38 |
| | 70 |
| | (32 | ) | | (46 | )% | | 150 |
| | 239 |
| | (89 | ) | | (37 | )% |
| Interest on FHLB advances | | 19,318 |
| | 8,612 |
| | 10,706 |
| | 124 | % | | 53,720 |
| | 20,209 |
| | 33,511 |
| | 166 | % |
| Interest on long-term funding | | 6,095 |
| | 4,544 |
| | 1,551 |
| | 34 | % | | 15,183 |
| | 13,632 |
| | 1,551 |
| | 11 | % |
| Total interest expense | | 76,072 |
| | 41,772 |
| | 34,300 |
| | 82 | % | | 192,576 |
| | 102,068 |
| | 90,508 |
| | 89 | % |
| Net interest income | | 219,392 |
| | 190,122 |
| | 29,270 |
| | 15 | % | | 655,625 |
| | 554,215 |
| | 101,410 |
| | 18 | % |
| Provision for credit losses | | (5,000 | ) | | 5,000 |
| | (10,000 | ) | | (200 | )% | | (1,000 | ) | | 26,000 |
| | (27,000 | ) | | (104 | )% |
| Net interest income after provision for credit losses | | 224,392 |
| | 185,122 |
| | 39,270 |
| | 21 | % | | 656,625 |
| | 528,215 |
| | 128,410 |
| | 24 | % |
| Noninterest income | | | | | | | | | | | | | | | | |
| Insurance commissions and fees | | 21,636 |
| | 19,815 |
| | 1,821 |
| | 9 | % | | 68,279 |
| | 62,288 |
| | 5,991 |
| | 10 | % |
| Service charges and deposit account fees | | 16,904 |
| | 16,268 |
| | 636 |
| | 4 | % | | 49,714 |
| | 48,654 |
| | 1,060 |
| | 2 | % |
Card-based and loan fees | | 14,090 |
| | 12,619 |
| | 1,471 |
| | 12 | % | | 41,899 |
| | 38,848 |
| | 3,051 |
| | 8 | % |
| Trust and asset management fees | | 14,140 |
| | 12,785 |
| | 1,355 |
| | 11 | % | | 40,946 |
| | 37,066 |
| | 3,880 |
| | 10 | % |
| Brokerage commissions and fees | | 7,084 |
| | 4,392 |
| | 2,692 |
| | 61 | % | | 21,253 |
| | 13,071 |
| | 8,182 |
| | 63 | % |
| Mortgage banking, net | | 4,012 |
| | 6,585 |
| | (2,573 | ) | | (39 | )% | | 16,640 |
| | 16,191 |
| | 449 |
| | 3 | % |
Capital markets, net | | 5,099 |
| | 4,610 |
| | 489 |
| | 11 | % | | 15,189 |
| | 12,535 |
| | 2,654 |
| | 21 | % |
| Bank and corporate owned life insurance | | 3,540 |
| | 6,580 |
| | (3,040 | ) | | (46 | )% | | 10,705 |
| | 13,094 |
| | (2,389 | ) | | (18 | )% |
Asset gains (losses), net (1) | | (1,037 | ) | | (16 | ) | | (1,021 | ) | | N/M |
| | 1,353 |
| | (716 | ) | | 2,069 |
| | N/M |
|
| Investment securities gains (losses), net | | 30 |
| | 3 |
| | 27 |
| | N/M |
| | (1,985 | ) | | 359 |
| | (2,344 | ) | | N/M |
|
Other | | 2,802 |
| | 2,254 |
| | 548 |
| | 24 | % | | 7,529 |
| | 6,746 |
| | 783 |
| | 12 | % |
| Total noninterest income | | 88,300 |
| | 85,895 |
| | 2,405 |
| | 3 | % | | 271,522 |
| | 248,136 |
| | 23,386 |
| | 9 | % |
| Noninterest expense | | | | | | | | | | | | | | | | |
| Personnel | | 124,476 |
| | 108,098 |
| | 16,378 |
| | 15 | % | | 366,141 |
| | 321,946 |
| | 44,195 |
| | 14 | % |
| Occupancy | | 14,519 |
| | 12,294 |
| | 2,225 |
| | 18 | % | | 44,947 |
| | 40,345 |
| | 4,602 |
| | 11 | % |
| Technology | | 17,563 |
| | 15,233 |
| | 2,330 |
| | 15 | % | | 54,730 |
| | 45,126 |
| | 9,604 |
| | 21 | % |
| Equipment | | 5,838 |
| | 5,232 |
| | 606 |
| | 12 | % | | 17,347 |
| | 15,951 |
| | 1,396 |
| | 9 | % |
| Business development and advertising | | 8,213 |
| | 7,764 |
| | 449 |
| | 6 | % | | 21,973 |
| | 20,751 |
| | 1,222 |
| | 6 | % |
| Legal and professional | | 5,476 |
| | 6,248 |
| | (772 | ) | | (12 | )% | | 17,173 |
| | 16,125 |
| | 1,048 |
| | 6 | % |
| Card issuance and loan costs | | 3,677 |
| | 3,330 |
| | 347 |
| | 10 | % | | 10,154 |
| | 8,924 |
| | 1,230 |
| | 14 | % |
| Foreclosure / OREO expense, net | | 950 |
| | 906 |
| | 44 |
| | 5 | % | | 2,694 |
| | 3,593 |
| | (899 | ) | | (25 | )% |
| FDIC assessment | | 7,750 |
| | 7,800 |
| | (50 | ) | | (1 | )% | | 24,250 |
| | 23,800 |
| | 450 |
| | 2 | % |
| Other intangible amortization | | 2,233 |
| | 450 |
| | 1,783 |
| | N/M |
| | 5,926 |
| | 1,459 |
| | 4,467 |
| | N/M |
|
Acquisition related costs (2) | | 2,271 |
| | — |
| | 2,271 |
| | N/M |
| | 29,983 |
| | — |
| | 29,983 |
| | N/M |
|
| Other | | 11,445 |
| | 10,072 |
| | 1,373 |
| | 14 | % | | 33,318 |
| | 29,413 |
| | 3,905 |
| | 13 | % |
| Total noninterest expense | | 204,413 |
| | 177,427 |
| | 26,986 |
| | 15 | % | | 628,636 |
| | 527,434 |
| | 101,202 |
| | 19 | % |
| Income before income taxes | | 108,279 |
| | 93,590 |
| | 14,689 |
| | 16 | % | | 299,510 |
| | 248,917 |
| | 50,593 |
| | 20 | % |
| Income tax expense | | 22,349 |
| | 28,589 |
| | (6,240 | ) | | (22 | )% | | 54,932 |
| | 69,663 |
| | (14,731 | ) | | (21 | )% |
| Net income | | 85,929 |
| | 65,001 |
| | 20,928 |
| | 32 | % | | 244,578 |
| | 179,254 |
| | 65,324 |
| | 36 | % |
| Preferred stock dividends | | 2,409 |
| | 2,339 |
| | 70 |
| | 3 | % | | 7,077 |
| | 7,008 |
| | 69 |
| | 1 | % |
| Net income available to common equity | | $ | 83,521 |
| | $ | 62,662 |
| | $ | 20,859 |
| | 33 | % | | $ | 237,501 |
| | $ | 172,246 |
| | $ | 65,255 |
| | 38 | % |
| Earnings per common share | | | | | | | | | | | | | | | | |
| Basic | | $ | 0.49 |
| | $ | 0.41 |
| | $ | 0.08 |
| | 20 | % | | $ | 1.40 |
| | $ | 1.13 |
| | $ | 0.27 |
| | 24 | % |
| Diluted | | $ | 0.48 |
| | $ | 0.41 |
| | $ | 0.07 |
| | 17 | % | | $ | 1.38 |
| | $ | 1.11 |
| | $ | 0.27 |
| | 24 | % |
| Average common shares outstanding | | | | | | | | | | | | | | | | |
| Basic | | 170,516 |
| | 150,565 |
| | 19,951 |
| | 13 | % | | 168,249 |
| | 150,983 |
| | 17,266 |
| | 11 | % |
| Diluted | | 172,802 |
| | 152,968 |
| | 19,834 |
| | 13 | % | | 170,876 |
| | 153,782 |
| | 17,094 |
| | 11 | % |
N/M = Not meaningful
Numbers may not sum due to rounding.
| |
| (1) | 3Q18 includes approximately $1 million of Bank Mutual acquisition related asset losses net of asset gains; YTD Sep 2018 includes approximately $2 million of Bank Mutual acquisition related asset losses net of asset gains. |
| |
| (2) | Includes Bank Mutual acquisition related costs only. |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Associated Banc-Corp
Consolidated Statements of Income (Unaudited) - Quarterly Trend |
| (In thousands, except per share data) | | | | | | Seql Qtr | | | | | | | | Comp Qtr |
| | 3Q18 | | 2Q18 | | $ Change | | % Change | | 1Q18 | | 4Q17 | | 3Q17 | | $ Change | | % Change |
| Interest income | | | | | | | | | | | | | | | | | | |
| Interest and fees on loans | | $ | 249,649 |
| | $ | 246,646 |
| | $ | 3,003 |
| | 1 | % | | $ | 220,034 |
| | $ | 194,133 |
| | $ | 196,972 |
| | $ | 52,677 |
| | 27 | % |
| Interest and dividends on investment securities | | | | | | | | | | | | | | | | | | |
| Taxable | | 29,895 |
| | 30,623 |
| | (728 | ) | | (2 | )% | | 30,104 |
| | 25,614 |
| | 24,162 |
| | 5,733 |
| | 24 | % |
| Tax-exempt | | 11,883 |
| | 10,783 |
| | 1,100 |
| | 10 | % | | 9,217 |
| | 8,437 |
| | 8,268 |
| | 3,615 |
| | 44 | % |
| Other interest | | 4,036 |
| | 3,153 |
| | 883 |
| | 28 | % | | 2,177 |
| | 2,138 |
| | 2,492 |
| | 1,544 |
| | 62 | % |
| Total interest income | | 295,464 |
| | 291,205 |
| | 4,259 |
| | 1 | % | | 261,532 |
| | 230,322 |
| | 231,894 |
| | 63,570 |
| | 27 | % |
| Interest expense | | | | | | | | | | | | | | | | | | |
| Interest on deposits | | 50,116 |
| | 38,431 |
| | 11,685 |
| | 30 | % | | 33,412 |
| | 28,143 |
| | 27,778 |
| | 22,338 |
| | 80 | % |
| Interest on Federal funds purchased and securities sold under agreements to repurchase | | 504 |
| | 538 |
| | (34 | ) | | (6 | )% | | 522 |
| | 420 |
| | 768 |
| | (264 | ) | | (34 | )% |
| Interest on other short-term funding | | 38 |
| | 51 |
| | (13 | ) | | (25 | )% | | 60 |
| | 54 |
| | 70 |
| | (32 | ) | | (46 | )% |
| Interest on FHLB advances | | 19,318 |
| | 21,279 |
| | (1,961 | ) | | (9 | )% | | 13,123 |
| | 10,156 |
| | 8,612 |
| | 10,706 |
| | 124 | % |
| Interest on long-term funding | | 6,095 |
| | 4,544 |
| | 1,551 |
| | 34 | % | | 4,544 |
| | 4,544 |
| | 4,544 |
| | 1,551 |
| | 34 | % |
| Total interest expense | | 76,072 |
| | 64,843 |
| | 11,229 |
| | 17 | % | | 51,661 |
| | 43,317 |
| | 41,772 |
| | 34,300 |
| | 82 | % |
| Net Interest income | | 219,392 |
| | 226,362 |
| | (6,970 | ) | | (3 | )% | | 209,871 |
| | 187,005 |
| | 190,122 |
| | 29,270 |
| | 15 | % |
| Provision for credit losses | | (5,000 | ) | | 4,000 |
| | (9,000 | ) | | N/M |
| | — |
| | — |
| | 5,000 |
| | (10,000 | ) | | (200 | )% |
| Net interest income after provision for credit losses | | 224,392 |
| | 222,362 |
| | 2,030 |
| | 1 | % | | 209,871 |
| | 187,005 |
| | 185,122 |
| | 39,270 |
| | 21 | % |
| Noninterest income | | | | | | | | | | | | | | | | | | |
| Insurance commissions and fees | | 21,636 |
| | 23,996 |
| | (2,360 | ) | | (10 | )% | | 22,648 |
| | 19,186 |
| | 19,815 |
| | 1,821 |
| | 9 | % |
| Service charges and deposit account fees | | 16,904 |
| | 16,390 |
| | 514 |
| | 3 | % | | 16,420 |
| | 15,773 |
| | 16,268 |
| | 636 |
| | 4 | % |
| Card-based and loan fees | | 14,090 |
| | 14,387 |
| | (297 | ) | | (2 | )% | | 13,422 |
| | 13,840 |
| | 12,619 |
| | 1,471 |
| | 12 | % |
| Trust and asset management fees | | 14,140 |
| | 13,437 |
| | 703 |
| | 5 | % | | 13,369 |
| | 13,125 |
| | 12,785 |
| | 1,355 |
| | 11 | % |
| Brokerage commissions and fees | | 7,084 |
| | 6,896 |
| | 188 |
| | 3 | % | | 7,273 |
| | 6,864 |
| | 4,392 |
| | 2,692 |
| | 61 | % |
| Mortgage banking, net | | 4,012 |
| | 6,258 |
| | (2,246 | ) | | (36 | )% | | 6,370 |
| | 3,169 |
| | 6,585 |
| | (2,573 | ) | | (39 | )% |
| Capital markets, net | | 5,099 |
| | 4,783 |
| | 316 |
| | 7 | % | | 5,306 |
| | 7,107 |
| | 4,610 |
| | 489 |
| | 11 | % |
| Bank and corporate owned life insurance | | 3,540 |
| | 3,978 |
| | (438 | ) | | (11 | )% | | 3,187 |
| | 3,156 |
| | 6,580 |
| | (3,040 | ) | | (46 | )% |
Asset gains (losses), net (1) | | (1,037 | ) | | 2,497 |
| | (3,534 | ) | | (142 | )% | | (107 | ) | | (528 | ) | | (16 | ) | | (1,021 | ) | | N/M |
|
| Investment securities gains (losses), net | | 30 |
| | (2,015 | ) | | 2,045 |
| | (101 | )% | | — |
| | 75 |
| | 3 |
| | 27 |
| | N/M |
|
| Other | | 2,802 |
| | 2,235 |
| | 567 |
| | 25 | % | | 2,492 |
| | 2,777 |
| | 2,254 |
| | 548 |
| | 24 | % |
| Total noninterest income | | 88,300 |
| | 92,842 |
| | (4,542 | ) | | (5 | )% | | 90,380 |
| | 84,544 |
| | 85,895 |
| | 2,405 |
| | 3 | % |
| Noninterest expense | | | | | | | | | | | | | | | | | | |
| Personnel | | 124,476 |
| | 123,980 |
| | 496 |
| | — | % | | 117,685 |
| | 107,031 |
| | 108,098 |
| | 16,378 |
| | 15 | % |
| Occupancy | | 14,519 |
| | 15,071 |
| | (552 | ) | | (4 | )% | | 15,357 |
| | 13,497 |
| | 12,294 |
| | 2,225 |
| | 18 | % |
| Technology | | 17,563 |
| | 19,452 |
| | (1,889 | ) | | (10 | )% | | 17,715 |
| | 17,878 |
| | 15,233 |
| | 2,330 |
| | 15 | % |
| Equipment | | 5,838 |
| | 5,953 |
| | (115 | ) | | (2 | )% | | 5,556 |
| | 5,250 |
| | 5,232 |
| | 606 |
| | 12 | % |
| Business development and advertising | | 8,213 |
| | 7,067 |
| | 1,146 |
| | 16 | % | | 6,693 |
| | 8,195 |
| | 7,764 |
| | 449 |
| | 6 | % |
| Legal and professional | | 5,476 |
| | 6,284 |
| | (808 | ) | | (13 | )% | | 5,413 |
| | 6,384 |
| | 6,248 |
| | (772 | ) | | (12 | )% |
| Card issuance and loan costs | | 3,677 |
| | 3,173 |
| | 504 |
| | 16 | % | | 3,304 |
| | 2,836 |
| | 3,330 |
| | 347 |
| | 10 | % |
| Foreclosure / OREO expense, net | | 950 |
| | 1,021 |
| | (71 | ) | | (7 | )% | | 723 |
| | 1,285 |
| | 906 |
| | 44 |
| | 5 | % |
| FDIC assessment | | 7,750 |
| | 8,250 |
| | (500 | ) | | (6 | )% | | 8,250 |
| | 7,500 |
| | 7,800 |
| | (50 | ) | | (1 | )% |
| Other intangible amortization | | 2,233 |
| | 2,168 |
| | 65 |
| | 3 | % | | 1,525 |
| | 500 |
| | 450 |
| | 1,783 |
| | N/M |
|
Acquisition related costs (2) | | 2,271 |
| | 7,107 |
| | (4,836 | ) | | (68 | )% | | 20,605 |
| | — |
| | — |
| | 2,271 |
| | N/M |
|
| Other | | 11,445 |
| | 11,732 |
| | (287 | ) | | (2 | )% | | 10,140 |
| | 11,343 |
| | 10,072 |
| | 1,373 |
| | 14 | % |
| Total noninterest expense | | 204,413 |
| | 211,258 |
| | (6,845 | ) | | (3 | )% | | 212,965 |
| | 181,699 |
| | 177,427 |
| | 26,986 |
| | 15 | % |
| Income before income taxes | | 108,279 |
| | 103,947 |
| | 4,332 |
| | 4 | % | | 87,285 |
| | 89,850 |
| | 93,590 |
| | 14,689 |
| | 16 | % |
| Income tax expense | | 22,349 |
| | 14,754 |
| | 7,595 |
| | 51 | % | | 17,829 |
| | 39,840 |
| | 28,589 |
| | (6,240 | ) | | (22 | )% |
| Net income | | 85,929 |
| | 89,192 |
| | (3,263 | ) | | (4 | )% | | 69,456 |
| | 50,010 |
| | 65,001 |
| | 20,928 |
| | 32 | % |
| Preferred stock dividends | | 2,409 |
| | 2,329 |
| | 80 |
| | 3 | % | | 2,339 |
| | 2,339 |
| | 2,339 |
| | 70 |
| | 3 | % |
| Net income available to common equity | | $ | 83,521 |
| | $ | 86,863 |
| | $ | (3,342 | ) | | (4 | )% | | $ | 67,117 |
| | $ | 47,671 |
| | $ | 62,662 |
| | $ | 20,859 |
| | 33 | % |
| Earnings per common share | | | | | | | | | | | | | | | | | | |
| Basic | | $ | 0.49 |
| | $ | 0.51 |
| | $ | (0.02 | ) | | (4 | )% | | $ | 0.41 |
| | $ | 0.31 |
| | $ | 0.41 |
| | $ | 0.08 |
| | 20 | % |
| Diluted | | $ | 0.48 |
| | $ | 0.50 |
| | $ | (0.02 | ) | | (4 | )% | | $ | 0.40 |
| | $ | 0.31 |
| | $ | 0.41 |
| | $ | 0.07 |
| | 17 | % |
| Average common shares outstanding | | | | | | | | | | | | | | | | | | |
| Basic | | 170,516 |
| | 170,633 |
| | (117 | ) | | — | % | | 163,520 |
| | 150,563 |
| | 150,565 |
| | 19,951 |
| | 13 | % |
| Diluted | | 172,802 |
| | 173,409 |
| | (607 | ) | | — | % | | 166,432 |
| | 153,449 |
| | 152,968 |
| | 19,834 |
| | 13 | % |
N/M = Not meaningful
Numbers may not sum due to rounding.
| |
| (1) | 3Q18 includes approximately $1 million of Bank Mutual acquisition related asset losses net of asset gains; 2Q18 includes approximately $1 million of Bank Mutual acquisition related asset losses net of asset gains. |
| |
| (2) | Includes Bank Mutual acquisition related costs only. |
|
| | | | | | | | | | | | | | | | | | | | | | |
Associated Banc-Corp
Selected Quarterly Information | | | | | | | | |
| (In millions, except share and per share, full time equivalent employee and branch count data) | | YTD
Sep 2018 | YTD
Sep 2017 | 3Q18 | 2Q18 | 1Q18 | 4Q17 | 3Q17 |
| Per common share data | | | | | | | | |
| Dividends | | $ | 0.45 |
| $ | 0.36 |
| $ | 0.15 |
| $ | 0.15 |
| $ | 0.15 |
| $ | 0.14 |
| $ | 0.12 |
|
| Market value: | | | | | | | | |
| High | | 28.85 |
| 26.50 |
| 28.35 |
| 28.85 |
| 26.90 |
| 26.10 |
| 25.70 |
|
| Low | | 23.60 |
| 21.25 |
| 26.00 |
| 24.20 |
| 23.60 |
| 24.00 |
| 21.25 |
|
| Close | | 26.00 |
| 24.25 |
| 26.00 |
| 27.30 |
| 24.85 |
| 25.40 |
| 24.25 |
|
| Book value | | 20.91 |
| 19.98 |
| 20.91 |
| 20.81 |
| 20.63 |
| 20.13 |
| 19.98 |
|
| Tangible book value / share | | $ | 13.55 |
| $ | 13.51 |
| $ | 13.55 |
| $ | 13.62 |
| $ | 13.47 |
| $ | 13.65 |
| $ | 13.51 |
|
| Performance ratios (annualized) | | | | | | | | |
| Return on average assets | | 0.99 | % | 0.82 | % | 1.02 | % | 1.07 | % | 0.88 | % | 0.66 | % | 0.86 | % |
| Effective tax rate | | 18.34 | % | 27.99 | % | 20.64 | % | 14.19 | % | 20.43 | % | 44.34 | % | 30.55 | % |
Dividend payout ratio (1) | | 32.14 | % | 31.86 | % | 30.61 | % | 29.41 | % | 36.59 | % | 45.16 | % | 29.27 | % |
| Net interest margin | | 2.95 | % | 2.83 | % | 2.92 | % | 3.02 | % | 2.92 | % | 2.79 | % | 2.84 | % |
| Selected trend information | | | | | | | | |
Average full time equivalent employees (2) | | 4,712 |
| 4,308 |
| 4,707 |
| 4,792 |
| 4,637 |
| 4,303 |
| 4,324 |
|
| Branch count | | | | 236 |
| 237 |
| 271 |
| 213 |
| 214 |
|
Assets under management, at market value (3) | | | | 11,206 |
| $ | 10,776 |
| $ | 10,540 |
| $ | 10,555 |
| $ | 9,243 |
|
| Mortgage loans originated for sale during period | | $ | 848 |
| $ | 466 |
| $ | 331 |
| $ | 319 |
| $ | 198 |
| $ | 249 |
| $ | 246 |
|
| Mortgage loan settlements during period | | $ | 827 |
| $ | 552 |
| $ | 345 |
| $ | 294 |
| $ | 188 |
| $ | 268 |
| $ | 188 |
|
| Mortgage portfolio serviced for others | | | | $ | 8,547 |
| $ | 8,501 |
| $ | 8,507 |
| $ | 7,647 |
| $ | 7,653 |
|
| Mortgage servicing rights, net / mortgage portfolio serviced for others | | | | 0.79 | % | 0.79 | % | 0.78 | % | 0.76 | % | 0.76 | % |
| Shares outstanding, end of period | | | | 169,293 |
| 173,526 |
| 172,182 |
| 152,846 |
| 152,316 |
|
Net shares issuable to Associated Banc-Corp warrant ("ASBWS") holders (4) | | | | 33 |
| 136 |
| 1,023 |
| 1,134 |
| 903 |
|
| Selected quarterly ratios | | | | | | | | |
| Loans / deposits | | | | 92.09 | % | 96.47 | % | 95.74 | % | 91.22 | % | 93.72 | % |
| Stockholders’ equity / assets | | | | 11.34 | % | 11.20 | % | 11.13 | % | 10.62 | % | 10.66 | % |
Risk-based capital (5) (6) | | | | | | | | |
| Total risk-weighted assets | | | | $ | 23,907 |
| $ | 24,059 |
| $ | 23,535 |
| $ | 21,544 |
| $ | 21,657 |
|
| Common equity Tier 1 | | | | $ | 2,475 |
| $ | 2,528 |
| $ | 2,474 |
| $ | 2,172 |
| $ | 2,144 |
|
| Common equity Tier 1 capital ratio | | | | 10.35 | % | 10.51 | % | 10.51 | % | 10.08 | % | 9.90 | % |
| Tier 1 capital ratio | | | | 11.42 | % | 11.17 | % | 11.19 | % | 10.82 | % | 10.64 | % |
| Total capital ratio | | | | 13.56 | % | 13.36 | % | 13.45 | % | 13.22 | % | 13.04 | % |
| Tier 1 leverage ratio | | | | 8.43 | % | 8.32 | % | 8.48 | % | 8.02 | % | 7.93 | % |
| Loans | | | | | | | | |
| Recorded investment on loans | | | | $ | 22,800 |
| $ | 22,916 |
| $ | 22,756 |
| $ | 20,699 |
| $ | 20,849 |
|
| Net unaccreted Bank Mutual purchase discount | | | | (21 | ) | (26 | ) | (34 | ) | — |
| — |
|
| Net other deferred costs | | | | 87 |
| 87 |
| 88 |
| 86 |
| 83 |
|
| Loans | | | | $ | 22,867 |
| $ | 22,977 |
| $ | 22,810 |
| $ | 20,785 |
| $ | 20,931 |
|
Numbers may not sum due to rounding.
| |
| (1) | Ratio is based upon basic earnings per common share. |
| |
| (2) | Average full time equivalent employees without overtime. |
| |
| (3) | Excludes assets held in brokerage accounts. |
| |
| (4) | Based on the treasury stock method and the period-end close price. The ASBWS warrants will expire on November 21, 2018. |
| |
| (5) | The Federal Reserve establishes regulatory capital requirements, including well-capitalized standards for the Corporation. The regulatory capital requirements effective for the Corporation follow Basel III, subject to certain transition provisions. |
| |
| (6) | September 30, 2018 data is estimated. |
|
| | | | | | | | | | | | | | | | | | | | | |
Associated Banc-Corp
Selected Asset Quality Information | | | | | | |
| (In thousands) | | Sep 30, 2018 | Jun 30, 2018 | Seql Qtr %
Change | | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Comp Qtr %
Change |
| Allowance for loan losses | | | | | | | | | |
| Balance at beginning of period | | $ | 252,601 |
| $ | 257,058 |
| (2 | )% | | $ | 265,880 |
| $ | 276,551 |
| $ | 281,101 |
| (10 | )% |
| Provision for loan losses | | (4,000 | ) | 4,000 |
| (200 | )% | | 500 |
| — |
| 6,000 |
| (167 | )% |
| Charge offs | | (17,304 | ) | (14,926 | ) | 16 | % | | (12,155 | ) | (14,289 | ) | (14,727 | ) | 17 | % |
| Recoveries | | 4,953 |
| 6,470 |
| (23 | )% | | 2,832 |
| 3,618 |
| 4,177 |
| 19 | % |
| Net charge offs | | (12,351 | ) | (8,456 | ) | 46 | % | | (9,323 | ) | (10,671 | ) | (10,550 | ) | 17 | % |
| Balance at end of period | | $ | 236,250 |
| $ | 252,601 |
| (6 | )% | | $ | 257,058 |
| $ | 265,880 |
| $ | 276,551 |
| (15 | )% |
| Allowance for unfunded commitments | | | | | | | | | |
| Balance at beginning of period | | $ | 26,336 |
| $ | 26,336 |
| — | % | | $ | 24,400 |
| $ | 24,400 |
| $ | 25,400 |
| 4 | % |
| Provision for unfunded commitments | | (1,000 | ) | — |
| N/M |
| | (500 | ) | — |
| (1,000 | ) | — | % |
| Amount recorded at acquisition | | — |
| — |
| N/M |
| | 2,436 |
| — |
| — |
| N/M |
|
| Balance at end of period | | $ | 25,336 |
| $ | 26,336 |
| (4 | )% | | $ | 26,336 |
| $ | 24,400 |
| $ | 24,400 |
| 4 | % |
| Allowance for credit losses | | $ | 261,586 |
| $ | 278,937 |
| (6 | )% | | $ | 283,394 |
| $ | 290,280 |
| $ | 300,951 |
| (13 | )% |
| Provision for credit losses | | $ | (5,000 | ) | $ | 4,000 |
| N/M |
| | $ | — |
| $ | — |
| $ | 5,000 |
| (200 | )% |
| | | Sep 30, 2018 | Jun 30, 2018 | Seql Qtr %
Change | | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Comp Qtr %
Change |
| Net charge offs | | | | | | | | | |
| Commercial and industrial | | $ | (6,893 | ) | $ | (6,606 | ) | 4 | % | | $ | (6,599 | ) | $ | (8,212 | ) | $ | (9,442 | ) | (27 | )% |
| Commercial real estate—owner occupied | | (252 | ) | 270 |
| (193 | )% | | (1,025 | ) | (246 | ) | 13 |
| N/M |
|
| Commercial and business lending | | (7,145 | ) | (6,336 | ) | 13 | % | | (7,624 | ) | (8,458 | ) | (9,429 | ) | (24 | )% |
| Commercial real estate—investor | | (3,958 | ) | (1,189 | ) | N/M |
| | 8 |
| (164 | ) | 55 |
| N/M |
|
| Real estate construction | | (195 | ) | 48 |
| N/M |
| | 189 |
| (365 | ) | (150 | ) | 30 | % |
| Commercial real estate lending | | (4,153 | ) | (1,141 | ) | N/M |
| | 197 |
| (529 | ) | (95 | ) | N/M |
|
| Total commercial | | (11,298 | ) | (7,477 | ) | 51 | % | | (7,427 | ) | (8,987 | ) | (9,524 | ) | 19 | % |
| Residential mortgage | | 5 |
| (135 | ) | (104 | )% | | (131 | ) | (966 | ) | (26 | ) | (119 | )% |
| Home equity | | 200 |
| 140 |
| 43 | % | | (677 | ) | 330 |
| (87 | ) | N/M |
|
| Other consumer | | (1,258 | ) | (984 | ) | 28 | % | | (1,088 | ) | (1,048 | ) | (913 | ) | 38 | % |
| Total consumer | | (1,053 | ) | (979 | ) | 8 | % | | (1,896 | ) | (1,684 | ) | (1,026 | ) | 3 | % |
| Total net charge offs | | $ | (12,351 | ) | $ | (8,456 | ) | 46 | % | | $ | (9,323 | ) | $ | (10,671 | ) | $ | (10,550 | ) | 17 | % |
| | | | | | | | | | |
| (In basis points) | | Sep 30, 2018 | Jun 30, 2018 | | | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | |
| Net charge offs to average loans (annualized) | | | | | | | | | |
| Commercial and industrial | | (39 | ) | (39 | ) | | | (41 | ) | (51 | ) | (58 | ) | |
| Commercial real estate—owner occupied | | (11 | ) | 12 |
| | | (48 | ) | (12 | ) | 1 |
| |
| Commercial and business lending | | (36 | ) | (33 | ) | | | (42 | ) | (47 | ) | (51 | ) | |
| Commercial real estate—investor | | (40 | ) | (12 | ) | | | — |
| (2 | ) | 1 |
| |
| Real estate construction | | (5 | ) | 1 |
| | | 5 |
| (10 | ) | (4 | ) | |
| Commercial real estate lending | | (30 | ) | (8 | ) | | | 1 |
| (4 | ) | (1 | ) | |
| Total commercial | | (34 | ) | (22 | ) | | | (24 | ) | (30 | ) | (31 | ) | |
| Residential mortgage | | — |
| (1 | ) | | | (1 | ) | (5 | ) | — |
| |
| Home equity | | 9 |
| 6 |
| | | (30 | ) | 15 |
| (4 | ) | |
| Other consumer | | (133 | ) | (105 | ) | | | (115 | ) | (109 | ) | (97 | ) | |
| Total consumer | | (4 | ) | (4 | ) | | | (8 | ) | (8 | ) | (5 | ) | |
| Total net charge offs | | (21 | ) | (15 | ) | | | (17 | ) | (20 | ) | (20 | ) | |
| | | | | | | | | | |
| (In thousands) | | Sep 30, 2018 | Jun 30, 2018 | Seql Qtr %
Change | | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Comp Qtr %
Change |
| Credit Quality | | | | | | | | | |
| Nonaccrual loans | | $ | 154,092 |
| $ | 204,460 |
| (25 | )% | | $ | 208,553 |
| $ | 208,546 |
| $ | 210,517 |
| (27 | )% |
Other real estate owned (OREO)(a) | | 25,653 |
| 27,207 |
| (6 | )% | | 16,919 |
| 12,608 |
| 8,483 |
| N/M |
|
| Other nonperforming assets | | 6,379 |
| 7,059 |
| (10 | )% | | 7,117 |
| 7,418 |
| 7,418 |
| (14 | )% |
| Total nonperforming assets | | $ | 186,124 |
| $ | 238,726 |
| (22 | )% | | $ | 232,589 |
| $ | 228,572 |
| $ | 226,418 |
| (18 | )% |
| | | | | | | | | | |
| Loans 90 or more days past due and still accruing | | $ | 2,175 |
| $ | 1,839 |
| 18 | % | | $ | 3,393 |
| $ | 1,867 |
| $ | 1,611 |
| 35 | % |
| Allowance for loan losses to loans | | 1.03 | % | 1.10 | % | | | 1.13 | % | 1.28 | % | 1.32 | % | |
| Net unaccreted purchase discount to net purchased loans | | 1.48 | % | 1.58 | % | | | 1.80 | % | — | % | — | % | |
| Allowance for loan losses to nonaccrual loans | | 153.32 | % | 123.55 | % | | | 123.26 | % | 127.49 | % | 131.37 | % | |
| Nonaccrual loans to total loans | | 0.67 | % | 0.89 | % | | | 0.91 | % | 1.00 | % | 1.01 | % | |
| Nonperforming assets to total loans plus OREO | | 0.81 | % | 1.04 | % | | | 1.02 | % | 1.10 | % | 1.08 | % | |
| Nonperforming assets to total assets | | 0.56 | % | 0.71 | % | | | 0.70 | % | 0.75 | % | 0.75 | % | |
| Year-to-date net charge offs to average loans (annualized) | | 0.18 | % | 0.16 | % | | | 0.17 | % | 0.19 | % | 0.19 | % | |
| |
| (a) | The March 31, 2018 to June 30, 2018 change in OREO is primarily due to the closure of Bank Mutual properties. |
|
| | | | | | | | | | | | | | | | | | | | | |
Associated Banc-Corp
Selected Asset Quality Information (continued) |
| (In thousands) | | Sep 30, 2018 | Jun 30, 2018 | Seql Qtr %
Change |
| Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Comp Qtr %
Change |
| Nonaccrual loans | | | | | | | | | |
| Commercial and industrial | | $ | 50,146 |
| $ | 81,776 |
| (39 | )% | | $ | 102,667 |
| $ | 112,786 |
| $ | 122,284 |
| (59 | )% |
| Commercial real estate—owner occupied | | 4,779 |
| 18,649 |
| (74 | )% | | 20,636 |
| 22,740 |
| 15,598 |
| (69 | )% |
| Commercial and business lending | | 54,925 |
| 100,425 |
| (45 | )% | | 123,303 |
| 135,526 |
| 137,882 |
| (60 | )% |
| Commercial real estate—investor | | 19,725 |
| 26,503 |
| (26 | )% | | 15,574 |
| 4,729 |
| 3,543 |
| N/M |
|
| Real estate construction | | 1,154 |
| 1,544 |
| (25 | )% | | 1,219 |
| 974 |
| 1,540 |
| (25 | )% |
| Commercial real estate lending | | 20,879 |
| 28,047 |
| (26 | )% | | 16,793 |
| 5,703 |
| 5,083 |
| N/M |
|
| Total commercial | | 75,804 |
| 128,472 |
| (41 | )% | | 140,096 |
| 141,229 |
| 142,965 |
| (47 | )% |
| Residential mortgage | | 65,896 |
| 62,896 |
| 5 | % | | 55,100 |
| 53,632 |
| 54,654 |
| 21 | % |
| Home equity | | 12,324 |
| 12,958 |
| (5 | )% | | 13,218 |
| 13,514 |
| 12,639 |
| (2 | )% |
| Other consumer | | 68 |
| 134 |
| (49 | )% | | 139 |
| 171 |
| 259 |
| (74 | )% |
| Total consumer | | 78,288 |
| 75,988 |
| 3 | % | | 68,456 |
| 67,317 |
| 67,552 |
| 16 | % |
| Total nonaccrual loans | | $ | 154,092 |
| $ | 204,460 |
| (25 | )% | | $ | 208,553 |
| $ | 208,546 |
| $ | 210,517 |
| (27 | )% |
| | | | | | | | | | |
| | | Sep 30, 2018 | Jun 30, 2018 | Seql Qtr %
Change | | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Comp Qtr %
Change |
| Restructured loans (accruing) | | | | | | | | | |
| Commercial and industrial | | $ | 38,885 |
| $ | 32,438 |
| 20 | % | | $ | 29,580 |
| $ | 30,047 |
| $ | 32,572 |
| 19 | % |
| Commercial real estate—owner occupied | | 3,746 |
| 3,820 |
| (2 | )% | | 3,892 |
| 3,989 |
| 4,077 |
| (8 | )% |
| Commercial and business lending | | 42,631 |
| 36,258 |
| 18 | % | | 33,472 |
| 34,036 |
| 36,649 |
| 16 | % |
| Commercial real estate—investor | | 350 |
| 372 |
| (6 | )% | | 13,683 |
| 14,389 |
| 14,294 |
| (98 | )% |
| Real estate construction | | 218 |
| 222 |
| (2 | )% | | 305 |
| 310 |
| 316 |
| (31 | )% |
| Commercial real estate lending | | 568 |
| 594 |
| (4 | )% | | 13,988 |
| 14,699 |
| 14,610 |
| (96 | )% |
| Total commercial | | 43,199 |
| 36,852 |
| 17 | % | | 47,460 |
| 48,735 |
| 51,259 |
| (16 | )% |
| Residential mortgage | | 16,986 |
| 17,934 |
| (5 | )% | | 19,902 |
| 17,068 |
| 16,859 |
| 1 | % |
| Home equity | | 7,792 |
| 7,900 |
| (1 | )% | | 8,098 |
| 7,705 |
| 7,987 |
| (2 | )% |
| Other consumer | | 1,177 |
| 1,037 |
| 14 | % | | 1,041 |
| 1,110 |
| 1,073 |
| 10 | % |
| Total consumer | | 25,955 |
| 26,871 |
| (3 | )% | | 29,041 |
| 25,883 |
| 25,919 |
| — | % |
| Total restructured loans (accruing) | | $ | 69,154 |
| $ | 63,723 |
| 9 | % | | $ | 76,501 |
| $ | 74,618 |
| $ | 77,178 |
| (10 | )% |
Nonaccrual restructured loans (included in nonaccrual loans)
| | $ | 33,757 |
| $ | 38,005 |
| (11 | )% | | $ | 23,827 |
| $ | 23,486 |
| $ | 33,520 |
| 1 | % |
| | | Sep 30, 2018 | Jun 30, 2018 | Seql Qtr %
Change | | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Comp Qtr %
Change |
| Accruing Loans 30-89 Days Past Due | | | | | | | | | |
| Commercial and industrial | | $ | 5,732 |
| $ | 588 |
| N/M |
| | $ | 880 |
| $ | 271 |
| $ | 1,378 |
| N/M |
|
| Commercial real estate—owner occupied | | 6,126 |
| 193 |
| N/M |
| | 511 |
| 48 |
| 1,522 |
| N/M |
|
| Commercial and business lending | | 11,858 |
| 781 |
| N/M |
| | 1,391 |
| 319 |
| 2,900 |
| N/M |
|
| Commercial real estate—investor | | 373 |
| 828 |
| (55 | )% | | 240 |
| 374 |
| 1,109 |
| (66 | )% |
| Real estate construction | | 517 |
| 19,765 |
| (97 | )% | | 490 |
| 251 |
| 700 |
| (26 | )% |
| Commercial real estate lending | | 890 |
| 20,593 |
| (96 | )% | | 730 |
| 625 |
| 1,809 |
| (51 | )% |
| Total commercial | | 12,748 |
| 21,374 |
| (40 | )% | | 2,121 |
| 944 |
| 4,709 |
| 171 | % |
| Residential mortgage | | 8,899 |
| 9,341 |
| (5 | )% | | 15,133 |
| 9,552 |
| 8,870 |
| — | % |
| Home equity | | 8,080 |
| 7,270 |
| 11 | % | | 5,868 |
| 6,825 |
| 7,191 |
| 12 | % |
| Other consumer | | 1,979 |
| 1,735 |
| 14 | % | | 1,811 |
| 2,007 |
| 1,686 |
| 17 | % |
| Total consumer | | 18,958 |
| 18,346 |
| 3 | % | | 22,812 |
| 18,384 |
| 17,747 |
| 7 | % |
| Total accruing loans 30-89 days past due | | $ | 31,706 |
| $ | 39,720 |
| (20 | )% | | $ | 24,934 |
| $ | 19,328 |
| $ | 22,456 |
| 41 | % |
| | | | | | | | | | |
| | | Sep 30, 2018 | Jun 30, 2018 | Seql Qtr %
Change | | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Comp Qtr %
Change |
| Potential Problem Loans | | | | | | | | | |
| Commercial and industrial | | $ | 144,468 |
| $ | 172,177 |
| (16 | )% | | $ | 196,766 |
| $ | 113,778 |
| $ | 153,779 |
| (6 | )% |
| Commercial real estate—owner occupied | | 32,526 |
| 38,879 |
| (16 | )% | | 34,410 |
| 41,997 |
| 57,468 |
| (43 | )% |
| Commercial and business lending | | 176,994 |
| 211,056 |
| (16 | )% | | 231,176 |
| 155,775 |
| 211,247 |
| (16 | )% |
| Commercial real estate—investor | | 49,842 |
| 24,790 |
| 101 | % | | 46,970 |
| 19,291 |
| 46,770 |
| 7 | % |
| Real estate construction | | 3,392 |
| 3,168 |
| 7 | % | | 1,695 |
| — |
| 118 |
| N/M |
|
| Commercial real estate lending | | 53,234 |
| 27,958 |
| 90 | % | | 48,665 |
| 19,291 |
| 46,888 |
| 14 | % |
| Total commercial | | 230,228 |
| 239,014 |
| (4 | )% | | 279,841 |
| 175,066 |
| 258,135 |
| (11 | )% |
| Residential mortgage | | 6,073 |
| 2,355 |
| 158 | % | | 2,155 |
| 1,616 |
| 650 |
| N/M |
|
| Home equity | | 148 |
| 142 |
| 4 | % | | 188 |
| 195 |
| 124 |
| 19 | % |
| Other consumer | | — |
| 6 |
| (100 | )% | | — |
| — |
| — |
| N/M |
|
| Total consumer | | 6,221 |
| 2,503 |
| 149 | % | | 2,343 |
| 1,811 |
| 774 |
| N/M |
|
| Total potential problem loans | | $ | 236,449 |
| $ | 241,517 |
| (2 | )% | | $ | 282,184 |
| $ | 176,877 |
| $ | 258,909 |
| (9 | )% |
N/M = Not meaningful
Numbers may not sum due to rounding.
|
| | | | | | | | | | | | | | | | | | | | | | | | | | |
Associated Banc-Corp
Net Interest Income Analysis - Fully Tax-Equivalent Basis - Sequential and Comparable Quarter | | | | |
| | Three Months Ended |
| | September 30, 2018 | | June 30, 2018 | | September 30, 2017 |
| (In thousands) | Average
Balance | Interest
Income /Expense | Average
Yield /Rate | | Average
Balance | Interest
Income /Expense | Average
Yield /Rate | | Average
Balance | Interest
Income /Expense | Average
Yield /Rate |
| Assets | | | | | | | | | | | |
| Earning assets | | | | | | | | | | | |
Loans (1) (2) (3) | | | | | | | | | | | |
| Commercial and business lending | $ | 7,938,739 |
| $ | 91,250 |
| 4.56 | % | | $ | 7,697,057 |
| $ | 86,771 |
| 4.52 | % | | $ | 7,318,594 |
| $ | 71,169 |
| 3.86 | % |
| Commercial real estate lending | 5,420,680 |
| 68,020 |
| 4.98 | % | | 5,705,817 |
| 72,049 |
| 5.06 | % | | 4,973,436 |
| 50,396 |
| 4.02 | % |
| Total commercial | 13,359,419 |
| 159,270 |
| 4.73 | % | | 13,402,874 |
| 158,820 |
| 4.75 | % | | 12,292,030 |
| 121,565 |
| 3.93 | % |
Residential mortgage (4) | 8,333,303 |
| 71,926 |
| 3.45 | % | | 8,310,358 |
| 69,774 |
| 3.36 | % | | 7,339,827 |
| 59,828 |
| 3.26 | % |
Retail (4) | 1,280,996 |
| 18,859 |
| 5.87 | % | | 1,292,196 |
| 18,466 |
| 5.72 | % | | 1,267,280 |
| 16,541 |
| 5.21 | % |
| Total loans | 22,973,717 |
| 250,055 |
| 4.33 | % | | 23,005,428 |
| 247,060 |
| 4.30 | % | | 20,899,137 |
| 197,934 |
| 3.77 | % |
| Investment securities | | | | | | | | | | | |
| Taxable | 5,290,859 |
| 29,895 |
| 2.26 | % | | 5,518,077 |
| 30,623 |
| 2.22 | % | | 4,846,653 |
| 24,162 |
| 1.99 | % |
Tax-exempt (1) | 1,627,715 |
| 14,973 |
| 3.68 | % | | 1,497,192 |
| 13,587 |
| 3.63 | % | | 1,177,962 |
| 12,650 |
| 4.30 | % |
| Other short-term investments | 582,578 |
| 4,036 |
| 2.75 | % | | 392,009 |
| 3,153 |
| 3.22 | % | | 536,043 |
| 2,492 |
| 1.85 | % |
| Investments and other | 7,501,152 |
| 48,905 |
| 2.61 | % | | 7,407,277 |
| 47,363 |
| 2.56 | % | | 6,560,658 |
| 39,304 |
| 2.40 | % |
| Total earning assets | 30,474,870 |
| $ | 298,959 |
| 3.91 | % | | 30,412,705 |
| $ | 294,423 |
| 3.88 | % | | 27,459,795 |
| $ | 237,238 |
| 3.44 | % |
| Other assets, net | 3,059,317 |
| | | | 3,022,659 |
| | | | 2,504,232 |
| | |
| Total assets | $ | 33,534,187 |
| | | | $ | 33,435,364 |
| | | | $ | 29,964,027 |
| | |
| Liabilities and stockholders' equity | | | | | | | | | | | |
| Interest-bearing liabilities | | | | | | | | | | | |
| Interest-bearing deposits | | | | | | | | | | | |
| Savings | $ | 1,901,960 |
| $ | 327 |
| 0.07 | % | | $ | 1,892,808 |
| $ | 210 |
| 0.04 | % | | $ | 1,545,884 |
| $ | 218 |
| 0.06 | % |
| Interest-bearing demand | 4,988,694 |
| 13,169 |
| 1.05 | % | | 4,735,514 |
| 9,918 |
| 0.84 | % | | 3,993,275 |
| 5,778 |
| 0.57 | % |
| Money market | 7,546,059 |
| 16,212 |
| 0.85 | % | | 7,190,178 |
| 12,045 |
| 0.67 | % | | 6,617,185 |
| 7,017 |
| 0.42 | % |
| Network transaction deposits | 1,969,915 |
| 10,027 |
| 2.02 | % | | 2,130,854 |
| 9,503 |
| 1.79 | % | | 3,104,997 |
| 9,392 |
| 1.20 | % |
| Time deposits | 2,978,314 |
| 10,382 |
| 1.38 | % | | 2,565,001 |
| 6,755 |
| 1.06 | % | | 2,187,986 |
| 5,372 |
| 0.97 | % |
| Total interest-bearing deposits | 19,384,942 |
| 50,116 |
| 1.03 | % | | 18,514,355 |
| 38,431 |
| 0.83 | % | | 17,449,327 |
| 27,778 |
| 0.63 | % |
| Federal funds purchased and securities sold under agreements to repurchase | 231,308 |
| 504 |
| 0.86 | % | | 259,713 |
| 538 |
| 0.83 | % | | 398,200 |
| 768 |
| 0.76 | % |
| Commercial paper | 43,911 |
| 38 |
| 0.35 | % | | 65,631 |
| 51 |
| 0.31 | % | | 86,689 |
| 70 |
| 0.32 | % |
| FHLB advances | 3,690,687 |
| 19,318 |
| 2.08 | % | | 4,809,071 |
| 21,279 |
| 1.77 | % | | 3,072,108 |
| 8,612 |
| 1.11 | % |
| Long-term funding | 656,055 |
| 6,095 |
| 3.72 | % | | 497,517 |
| 4,544 |
| 3.65 | % | | 497,014 |
| 4,544 |
| 3.66 | % |
| Total short and long-term funding | 4,621,961 |
| 25,956 |
| 2.23 | % | | 5,631,932 |
| 26,412 |
| 1.88 | % | | 4,054,011 |
| 13,994 |
| 1.37 | % |
| Total interest-bearing liabilities | 24,006,903 |
| $ | 76,072 |
| 1.26 | % | | 24,146,287 |
| $ | 64,843 |
| 1.08 | % | | 21,503,338 |
| $ | 41,772 |
| 0.77 | % |
| Noninterest-bearing demand deposits | 5,310,977 |
| | | | 5,131,894 |
| | | | 4,992,118 |
| | |
| Other liabilities | 454,767 |
| | | | 436,130 |
| | | | 283,724 |
| | |
| Stockholders’ equity | 3,761,541 |
| | | | 3,721,053 |
| | | | 3,184,847 |
| | |
| Total liabilities and stockholders’ equity | $ | 33,534,187 |
| | | | $ | 33,435,364 |
| | | | $ | 29,964,027 |
| | |
| Interest rate spread | | | 2.65 | % | | | | 2.80 | % | | | | 2.67 | % |
| Net free funds | | | 0.27 | % | | | | 0.22 | % | | | | 0.17 | % |
| Fully tax-equivalent net interest income and net interest margin ("NIM") | | $ | 222,887 |
| 2.92 | % | | | $ | 229,580 |
| 3.02 | % | | | $ | 195,466 |
| 2.84 | % |
| Fully tax-equivalent adjustment | | 3,496 |
| | | | 3,217 |
| | | | 5,344 |
| |
| Net interest income | | $ | 219,392 |
| | | | $ | 226,362 |
| | | | $ | 190,122 |
| |
Numbers may not sum due to rounding.
| |
| (1) | Beginning in 2018, the yield on tax-exempt loans and securities is computed on a fully tax-equivalent basis using a tax rate of 21% and is net of the effects of certain disallowed interest deductions. Prior to 2018, the yield on tax-exempt loans and securities was computed on a fully tax-equivalent basis using a tax rate of 35% and was 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 amortization of net deferred loan origination costs and net accreted purchase loan discount. |
| |
| (4) | Upon conversion, certain Bank Mutual loans were reclassified from home equity to residential mortgage. All prior periods have been adjusted to reflect this change. |
|
| | | | | | | | | | | | | | | | | | | | | | |
Associated Banc-Corp
Net Interest Income Analysis - Fully Tax-Equivalent Basis - Year Over Year |
| | | Nine months ended September 30, |
| | | 2018 | | 2017 |
| (In thousands) | | Average
Balance | | Interest
Income /Expense | | Average
Yield / Rate | | Average
Balance | | Interest
Income /Expense | | Average
Yield / Rate |
| Assets | | | | | | | | | | | | |
| Earning assets | | | | | | | | | | | | |
Loans (1) (2) (3) | | | | | | | | | | | | |
| Commercial and business lending | | $ | 7,652,096 |
| | $ | 252,727 |
| | 4.42 | % | | $ | 7,280,302 |
| | $ | 197,356 |
| | 3.62 | % |
| Commercial real estate lending | | 5,508,720 |
| | 201,573 |
| | 4.89 | % | | 4,979,132 |
| | 143,093 |
| | 3.84 | % |
| Total commercial | | 13,160,815 |
| | 454,300 |
| | 4.61 | % | | 12,259,434 |
| | 340,449 |
| | 3.71 | % |
Residential mortgage (4) | | 8,259,305 |
| | 208,656 |
| | 3.37 | % | | 6,956,937 |
| | 169,231 |
| | 3.24 | % |
Retail (4) | | 1,269,050 |
| | 54,623 |
| | 5.74 | % | | 1,284,607 |
| | 48,039 |
| | 4.99 | % |
| Total loans | | 22,689,170 |
| | 717,579 |
| | 4.22 | % | | 20,500,978 |
| | 557,719 |
| | 3.63 | % |
| Investment securities | | | | | | | | | | | | |
| Taxable | | 5,460,873 |
| | 90,622 |
| | 2.21 | % | | 4,819,580 |
| | 71,295 |
| | 1.97 | % |
Tax-exempt (1) | | 1,480,426 |
| | 40,173 |
| | 3.62 | % | | 1,153,382 |
| | 37,546 |
| | 4.34 | % |
| Other short-term investments | | 430,468 |
| | 9,366 |
| | 2.91 | % | | 378,052 |
| | 5,581 |
| | 1.97 | % |
| Investments and other | | 7,371,767 |
| | 140,161 |
| | 2.54 | % | | 6,351,014 |
| | 114,422 |
| | 2.40 | % |
| Total earning assets | | 30,060,938 |
| | $ | 857,740 |
| | 3.81 | % | | 26,851,992 |
| | $ | 672,141 |
| | 3.34 | % |
| Other assets, net | | 2,989,470 |
| | | | | | 2,466,764 |
| | | | |
| Total assets | | $ | 33,050,408 |
| | | | | | $ | 29,318,756 |
| | | | |
| Liabilities and stockholders' equity | | | | | | | | | | | | |
| Interest-bearing liabilities | | | | | | | | | | | | |
| Interest-bearing deposits | | | | | | | | | | | | |
| Savings | | $ | 1,839,801 |
| | $ | 739 |
| | 0.05 | % | | $ | 1,517,901 |
| | $ | 607 |
| | 0.05 | % |
| Interest-bearing demand | | 4,744,503 |
| | 30,904 |
| | 0.87 | % | | 3,880,379 |
| | 13,779 |
| | 0.47 | % |
| Money market | | 7,318,400 |
| | 38,042 |
| | 0.69 | % | | 6,254,725 |
| | 15,765 |
| | 0.34 | % |
| Network transaction deposits | | 2,168,209 |
| | 28,308 |
| | 1.75 | % | | 3,357,125 |
| | 23,510 |
| | 0.94 | % |
| Time deposits | | 2,753,832 |
| | 23,966 |
| | 1.16 | % | | 1,853,295 |
| | 12,221 |
| | 0.88 | % |
| Total interest-bearing deposits | | 18,824,746 |
| | 121,959 |
| | 0.87 | % | | 16,863,427 |
| | 65,882 |
| | 0.52 | % |
| Federal funds purchased and securities sold under agreements to repurchase | | 255,371 |
| | 1,564 |
| | 0.82 | % | | 460,672 |
| | 2,107 |
| | 0.61 | % |
| Commercial paper | | 60,979 |
| | 150 |
| | 0.33 | % | | 100,178 |
| | 239 |
| | 0.32 | % |
| FHLB advances | | 4,078,588 |
| | 53,720 |
| | 1.76 | % | | 3,028,957 |
| | 20,209 |
| | 0.89 | % |
| Long-term funding | | 550,888 |
| | 15,183 |
| | 3.67 | % | | 496,842 |
| | 13,632 |
| | 3.66 | % |
| Total short and long-term funding | | 4,945,826 |
| | 70,617 |
| | 1.91 | % | | 4,086,650 |
| | 36,186 |
| | 1.18 | % |
| Total interest-bearing liabilities | | 23,770,572 |
| | $ | 192,576 |
| | 1.08 | % | | 20,950,077 |
| | $ | 102,068 |
| | 0.65 | % |
| Noninterest-bearing demand deposits | | 5,176,858 |
| | | | | | 4,950,252 |
| | | | |
| Other liabilities | | 428,854 |
| | | | | | 260,409 |
| | | | |
| Stockholders’ equity | | 3,674,125 |
| | | | | | 3,158,018 |
| | | | |
| Total liabilities and stockholders’ equity | | $ | 33,050,408 |
| | | | | | $ | 29,318,756 |
| | | | |
| Interest rate spread | | | | | | 2.73 | % | | | | | | 2.69 | % |
| Net free funds | | | | | | 0.22 | % | | | | | | 0.14 | % |
| Fully tax-equivalent net interest income and net interest margin | | | | $ | 665,164 |
| | 2.95 | % | | | | $ | 570,073 |
| | 2.83 | % |
| Fully tax-equivalent adjustment | | | | 9,539 |
| | | | | | 15,858 |
| | |
| Net interest income | | | | $ | 655,625 |
| | | | | | $ | 554,215 |
| | |
Numbers may not sum due to rounding.
| |
| (1) | Beginning in 2018, the yield on tax-exempt loans and securities is computed on a fully tax-equivalent basis using a tax rate of 21% and is net of the effects of certain disallowed interest deductions. Prior to 2018, the yield on tax-exempt loans and securities was computed on a fully tax-equivalent basis using a tax rate of 35% and was 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 amortization of net deferred loan origination costs and net accreted purchase loan discount. |
(4) Upon conversion, certain Bank Mutual loans were reclassified from home equity to residential mortgage. All prior periods have been adjusted to reflect this change.
|
| | | | | | | | | | | | | | | | | | | | | | | | | | |
Associated Banc-Corp Loan and Deposit Composition | | | | | | | | | | | | | | |
| (In thousands) | | | | | | | | | | | | | | |
Period end loan composition (3) | | Sep 30, 2018 | | Jun 30, 2018 | | Seql Qtr % Change | | Mar 31, 2018 | | Dec 31, 2017 | | Sep 30, 2017 | | Comp Qtr % Change |
| Commercial and industrial | | $ | 7,159,941 |
| | $ | 7,109,796 |
| | 1 | % | | $ | 6,756,983 |
| | $ | 6,399,693 |
| | $ | 6,534,660 |
| | 10 | % |
| Commercial real estate—owner occupied | | 867,682 |
| | 888,330 |
| | (2 | )% | | 900,913 |
| | 802,209 |
| | 827,064 |
| | 5 | % |
| Commercial and business lending | | 8,027,622 |
| | 7,998,126 |
| | — | % | | 7,657,896 |
| | 7,201,902 |
| | 7,361,724 |
| | 9 | % |
| Commercial real estate—investor | | 3,924,499 |
| | 3,996,415 |
| | (2 | )% | | 4,077,671 |
| | 3,315,254 |
| | 3,345,536 |
| | 17 | % |
| Real estate construction | | 1,416,209 |
| | 1,487,159 |
| | (5 | )% | | 1,579,778 |
| | 1,451,684 |
| | 1,552,135 |
| | (9 | )% |
| Commercial real estate lending | | 5,340,708 |
| | 5,483,574 |
| | (3 | )% | | 5,657,449 |
| | 4,766,938 |
| | 4,897,671 |
| | 9 | % |
| Total commercial | | 13,368,330 |
| | 13,481,700 |
| | (1 | )% | | 13,315,345 |
| | 11,968,840 |
| | 12,259,395 |
| | 9 | % |
| Residential mortgage | | 8,227,649 |
| | 8,207,253 |
| | — | % | | 8,197,223 |
| | 7,546,534 |
| | 7,408,471 |
| | 11 | % |
| Home equity | | 901,275 |
| | 911,363 |
| | (1 | )% | | 923,470 |
| | 883,804 |
| | 890,130 |
| | 1 | % |
| Other consumer | | 369,858 |
| | 376,470 |
| | (2 | )% | | 374,453 |
| | 385,813 |
| | 373,464 |
| | (1 | )% |
| Total consumer | | 9,498,782 |
| | 9,495,086 |
| | — | % | | 9,495,146 |
| | 8,816,151 |
| | 8,672,065 |
| | 10 | % |
| Total loans | | $ | 22,867,112 |
| | $ | 22,976,786 |
| | — | % | | $ | 22,810,491 |
| | $ | 20,784,991 |
| | $ | 20,931,460 |
| | 9 | % |
| Purchased credit-impaired loans | | $ | 13,133 |
| | $ | 15,900 |
| | (17 | )% | | $ | 14,838 |
| | $ | — |
| | $ | — |
| | N/M |
|
Period end deposit and customer funding composition (4) | | Sep 30, 2018 | | Jun 30, 2018 | | Seql Qtr % Change | | Mar 31, 2018 | | Dec 31, 2017 | | Sep 30, 2017 | | Comp Qtr % Change |
| Noninterest-bearing demand | | $ | 5,421,270 |
| | $ | 5,341,361 |
| | 1 | % | | $ | 5,458,473 |
| | $ | 5,478,416 |
| | $ | 5,177,734 |
| | 5 | % |
| Savings | | 1,937,006 |
| | 1,887,777 |
| | 3 | % | | 1,883,638 |
| | 1,524,992 |
| | 1,544,037 |
| | 25 | % |
| Interest-bearing demand | | 5,096,998 |
| | 4,650,407 |
| | 10 | % | | 4,719,566 |
| | 4,603,157 |
| | 4,990,891 |
| | 2 | % |
| Money market | | 9,087,587 |
| | 9,208,993 |
| | (1 | )% | | 9,086,553 |
| | 8,830,328 |
| | 8,299,512 |
| | 9 | % |
| Brokered CDs | | 235,711 |
| | 228,029 |
| | 3 | % | | 44,503 |
| | 18,609 |
| | 3,554 |
| | N/M |
|
| Other time | | 3,053,041 |
| | 2,499,747 |
| | 22 | % | | 2,632,869 |
| | 2,330,460 |
| | 2,317,723 |
| | 32 | % |
| Total deposits | | 24,831,612 |
| | 23,816,314 |
| | 4 | % | | 23,825,602 |
| | 22,785,962 |
| | 22,333,451 |
| | 11 | % |
Customer funding (1) | | 184,269 |
| | 235,804 |
| | (22 | )% | | 297,289 |
| | 250,332 |
| | 324,042 |
| | (43 | )% |
| Total deposits and customer funding | | $ | 25,015,882 |
| | $ | 24,052,118 |
| | 4 | % | | $ | 24,122,891 |
| | $ | 23,036,294 |
| | $ | 22,657,493 |
| | 10 | % |
Network transaction deposits (2) | | $ | 1,852,863 |
| | $ | 2,094,670 |
| | (12 | )% | | $ | 2,244,739 |
| | $ | 2,520,968 |
| | $ | 2,622,787 |
| | (29 | )% |
| Net deposits and customer funding (Total deposits and customer funding, excluding Brokered CDs and network transaction deposits) | | $ | 22,927,308 |
| | $ | 21,729,419 |
| | 6 | % | | $ | 21,833,649 |
| | $ | 20,496,717 |
| | $ | 20,031,152 |
| | 14 | % |
| | | | | | | | | | | | | | | |
Quarter average loan composition (3) | | Sep 30, 2018 | | Jun 30, 2018 | | Seql Qtr % Change | | Mar 31, 2018 | | Dec 31, 2017 | | Sep 30, 2017 | | Comp Qtr % Change |
| Commercial and industrial | | $ | 7,059,946 |
| | $ | 6,804,311 |
| | 4 | % | | $ | 6,449,898 |
| | $ | 6,366,626 |
| | $ | 6,487,378 |
| | 9 | % |
| Commercial real estate—owner occupied | | 878,793 |
| | 892,746 |
| | (2 | )% | | 863,723 |
| | 811,758 |
| | 831,216 |
| | 6 | % |
| Commercial and business lending | | 7,938,739 |
| | 7,697,057 |
| | 3 | % | | 7,313,621 |
| | 7,178,384 |
| | 7,318,594 |
| | 8 | % |
| Commercial real estate—investor | | 3,948,922 |
| | 4,117,675 |
| | (4 | )% | | 3,866,286 |
| | 3,369,785 |
| | 3,346,669 |
| | 18 | % |
| Real estate construction | | 1,471,758 |
| | 1,588,141 |
| | (7 | )% | | 1,533,143 |
| | 1,504,104 |
| | 1,626,767 |
| | (10 | )% |
| Commercial real estate lending | | 5,420,680 |
| | 5,705,817 |
| | (5 | )% | | 5,399,429 |
| | 4,873,889 |
| | 4,973,436 |
| | 9 | % |
| Total commercial | | 13,359,419 |
| | 13,402,874 |
| | — | % | | 12,713,050 |
| | 12,052,273 |
| | 12,292,030 |
| | 9 | % |
Residential mortgage(5) | | 8,333,303 |
| | 8,310,358 |
| | — | % | | 8,066,297 |
| | 7,546,288 |
| | 7,339,827 |
| | 14 | % |
Home equity(5) | | 906,364 |
| | 917,688 |
| | (1 | )% | | 917,001 |
| | 885,235 |
| | 894,596 |
| | 1 | % |
| Other consumer | | 374,632 |
| | 374,508 |
| | — | % | | 382,180 |
| | 379,820 |
| | 372,684 |
| | 1 | % |
| Total consumer | | 9,614,298 |
| | 9,602,555 |
| | — | % | | 9,365,479 |
| | 8,811,343 |
| | 8,607,107 |
| | 12 | % |
| Total loans | | $ | 22,973,717 |
| | $ | 23,005,428 |
| | — | % | | $ | 22,078,529 |
| | $ | 20,863,616 |
| | $ | 20,899,137 |
| | 10 | % |
| | | | | | | | | | | | | | | |
Quarter average deposit composition (4) | | Sep 30, 2018 | | Jun 30, 2018 | | Seql Qtr % Change | | Mar 31, 2018 | | Dec 31, 2017 | | Sep 30, 2017 | | Comp Qtr % Change |
| Noninterest-bearing demand | | $ | 5,310,977 |
| | $ | 5,131,894 |
| | 3 | % | | $ | 5,084,957 |
| | $ | 5,133,977 |
| | $ | 4,992,118 |
| | 6 | % |
| Savings | | 1,901,960 |
| | 1,892,808 |
| | — | % | | 1,722,665 |
| | 1,554,639 |
| | 1,545,884 |
| | 23 | % |
| Interest-bearing demand | | 4,988,694 |
| | 4,735,514 |
| | 5 | % | | 4,503,974 |
| | 4,168,550 |
| | 3,993,275 |
| | 25 | % |
| Money market | | 7,546,059 |
| | 7,190,178 |
| | 5 | % | | 7,215,329 |
| | 6,520,052 |
| | 6,617,185 |
| | 14 | % |
| Network transaction deposits | | 1,969,915 |
| | 2,130,854 |
| | (8 | )% | | 2,408,681 |
| | 2,517,737 |
| | 3,104,997 |
| | (37 | )% |
| Time deposits | | 2,978,314 |
| | 2,565,001 |
| | 16 | % | | 2,715,292 |
| | 2,354,828 |
| | 2,187,986 |
| | 36 | % |
| Total deposits | | $ | 24,695,918 |
| | $ | 23,646,250 |
| | 4 | % | | $ | 23,650,898 |
| | $ | 22,249,783 |
| | $ | 22,441,445 |
| | 10 | % |
N/M = Not meaningful
Numbers may not sum due to rounding.
| |
| (1) | Includes repurchase agreements and commercial paper. |
(2) Included above in interest-bearing demand and money market.
(3) On February 1, 2018, the Corporation acquired Bank Mutual and added $1.9 billion of loans.
(4) On February 1, 2018, the Corporation acquired Bank Mutual and assumed $1.8 billion of deposits.
(5) Upon conversion, certain Bank Mutual loans were reclassified from home equity to residential mortgage. All prior periods have been adjusted to reflect this change.
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Associated Banc-Corp
Non-GAAP Financial Measures Reconciliation | | | | | | | | |
| (In millions, except per share data) | | YTD
Sep 2018 | YTD
Sep 2017 | 3Q18 | 2Q18 | 1Q18 | 4Q17 | 3Q17 |
Tangible common equity reconciliation (1) | | | | | | | | |
| Common equity | | | | $ | 3,540 |
| $ | 3,611 |
| $ | 3,553 |
| $ | 3,078 |
| $ | 3,044 |
|
| Goodwill and other intangible assets, net | | | | (1,247 | ) | (1,247 | ) | (1,233 | ) | (992 | ) | (986 | ) |
| Tangible common equity | | | | $ | 2,293 |
| $ | 2,364 |
| $ | 2,320 |
| $ | 2,086 |
| $ | 2,058 |
|
Tangible assets reconciliation (1) | | | | | | | | |
| Total assets | | | | $ | 33,489 |
| $ | 33,653 |
| $ | 33,367 |
| $ | 30,484 |
| $ | 30,065 |
|
| Goodwill and other intangible assets, net | | | | (1,247 | ) | (1,247 | ) | (1,233 | ) | (992 | ) | (986 | ) |
| Tangible assets | | | | $ | 32,242 |
| $ | 32,406 |
| $ | 32,134 |
| $ | 29,492 |
| $ | 29,079 |
|
Average tangible common equity and average common equity tier 1 reconciliation(1) | | | | | | | | |
| Common equity | | $ | 3,510 |
| $ | 2,998 |
| $ | 3,589 |
| $ | 3,561 |
| $ | 3,377 |
| $ | 3,056 |
| $ | 3,025 |
|
| Goodwill and other intangible assets, net | | (1,197 | ) | (987 | ) | (1,246 | ) | (1,236 | ) | (1,108 | ) | (992 | ) | (986 | ) |
| Tangible common equity | | 2,313 |
| 2,011 |
| 2,343 |
| 2,325 |
| 2,269 |
| 2,064 |
| 2,039 |
|
| Accumulated other comprehensive loss (income) | | 111 |
| 51 |
| 125 |
| 117 |
| 89 |
| 62 |
| 49 |
|
| Deferred tax assets (liabilities), net | | 40 |
| 32 |
| 45 |
| 47 |
| 32 |
| 29 |
| 32 |
|
| Average common equity Tier 1 | | $ | 2,464 |
| $ | 2,094 |
| $ | 2,513 |
| $ | 2,489 |
| $ | 2,390 |
| $ | 2,155 |
| $ | 2,120 |
|
Selected Trend Information (2) | | | | | | | | |
| Insurance commissions and fees | | | | $ | 22 |
| $ | 24 |
| $ | 23 |
| $ | 19 |
| $ | 20 |
|
| Service charges and deposit account fees | | | | 17 |
| 16 |
| 16 |
| 16 |
| 16 |
|
| Card-based and loan fees | | | | 14 |
| 14 |
| 13 |
| 14 |
| 13 |
|
| Trust and asset management fees | | | | 14 |
| 13 |
| 13 |
| 13 |
| 13 |
|
| Brokerage commissions and fees | | | | 7 |
| 7 |
| 7 |
| 7 |
| 4 |
|
| Fee-based revenue | | | | 74 |
| 75 |
| 73 |
| 69 |
| 66 |
|
| Other | | | | 14 |
| 18 |
| 17 |
| 16 |
| 20 |
|
| Total noninterest income | | | | $ | 88 |
| $ | 93 |
| $ | 90 |
| $ | 85 |
| $ | 86 |
|
Selected equity and performance ratios (1) (3) | | | | | | | | |
| Tangible common equity / tangible assets | | | | 7.11 | % | 7.29 | % | 7.22 | % | 7.07 | % | 7.08 | % |
| Return on average equity | | 8.90 | % | 7.59 | % | 9.06 | % | 9.61 | % | 7.96 | % | 6.17 | % | 8.10 | % |
| Return on average tangible common equity | | 13.73 | % | 11.45 | % | 14.14 | % | 14.98 | % | 11.99 | % | 9.16 | % | 12.20 | % |
| Return on average common equity Tier 1 | | 12.89 | % | 11.00 | % | 13.18 | % | 14.00 | % | 11.39 | % | 8.77 | % | 11.73 | % |
Efficiency ratio reconciliation (4) | | | | | | | | |
| Federal Reserve efficiency ratio | | 67.50 | % | 65.64 | % | 66.12 | % | 65.77 | % | 70.76 | % | 66.93 | % | 63.92 | % |
| Fully tax-equivalent adjustment | | (0.69 | )% | (1.27 | )% | (0.75 | )% | (0.65 | )% | (0.66 | )% | (1.30 | )% | (1.21 | )% |
| Other intangible amortization | | (0.64 | )% | (0.18 | )% | (0.73 | )% | (0.68 | )% | (0.51 | )% | (0.18 | )% | (0.16 | )% |
| Fully tax-equivalent efficiency ratio | | 66.18 | % | 64.19 | % | 64.66 | % | 64.45 | % | 69.60 | % | 65.45 | % | 62.55 | % |
| Acquisition related costs adjustment | | (3.33 | )% | — | % | (0.94 | )% | (2.40 | )% | (6.60 | )% | — | % | — | % |
| Fully tax-equivalent efficiency ratio, excluding acquisition related costs | | 62.85 | % | 64.19 | % | 63.72 | % | 62.05 | % | 63.00 | % | 65.45 | % | 62.55 | % |
| Acquisition Related Costs | YTD 2018 | YTD 2018 per share data(6) | 3Q 2018 | 3Q 2018 per share data(6) | 2Q 2018 | 2Q 2018 per share data(6) | 1Q 2018 | 1Q 2018 per share data(6) |
| GAAP earnings | $ | 238 |
| $ | 1.38 |
| $ | 84 |
| $ | 0.48 |
| $ | 87 |
| $ | 0.50 |
| $ | 67 |
| $ | 0.40 |
|
| Change of control and severance | 7 |
|
|
| 1 |
|
|
| (1 | ) |
|
| 7 |
|
|
|
| Merger advisors and consultants | 5 |
|
|
| 1 |
|
|
| — |
|
|
| 4 |
|
|
|
| Facilities and other | 8 |
|
|
| 1 |
|
|
| 2 |
|
|
| 5 |
|
|
|
| Contract terminations and conversion costs | 11 |
|
|
| — |
|
|
| 6 |
|
|
| 5 |
|
|
|
| Asset losses (gains), net | $ | 2 |
|
|
| $ | 1 |
|
|
| $ | 1 |
|
|
| $ | — |
|
|
|
| Total acquisition related costs | $ | 32 |
|
|
| $ | 3 |
|
|
| $ | 8 |
|
|
| $ | 21 |
|
|
|
| Less additional tax expense | $ | 8 |
|
|
| $ | 1 |
|
|
| $ | 2 |
|
|
| $ | 5 |
|
|
|
Earnings, excluding acquisition related costs (5) | $ | 262 |
| $ | 1.52 |
| $ | 87 |
| $ | 0.49 |
| $ | 93 |
| $ | 0.53 |
| $ | 83 |
| $ | 0.50 |
|
Numbers may not sum due to rounding.
| |
| (1) | The ratio tangible common equity to tangible assets excludes goodwill and other intangible assets, net. This financial measure has been included as it is considered to be a critical metric with which to analyze and evaluate financial condition and capital strength. |
| |
| (2) | These financial measures have been included as they provide meaningful supplemental information to assess trends in the Corporation’s results of operations. |
| |
| (3) | These capital measurements are used by management, regulators, investors, and analysts to assess, monitor and compare the quality and composition of our capital with the capital of other financial services companies. |
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| (4) | The efficiency ratio as defined by the Federal Reserve guidance is noninterest expense (which includes the provision for unfunded commitments) divided by the sum of net interest income plus noninterest income, excluding investment securities gains / losses, net. The fully tax-equivalent efficiency ratio is noninterest expense (which includes the provision for unfunded commitments), excluding other intangible amortization, divided by the sum of fully tax-equivalent net interest income plus noninterest income, excluding investment securities gains / losses, net. Management believes the fully tax-equivalent efficiency ratio, which adjusts net interest income for the tax-favored status of certain loans and investment securities, to be the preferred industry measurement as it enhances the comparability of net interest income arising from taxable and tax-exempt sources. |
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| (5) | This is a non-GAAP financial measure. Management believes these measures are meaningful because they reflect adjustments commonly made by management, investors, regulators, and analysts to evaluate the adequacy of earnings per common share and provide greater understanding of ongoing operations and enhanced comparability of results with prior periods. |
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| (6) | Earnings and per share data presented after-tax. |
