Exhibit 99.1
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| NEWS RELEASE Investor Contact: Brian Mathena, Senior Vice President, Director of Investor Relations 920-491-7059 Media Contact: Jennifer Kaminski, Vice President, Public Relations Senior Manager 920-491-7576 |
Associated Banc-Corp Reports Third Quarter 2020 Earnings of $0.26 Per Common Share Including Restructuring Charges and Tax Benefits
GREEN BAY, Wis. -- October 22, 2020 -- Associated Banc-Corp (NYSE: ASB) ("Associated" or "Company") today reported net income available to common equity ("earnings") of $40 million, or $0.26 per common share, for the quarter ended September 30, 2020. Third quarter earnings, excluding restructuring charges and tax benefits, were $0.24 per common share1. These amounts compare to net income available to common equity of $80 million, or $0.49 per common share for the quarter ended September 30, 2019.
Year to date earnings were $227 million, or $1.46 per common share, compared to $243 million, or $1.48 per common share, for the same period last year. Excluding restructuring charges, tax benefits from the reorganization of our securities and real estate lending subsidiaries, the gain on sale of Associated Benefits and Risk Consulting (ABRC), and acquisition costs, year to date 2020 earnings per common share were $0.681.
"We took action during the quarter to optimize our operations and improve efficiency," said President and CEO Philip B. Flynn. "We announced the sale or consolidation of 22 branches, along with the streamlining of our back office functions, and the restructuring of several subsidiaries and liabilities. Together we expect these actions will reduce our run-rate expenses by approximately $40 million and improve our net interest income by approximately $20 million on an annualized basis. The current environment has accelerated the on-going shift of customer activity towards online and mobile banking and is driving our need to invest in technology that allows us to be more nimble, more virtual, and more digitally enabled. While the environment has been challenging, our customers are demonstrating resilience, credit trends are moderating, and the actions we have taken position us to better support our core markets going into next year.”
THIRD QUARTER 2020 SUMMARY (all comparisons to the second quarter of 2020)
•Average loans of $25.0 billion were down 1%, or $228 million
•Average deposits of $26.8 billion were up 3%, or $696 million
•Net interest income of $182 million decreased, $8 million, or 4%
•Provision for credit losses was $43 million, an improvement of $18 million, or 29%
•Tangible book value per share was $16.37, up 1%
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 pages 10 and 11 of the attached tables for a reconciliation of non-GAAP financial measures to GAAP financial measures.
Loans
Third quarter 2020 average loans of $25.0 billion were down 1%, or $228 million from the second quarter 2020 and were up 7%, or $1.7 billion from the same period last year. With respect to third quarter average balances by loan category:
•Commercial real estate lending increased $312 million from the second quarter 2020 and $875 million from the same period last year to $6.0 billion. The increase was driven by the continued funding of the existing pipeline and slowed loan payoffs.
•Consumer lending was $9.2 billion, down $269 million from the second quarter 2020 and down $433 million from the same period last year. This was driven by continued refinancing activity and a $70 million mortgage portfolio sale.
•Commercial and business lending decreased $271 million from the second quarter 2020 and increased $1.3 billion compared to the same period last year to $9.8 billion. General commercial line pay downs drove the decrease from last quarter and PPP loans accounted for the majority of the increase from the same period last year.
Deposits
Third quarter 2020 average deposits of $26.8 billion were up $696 million, or 3%, compared to the second quarter 2020 and were up $1.6 billion, or 7%, from the same period last year.
With respect to third quarter 2020 average balances by deposit category:
•Noninterest-bearing demand deposits increased $486 million from the second quarter and $2.1 billion from the same period last year to $7.4 billion.
•Interest-bearing demand deposits increased $390 million from the second quarter and $383 million from the same period last year to $5.8 billion.
•Savings increased $203 million from the second quarter and $845 million from the same period last year to $3.5 billion.
•Network transaction deposits decreased $17 million from the second quarter and $237 million from the same period last year to $1.5 billion.
•Money market deposits decreased $32 million from the second quarter and $468 million from the same period last year to $6.5 billion.
•Time deposits decreased $334 million from the second quarter and $972 million from the same period last year to $2.1 billion.
Net Interest Income and Net Interest Margin
Third quarter 2020 net interest income of $182 million was down 4%, or $8 million, and the net interest margin decreased 18 basis points, from the second quarter of 2020. Third quarter 2020 net interest income decreased 12%, or $24 million, and the net interest margin decreased 50 basis points from the same period last year, to 2.31%. The decreases in net interest income and net interest margin from the second quarter are due to loans repricing lower after reductions to LIBOR and increasing liquidity during the third quarter.
•The average yield on total earning assets for the third quarter of 2020 decreased 24 basis points from the prior quarter and decreased 124 basis points from the same period last year to 2.70%.
•The average cost of total interest-bearing liabilities for the third quarter of 2020 decreased 8 basis points from the prior quarter and decreased 92 basis points from the same period last year to 0.52%.
•The net free funds benefit for the third quarter of 2020 decreased two basis points from the prior quarter and decreased 18 basis points compared to the same period last year.
Noninterest Income
Third quarter 2020 total noninterest income of $76 million decreased $179 million from the prior quarter and decreased $25 million from the same period last year. The second quarter included $157 million of asset gains driven by the gain on sale of Associated Benefits and Risk Consulting ("ABRC").
With respect to third quarter 2020 noninterest income line items:
•Service charges and deposit account fees were $14 million for the third quarter, up $3 million from the previous quarter and down $2 million from the same period last year.
•Card-based revenue was $10 million for the third quarter, up $1 million from the previous quarter and flat from the same period last year.
•Insurance commissions and fees were down $22 million from the previous quarter and down $21 million from the same period last year due to the sale of ABRC.
Noninterest Expense
Third quarter 2020 total noninterest expense of $228 million increased $44 million from the prior quarter and increased $27 million compared to the same period last year. The third quarter 2020 included $45 million of loss on prepayments of FHLB advances which were not incurred in the prior quarter or the third quarter last year.
With respect to third quarter 2020 noninterest expense line items:
•Personnel expense decreased $3 million from the prior quarter and $15 million from the same period last year, driven by lower personnel expense from the sale of ABRC which was partially offset by severance from restructuring in 3Q 2020.
•Technology expense decreased $2 million from the prior quarter and $1 million from the same period last year.
•Occupancy expense increased $3 million from both the prior quarter and the same period last year. This was driven by $2 million of lease termination expense.
•Other expense was up $3 million from the prior quarter and $2 million from the same period last year. This was driven by $5 million of OREO expense primarily due to our restructuring.
Taxes
The third quarter 2020 tax benefit was $58 million compared to $51 million of tax expense in the prior quarter and $21 million of tax expense in the same period last year. The tax benefit recognized in the third quarter was driven by capital losses from the reorganization of our securities and real estate lending subsidiaries.
Credit
The third quarter 2020 provision for credit losses was $43 million, down from $61 million in the prior quarter and up from $2 million in the same period last year.
With respect to third quarter 2020 credit quality:
•Potential problem loans of $293 million were down $14 million, or 5%, from the prior quarter and up $160 million, or 120%, from the same period last year.
•Nonaccrual loans of $232 million were up $60 million from the prior quarter and up $103 million from the same period last year. The increase from the prior quarter was driven by three commercial real estate deals. The nonaccrual loans to total loans ratio was 0.93% in the third quarter, up from 0.69% in the prior quarter and up from 0.57% in the same period last year.
•Net charge offs of $30 million were up $3 million from the prior quarter and up $9 million from the same period last year.
•The allowance for credit losses on loans (ACLL) of $442 million was up $13 million from the prior quarter and up $205 million compared to the same period last year. The ACLL to total loans ratio was 1.77% in the second quarter, up from 1.73% in the prior quarter and 1.04% in the same period last year.
Capital
The Company’s capital position remains strong, with a CET1 capital ratio of 10.2% at September 30, 2020. The Company’s capital ratios continue to be in excess of the Basel III “well-capitalized” regulatory benchmarks on a fully phased in basis.
THIRD QUARTER 2020 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 22, 2020. 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 2020 earnings call. The third quarter 2020 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 $35 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 240 banking locations serving more than 120 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) | September 30, 2020 | June 30, 2020 | Seql Qtr $ Change | March 31, 2020 | December 31, 2019 | September 30, 2019 | Comp Qtr $ Change |
| Assets | | | | | | | |
| Cash and due from banks | $ | 401,151 | | $ | 443,500 | | $ | (42,349) | | $ | 480,337 | | $ | 373,380 | | $ | 523,435 | | $ | (122,284) | |
| Interest-bearing deposits in other financial institutions | 712,416 | | 1,569,006 | | (856,590) | | 176,440 | | 207,624 | | 236,010 | | 476,406 | |
| Federal funds sold and securities purchased under agreements to resell | 95 | | 185 | | (90) | | 22,455 | | 7,740 | | 100 | | (5) | |
Investment securities held to maturity, net, at amortized cost(a) | 1,990,870 | | 2,077,225 | | (86,355) | | 2,149,373 | | 2,205,083 | | 2,200,419 | | (209,549) | |
| Investment securities available for sale, at fair value | 3,258,360 | | 3,149,773 | | 108,587 | | 2,928,787 | | 3,262,586 | | 3,436,289 | | (177,929) | |
| Equity securities | 15,090 | | 15,091 | | (1) | | 15,063 | | 15,090 | | 15,096 | | (6) | |
| Federal Home Loan Bank and Federal Reserve Bank stocks, at cost | 168,280 | | 206,281 | | (38,001) | | 222,922 | | 227,347 | | 207,443 | | (39,163) | |
| Residential loans held for sale | 130,139 | | 196,673 | | (66,534) | | 366,330 | | 136,280 | | 137,655 | | (7,516) | |
| Commercial loans held for sale | 19,360 | | 3,565 | | 15,795 | | — | | 15,000 | | 11,597 | | 7,763 | |
| Loans | 25,003,753 | | 24,832,671 | | 171,082 | | 24,365,633 | | 22,821,440 | | 22,754,710 | | 2,249,043 | |
Allowance for loan losses(b) | (384,711) | | (363,803) | | (20,908) | | (337,793) | | (201,371) | | (214,425) | | (170,286) | |
| Loans, net | 24,619,041 | | 24,468,868 | | 150,173 | | 24,027,841 | | 22,620,068 | | 22,540,285 | | 2,078,756 | |
| Bank and corporate owned life insurance | 679,257 | | 676,196 | | 3,061 | | 674,026 | | 671,948 | | 670,739 | | 8,518 | |
| Tax credit and other investments | 314,066 | | 303,132 | | 10,934 | | 315,909 | | 279,969 | | 256,220 | | 57,846 | |
| Premises and equipment, net | 422,222 | | 434,042 | | (11,820) | | 438,469 | | 435,284 | | 436,268 | | (14,046) | |
| Goodwill | 1,107,902 | | 1,107,902 | | — | | 1,191,388 | | 1,176,230 | | 1,176,230 | | (68,328) | |
| Mortgage servicing rights, net | 45,261 | | 49,403 | | (4,142) | | 58,289 | | 67,306 | | 68,168 | | (22,907) | |
| Other intangible assets, net | 70,507 | | 72,759 | | (2,252) | | 92,723 | | 88,301 | | 91,089 | | (20,582) | |
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| Interest receivable | 91,612 | | 87,097 | | 4,515 | | 92,377 | | 91,196 | | 96,315 | | (4,703) | |
| Other assets | 653,117 | | 640,765 | | 12,352 | | 655,328 | | 506,046 | | 493,105 | | 160,012 | |
| Total assets | $ | 34,698,746 | | $ | 35,501,464 | | $ | (802,718) | | $ | 33,908,056 | | $ | 32,386,478 | | $ | 32,596,460 | | $ | 2,102,286 | |
| Liabilities and stockholders’ equity | | | | | | | |
| Noninterest-bearing demand deposits | $ | 7,489,048 | | $ | 7,573,942 | | $ | (84,894) | | $ | 6,107,386 | | $ | 5,450,709 | | $ | 5,503,223 | | $ | 1,985,825 | |
| Interest-bearing deposits | 19,223,500 | | 18,977,502 | | 245,998 | | 19,554,194 | | 18,328,355 | | 18,919,339 | | 304,161 | |
| Total deposits | 26,712,547 | | 26,551,444 | | 161,103 | | 25,661,580 | | 23,779,064 | | 24,422,562 | | 2,289,985 | |
| Federal funds purchased and securities sold under agreements to repurchase | 155,329 | | 142,293 | | 13,036 | | 133,007 | | 433,097 | | 78,028 | | 77,301 | |
| Commercial paper | 50,987 | | 39,535 | | 11,452 | | 33,647 | | 32,016 | | 30,416 | | 20,571 | |
| PPPLF | 1,022,217 | | 1,009,760 | | 12,457 | | — | | — | | — | | 1,022,217 | |
| FHLB advances | 1,706,763 | | 2,657,016 | | (950,253) | | 3,214,194 | | 3,180,967 | | 2,877,727 | | (1,170,964) | |
| Other long-term funding | 549,201 | | 548,937 | | 264 | | 549,644 | | 549,343 | | 796,799 | | (247,598) | |
Allowance for unfunded commitments(b) | 57,276 | | 64,776 | | (7,500) | | 56,276 | | 21,907 | | 22,907 | | 34,369 | |
Accrued expenses and other liabilities(b) | 398,991 | | 463,245 | | (64,254) | | 469,235.526 | | 467,961 | | 447,166 | | (48,175) | |
| Total liabilities | 30,653,313 | | 31,477,007 | | (823,694) | | 30,117,584 | | 28,464,355 | | 28,675,605 | | 1,977,708 | |
| Stockholders’ equity | | | | | | | |
| Preferred equity | 353,637 | | 353,846 | | (209) | | 256,716 | | 256,716 | | 256,716 | | 96,921 | |
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Common equity(b) | 3,691,796 | | 3,670,612 | | 21,184 | | 3,533,755 | | 3,665,407 | | 3,664,139 | | 27,657 | |
| Total stockholders’ equity | 4,045,433 | | 4,024,457 | | 20,976 | | 3,790,471 | | 3,922,124 | | 3,920,855 | | 124,578 | |
| Total liabilities and stockholders’ equity | $ | 34,698,746 | | $ | 35,501,464 | | $ | (802,718) | | $ | 33,908,056 | | $ | 32,386,478 | | $ | 32,596,460 | | $ | 2,102,286 | |
Numbers may not sum due to rounding.
(a) Beginning in 2020, the investment securities held to maturity are reported net of the related allowance for credit losses. Prior periods were unadjusted due to the modified retrospective application of ASU 2016-13.
(b) At January 1, 2020, the adoption of ASU 2016-13 resulted in an increase to the allowance for loan losses of $112 million and an increase to the allowance for unfunded commitments of $19 million for a total increase to the allowance for credit losses on loans of $131 million. A corresponding after tax decrease to common equity of $98 million was recorded along with a deferred tax asset of $33 million resulting in a decrease to accrued expenses and other liabilities. Prior periods were unadjusted due to the modified retrospective application of ASU 2016-13.
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Associated Banc-Corp
Consolidated Statements of Income (Unaudited) | | | | | Comp Qtr | | | | YTD | | YTD | | Comp YTD | | |
| ($ in thousands, except per share data) | 3Q20 | | 2Q20 | | $ Change | | % Change | | Sep 2020 | | Sep 2019 | | $ Change | | % Change |
| Interest income | | | | | | | | | | | | | | | |
| Interest and fees on loans | $ | 182,625 | | | $ | 191,895 | | | $ | (9,270) | | | (5) | % | | $ | 599,306 | | | $ | 768,216 | | | $ | (168,910) | | | (22) | % |
| Interest and dividends on investment securities | | | | | | | | | | | | | | | |
| Taxable | 13,689 | | | 16,103 | | | (2,414) | | | (15) | % | | 50,064 | | | 79,248 | | | (29,184) | | | (37) | % |
| Tax-exempt | 14,523 | | | 14,616 | | | (93) | | | (1) | % | | 44,021 | | | 42,950 | | | 1,071 | | | 2 | % |
| Other interest | 2,238 | | | 2,231 | | | 7 | | | — | % | | 7,774 | | | 13,086 | | | (5,312) | | | (41) | % |
| Total interest income | 213,075 | | | 224,845 | | | (11,770) | | | (5) | % | | 701,165 | | | 903,500 | | | (202,335) | | | (22) | % |
| Interest expense | | | | | | | | | | | | | | | |
| Interest on deposits | 10,033 | | | 13,178 | | | (3,145) | | | (24) | % | | 59,877 | | | 191,408 | | | (131,531) | | | (69) | % |
| Interest on federal funds purchased and securities sold under agreements to repurchase | 34 | | | 51 | | | (17) | | | (33) | % | | 454 | | | 1,058 | | | (604) | | | (57) | % |
| Interest on other short-term funding | 5 | | | 5 | | | — | | | — | % | | 46 | | | 113 | | | (67) | | | (59) | % |
| Interest on PPPLF | 899 | | | 676 | | | 223 | | | 33 | % | | 1,574 | | | — | | | 1,574 | | | N/M |
| Interest on FHLB Advances | 14,375 | | | 15,470 | | | (1,095) | | | (7) | % | | 47,471 | | | 53,194 | | | (5,723) | | | (11) | % |
| Interest on long-term funding | 5,580 | | | 5,593 | | | (13) | | | — | % | | 16,780 | | | 22,196 | | | (5,416) | | | (24) | % |
| Total interest expense | 30,925 | | | 34,973 | | | (4,048) | | | (12) | % | | 126,201 | | | 267,969 | | | (141,768) | | | (53) | % |
| Net interest income | 182,150 | | | 189,872 | | | (7,722) | | | (4) | % | | 574,964 | | | 635,532 | | | (60,568) | | | (10) | % |
| Provision for credit losses | 43,009 | | | 61,000 | | | (17,991) | | | (29) | % | | 157,009 | | | 16,000 | | | 141,009 | | | N/M |
| Net interest income after provision for credit losses | 139,141 | | | 128,872 | | | 10,269 | | | 8 | % | | 417,954 | | | 619,532 | | | (201,578) | | | (33) | % |
| Noninterest income | | | | | | | | | | | | | | | |
Wealth management fees(a) | 21,152 | | | 20,916 | | | 236 | | | 1 | % | | 62,884 | | | 61,885 | | | 999 | | | 2 | % |
| Service charges and deposit account fees | 14,283 | | | 11,484 | | | 2,799 | | | 24 | % | | 40,989 | | | 47,102 | | | (6,113) | | | (13) | % |
| Card-based fees | 10,195 | | | 8,893 | | | 1,302 | | | 15 | % | | 28,685 | | | 29,848 | | | (1,163) | | | (4) | % |
| Other fee-based revenue | 4,968 | | | 4,774 | | | 194 | | | 4 | % | | 14,240 | | | 14,246 | | | (6) | | | — | % |
Capital markets, net | 7,222 | | | 6,910 | | | 312 | | | 5 | % | | 22,067 | | | 12,215 | | | 9,852 | | | 81 | % |
| Mortgage banking, net | 12,636 | | | 12,263 | | | 373 | | | 3 | % | | 31,043 | | | 25,118 | | | 5,925 | | | 24 | % |
| Bank and corporate owned life insurance | 3,074 | | | 3,625 | | | (551) | | | (15) | % | | 9,793 | | | 11,482 | | | (1,689) | | | (15) | % |
| Insurance commissions and fees | 114 | | | 22,430 | | | (22,316) | | | (99) | % | | 45,153 | | | 69,403 | | | (24,250) | | | (35) | % |
Asset gains (losses), net(b) | (339) | | | 157,361 | | | (157,700) | | | (100) | % | | 156,945 | | | 2,316 | | | 154,629 | | | N/M |
| Investment securities gains (losses), net | 7 | | | 3,096 | | | (3,089) | | | (100) | % | | 9,222 | | | 5,931 | | | 3,291 | | | 55 | % |
Other | 2,232 | | | 2,737 | | | (505) | | | (18) | % | | 7,321 | | | 8,344 | | | (1,023) | | | (12) | % |
| Total noninterest income | 75,545 | | | 254,490 | | | (178,945) | | | (70) | % | | 428,342 | | | 287,890 | | | 140,452 | | | 49 | % |
| Noninterest expense | | | | | | | | | | | | | | | |
| Personnel | 108,567 | | | 111,350 | | | (2,783) | | | (2) | % | | 334,117 | | | 366,449 | | | (32,332) | | | (9) | % |
| Technology | 19,666 | | | 21,174 | | | (1,508) | | | (7) | % | | 61,639 | | | 59,698 | | | 1,941 | | | 3 | % |
| Occupancy | 17,854 | | | 14,464 | | | 3,390 | | | 23 | % | | 48,386 | | | 45,466 | | | 2,920 | | | 6 | % |
| Business development and advertising | 3,626 | | | 3,556 | | | 70 | | | 2 | % | | 13,007 | | | 21,284 | | | (8,277) | | | (39) | % |
| Equipment | 5,399 | | | 5,312 | | | 87 | | | 2 | % | | 16,150 | | | 17,580 | | | (1,430) | | | (8) | % |
| Legal and professional | 5,591 | | | 5,058 | | | 533 | | | 11 | % | | 15,809 | | | 14,342 | | | 1,467 | | | 10 | % |
| Loan and foreclosure costs | 2,118 | | | 3,605 | | | (1,487) | | | (41) | % | | 8,842 | | | 5,599 | | | 3,243 | | | 58 | % |
| FDIC assessment | 3,900 | | | 5,250 | | | (1,350) | | | (26) | % | | 14,650 | | | 12,250 | | | 2,400 | | | 20 | % |
| Other intangible amortization | 2,253 | | | 2,872 | | | (619) | | | (22) | % | | 7,939 | | | 7,237 | | | 702 | | | 10 | % |
Acquisition related costs(c) | 218 | | | 518 | | | (300) | | | (58) | % | | 2,457 | | | 5,995 | | | (3,538) | | | (59) | % |
| Loss on prepayments of FHLB advances | 44,650 | | | — | | | 44,650 | | | N/M | | 44,650 | | | — | | | 44,650 | | | N/M |
| Other | 13,745 | | | 10,249 | | | 3,496 | | | 34 | % | | 35,537 | | | 34,479 | | | 1,058 | | | 3 | % |
| Total noninterest expense | 227,587 | | | 183,407 | | | 44,180 | | | 24 | % | | 603,184 | | | 590,380 | | | 12,804 | | | 2 | % |
| Income (loss) before income taxes | (12,900) | | | 199,955 | | | (212,855) | | | (106) | % | | 243,112 | | | 317,042 | | | (73,930) | | | (23) | % |
| Income tax expense (benefit) | (58,114) | | | 51,238 | | | (109,352) | | | N/M | | 3,342 | | | 62,356 | | | (59,014) | | | (95) | % |
| Net income | 45,214 | | | 148,718 | | | (103,504) | | | (70) | % | | 239,769 | | | 254,686 | | | (14,917) | | | (6) | % |
| Preferred stock dividends | 5,207 | | | 4,144 | | | 1,063 | | | 26 | % | | 13,152 | | | 11,402 | | | 1,750 | | | 15 | % |
| Net income available to common equity | $ | 40,007 | | | $ | 144,573 | | | $ | (104,566) | | | (72) | % | | $ | 226,618 | | | $ | 243,285 | | | $ | (16,667) | | | (7) | % |
| Earnings per common share | | | | | | | | | | | | | | | |
| Basic | $ | 0.26 | | | $ | 0.94 | | | $ | (0.68) | | | (72) | % | | $ | 1.47 | | | $ | 1.49 | | | $ | (0.02) | | | (1) | % |
| Diluted | $ | 0.26 | | | $ | 0.94 | | | $ | (0.68) | | | (72) | % | | $ | 1.46 | | | $ | 1.48 | | | $ | (0.02) | | | (1) | % |
| Average common shares outstanding | | | | | | | | | | | | | | | |
| Basic | 152,440 | | | 152,393 | | | 47 | | | — | % | | 153,175 | | | 161,727 | | | (8,552) | | | (5) | % |
| Diluted | 153,194 | | | 153,150 | | | 44 | | | — | % | | 153,914 | | | 163,061 | | | (9,147) | | | (6) | % |
| | | | | | | | | | | | | | | |
N/M = Not meaningful
Numbers may not sum due to rounding.
(a) Includes trust, asset management, brokerage, and annuity fees.
(b) 2Q20 and YTD 2020 include a gain of $163 million from the sale of Associated Benefits & Risk Consulting. YTD 2019 include less than $1 million of Huntington related asset losses.
(c) Includes Huntington branch and First Staunton acquisition related costs only.
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Associated Banc-Corp
Consolidated Statements of Income (Unaudited) - Quarterly Trend | | | | | | | | | | | | | | | | | |
| ($ in thousands, except per share data) | | | | | Seql Qtr | | | | | | | | | | Comp Qtr | | |
| 3Q20 | | 2Q20 | | $ Change | | % Change | | 1Q20 | | 4Q19 | | 3Q19 | | $ Change | | % Change |
| Interest income | | | | | | | | | | | | | | | | | |
| Interest and fees on loans | $ | 182,625 | | | $ | 191,895 | | | $ | (9,270) | | | (5) | % | | $ | 224,786 | | | $ | 229,883 | | | $ | 248,579 | | | $ | (65,954) | | | (27) | % |
| Interest and dividends on investment securities | | | | | | | | | | | | | | | | | |
| Taxable | 13,689 | | | 16,103 | | | (2,414) | | | (15) | % | | 20,272 | | | 21,056 | | | 23,485 | | | (9,796) | | | (42) | % |
| Tax-exempt | 14,523 | | | 14,616 | | | (93) | | | (1) | % | | 14,882 | | | 14,615 | | | 14,491 | | | 32 | | | — | % |
| Other interest | 2,238 | | | 2,231 | | | 7 | | | — | % | | 3,304 | | | 3,556 | | | 4,865 | | | (2,627) | | | (54) | % |
| Total interest income | 213,075 | | | 224,845 | | | (11,770) | | | (5) | % | | 263,244 | | | 269,110 | | | 291,420 | | | (78,345) | | | (27) | % |
| Interest expense | | | | | | | | | | | | | | | | | |
| Interest on deposits | 10,033 | | | 13,178 | | | (3,145) | | | (24) | % | | 36,666 | | | 45,877 | | | 61,585 | | | (51,552) | | | (84) | % |
| Interest on federal funds purchased and securities sold under agreements to repurchase | 34 | | | 51 | | | (17) | | | (33) | % | | 368 | | | 521 | | | 145 | | | (111) | | | (77) | % |
| Interest on other short-term funding | 5 | | | 5 | | | — | | | — | % | | 36 | | | 25 | | | 30 | | | (25) | | | (83) | % |
| Interest on PPPLF | 899 | | | 676 | | | 223 | | | 33 | % | | — | | | — | | | — | | | 899 | | | N/M |
| Interest on FHLB Advances | 14,375 | | | 15,470 | | | (1,095) | | | (7) | % | | 17,626 | | | 16,623 | | 0 | 15,896 | | | (1,521) | | | (10) | % |
| Interest on long-term funding | 5,580 | | | 5,593 | | | (13) | | | — | % | | 5,607 | | | 5,921 | | | 7,398 | | | (1,818) | | | (25) | % |
| Total interest expense | 30,925 | | | 34,973 | | | (4,048) | | | (12) | % | | 60,303 | | | 68,967 | | | 85,054 | | | (54,129) | | | (64) | % |
| Net interest income | 182,150 | | | 189,872 | | | (7,722) | | | (4) | % | | 202,942 | | | 200,142 | | | 206,365 | | | (24,215) | | | (12) | % |
| Provision for credit losses | 43,009 | | | 61,000 | | | (17,991) | | | (29) | % | | 53,001 | | | — | | | 2,000 | | | 41,009 | | | N/M |
| Net interest income after provision for credit losses | 139,141 | | | 128,872 | | | 10,269 | | | 8 | % | | 149,941 | | | 200,142 | | | 204,365 | | | (65,224) | | | (32) | % |
| Noninterest income | | | | | | | | | | | | | | | | | |
Wealth management fees(a) | 21,152 | | | 20,916 | | | 236 | | | 1 | % | | 20,816 | | | 21,582 | | | 21,015 | | | 137 | | | 1 | % |
| Service charges and deposit account fees | 14,283 | | | 11,484 | | | 2,799 | | | 24 | % | | 15,222 | | | 16,032 | | | 16,561 | | | (2,278) | | | (14) | % |
| Card-based fees | 10,195 | | | 8,893 | | | 1,302 | | | 15 | % | | 9,597 | | | 9,906 | | | 10,456 | | | (261) | | | (2) | % |
| Other fee-based revenue | 4,968 | | | 4,774 | | | 194 | | | 4 | % | | 4,497 | | | 4,696 | | | 5,085 | | | (117) | | | (2) | % |
| Capital markets, net | 7,222 | | | 6,910 | | | 312 | | | 5 | % | | 7,935 | | | 7,647 | | | 4,300 | | | 2,922 | | | 68 | % |
| Mortgage banking, net | 12,636 | | | 12,263 | | | 373 | | | 3 | % | | 6,143 | | | 6,760 | | | 10,940 | | | 1,696 | | | 16 | % |
| Bank and corporate owned life insurance | 3,074 | | | 3,625 | | | (551) | | | (15) | % | | 3,094 | | | 3,364 | | | 4,337 | | | (1,263) | | | (29) | % |
| Insurance commissions and fees | 114 | | | 22,430 | | | (22,316) | | | (99) | % | | 22,608 | | | 19,701 | | 0 | 20,954 | | | (20,840) | | | (99) | % |
Asset gains (losses), net(b) | (339) | | | 157,361 | | | (157,700) | | | (100) | % | | (77) | | | 398 | | | 877 | | | (1,216) | | | (139) | % |
| Investment securities gains (losses), net | 7 | | | 3,096 | | | (3,089) | | | (100) | % | | 6,118 | | | 26 | | | 3,788 | | | (3,781) | | | (100) | % |
| Other | 2,232 | | | 2,737 | | | (505) | | | (18) | % | | 2,352 | | | 2,822 | | | 2,537 | | | (305) | | | (12) | % |
| Total noninterest income | 75,545 | | | 254,490 | | | (178,945) | | | (70) | % | | 98,306 | | | 92,934 | | | 100,850 | | | (25,305) | | | (25) | % |
| Noninterest expense | | | | | | | | | | | | | | | | | |
| Personnel | 108,567 | | | 111,350 | | | (2,783) | | | (2) | % | | 114,200 | | | 120,614 | | | 123,170 | | | (14,603) | | | (12) | % |
| Technology | 19,666 | | | 21,174 | | | (1,508) | | | (7) | % | | 20,799 | | | 22,731 | | | 20,572 | | | (906) | | | (4) | % |
| Occupancy | 17,854 | | | 14,464 | | | 3,390 | | | 23 | % | | 16,069 | | | 16,933 | | | 15,164 | | | 2,690 | | | 18 | % |
| Business development and advertising | 3,626 | | | 3,556 | | | 70 | | | 2 | % | | 5,826 | | | 8,316 | | | 7,991 | | | (4,365) | | | (55) | % |
| Equipment | 5,399 | | | 5,312 | | | 87 | | | 2 | % | | 5,439 | | | 5,970 | | | 6,335 | | | (936) | | | (15) | % |
| Legal and professional | 5,591 | | | 5,058 | | | 533 | | | 11 | % | | 5,160 | | | 5,559 | | | 5,724 | | | (133) | | | (2) | % |
| Loan and foreclosure costs | 2,118 | | | 3,605 | | | (1,487) | | | (41) | % | | 3,120 | | | 3,262 | | | 1,638 | | | 480 | | | 29 | % |
| FDIC assessment | 3,900 | | | 5,250 | | | (1,350) | | | (26) | % | | 5,500 | | | 4,000 | | | 4,000 | | | (100) | | | (3) | % |
| Other intangible amortization | 2,253 | | | 2,872 | | | (619) | | | (22) | % | | 2,814 | | | 2,712 | | | 2,686 | | | (433) | | | (16) | % |
Acquisition related costs(c) | 218 | | | 518 | | | (300) | | | (58) | % | | 1,721 | | | 1,325 | | | 1,629 | | | (1,411) | | | (87) | % |
| Loss on prepayments of FHLB advances | 44,650 | | | — | | | 44,650 | | | N/M | | — | | | — | | | — | | | 44,650 | | | N/M |
| Other | 13,745 | | | 10,249 | | | 3,496 | | | 34 | % | | 11,543 | | | 12,187 | | | 12,021 | | | 1,724 | | | 14 | % |
| Total noninterest expense | 227,587 | | | 183,407 | | | 44,180 | | | 24 | % | | 192,191 | | | 203,609 | | | 200,930 | | | 26,657 | | | 13 | % |
| Income (loss) before income taxes | (12,900) | | | 199,955 | | | (212,855) | | | (106) | % | | 56,056 | | | 89,467 | | | 104,286 | | | (117,186) | | | (112) | % |
| Income tax expense (benefit) | (58,114) | | | 51,238 | | | (109,352) | | | N/M | | 10,219 | | | 17,364 | | | 20,947 | | | (79,061) | | | N/M |
| Net income | 45,214 | | | 148,718 | | | (103,504) | | | (70) | % | | 45,838 | | | 72,103 | | | 83,339 | | | (38,125) | | | (46) | % |
| Preferred stock dividends | 5,207 | | | 4,144 | | | 1,063 | | | 26 | % | | 3,801 | | | 3,801 | | | 3,801 | | | 1,406 | | | 37 | % |
| Net income available to common equity | $ | 40,007 | | | $ | 144,573 | | | $ | (104,566) | | | (72) | % | | $ | 42,037 | | | $ | 68,303 | | | $ | 79,539 | | | $ | (39,532) | | | (50) | % |
| Earnings per common share | | | | | | | | | | | | | | | | | |
| Basic | $ | 0.26 | | | $ | 0.94 | | | $ | (0.68) | | | (72) | % | | $ | 0.27 | | | $ | 0.43 | | | $ | 0.50 | | | $ | (0.24) | | | (48) | % |
| Diluted | $ | 0.26 | | | $ | 0.94 | | | $ | (0.68) | | | (72) | % | | $ | 0.27 | | | $ | 0.43 | | | $ | 0.49 | | | $ | (0.23) | | | (47) | % |
| Average common shares outstanding | | | | | | | | | | | | | | | | | |
| Basic | 152,440 | | | 152,393 | | | 47 | | | — | % | | 154,701 | | | 156,994 | | | 159,126 | | | (6,686) | | | (4) | % |
| Diluted | 153,194 | | | 153,150 | | | 44 | | | — | % | | 155,619 | | | 158,472 | | | 160,382 | | | (7,188) | | | (4) | % |
| | | | | | | | | | | | | | | | | |
N/M = Not meaningful
Numbers may not sum due to rounding.
(a) Includes trust, asset management, brokerage, and annuity fees.
(b) 2Q20 includes a gain of $163 million from the sale of Associated Benefits & Risk Consulting.
(c) Includes Huntington branch and First Staunton acquisition related costs only.
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Associated Banc-Corp
Selected Quarterly Information | | | | | | | |
| ($ in millions except per share data and COVID-19 loan modifications; shares repurchased and outstanding in thousands) | YTD
Sep 2020 | YTD
Sep 2019 | 3Q20 | 2Q20 | 1Q20 | 4Q19 | 3Q19 |
| Per common share data | | | | | | | |
| Dividends | $ | 0.54 | | $ | 0.51 | | $ | 0.18 | | $ | 0.18 | | $ | 0.18 | | $ | 0.18 | | $ | 0.17 | |
| Market value: | | | | | | | |
| High | 21.94 | | 23.67 | | 14.25 | | 17.03 | | 21.94 | | 22.51 | | 21.67 | |
| Low | 10.85 | | 18.64 | | 11.86 | | 11.48 | | 10.85 | | 18.96 | | 18.64 | |
| Close | 12.62 | | 20.25 | | 12.62 | | 13.68 | | 12.79 | | 22.04 | | 20.25 | |
| Book value | 24.04 | | 23.00 | | 24.04 | | 23.89 | | 22.99 | | 23.32 | | 23.00 | |
| Tangible book value / share | 16.37 | | 15.05 | | 16.37 | | 16.21 | | 14.64 | | 15.28 | | 15.05 | |
| Performance ratios (annualized) | | | | | | | |
| Return on average assets | 0.93 | % | 1.02 | % | 0.51 | % | 1.72 | % | 0.57 | % | 0.89 | % | 1.00 | % |
| Noninterest expense / average assets | 2.35 | % | 2.37 | % | 2.55 | % | 2.12 | % | 2.37 | % | 2.51 | % | 2.40 | % |
| Effective tax rate | 1.37 | % | 19.67 | % | N/M | 25.62 | % | 18.23 | % | 19.41 | % | 20.09 | % |
Dividend payout ratio(a) | 36.73 | % | 34.23 | % | 69.23 | % | 19.15 | % | 66.67 | % | 41.86 | % | 34.00 | % |
| Net interest margin | 2.54 | % | 2.86 | % | 2.31 | % | 2.49 | % | 2.84 | % | 2.83 | % | 2.81 | % |
| Selected trend information | | | | | | | |
Average full time equivalent employees(b) | 4,568 | | 4,703 | | 4,374 | | 4,701 | | 4,631 | | 4,696 | | 4,782 | |
| Branch count | | | 249 | | 249 | | 249 | | 248 | | 248 | |
Assets under management, at market value(c) | | | $ | 12,195 | | $ | 11,755 | | $ | 10,454 | | $ | 12,104 | | $ | 11,604 | |
| Mortgage loans originated for sale during period | $ | 1,319 | | $ | 824 | | $ | 458 | | $ | 550 | | $ | 310 | | $ | 267 | | $ | 365 | |
Mortgage loan settlements during period(d) | $ | 1,621 | | $ | 1,049 | | $ | 599 | | $ | 725 | | $ | 297 | | $ | 268 | | $ | 617 | |
| Mortgage portfolio loans transferred to held for sale during period | $ | 269 | | $ | 243 | | $ | 70 | | $ | — | | $ | 200 | | $ | — | | $ | 243 | |
| Mortgage portfolio serviced for others | | | $ | 8,219 | | $ | 8,454 | | $ | 8,549 | | $ | 8,489 | | $ | 8,692 | |
| Mortgage servicing rights, net / mortgage portfolio serviced for others | | | 0.55 | % | 0.58 | % | 0.68 | % | 0.79 | % | 0.78 | % |
Shares repurchased during period(e) | 4,264 | | 5,954 | | — | | — | | 4,264 | | 2,256 | | 2,892 | |
| Shares outstanding, end of period | 153,552 | | 159,291 | | 153,552 | | 153,616 | | 153,690 | | 157,171 | | 159,291 | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| Paycheck Protection Program fees, net | | | | | | | |
| Fees, beginning of period | $ | 27 | | N/A | $ | 24 | | $ | 27 | | N/A | N/A | N/A |
| Fees recognized | (6) | | N/A | (4) | | (3) | | N/A | N/A | N/A |
| Fees, end of period | $ | 21 | | N/A | $ | 21 | | $ | 24 | | N/A | N/A | N/A |
| Outstanding COVID-19 Forbearances ($ in thousands) | | | | | | | |
| Commercial and industrial | | | $ | 19,414 | | $ | 45,415 | | $ | 345 | | N/A | N/A |
| Commercial real estate—owner occupied | | | 38,111 | | 138,267 | | — | | N/A | N/A |
| Commercial and business lending | | | 57,525 | | 183,682 | | 345 | | N/A | N/A |
| Commercial real estate—investor | | | 226,720 | | 623,020 | | 595 | | N/A | N/A |
| Real estate construction | | | 2,009 | | 32,214 | | — | | N/A | N/A |
| Commercial real estate lending | | | 228,729 | | 655,234 | | 595 | | N/A | N/A |
| Total commercial | | | 286,254 | | 838,917 | | 940 | | N/A | N/A |
| Residential mortgage | | | 364,593 | | 692,307 | | 428 | | N/A | N/A |
| Home equity | | | 10,068 | | 30,554 | | — | | N/A | N/A |
| Other consumer | | | 1,132 | | 2,060 | | — | | N/A | N/A |
| Total consumer | | | 375,794 | | 724,921 | | 428 | | N/A | N/A |
| Total COVID-19 loan modifications | | | $ | 662,048 | | $ | 1,563,838 | | $ | 1,368 | | N/A | N/A |
| Selected quarterly ratios | | | | | | | |
| Loans / deposits | | | 93.60 | % | 93.53 | % | 94.95 | % | 95.97 | % | 93.17 | % |
| Stockholders’ equity / assets | | | 11.66 | % | 11.34 | % | 11.18 | % | 12.11 | % | 12.03 | % |
Risk-based capital(f)(g) | | | | | | | |
| Total risk-weighted assets | | | $ | 26,142 | | $ | 25,865 | | $ | 25,866 | | $ | 24,296 | | $ | 24,313 | |
| Common equity Tier 1 | | | $ | 2,672 | | $ | 2,651 | | $ | 2,421 | | $ | 2,481 | | $ | 2,482 | |
| Common equity Tier 1 capital ratio | | | 10.22 | % | 10.25 | % | 9.36 | % | 10.21 | % | 10.21 | % |
| Tier 1 capital ratio | | | 11.57 | % | 11.62 | % | 10.35 | % | 11.26 | % | 11.26 | % |
| Total capital ratio | | | 13.78 | % | 13.83 | % | 12.56 | % | 13.21 | % | 13.26 | % |
| Tier 1 leverage ratio | | | 9.02 | % | 9.08 | % | 8.50 | % | 8.83 | % | 8.57 | % |
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| | | | | | | |
| | | | | | | |
| Mortgage banking, net | | | | | | | |
Mortgage servicing fees, net(h) | $ | — | | $ | 8 | | $ | (1) | | $ | (1) | | $ | 2 | | $ | 2 | | $ | 2 | |
| Gains (losses) and fair value adjustments on loans held for sale | 45 | | 13 | | 14 | | 21 | | 10 | | 5 | | 4 | |
| Fair value adjustment on portfolio loans transferred to held for sale | 4 | | 4 | | 1 | | — | | 3 | | — | | 4 | |
| Mortgage servicing rights (impairment) recovery | (18) | | — | | (1) | | (8) | | (9) | | — | | — | |
| Mortgage banking, net | $ | 31 | | $ | 25 | | $ | 13 | | $ | 12 | | $ | 6 | | $ | 7 | | $ | 11 | |
N/M = Not meaningful
Numbers may not sum due to rounding.
(a)Ratio is based upon basic earnings per common share.
(b)Average full time equivalent employees without overtime.
(c)Excludes assets held in brokerage accounts.
(d)During the third quarter of 2019, the Corporation sold approximately $240 million of portfolio mortgages that were transferred during the period, resulting in increased settlements.
(e)Does not include repurchases related to tax withholding on equity compensation.
(f)The Federal Reserve establishes regulatory capital requirements, including well-capitalized standards for the Corporation. The regulatory capital requirements effective for the Corporation follow Basel III, subject to certain transition provisions.
(g)September 30, 2020 data is estimated.
(h)Includes mortgage origination and servicing fees, net of mortgage servicing rights amortization.
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Associated Banc-Corp
Selected Asset Quality Information | | | | | | | | | |
| ($ in thousands) | | Sep 30, 2020 | Jun 30, 2020 | Seql Qtr %
Change | | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Comp Qtr %
Change |
| Allowance for loan losses | | | | | | | | | |
| Balance at beginning of period | | $ | 363,803 | | $ | 337,793 | | 8 | % | | $ | 201,371 | | $ | 214,425 | | $233,659 | 56 | % |
| Cumulative effect of ASU 2016-13 adoption (CECL) | | N/A | N/A | | | 112,457 | | N/A | N/A | |
| January 1, 2020 | | N/A | N/A | | | 313,828 | | N/A | N/A | |
| Provision for loan losses | | 50,500 | | 52,500 | | (4) | % | | 37,500 | | 1,000 | | 1,000 | | N/M |
| Allowance for PCD loans for bank acquisition | | N/A | N/A | | | 3,504 | | N/A | N/A | |
| Charge offs | | (34,079) | | (28,351) | | 20 | % | | (19,308) | | (16,752) | | (26,313) | | 30 | % |
| Recoveries | | 4,488 | | 1,861 | | 141 | % | | 2,268 | | 2,699 | | 6,079 | | (26) | % |
| Net charge offs | | (29,592) | | (26,490) | | 12 | % | | (17,040) | | (14,054) | | (20,234) | | 46 | % |
| Balance at end of period | | $ | 384,711 | | $ | 363,803 | | 6 | % | | $ | 337,793 | | $ | 201,371 | | $ | 214,425 | | 79 | % |
| Allowance for unfunded commitments | | | | | | | | | |
| Balance at beginning of period | | $ | 64,776 | | $ | 56,276 | | 15 | % | | $ | 21,907 | | $ | 22,907 | | $ | 21,907 | | 196 | % |
| Cumulative effect of ASU 2016-13 adoption (CECL) | | N/A | N/A | | | 18,690 | | N/A | N/A | |
| January 1, 2020 | | N/A | N/A | | | 40,597 | | N/A | N/A | |
| Provision for unfunded commitments | | (7,500) | | 8,500 | | N/M | | 15,500 | | (1,000) | | 1,000 | | N/M |
| Amount recorded at acquisition | | — | | — | | N/M | | 179 | | — | | — | | N/M |
| Balance at end of period | | $ | 57,276 | | $ | 64,776 | | (12) | % | | $ | 56,276 | | $ | 21,907 | | $ | 22,907 | | 150 | % |
Allowance for credit losses on loans (ACLL)(a) | | $ | 441,988 | | $ | 428,579 | | 3 | % | | $ | 394,069 | | $ | 223,278 | | $ | 237,331 | | 86 | % |
Provision for credit losses on loans(b) | | $ | 43,000 | | $ | 61,000 | | (30) | % | | $ | 53,000 | | $ | — | | $ | 2,000 | | N/M |
| ($ in thousands) | | Sep 30, 2020 | Jun 30, 2020 | | | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | |
| Net (charge offs) recoveries | | | | | | | | | |
| PPP Loans | | $ | — | | $ | — | | N/M | | $ | — | | $ | — | | $ | — | | N/M |
| Commercial and industrial | | (24,834) | | (24,919) | | — | % | | (15,049) | | (11,917) | | (19,918) | | 25 | % |
| Commercial real estate—owner occupied | | (416) | | 1 | | N/M | | — | | — | | 1,483 | | N/M |
| Commercial and business lending | | (25,249) | | (24,919) | | 1 | % | | (15,048) | | (11,917) | | (18,435) | | 37 | % |
| Commercial real estate—investor | | (3,609) | | 28 | | N/M | | — | | — | | (3) | | N/M |
| Real estate construction | | (21) | | (3) | | N/M | | 11 | | 72 | | 20 | | N/M |
| Commercial real estate lending | | (3,630) | | 25 | | N/M | | 11 | | 72 | | 17 | | N/M |
| Total commercial | | (28,879) | | (24,893) | | 16 | % | | (15,037) | | (11,845) | | (18,418) | | 57 | % |
| Residential mortgage | | (79) | | (215) | | (63) | % | | (912) | | (1,415) | | (393) | | (80) | % |
| Home equity | | 156 | | (303) | | N/M | | 71 | | 480 | | (275) | | N/M |
| Other consumer | | (790) | | (1,078) | | (27) | % | | (1,162) | | (1,274) | | (1,148) | | (31) | % |
| Total consumer | | (712) | | (1,596) | | (55) | % | | (2,003) | | (2,208) | | (1,816) | | (61) | % |
| Total net (charge offs) recoveries | | $ | (29,592) | | $ | (26,490) | | 12 | % | | $ | (17,040) | | $ | (14,054) | | $ | (20,234) | | 46 | % |
| | | | | | | | | |
| (In basis points) | | Sep 30, 2020 | Jun 30, 2020 | | | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | |
| Net charge offs to average loans (annualized) | | | | | | | | | |
| PPP Loans | | — | | — | | | | — | | — | | — | | |
| Commercial and industrial | | (126) | | (121) | | | | (81) | | (65) | | (104) | | |
| Commercial real estate—owner occupied | | (18) | | — | | | | — | | — | | 63 | | |
| Commercial and business lending | | (103) | | (100) | | | | (72) | | (58) | | (86) | | |
| Commercial real estate—investor | | (34) | | — | | | | — | | — | | — | | |
| Real estate construction | | — | | — | | | | — | | 2 | | 1 | | |
| Commercial real estate lending | | (24) | | — | | | | — | | 1 | | — | | |
| Total commercial | | (73) | | (64) | | | | (44) | | (35) | | (53) | | |
| Residential mortgage | | — | | (1) | | | | (4) | | (7) | | (2) | | |
| Home equity | | 8 | | (15) | | | | 3 | | 22 | | (12) | | |
| Other consumer | | (98) | | (128) | | | | (134) | | (145) | | (129) | | |
| Total consumer | | (3) | | (7) | | | | (8) | | (9) | | (8) | | |
| Total net charge offs | | (47) | | (42) | | | | (29) | | (24) | | (35) | | |
| | | | | | | | | |
| ($ in thousands) | | Sep 30, 2020 | Jun 30, 2020 | | | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | |
| Credit Quality | | | | | | | | | |
| Nonaccrual loans | | $ | 231,590 | | $ | 171,607 | | 35 | % | | $ | 136,717 | | $ | 118,380 | | $ | 128,939 | | 80 | % |
| Other real estate owned (OREO) | | 18,983 | | 20,264 | | (6) | % | | 22,530 | | 21,101 | | 19,625 | | (3) | % |
| Other nonperforming assets | | 909 | | 909 | | — | % | | 6,004 | | 6,004 | | 6,004 | | (85) | % |
| Total nonperforming assets | | $ | 251,481 | | $ | 192,780 | | 30 | % | | $ | 165,251 | | $ | 145,485 | | $ | 154,568 | | 63 | % |
| | | | | | | | | |
| Loans 90 or more days past due and still accruing | | $ | 1,854 | | $ | 1,466 | | 26 | % | | $ | 2,255 | | $ | 2,259 | | $ | 1,986 | | (7) | % |
| Allowance for loan losses to loans | | N/A | N/A | | | N/A | 0.88 | % | 0.94 | % | |
| Allowance for credit losses to loans | | 1.77 | % | 1.73 | % | | | 1.62 | % | 0.98 | % | 1.04 | % | |
| Allowance for loan losses to nonaccrual loans | | N/A | N/A | | | N/A | 170.10 | % | 166.30 | % | |
| Allowance for credit losses to nonaccrual loans | | 190.85 | % | 249.74 | % | | | 288.24 | % | 188.61 | % | 184.07 | % | |
| Nonaccrual loans to total loans | | 0.93 | % | 0.69 | % | | | 0.56 | % | 0.52 | % | 0.57 | % | |
| Nonperforming assets to total loans plus OREO | | 1.01 | % | 0.78 | % | | | 0.68 | % | 0.64 | % | 0.68 | % | |
| Nonperforming assets to total assets | | 0.72 | % | 0.54 | % | | | 0.49 | % | 0.45 | % | 0.47 | % | |
| Year-to-date net charge offs to year-to-date average loans (annualized) | | 0.40 | % | 0.36 | % | | | 0.29 | % | 0.24 | % | 0.24 | % | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
(a) Excludes approximately $70,000 of allowance for held to maturity investment securities
(b) March 31, 2020 excludes less than $1,000 and September 30, 2020 excludes approximately $9,000 of provision for held to maturity investment securities
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Associated Banc-Corp
Selected Asset Quality Information (continued) | | | | | | | | | |
| (In thousands) | | Sep 30, 2020 | Jun 30, 2020 | Seql Qtr %
Change | | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Comp Qtr %
Change |
| Nonaccrual loans | | | | | | | | | |
| Commercial and industrial | | $ | 105,899 | | $ | 80,239 | | 32 | % | | $ | 58,854 | | $ | 46,312 | | $ | 56,536 | | 87 | % |
| Commercial real estate—owner occupied | | 2,043 | | 1,932 | | 6 | % | | 1,838 | | 67 | | 68 | | N/M |
| Commercial and business lending | | 107,941 | | 82,171 | | 31 | % | | 60,692 | | 46,380 | | 56,604 | | 91 | % |
| Commercial real estate—investor | | 50,458 | | 11,172 | | N/M | | 1,091 | | 4,409 | | 4,800 | | N/M |
| Real estate construction | | 392 | | 503 | | (22) | % | | 486 | | 493 | | 542 | | (28) | % |
| Commercial real estate lending | | 50,850 | | 11,675 | | N/M | | 1,577 | | 4,902 | | 5,342 | | N/M |
| Total commercial | | 158,792 | | 93,846 | | 69 | % | | 62,269 | | 51,282 | | 61,946 | | 156 | % |
| Residential mortgage | | 62,331 | | 66,656 | | (6) | % | | 64,855 | | 57,844 | | 57,056 | | 9 | % |
| Home equity | | 10,277 | | 10,829 | | (5) | % | | 9,378 | | 9,104 | | 9,828 | | 5 | % |
| Other consumer | | 190 | | 276 | | (31) | % | | 215 | | 152 | | 109 | | 74 | % |
| Total consumer | | 72,798 | | 77,761 | | (6) | % | | 74,448 | | 67,099 | | 66,993 | | 9 | % |
| Total nonaccrual loans | | $ | 231,590 | | $ | 171,607 | | 35 | % | | $ | 136,717 | | $ | 118,380 | | $ | 128,939 | | 80 | % |
| | | | | | | | | |
| | Sep 30, 2020 | Jun 30, 2020 | Seql Qtr %
Change | | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Comp Qtr %
Change |
Restructured loans (accruing)(a) | | | | | | | | | |
| Commercial and industrial | | $ | 16,002 | | $ | 16,321 | | (2) | % | | $ | 16,056 | | $ | 16,678 | | $ | 15,398 | | 4 | % |
| Commercial real estate—owner occupied | | 1,389 | | 1,441 | | (4) | % | | 2,091 | | 1,676 | | 1,912 | | (27) | % |
| Commercial and business lending | | 17,391 | | 17,762 | | (2) | % | | 18,146 | | 18,353 | | 17,311 | | — | % |
| Commercial real estate—investor | | 635 | | 114 | | N/M | | 281 | | 293 | | 304 | | 109 | % |
| Real estate construction | | 382 | | 313 | | 22 | % | | 339 | | 298 | | 227 | | 68 | % |
| Commercial real estate lending | | 1,016 | | 427 | | 138 | % | | 620 | | 591 | | 531 | | 91 | % |
| Total commercial | | 18,407 | | 18,189 | | 1 | % | | 18,767 | | 18,944 | | 17,842 | | 3 | % |
| Residential mortgage | | 5,378 | | 4,178 | | 29 | % | | 4,654 | | 3,955 | | 3,228 | | 67 | % |
| Home equity | | 1,889 | | 1,717 | | 10 | % | | 1,719 | | 1,896 | | 2,017 | | (6) | % |
| Other consumer | | 1,218 | | 1,219 | | — | % | | 1,245 | | 1,246 | | 1,243 | | (2) | % |
| Total consumer | | 8,485 | | 7,114 | | 19 | % | | 7,618 | | 7,097 | | 6,487 | | 31 | % |
| Total restructured loans (accruing) | | $ | 26,891 | | $ | 25,303 | | 6 | % | | $ | 26,384 | | $ | 26,041 | | $ | 24,329 | | 11 | % |
| Nonaccrual restructured loans (included in nonaccrual loans) | | $ | 23,844 | | $ | 25,362 | | (6) | % | | $ | 24,204 | | $ | 22,494 | | $ | 16,293 | | 46 | % |
| | Sep 30, 2020 | Jun 30, 2020 | Seql Qtr %
Change | | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Comp Qtr %
Change |
| Accruing Loans 30-89 Days Past Due | | | | | | | | | |
| Commercial and industrial | | $ | 298 | | $ | 716 | | (58) | % | | $ | 976 | | $ | 821 | | $ | 426 | | (30) | % |
| Commercial real estate—owner occupied | | 870 | | 199 | | N/M | | 51 | | 1,369 | | 2,646 | | (67) | % |
| Commercial and business lending | | 1,167 | | 916 | | 27 | % | | 1,027 | | 2,190 | | 3,073 | | (62) | % |
| Commercial real estate—investor | | 409 | | 13,874 | | (97) | % | | 14,462 | | 1,812 | | 636 | | (36) | % |
| Real estate construction | | 111 | | 385 | | (71) | % | | 179 | | 97 | | 595 | | (81) | % |
| Commercial real estate lending | | 520 | | 14,260 | | (96) | % | | 14,641 | | 1,909 | | 1,232 | | (58) | % |
| Total commercial | | 1,687 | | 15,175 | | (89) | % | | 15,668 | | 4,099 | | 4,304 | | (61) | % |
| Residential mortgage | | 6,185 | | 3,023 | | 105 | % | | 10,102 | | 9,274 | | 8,063 | | (23) | % |
| Home equity | | 5,609 | | 3,108 | | 80 | % | | 7,001 | | 5,647 | | 4,798 | | 17 | % |
| Other consumer | | 1,351 | | 1,482 | | (9) | % | | 1,777 | | 2,083 | | 2,203 | | (39) | % |
| Total consumer | | 13,144 | | 7,613 | | 73 | % | | 18,879 | | 17,005 | | 15,063 | | (13) | % |
| Total accruing loans 30-89 days past due | | $ | 14,831 | | $ | 22,788 | | (35) | % | | $ | 34,547 | | $ | 21,104 | | $ | 19,367 | | (23) | % |
| | | | | | | | | |
| | Sep 30, 2020 | Jun 30, 2020 | Seql Qtr %
Change | | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Comp Qtr %
Change |
| Potential Problem Loans | | | | | | | | | |
| PPP Loans | | $ | 19,161 | | $ | 19,161 | | — | % | | $ | — | | $ | — | | $ | — | | N/M |
| Commercial and industrial | | 144,159 | | 176,270 | | (18) | % | | 149,747 | | 110,308 | | 59,427 | | 143 | % |
| Commercial real estate—owner occupied | | 22,808 | | 15,919 | | 43 | % | | 15,802 | | 19,889 | | 22,624 | | 1 | % |
| Commercial and business lending | | 186,129 | | 211,350 | | (12) | % | | 165,550 | | 130,197 | | 82,051 | | 127 | % |
| Commercial real estate—investor | | 100,459 | | 88,237 | | 14 | % | | 61,030 | | 29,449 | | 49,353 | | 104 | % |
| Real estate construction | | 2,178 | | 2,170 | | — | % | | 1,753 | | — | | 544 | | N/M |
| Commercial real estate lending | | 102,637 | | 90,407 | | 14 | % | | 62,783 | | 29,449 | | 49,897 | | 106 | % |
| Total commercial | | 288,766 | | 301,758 | | (4) | % | | 228,333 | | 159,646 | | 131,948 | | 119 | % |
| Residential mortgage | | 2,396 | | 3,157 | | (24) | % | | 3,322 | | 1,451 | | 1,242 | | 93 | % |
| Home equity | | 1,632 | | 1,921 | | (15) | % | | 2,238 | | — | | — | | N/M |
| | | | | | | | | |
| Total consumer | | 4,028 | | 5,078 | | (21) | % | | 5,559 | | 1,451 | | 1,242 | | N/M |
| Total potential problem loans | | $ | 292,794 | | $ | 306,836 | | (5) | % | | $ | 233,892 | | $ | 161,097 | | $ | 133,189 | | 120 | % |
| | | | | | | | | |
N/M = Not meaningful
N/A = Not applicable
Numbers may not sum due to rounding.
(a) Does not include any restructured loans related to COVID-19 in accordance with regulatory guidance
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Associated Banc-Corp
Net Interest Income Analysis - Fully Tax-Equivalent Basis - Sequential and Comparable Quarter | | | | | | | | | | | |
| Three Months Ended | | | | | | | | | | |
| | September 30, 2020 | | | | June 30, 2020 | | | | September 30, 2019 | | |
| ($ 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 (a) (b) (c) | | | | | | | | | | | |
| Commercial PPP lending | $ | 1,019,808 | | $ | 6,172 | | 2.41 | % | | $ | 848,761 | | $ | 4,841 | | 2.29 | % | | $ | — | | $ | — | | — | % |
| Commercial and business lending (excl PPP loans) | 8,751,083 | | 56,951 | | 2.59 | % | | 9,192,910 | | 64,097 | | 2.80 | % | | 8,502,268 | | 96,327 | | 4.49 | % |
| Commercial real estate lending | 6,032,308 | | 44,354 | | 2.93 | % | | 5,720,262 | | 46,057 | | 3.24 | % | | 5,157,031 | | 64,058 | | 4.92 | % |
| Total commercial | 15,803,199 | | 107,476 | | 2.71 | % | | 15,761,933 | | 114,995 | | 2.93 | % | | 13,659,299 | | 160,386 | | 4.66 | % |
| Residential mortgage | 8,058,283 | | 61,701 | | 3.06 | % | | 8,271,757 | | 62,860 | | 3.04 | % | | 8,337,230 | | 68,656 | | 3.29 | % |
| Retail | 1,101,589 | | 13,780 | | 4.99 | % | | 1,157,116 | | 14,368 | | 4.98 | % | | 1,255,540 | | 20,066 | | 6.38 | % |
| Total loans | 24,963,071 | | 182,957 | | 2.92 | % | | 25,190,806 | | 192,223 | | 3.06 | % | | 23,252,068 | | 249,108 | | 4.26 | % |
| Investment securities | | | | | | | | | | | |
| Taxable | 3,438,858 | | 13,689 | | 1.59 | % | | 3,129,113 | | 16,103 | | 2.06 | % | | 4,032,027 | | 23,485 | | 2.33 | % |
Tax-exempt(a) | 1,923,445 | | 18,154 | | 3.78 | % | | 1,922,392 | | 18,270 | | 3.80 | % | | 1,918,661 | | 18,114 | | 3.78 | % |
| Other short-term investments | 1,788,471 | | 2,238 | | 0.50 | % | | 1,016,976 | | 2,231 | | 0.88 | % | | 619,334 | | 4,865 | | 3.12 | % |
| Investments and other | 7,150,775 | | 34,081 | | 1.90 | % | | 6,068,481 | | 36,604 | | 2.41 | % | | 6,570,022 | | 46,464 | | 2.83 | % |
| Total earning assets | 32,113,847 | | $ | 217,038 | | 2.70 | % | | 31,259,287 | | $ | 228,826 | | 2.94 | % | | 29,822,090 | | $ | 295,572 | | 3.94 | % |
| Other assets, net | 3,436,512 | | | | | 3,586,656 | | | | | 3,331,910 | | | |
| Total assets | $ | 35,550,359 | | | | | $ | 34,845,943 | | | | | $ | 33,154,000 | | | |
| Liabilities and stockholders' equity | | | | | | | | | | | |
| Interest-bearing liabilities | | | | | | | | | | | |
| Interest-bearing deposits | | | | | | | | | | | |
| Savings | $ | 3,462,942 | | $ | 382 | | 0.04 | % | | $ | 3,260,040 | | $ | 429 | | 0.05 | % | | $ | 2,618,188 | | $ | 2,164 | | 0.33 | % |
| Interest-bearing demand | 5,835,597 | | 1,085 | | 0.07 | % | | 5,445,267 | | 1,442 | | 0.11 | % | | 5,452,674 | | 16,055 | | 1.17 | % |
| Money market | 6,464,784 | | 1,444 | | 0.09 | % | | 6,496,841 | | 1,902 | | 0.12 | % | | 6,933,230 | | 18,839 | | 1.08 | % |
| Network transaction deposits | 1,528,199 | | 609 | | 0.16 | % | | 1,544,737 | | 539 | | 0.14 | % | | 1,764,961 | | 10,147 | | 2.28 | % |
| Time deposits | 2,135,870 | | 6,513 | | 1.21 | % | | 2,469,899 | | 8,866 | | 1.44 | % | | 3,107,670 | | 14,381 | | 1.84 | % |
| Total interest-bearing deposits | 19,427,392 | | 10,033 | | 0.21 | % | | 19,216,785 | | 13,178 | | 0.28 | % | | 19,876,723 | | 61,585 | | 1.23 | % |
| Federal funds purchased and securities sold under agreements to repurchase | 140,321 | | 34 | | 0.10 | % | | 204,548 | | 51 | | 0.10 | % | | 81,285 | | 145 | | 0.71 | % |
| Commercial Paper | 42,338 | | 5 | | 0.05 | % | | 37,526 | | 5 | | 0.05 | % | | 28,721 | | 30 | | 0.41 | % |
| PPPLF | 1,018,994 | | 899 | | 0.35 | % | | 774,500 | | 676 | | 0.35 | % | | — | | — | | — | % |
| | | | | | | | | | | |
| FHLB advances | 2,450,344 | | 14,375 | | 2.33 | % | | 2,810,867 | | 15,470 | | 2.21 | % | | 2,716,946 | | 15,896 | | 2.32 | % |
| Long-term funding | 549,042 | | 5,580 | | 4.06 | % | | 548,757 | | 5,593 | | 4.08 | % | | 796,561 | | 7,398 | | 3.71 | % |
| Total short and long-term funding | 4,201,039 | | 20,892 | | 1.98 | % | | 4,376,199 | | 21,795 | | 2.00 | % | | 3,623,513 | | 23,469 | | 2.58 | % |
| Total interest-bearing liabilities | 23,628,431 | | $ | 30,925 | | 0.52 | % | | 23,592,983 | | $ | 34,973 | | 0.60 | % | | 23,500,235 | | $ | 85,054 | | 1.44 | % |
| Noninterest-bearing demand deposits | 7,412,186 | | | | | 6,926,401 | | | | | 5,324,481 | | | |
| Other liabilities | 475,310 | | | | | 480,041 | | | | | 425,810 | | | |
| Stockholders’ equity | 4,034,432 | | | | | 3,846,517 | | | | | 3,903,474 | | | |
| Total liabilities and stockholders’ equity | $ | 35,550,359 | | | | | $ | 34,845,943 | | | | | $ | 33,154,000 | | | |
| Interest rate spread | | | 2.18 | % | | | | 2.34 | % | | | | 2.50 | % |
| Net free funds | | | 0.13 | % | | | | 0.15 | % | | | | 0.31 | % |
| Fully tax-equivalent net interest income and net interest margin ("NIM") | | $ | 186,112 | | 2.31 | % | | | $ | 193,853 | | 2.49 | % | | | $ | 210,517 | | 2.81 | % |
| Fully tax-equivalent adjustment | | 3,963 | | | | | 3,981 | | | | | 4,152 | | |
| Net interest income | | $ | 182,150 | | | | | $ | 189,872 | | | | | $ | 206,365 | | |
Numbers may not sum due to rounding.
(a)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.
(b)Nonaccrual loans and loans held for sale have been included in the average balances.
(c)Interest income includes amortization of net deferred loan origination costs and net accreted purchase loan discount.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Associated Banc-Corp
Net Interest Income Analysis - Fully Tax-Equivalent Basis - Year Over Year | | | | | | | | | | | | |
| | Nine Months Ended September 30, | | | | | | | | | | |
| | | 2020 | | | | | | 2019 | | | | |
| ($ in thousands) | | Average
Balance | | Interest
Income /Expense | | Average
Yield / Rate | | Average
Balance | | Interest
Income /Expense | | Average
Yield / Rate |
| Assets | | | | | | | | | | | | |
| Earning assets | | | | | | | | | | | | |
Loans (a) (b) (c) | | | | | | | | | | | | |
| Commercial PPP lending | | $ | 624,305 | | | $ | 11,012 | | | 2.36 | % | | $ | — | | | $ | — | | | — | % |
| Commercial and business lending (excl PPP loans) | | 8,774,616 | | | 201,265 | | | 3.06 | % | | 8,500,475 | | | 299,621 | | | 4.71 | % |
| Commercial real estate lending | | 5,695,281 | | | 147,909 | | | 3.47 | % | | 5,135,447 | | | 196,005 | | | 5.10 | % |
| Total commercial | | 15,094,201 | | | 360,187 | | | 3.19 | % | | 13,635,922 | | | 495,626 | | | 4.86 | % |
Residential mortgage | | 8,244,116 | | | 194,521 | | | 3.15 | % | | 8,360,481 | | | 215,329 | | | 3.43 | % |
| Retail | | 1,150,916 | | | 45,621 | | | 5.29 | % | | 1,240,793 | | | 58,517 | | | 6.29 | % |
| Total loans | | 24,489,234 | | | 600,329 | | | 3.27 | % | | 23,237,195 | | | 769,472 | | | 4.42 | % |
| Investment securities | | | | | | | | | | | | |
| Taxable | | 3,343,083 | | | 50,064 | | | 2.00 | % | | 4,507,586 | | | 79,248 | | | 2.34 | % |
Tax-exempt (a) | | 1,939,968 | | | 55,026 | | | 3.78 | % | | 1,902,768 | | | 53,687 | | | 3.76 | % |
| Other short-term investments | | 1,095,555 | | | 7,774 | | | 0.95 | % | | 523,010 | | | 13,086 | | | 3.34 | % |
| Investments and other | | 6,378,606 | | | 112,864 | | | 2.36 | % | | 6,933,364 | | | 146,022 | | | 2.81 | % |
| Total earning assets | | 30,867,840 | | | $ | 713,193 | | | 3.08 | % | | 30,170,560 | | | $ | 915,493 | | | 4.05 | % |
| Other assets, net | | 3,460,967 | | | | | | | 3,167,352 | | | | | |
| Total assets | | $ | 34,328,806 | | | | | | | $ | 33,337,911 | | | | | |
| Liabilities and stockholders' equity | | | | | | | | | | | | |
| Interest-bearing liabilities | | | | | | | | | | | | |
| Interest-bearing deposits | | | | | | | | | | | | |
| Savings | | $ | 3,198,244 | | | $ | 2,610 | | | 0.11 | % | | $ | 2,347,428 | | | $ | 5,000 | | | 0.28 | % |
| Interest-bearing demand | | 5,530,482 | | | 11,281 | | | 0.27 | % | | 5,061,561 | | | 45,284 | | | 1.20 | % |
| Money market | | 6,499,965 | | | 14,152 | | | 0.29 | % | | 7,144,999 | | | 60,509 | | | 1.13 | % |
| Network transaction deposits | | 1,502,449 | | | 5,750 | | | 0.51 | % | | 2,003,179 | | | 36,228 | | | 2.42 | % |
| Time deposits | | 2,412,985 | | | 26,083 | | | 1.44 | % | | 3,257,930 | | | 44,388 | | | 1.82 | % |
| Total interest-bearing deposits | | 19,144,126 | | | 59,877 | | | 0.42 | % | | 19,815,097 | | | 191,408 | | | 1.29 | % |
| Federal funds purchased and securities sold under agreements to repurchase | | 179,615 | | | 454 | | | 0.34 | % | | 124,428 | | | 1,058 | | | 1.14 | % |
| Commercial Paper | | 38,064 | | | 35 | | | 0.12 | % | | 33,610 | | | 113 | | | 0.45 | % |
| PPPLF | | 599,368 | | | 1,574 | | | 0.35 | % | | — | | | — | | | — | % |
| Other short-term funding | | 5,645 | | | 11 | | | 0.25 | % | | — | | | — | | | — | % |
| FHLB advances | | 2,829,680 | | | 47,471 | | | 2.24 | % | | 3,172,606 | | | 53,194 | | | 2.24 | % |
| Long-term funding | | 549,088 | | | 16,780 | | | 4.07 | % | | 796,165 | | | 22,196 | | | 3.72 | % |
| Total short and long-term funding | | 4,201,461 | | | 66,325 | | | 2.11 | % | | 4,126,810 | | | 76,560 | | | 2.48 | % |
| Total interest-bearing liabilities | | 23,345,586 | | | $ | 126,201 | | | 0.72 | % | | 23,941,907 | | | $ | 267,969 | | | 1.50 | % |
| Noninterest-bearing demand deposits | | 6,618,058 | | | | | | | 5,133,573 | | | | | |
| Other liabilities | | 457,195 | | | | | | | 404,941 | | | | | |
| Stockholders’ equity | | 3,907,966 | | | | | | | 3,857,490 | | | | | |
| Total liabilities and stockholders’ equity | | $ | 34,328,806 | | | | | | | $ | 33,337,911 | | | | | |
| Interest rate spread | | | | | | 2.36 | % | | | | | | 2.55 | % |
| Net free funds | | | | | | 0.18 | % | | | | | | 0.31 | % |
| Fully tax-equivalent net interest income and net interest margin ("NIM") | | | | $ | 586,992 | | | 2.54 | % | | | | $ | 647,525 | | | 2.86 | % |
| Fully tax-equivalent adjustment | | | | 12,028 | | | | | | | 11,993 | | | |
| Net interest income | | | | $ | 574,964 | | | | | | | $ | 635,532 | | | |
Numbers may not sum due to rounding.
(a)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.
(b)Nonaccrual loans and loans held for sale have been included in the average balances.
(c)Interest income includes amortization of net deferred loan origination costs and net accreted purchase loan discount.
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Associated Banc-Corp
Loan and Deposit Composition | | | | | | | | | | | | | | |
| ($ in thousands) | | | | | | | | | | | | | | |
| Period end loan composition | | Sep 30, 2020 | | Jun 30, 2020 | | Seql Qtr % Change | | Mar 31, 2020 | | Dec 31, 2019 | | Sep 30, 2019 | | Comp Qtr % Change |
| PPP Loans | | $ | 1,022,217 | | | $ | 1,012,033 | | | 1 | % | | $ | — | | | $ | — | | | $ | — | | | N/M |
| Commercial and industrial | | 7,933,404 | | | 7,968,709 | | | — | % | | 8,517,974 | | | 7,354,594 | | | 7,495,623 | | | 6 | % |
| Commercial real estate—owner occupied | | 904,997 | | | 914,385 | | | (1) | % | | 940,687 | | | 911,265 | | | 915,524 | | | (1) | % |
| Commercial and business lending | | 9,860,618 | | | 9,895,127 | | | — | % | | 9,458,661 | | | 8,265,858 | | | 8,411,147 | | | 17 | % |
| Commercial real estate—investor | | 4,320,926 | | | 4,174,125 | | | 4 | % | | 4,038,036 | | | 3,794,517 | | | 3,803,277 | | | 14 | % |
| Real estate construction | | 1,859,609 | | | 1,708,189 | | | 9 | % | | 1,544,858 | | | 1,420,900 | | | 1,356,508 | | | 37 | % |
| Commercial real estate lending | | 6,180,536 | | | 5,882,314 | | | 5 | % | | 5,582,894 | | | 5,215,417 | | | 5,159,784 | | | 20 | % |
| Total commercial | | 16,041,154 | | | 15,777,441 | | | 2 | % | | 15,041,555 | | | 13,481,275 | | | 13,570,932 | | | 18 | % |
| Residential mortgage | | 7,885,523 | | | 7,933,518 | | | (1) | % | | 8,132,417 | | | 8,136,980 | | | 7,954,801 | | | (1) | % |
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| Home equity | | 761,593 | | | 795,671 | | | (4) | % | | 844,901 | | | 852,025 | | | 879,642 | | | (13) | % |
| Other consumer | | 315,483 | | | 326,040 | | | (3) | % | | 346,761 | | | 351,159 | | | 349,335 | | | (10) | % |
| Total consumer | | 8,962,599 | | | 9,055,230 | | | (1) | % | | 9,324,079 | | | 9,340,164 | | | 9,183,778 | | | (2) | % |
| Total loans | | $ | 25,003,753 | | | $ | 24,832,671 | | | 1 | % | | $ | 24,365,633 | | | $ | 22,821,440 | | | $ | 22,754,710 | | | 10 | % |
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| Period end deposit and customer funding composition | | Sep 30, 2020 | | Jun 30, 2020 | | Seql Qtr % Change | | Mar 31, 2020 | | Dec 31, 2019 | | Sep 30, 2019 | | Comp Qtr % Change |
| Noninterest-bearing demand | | $ | 7,489,048 | | | $ | 7,573,942 | | | (1) | % | | $ | 6,107,386 | | | $ | 5,450,709 | | | $ | 5,503,223 | | | 36 | % |
| Savings | | 3,529,423 | | | 3,394,930 | | | 4 | % | | 3,033,039 | | | 2,735,036 | | | 2,643,950 | | | 33 | % |
| Interest-bearing demand | | 5,979,449 | | | 5,847,349 | | | 2 | % | | 6,170,071 | | | 5,329,717 | | | 5,434,955 | | | 10 | % |
| Money market | | 7,687,775 | | | 7,486,319 | | | 3 | % | | 7,717,739 | | | 7,640,798 | | | 7,930,676 | | | (3) | % |
| Brokered CDs | | — | | | 4,225 | | | (100) | % | | 65,000 | | | 5,964 | | | 16,266 | | | (100) | % |
| Other time | | 2,026,852 | | | 2,244,680 | | | (10) | % | | 2,568,345 | | | 2,616,839 | | | 2,893,493 | | | (30) | % |
| Total deposits | | 26,712,547 | | | 26,551,444 | | | 1 | % | | 25,661,580 | | | 23,779,064 | | | 24,422,562 | | | 9 | % |
Customer funding(a) | | 198,741 | | | 178,398 | | | 11 | % | | 142,174 | | | 103,113 | | | 108,369 | | | 83 | % |
| Total deposits and customer funding | | $ | 26,911,289 | | | $ | 26,729,842 | | | 1 | % | | $ | 25,803,754 | | | $ | 23,882,177 | | | $ | 24,530,932 | | | 10 | % |
Network transaction deposits(b) | | $ | 1,390,778 | | | $ | 1,496,958 | | | (7) | % | | $ | 1,731,996 | | | $ | 1,336,286 | | | $ | 1,527,910 | | | (9) | % |
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| Net deposits and customer funding (Total deposits and customer funding, excluding Brokered CDs and network transaction deposits) | | $ | 25,520,511 | | | $ | 25,228,660 | | | 1 | % | | $ | 24,006,758 | | | $ | 22,539,927 | | | $ | 22,986,756 | | | 11 | % |
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| Quarter average loan composition | | Sep 30, 2020 | | Jun 30, 2020 | | Seql Qtr % Change | | Mar 31, 2020 | | Dec 31, 2019 | | Sep 30, 2019 | | Comp Qtr % Change |
| PPP Loans | | $ | 1,019,808 | | | $ | 848,761 | | | 20 | % | | $ | — | | | $ | — | | | $ | — | | | N/M |
| Commercial and industrial | | $ | 7,844,209 | | | $ | 8,263,270 | | | (5) | % | | $ | 7,455,528 | | | $ | 7,291,592 | | | $ | 7,574,448 | | | 4 | % |
| Commercial real estate—owner occupied | | 906,874 | | | 929,640 | | | (2) | % | | 924,585 | | | 916,484 | | | 927,820 | | | (2) | % |
| Commercial and business lending | | 9,770,891 | | | 10,041,671 | | | (3) | % | | 8,380,113 | | | 8,208,076 | | | 8,502,268 | | | 15 | % |
| Commercial real estate—investor | | 4,255,473 | | | 4,113,895 | | | 3 | % | | 3,857,277 | | | 3,806,168 | | | 3,768,377 | | | 13 | % |
| Real estate construction | | 1,776,835 | | | 1,606,367 | | | 11 | % | | 1,472,292 | | | 1,388,857 | | | 1,388,653 | | | 28 | % |
| Commercial real estate lending | | 6,032,308 | | | 5,720,262 | | | 5 | % | | 5,329,568 | | | 5,195,025 | | | 5,157,031 | | | 17 | % |
| Total commercial | | 15,803,199 | | | 15,761,933 | | | — | % | | 13,709,681 | | | 13,403,101 | | | 13,659,299 | | | 16 | % |
| Residential mortgage | | 8,058,283 | | | 8,271,757 | | | (3) | % | | 8,404,351 | | | 8,167,795 | | | 8,337,230 | | | (3) | % |
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| Home equity | | 780,202 | | | 819,680 | | | (5) | % | | 845,422 | | | 864,144 | | | 901,291 | | | (13) | % |
| Other consumer | | 321,387 | | | 337,436 | | | (5) | % | | 349,164 | | | 348,295 | | | 354,249 | | | (9) | % |
| Total consumer | | 9,159,872 | | | 9,428,873 | | | (3) | % | | 9,598,937 | | | 9,380,233 | | | 9,592,770 | | | (5) | % |
Total loans(c) | | $ | 24,963,071 | | | $ | 25,190,806 | | | (1) | % | | $ | 23,308,618 | | | $ | 22,783,334 | | | $ | 23,252,068 | | | 7 | % |
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| Quarter average deposit composition | | Sep 30, 2020 | | Jun 30, 2020 | | Seql Qtr % Change | | Mar 31, 2020 | | Dec 31, 2019 | | Sep 30, 2019 | | Comp Qtr % Change |
| Noninterest-bearing demand | | $ | 7,412,186 | | | $ | 6,926,401 | | | 7 | % | | $ | 5,506,861 | | | $ | 5,470,496 | | | $ | 5,324,481 | | | 39 | % |
| Savings | | 3,462,942 | | | 3,260,040 | | | 6 | % | | 2,868,840 | | | 2,714,191 | | | 2,618,188 | | | 32 | % |
| Interest-bearing demand | | 5,835,597 | | | 5,445,267 | | | 7 | % | | 5,307,230 | | | 5,138,116 | | | 5,452,674 | | | 7 | % |
| Money market | | 6,464,784 | | | 6,496,841 | | | — | % | | 6,538,658 | | | 6,594,681 | | | 6,933,230 | | | (7) | % |
| Network transaction deposits | | 1,528,199 | | | 1,544,737 | | | (1) | % | | 1,434,128 | | | 1,438,908 | | | 1,764,961 | | | (13) | % |
| Time deposits | | 2,135,870 | | | 2,469,899 | | | (14) | % | | 2,636,231 | | | 2,746,978 | | | 3,107,670 | | | (31) | % |
| Total deposits | | $ | 26,839,578 | | | $ | 26,143,186 | | | 3 | % | | $ | 24,291,949 | | | $ | 24,103,371 | | | $ | 25,201,203 | | | 7 | % |
N/M = Not meaningful
Numbers may not sum due to rounding.
(a)Includes repurchase agreements and commercial paper.
(b)Included above in interest-bearing demand and money market.
(c)Nonaccrual loans and loans held for sale have been included in the average balances.
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Associated Banc-Corp
Non-GAAP Financial Measures Reconciliation | | YTD | YTD | | | | | |
| ($ in millions, except per share data) | | Sep 2020 | Sep 2019 | 3Q20 | 2Q20 | 1Q20 | 4Q19 | 3Q19 |
Tangible common equity reconciliation(a) | | | | | | | | |
| Common equity | | | | $ | 3,692 | | $ | 3,671 | | $ | 3,534 | | $ | 3,665 | | $ | 3,664 | |
| Goodwill and other intangible assets, net | | | | (1,178) | | (1,181) | | (1,284) | | (1,265) | | (1,267) | |
| Tangible common equity | | | | $ | 2,513 | | $ | 2,490 | | $ | 2,250 | | $ | 2,401 | | $ | 2,397 | |
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Tangible assets reconciliation(a) | | | | | | | | |
| Total assets | | | | $ | 34,699 | | $ | 35,501 | | $ | 33,908 | | $ | 32,386 | | $ | 32,596 | |
| Goodwill and other intangible assets, net | | | | (1,178) | | (1,181) | | (1,284) | | (1,265) | | (1,267) | |
| Tangible assets | | | | $ | 33,520 | | $ | 34,321 | | $ | 32,624 | | $ | 31,122 | | $ | 31,329 | |
Average tangible common equity and average common equity tier 1 reconciliation(a) | | | | | | | | |
| Common equity | | $ | 3,611 | | $ | 3,601 | | $ | 3,681 | | $ | 3,566 | | $ | 3,585 | | $ | 3,658 | | $ | 3,647 | |
| Goodwill and other intangible assets, net | | (1,244) | | (1,253) | | (1,180) | | (1,281) | | (1,272) | | (1,266) | | (1,269) | |
| Tangible common equity | | 2,367 | | 2,347 | | 2,501 | | 2,285 | | 2,313 | | 2,392 | | 2,378 | |
| Modified CECL transitional amount | | 112 | | N/A | 120 | | 115 | | 101 | | N/A | N/A |
| Accumulated other comprehensive loss (income) | | 5 | | 80 | | (4) | | 8 | | 10 | | 37 | | 42 | |
| Deferred tax assets (liabilities), net | | 45 | | 47 | | 42 | | 45 | | 47 | | 48 | | 49 | |
| Average common equity Tier 1 | | $ | 2,528 | | $ | 2,474 | | $ | 2,660 | | $ | 2,453 | | $ | 2,471 | | $ | 2,476 | | $ | 2,469 | |
Average tangible assets reconciliation(a) | | | | | | | | |
| Total assets | | $ | 34,329 | | $ | 33,338 | | $ | 35,550 | | $ | 34,846 | | $ | 32,577 | | $ | 32,182 | | $ | 33,154 | |
| Goodwill and other intangible assets, net | | (1,244) | | (1,253) | | (1,180) | | (1,281) | | (1,272) | | (1,266) | | (1,269) | |
| Tangible assets | | $ | 33,085 | | $ | 32,084 | | $ | 34,371 | | $ | 33,565 | | $ | 31,305 | | $ | 30,916 | | $ | 31,885 | |
Selected trend information(b) | | | | | | | | |
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Wealth management fees(c) | | 63 | | 62 | | 21 | | 21 | | 21 | | 22 | | 21 | |
| Service charges and deposit account fees | | 41 | | 47 | | 14 | | 11 | | 15 | | 16 | | 17 | |
| Card-based fees | | 29 | | 30 | | 10 | | 9 | | 10 | | 10 | | 10 | |
| Other fee-based revenue | | 14 | | 14 | | 5 | | 5 | | 4 | | 5 | | 5 | |
| Fee-based revenue | | 147 | | 153 | | 51 | | 46 | | 50 | | 52 | | 53 | |
| Other | | 282 | | 135 | | 25 | | 208 | | 48 | | 41 | | 48 | |
| Total noninterest income | | $ | 428 | | $ | 288 | | $ | 76 | | $ | 254 | | $ | 98 | | $ | 93 | | $ | 101 | |
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Selected equity and performance ratios(a)(e) | | | | | | | | |
| Tangible common equity / tangible assets | | | | 7.50 | % | 7.25 | % | 6.90 | % | 7.71 | % | 7.65 | % |
| Return on average equity | | 8.20 | % | 8.83 | % | 4.46 | % | 15.55 | % | 4.80 | % | 7.31 | % | 8.47 | % |
| Return on average tangible common equity | | 12.79 | % | 13.86 | % | 6.36 | % | 25.45 | % | 7.31 | % | 11.33 | % | 13.27 | % |
| Return on average common equity Tier 1 | | 11.97 | % | 13.15 | % | 5.98 | % | 23.71 | % | 6.84 | % | 10.94 | % | 12.78 | % |
| Return on average tangible assets | | 0.97 | % | 1.06 | % | 0.52 | % | 1.78 | % | 0.59 | % | 0.93 | % | 1.04 | % |
Efficiency ratio reconciliation(f) | | | | | | | | |
| Federal Reserve efficiency ratio | | 62.34 | % | 64.18 | % | 85.41 | % | 43.49 | % | 70.37 | % | 69.14 | % | 66.55 | % |
| Fully tax-equivalent adjustment | | (0.75) | % | (0.83) | % | (1.29) | % | (0.39) | % | (0.96) | % | (0.91) | % | (0.90) | % |
| Other intangible amortization | | (0.80) | % | (0.79) | % | (0.87) | % | (0.65) | % | (0.95) | % | (0.93) | % | (0.89) | % |
| Fully tax-equivalent efficiency ratio | | 60.80 | % | 62.58 | % | 83.25 | % | 42.46 | % | 68.47 | % | 67.32 | % | 64.78 | % |
| Acquisition related costs adjustment | | (0.24) | % | (0.65) | % | (0.08) | % | (0.12) | % | (0.58) | % | (0.45) | % | (0.53) | % |
| Provision for unfunded commitments adjustment | | (1.64) | % | 0.16 | % | 2.87 | % | (1.91) | % | (5.18) | % | 0.34 | % | (0.33) | % |
| Asset gains (losses), net adjustment | | 10.89 | % | 0.16 | % | (0.11) | % | 22.10 | % | (0.02) | % | 0.09 | % | 0.18 | % |
| 3Q 2020 Initiatives | | (7.07) | % | — | % | (22.90) | % | — | % | — | % | — | % | — | % |
| Adjusted efficiency ratio | | 62.74 | % | 62.24 | % | 63.00 | % | 62.53 | % | 62.70 | % | 67.30 | % | 64.11 | % |
Acquisition Related Costs, Gain on Sale of ABRC, & 3Q20 Initiatives(d) | YTD 2020 | YTD 2020 per share data(g) | 3Q 2020 | 3Q 2020 per share data(g) | 2Q 2020 | 2Q 2020 per share data(g) | 1Q 2020 | 1Q 2020 per share data(g) |
| GAAP earnings: | $ | 227 | | $ | 1.46 | | $ | 40 | | $ | 0.26 | | $ | 145 | | $ | 0.94 | | $ | 42 | | $ | 0.27 | |
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| Net of Tax | | | | | | | | |
| Acquisition Related Costs (noninterest expense) | 2 | | 0.01 | | — | | — | | — | | — | | 1 | | 0.01 | |
| Gain on Sale of ABRC (asset gains, net) | (104) | | (0.68) | | — | | — | | (104) | | (0.68) | | — | | — | |
| Q3 Initiatives | | | | | | | | |
| Severance related to Optimization Plans (Personnel) | 7 | | 0.05 | | 7 | | 0.05 | | — | | — | | — | | — | |
| Branch Consolidations Costs (Occupancy and Other) | 4 | | 0.03 | | 4 | | 0.03 | | — | | — | | — | | — | |
| Loss on prepayment of FHLB Advances (Expense) | 33 | | 0.22 | | 33 | | 0.22 | | — | | — | | — | | — | |
| Re-organization (Income Tax Benefit) | (63) | | (0.41) | | (49) | | (0.32) | | (14) | | (0.09) | | — | | — | |
| Earnings, excluding above items: | $ | 106 | | $ | 0.68 | | $ | 35 | | $ | 0.24 | | $ | 27 | | $ | 0.17 | | $ | 43 | | $ | 0.28 | |
Numbers may not sum due to rounding.
(a)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.
(b)These financial measures have been included as they provide meaningful supplemental information to assess trends in the Corporation’s results of operations.
(c)Includes trust, asset management, brokerage, and annuity fees.
(d)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.
(e)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.
(f)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. The adjusted efficiency ratio is noninterest expense, which excludes the provision for unfunded commitments, other intangible amortization, acquisition related costs and 3Q20 initiatives, divided by the sum of fully tax-equivalent net interest income plus noninterest income, excluding investment securities gains (losses), net, acquisition related costs, and asset gains (losses), net. Management believes the adjusted efficiency ratio is a meaningful measure as it enhances the comparability of net interest income arising from taxable and tax-exempt sources and provides a better measure as to how the Corporation is managing its expenses by adjusting for acquisition related costs, provision for unfunded commitments, and asset gains (losses), net.
(g)Diluted earnings and per share data presented after-tax.
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3Q20 Pre-tax Pre-Provision income, excluding 3Q20 Initiatives(d) | | | | | | 3Q 2020 |
| Pre-tax pre-provision income | | | | | | |
| Loss before income taxes | | | | | | $ | (13) | |
| Provision for credit losses | | | | | | 43 | |
| Pre-tax pre-provision income | | | | | | $ | 30 | |
| 3Q20 Announced Initiatives | | | | | | |
| Loss on prepayments of FHLB Advances | | | | | | $ | 45 | |
| Severance | | | | | | 10 | |
| Branch sales & consolidations | | | | | | 6 | |
| 3Q20 Announced Initiatives | | | | | | $ | 60 | |
| Pre-tax pre-provision income, excluding 3Q20 initiatives | | | | | | $ | 90 | |
