EXHIBIT 99
| | | | | |
News Release | | CONTACTS: | | |
| | Investors: | | |
| | | | Joe Selner, Chief Financial Officer |
| | | | 920-491-7120 |
| | | | | |
| | Media: | | |
| | | | Jon Drayna, Corporate Communications |
| | | | 920-491-7006 |
Associated Banc-Corp 1st quarter 2005 earnings 59 cents up 11 percent
GREEN BAY, Wis. – April 21, 2005 – Associated Banc-Corp (Nasdaq: ASBC) earned 59 cents per diluted share in the first quarter of 2005, up 11 percent from 53 cents earned in the first quarter of 2004. Net income for the first quarter was $77.5 million, up 30 percent compared to first quarter 2004 of $59.6 million.
In comparison, diluted earnings per share and net income for the fourth quarter of 2004 were 57 cents and $70.9 million, respectively.
Associated’s acquisition of First Federal Capital Corp., a $4 billion thrift, on Oct. 29, 2004, affects comparisons to past periods. Additionally, the acquisition of Jabas Group, Inc., an employee benefits firm, on April 1, 2004 affects the comparison of retail commission income and noninterest expenses between first quarter periods.
For the first quarter of 2005, return on average assets was 1.54 percent, compared to 1.49 percent and 1.57 percent for fourth and first quarters of 2004, respectively. Return on average equity for the first quarter of 2005 was 15.52 percent, compared to 15.46 percent for the previous quarter and 17.37 percent for the year-earlier quarter. Comparably, return on average tangible equity (which is a non-GAAP measure that excludes average goodwill and other intangible assets from average equity) was 24.13 percent, 22.47 percent and 21.13 percent for the same respective quarter periods. Book value per share rose to $15.61 as of March 31, 2005, up 23 percent compared to a year earlier.
“Our first quarter performance reflects the success of the First Federal integration and progress on several of our strategic initiatives,” said Paul S. Beideman, president and CEO of Associated Banc-Corp. “While we were primarily focused on the First Federal conversion, we saw overall loan growth, solid asset quality performance, and growth in several categories of noninterest income,” he said.
Associated’s net interest income for the first quarter of 2005 was $165.9 million, compared to $158.5 million for fourth quarter 2004 and $129.1 million in the year-earlier quarter. The increase is due predominantly to higher average balance sheet volumes.
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ASBC 1Q ’05,add one
Net interest margin was 3.68 percent, compared to 3.74 percent and 3.80 percent for fourth and first quarters of 2004, respectively. The flattening of the yield curve and competitive pricing pressures have substantially offset the benefits to the margin from interest rate increases that began in the second half of 2004 and continue into 2005.
Period end loans at March 31, 2005 were $13.9 billion, up slightly from Dec. 31, 2004 and up 33 percent over a year earlier. Quarterly average loan balances, a key driver to net interest income, were up 35 percent annualized compared to fourth quarter 2004 and up 34 percent between first quarter periods. Adjusting for balances acquired with First Federal, average loan growth was sustained at approximately 6 percent annualized compared to both fourth and first quarters of 2004.
Period end deposits at March 31, 2005 were $12.2 billion, compared to $12.8 billion at year-end 2004 and $9.7 billion a year ago. On average, deposits were $12.4 billion for first quarter 2005, compared to $11.7 billion (up 24 percent annualized) and $9.6 billion (up 29 percent) for fourth and first quarters of 2004, respectively. Adjusting for balances acquired with First Federal, average deposits for first quarter 2005 were down approximately 6 percent annualized compared to fourth quarter 2004, and up approximately 1 percent over first quarter 2004 averages.
The decline in deposits from the fourth quarter is the result of usual seasonal trends, driven largely by escrow deposits which accumulate throughout the year, are dispersed at year-end and re-build as the year progresses. On average, escrow deposits declined by $0.2 billion between fourth quarter 2004 and first quarter 2005. In addition, the fourth quarter of 2004 experienced a large increase in municipal and institutional deposits which were withdrawn by the end of the first quarter of 2005, totaling approximately $0.3 billion.
Asset quality indicators remained strong and resolution to problem credits continued. First quarter 2005 net charge-offs were $2.2 million (0.06 percent of average loans), compared to $3.6 million (0.11 percent) for fourth quarter 2004, and $5.1 million (0.20 percent) for first quarter 2004. Nonperforming loans at March 31, 2005 were $102.9 million, representing 0.74 percent of loans, compared to 0.83 percent of loans at year-end 2004 and 0.89 percent of loans at March 31, 2004. The provision for loan losses was $2.3 million, $3.6 million, and $5.2 million, for first quarter 2005, fourth quarter 2004, and first quarter 2004, respectively.
At March 31, 2005, the allowance for loan losses was $189.9 million. The allowance for loan losses to total loans was 1.36 percent and covered 184 percent of nonperforming loans at March 31,2005, compared to 1.37 percent and 165 percent, respectively, at year-end 2004, and 1.69 percent and 190 percent, respectively, at March 31, 2004.
As mentioned earlier, quarterly comparisons of noninterest income and noninterest expense are particularly affected by the timing of acquisitions, with fourth quarter 2004 including only two months of First Federal activity and first quarter 2004 carrying no First Federal or Jabas activity.
Noninterest income was strong at $71.4 million for first quarter 2005, up $12.3 million (21 percent) over fourth quarter 2004 and up $25.2 million (55 percent) over first quarter last year. Excluding a non-recurring gain from the dissolution of stock in a regional ATM network of approximately $4 million, recorded in other income during first quarter 2005, noninterest income was up 14 percent and 46 percent over fourth and first quarters of 2004, respectively.
Net mortgage banking income (gross mortgage banking income less mortgage servicing rights (MSR) expense) was $9.9 million for first quarter 2005, up $3.8 million over fourth quarter 2004. The increase was the net result of lower MSR expense and higher servicing fees, offset in part by lower gains on sales and other fees.
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ASBC 1Q ’05,add two
Including First Federal, the average portfolio serviced for others increased, resulting in a $1.0 million (18 percent) increase to servicing fees between fourth quarter 2004 and first quarter 2005. Rising mortgage interest rates slowed secondary mortgage production (down 21 percent to $337 million compared to fourth quarter 2004), lowering resultant gains on sales and other related fees by $1.7 million. However, rising rates also slowed prepayment speeds, a predominant valuation factor, increasing the value of the MSR asset and requiring less valuation reserve. Consequently, MSR expense was $4.5 million lower than fourth quarter 2004, including a $4.0 million valuation reserve reversal in first quarter 2005 compared to a $1.0 million valuation reserve addition in fourth quarter 2004.
At March 31, 2005, the net MSR asset was $78.2 million, representing 82 basis points of the $9.53 billion portfolio serviced for others, compared to 80 basis points at Dec. 31, 2004.
Service charges on deposit accounts were $18.7 million, up $1.7 million (10 percent) over fourth quarter 2004, and credit card and other nondeposit fees were $9.1 million, up $0.9 million (11 percent), both due largely to the increased deposit base and card base from First Federal. Retail commissions were $14.7 million, up $2.0 million (16 percent) over fourth quarter 2004, from the seasonal increase in profit sharing/contingency income from insurance carriers and increased sales.
Noninterest expense was $121.2 million for first quarter 2005, up $11.3 million (10 percent) over fourth quarter 2004 and up $34.4 million (40 percent) over first quarter last year, influenced by the timing of the First Federal and Jabas acquisitions. During the first quarter, $3 million of noninterest expenses recorded in various categories were specifically attributable to the integration activities and conversion of First Federal onto Associated’s operating systems in mid-February. As a result of the conversion, Associated is now positioned to phase-in anticipated cost savings through the remainder of 2005.
Personnel expense was $73.0 million in the first quarter, up $7.8 million or 12 percent over fourth quarter 2004, including the extra month of First Federal’s employee base, merit increases between years, increased overtime, and the usual first quarter increases in personnel taxes. Occupancy expense of $9.9 million was up $1.6 million (19 percent) compared to fourth quarter 2004, including seasonal increases in utilities and snow removal costs. All other noninterest expense categories combined were up $1.9 million (5 percent) over fourth quarter 2004, a combination of increased expenses related to the extra month of First Federal and conversion and integration costs, offset in part with controlled discretionary spending.
The efficiency ratio remained favorable at 49.73 percent, 49.07 percent, and 48.40 percent for first quarter 2005, fourth quarter 2004 and first quarter 2004, respectively.
“Our successful integration of First Federal positions us well for the future as we capture synergies and sell our expanded product line to First Federal customers,” Beideman said.
He added, “While the rate environment and competition for loans and deposits are challenging, we’re confident that our strategies will allow us to meet consensus earnings estimates for 2005.”
Associated repurchased 0.4 million shares of its common stock in the first quarter, at an average price of $32.76 per share. Also, during the first quarter, the company paid a dividend of 25 cents per share, up 10 percent from the year-earlier dividend.
On March 21, 2005, Associated signed a definitive agreement to acquire State Financial Services Corp (Nasdaq: SFSW) in an all-stock transaction, whereby State Financial shareholders receive 1.20 shares of Associated common stock for each share of State Financial common stock they hold. Based on Associated’s closing share price on March 18, 2005, the transaction is valued at approximately $278 million. At March 31, 2005, State Financial is a $1.5 billion financial services company based in Milwaukee, with 29 banking branches in Southeastern Wisconsin and Northeastern Illinois.
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ASBC 1Q ’05,add three
Associated will host a conference call for investors and analysts at 3 p.m. CDT today. The toll-free dial-in number is 877-654-5513. Participants should ask the operator for the Associated Banc-Corp earnings call, or for call ID number 5626644. A taped play-back of the call will be available through April 28 by calling 800-642-1687.
Associated Banc-Corp, headquartered in Green Bay, Wis., is a diversified multibank holding company with total assets of $20.5 billion. Associated has more than 300 banking offices serving more than 170 communities in Wisconsin, Illinois, and Minnesota. The company offers a full range of traditional banking services and a variety of other financial products and services. More information about Associated Banc-Corp is available at www.AssociatedBank.com.
Statements made in this document that are not purely historical are forward-looking statements, as defined in the Private Securities Litigation Reform Act of 1995. This includes any statements regarding management’s plans, objectives, or goals for future operations, products or services, and forecasts of its revenues, earnings, or other measures of performance. Forward-looking statements are based on current management expectations and, by their nature, are subject to risks and uncertainties. These statements may be identified by the use of words such as “believe,” “expect,” “anticipate,” “plan,” “estimate,” “should,” “will,” “intend,” or similar expressions. Outcomes related to such statements are subject to numerous risk factors and uncertainties including those listed in the company’s Annual Report to be filed on Form 10-K.
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Six pages of tables follow.
Consolidated Balance Sheets (Unaudited)
Associated Banc-Corp
| | | | | | | | | | | | | | | | | | | | | |
| | | | March 31, | | | | December 31, | | | | | | | | March 31, | | | | | |
| (in thousands) | | | 2005 | | | | 2004 | | | | % Change | | | | 2004 | | | | % Change | |
| |
| Assets | | | | | | | | | | | | | | | | | | | | |
| Cash and due from banks | | $ | 327,487 | | | $ | 389,311 | | | | (15.9 | %) | | $ | 323,686 | | | | 1.2 | % |
| Interest-bearing deposits in other financial institutions | | | 14,202 | | | | 13,321 | | | | 6.6 | % | | | 17,057 | | | | (16.7 | %) |
| Federal funds sold and securities purchased under agreements to resell | | | 15,655 | | | | 55,440 | | | | (71.8 | %) | | | 7,000 | | | | 123.6 | % |
| Securities available for sale, at fair value | | | 4,835,134 | | | | 4,815,344 | | | | 0.4 | % | | | 3,883,470 | | | | 24.5 | % |
| Loans held for sale | | | 79,975 | | | | 64,964 | | | | 23.1 | % | | | 120,699 | | | | (33.7 | %) |
| Loans | | | 13,923,196 | | | | 13,881,887 | | | | 0.3 | % | | | 10,486,610 | | | | 32.8 | % |
| Allowance for loan losses | | | (189,917 | ) | | | (189,762 | ) | | | 0.1 | % | | | (177,717 | ) | | | 6.9 | % |
| | | | | | | | | | | | | | | | | | |
| Loans, net | | | 13,733,279 | | | | 13,692,125 | | | | 0.3 | % | | | 10,308,893 | | | | 33.2 | % |
| Premises and equipment | | | 180,315 | | | | 184,944 | | | | (2.5 | %) | | | 130,028 | | | | 38.7 | % |
| Goodwill | | | 679,993 | | | | 679,993 | | | | 0.0 | % | | | 224,388 | | | | 203.0 | % |
| Intangible assets | | | 119,381 | | | | 119,440 | | | | (0.0 | %) | | | 59,899 | | | | 99.3 | % |
| Other assets | | | 517,021 | | | | 505,254 | | | | 2.3 | % | | | 435,748 | | | | 18.7 | % |
| | | | | | | | | | | | | | | | | | |
Total assets | | $ | 20,502,442 | | | $ | 20,520,136 | | | | (0.1 | %) | | $ | 15,510,868 | | | | 32.2 | % |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| Liabilities and Stockholders’ Equity | | | | | | | | | | | | | | | | | | | | |
| Noninterest-bearing deposits | | $ | 2,156,592 | | | $ | 2,347,611 | | | | (8.1 | %) | | $ | 1,755,485 | | | | 22.8 | % |
| Interest-bearing deposits, excluding Brokered CDs | | | 9,819,201 | | | | 10,077,069 | | | | (2.6 | %) | | | 7,716,290 | | | | 27.3 | % |
| Brokered CDs | | | 218,111 | | | | 361,559 | | | | (39.7 | %) | | | 230,983 | | | | (5.6 | %) |
| | | | | | | | | | | | | | | | | | |
| Total deposits | | | 12,193,904 | | | | 12,786,239 | | | | (4.6 | %) | | | 9,702,758 | | | | 25.7 | % |
| Short-term borrowings | | | 2,778,161 | | | | 2,926,716 | | | | (5.1 | %) | | | 2,516,270 | | | | 10.4 | % |
| Long-term funding | | | 3,332,804 | | | | 2,604,540 | | | | 28.0 | % | | | 1,749,418 | | | | 90.5 | % |
| Accrued expenses and other liabilities | | | 172,502 | | | | 185,222 | | | | (6.9 | %) | | | 147,129 | | | | 17.2 | % |
| | | | | | | | | | | | | | | | | | |
| Total liabilities | | | 18,477,371 | | | | 18,502,717 | | | | (0.1 | %) | | | 14,115,575 | | | | 30.9 | % |
| Stockholders’ Equity | | | | | | | | | | | | | | | | | | | | |
| Preferred Stock | | | — | | | | — | | | | | | | | — | | | | | |
| Common Stock | | | 1,300 | | | | 1,300 | | | | 0.0 | % | | | 1,105 | | | | 17.6 | % |
| Surplus | | | 1,128,148 | | | | 1,127,205 | | | | 0.1 | % | | | 582,559 | | | | 93.7 | % |
| Retained earnings | | | 898,578 | | | | 858,847 | | | | 4.6 | % | | | 755,627 | | | | 18.9 | % |
| Accumulated other comprehensive income | | | 10,505 | | | | 41,205 | | | | (74.5 | %) | | | 66,526 | | | | (84.2 | %) |
| Deferred compensation | | | (3,814 | ) | | | (2,122 | ) | | | 79.7 | % | | | (1,981 | ) | | | 92.5 | % |
| Treasury stock, at cost | | | (9,646 | ) | | | (9,016 | ) | | | 7.0 | % | | | (8,543 | ) | | | 12.9 | % |
| | | | | | | | | | | | | | | | | | |
| Total stockholders’ equity | | | 2,025,071 | | | | 2,017,419 | | | | 0.4 | % | | | 1,395,293 | | | | 45.1 | % |
| | | | | | | | | | | | | | | | | | |
Total liabilities and stockholders’ equity | | $ | 20,502,442 | | | $ | 20,520,136 | | | | (0.1 | %) | | $ | 15,510,868 | | | | 32.2 | % |
| | | | | | | | | | | | | | | | | | |
Consolidated Statements of Income (Unaudited)
Associated Banc-Corp
| | | | | | | | | | | | | |
| | | For The Three Months Ended,
March 31, | | | | |
| (in thousands, except per share amounts) | | | 2005 | | | | 2004 | | | | %Change | |
Interest Income | | | | | | | | | | | | |
| Interest and fees on loans | | $ | 200,309 | | | $ | 135,252 | | | | 48.1 | % |
| Interest and dividends on investment securities and deposits with other financial institutions | | | | | | | | | | | | |
| Taxable | | | 41,034 | | | | 31,032 | | | | 32.2 | % |
| Tax-exempt | | | 9,723 | | | | 10,235 | | | | (5.0 | %) |
| Interest on federal funds sold and securities purchased under agreements to resell | | | 82 | | | | 27 | | | | 203.7 | % |
| | | | | | | | | | | |
| Total interest income | | | 251,148 | | | | 176,546 | | | | 42.3 | % |
Interest Expense | | | | | | | | | | | | |
| Interest on deposits | | | 44,433 | | | | 27,554 | | | | 61.3 | % |
| Interest on short-term borrowings | | | 17,169 | | | | 6,539 | | | | 162.6 | % |
| Interest on long-term funding | | | 23,638 | | | | 13,378 | | | | 76.7 | % |
| | | | | | | | | | | |
| Total interest expense | | | 85,240 | | | | 47,471 | | | | 79.6 | % |
| | | | | | | | | | | |
Net Interest Income | | | 165,908 | | | | 129,075 | | | | 28.5 | % |
| Provision for loan losses | | | 2,327 | | | | 5,176 | | | | (55.0 | %) |
| | | | | | | | | | | |
| Net interest income after provision for loan losses | | | 163,581 | | | | 123,899 | | | | 32.0 | % |
Noninterest Income | | | | | | | | | | | | |
| Trust service fees | | | 8,328 | | | | 7,868 | | | | 5.8 | % |
| Service charges on deposit accounts | | | 18,665 | | | | 12,397 | | | | 50.6 | % |
| Mortgage banking, net | | | 9,884 | | | | 2,254 | | | | 338.5 | % |
| Credit card and other nondeposit fees | | | 9,111 | | | | 5,671 | | | | 60.7 | % |
| Retail commissions | | | 14,705 | | | | 9,357 | | | | 57.2 | % |
| Bank owned life insurance income | | | 2,168 | | | | 3,355 | | | | (35.4 | %) |
| Asset sale gains (losses), net | | | (302 | ) | | | 222 | | | | N/M | |
| Investment securities gains, net | | | — | | | | 1,931 | | | | N/M | |
| Other | | | 8,814 | | | | 3,132 | | | | 181.4 | % |
| | | | | | | | | | | |
| Total noninterest income | | | 71,373 | | | | 46,187 | | | | 54.5 | % |
Noninterest Expense | | | | | | | | | | | | |
| Personnel expense | | | 72,985 | | | | 52,276 | | | | 39.6 | % |
| Occupancy | | | 9,888 | | | | 7,472 | | | | 32.3 | % |
| Equipment | | | 4,018 | | | | 2,999 | | | | 34.0 | % |
| Data processing | | | 6,293 | | | | 5,673 | | | | 10.9 | % |
| Business development and advertising | | | 3,939 | | | | 2,657 | | | | 48.2 | % |
| Stationery and supplies | | | 1,844 | | | | 1,226 | | | | 50.4 | % |
| Other intangible amortization | | | 1,994 | | | | 782 | | | | 155.0 | % |
| Other | | | 20,281 | | | | 13,799 | | | | 47.0 | % |
| | | | | | | | | | | |
| Total noninterest expense | | | 121,242 | | | | 86,884 | | | | 39.5 | % |
| | | | | | | | | | | |
Income before income taxes | | | 113,712 | | | | 83,202 | | | | 36.7 | % |
| Income tax expense | | | 36,242 | | | | 23,642 | | | | 53.3 | % |
| | | | | | | | | | | |
Net Income | | $ | 77,470 | | | $ | 59,560 | | | | 30.1 | % |
| | | | | | | | | | | |
| | | | | | | | | | | | | |
Earnings Per Share: | | | | | | | | | | | | |
| Basic | | $ | 0.60 | | | $ | 0.54 | | | | 11.1 | % |
| Diluted | | $ | 0.59 | | | $ | 0.53 | | | | 11.3 | % |
Average Shares Outstanding: | | | | | | | | | | | | |
| Basic | | | 129,781 | | | | 110,294 | | | | 17.7 | % |
| Diluted | | | 131,358 | | | | 111,830 | | | | 17.5 | % |
N/M — Not meaningful.
Consolidated Statements of Income (Unaudited) — Quarterly Trend
Associated Banc-Corp
| | | | | | | | | | | | | | | | | | | | | |
| (in thousands, except per share amounts) | | 1Q05 | | | 4Q04 | | | 3Q04 | | | 2Q04 | | | 1Q04 | |
Interest Income | | | | | | | | | | | | | | | | | | | | |
| Interest and fees on loans | | $ | 200,309 | | | $ | 179,612 | | | $ | 142,389 | | | $ | 137,449 | | | $ | 135,252 | |
| Interest and dividends on investment securities and deposits in other financial institutions: | | | | | | | | | | | | | | | | | | | | |
| Taxable | | | 41,034 | | | | 37,631 | | | | 31,590 | | | | 30,767 | | | | 31,032 | |
| Tax-exempt | | | 9,723 | | | | 10,047 | | | | 10,255 | | | | 10,267 | | | | 10,235 | |
| Interest on federal funds sold and securities purchased under agreements to resell | | | 82 | | | | 260 | | | | 241 | | | | 68 | | | | 27 | |
| | | | | | | | | | | | | | | | |
| Total interest income | | | 251,148 | | | | 227,550 | | | | 184,475 | | | | 178,551 | | | | 176,546 | |
Interest Expense | | | | | | | | | | | | | | | | | | | | |
| Interest on deposits | | | 44,433 | | | | 36,835 | | | | 27,191 | | | | 26,656 | | | | 27,554 | |
| Interest on short-term borrowings | | | 17,169 | | | | 14,898 | | | | 10,262 | | | | 7,241 | | | | 6,539 | |
| Interest on long-term funding | | | 23,638 | | | | 17,360 | | | | 13,806 | | | | 12,775 | | | | 13,378 | |
| | | | | | | | | | | | | | | | |
| Total interest expense | | | 85,240 | | | | 69,093 | | | | 51,259 | | | | 46,672 | | | | 47,471 | |
| | | | | | | | | | | | | | | | |
Net Interest Income | | | 165,908 | | | | 158,457 | | | | 133,216 | | | | 131,879 | | | | 129,075 | |
| Provision for loan losses | | | 2,327 | | | | 3,603 | | | | — | | | | 5,889 | | | | 5,176 | |
| | | | | | | | | | | | | | | | |
| Net interest income after provision for loan losses | | | 163,581 | | | | 154,854 | | | | 133,216 | | | | 125,990 | | | | 123,899 | |
Noninterest Income | | | | | | | | | | | | | | | | | | | | |
| Trust service fees | | | 8,328 | | | | 8,107 | | | | 7,773 | | | | 8,043 | | | | 7,868 | |
| Service charges on deposit accounts | | | 18,665 | | | | 16,943 | | | | 13,672 | | | | 13,141 | | | | 12,397 | |
| Mortgage banking, net | | | 9,884 | | | | 6,046 | | | | 618 | | | | 11,413 | | | | 2,254 | |
| Credit card and other nondeposit fees | | | 9,111 | | | | 8,183 | | | | 6,253 | | | | 6,074 | | | | 5,671 | |
| Retail commissions | | | 14,705 | | | | 12,727 | | | | 11,925 | | | | 13,162 | | | | 9,357 | |
| Bank owned life insurance income | | | 2,168 | | | | 2,525 | | | | 3,580 | | | | 3,641 | | | | 3,355 | |
| Asset sale gains (losses), net | | | (302 | ) | | | 432 | | | | 309 | | | | 218 | | | | 222 | |
| Investment securities gains (losses), net | | | — | | | | (719 | ) | | | (6 | ) | | | (569 | ) | | | 1,931 | |
| Other | | | 8,814 | | | | 4,793 | | | | 3,034 | | | | 2,742 | | | | 3,132 | |
| | | | | | | | | | | | | | | | |
| Total noninterest income | | | 71,373 | | | | 59,037 | | | | 47,158 | | | | 57,865 | | | | 46,187 | |
Noninterest Expense | | | | | | | | | | | | | | | | | | | | |
| Personnel expense | | | 72,985 | | | | 65,193 | | | | 53,467 | | | | 53,612 | | | | 52,276 | |
| Occupancy | | | 9,888 | | | | 8,297 | | | | 6,939 | | | | 6,864 | | | | 7,472 | |
| Equipment | | | 4,018 | | | | 3,855 | | | | 3,022 | | | | 2,878 | | | | 2,999 | |
| Data processing | | | 6,293 | | | | 5,966 | | | | 5,865 | | | | 6,128 | | | | 5,673 | |
| Business development and advertising | | | 3,939 | | | | 4,271 | | | | 3,990 | | | | 4,057 | | | | 2,657 | |
| Stationery and supplies | | | 1,844 | | | | 1,567 | | | | 1,214 | | | | 1,429 | | | | 1,226 | |
| Other intangible amortization | | | 1,994 | | | | 1,699 | | | | 935 | | | | 934 | | | | 782 | |
| Other | | | 20,281 | | | | 19,119 | | | | 13,599 | | | | 16,085 | | | | 13,799 | |
| | | | | | | | | | | | | | | | |
| Total noninterest expense | | | 121,242 | | | | 109,967 | | | | 89,031 | | | | 91,987 | | | | 86,884 | |
| | | | | | | | | | | | | | | | |
Income before income taxes | | | 113,712 | | | | 103,924 | | | | 91,343 | | | | 91,868 | | | | 83,202 | |
| Income tax expense | | | 36,242 | | | | 33,069 | | | | 27,977 | | | | 27,363 | | | | 23,642 | |
| | | | | | | | | | | | | | | | |
Net Income | | $ | 77,470 | | | $ | 70,855 | | | $ | 63,366 | | | $ | 64,505 | | | $ | 59,560 | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
Earnings Per Share: | | | | | | | | | | | | | | | | | | | | |
| Basic | | $ | 0.60 | | | $ | 0.57 | | | $ | 0.58 | | | $ | 0.59 | | | $ | 0.54 | |
| Diluted | | $ | 0.59 | | | $ | 0.57 | | | $ | 0.57 | | | $ | 0.58 | | | $ | 0.53 | |
Average Shares Outstanding: | | | | | | | | | | | | | | | | | | | | |
| Basic | | | 129,781 | | | | 123,509 | | | | 110,137 | | | | 110,116 | | | | 110,294 | |
| Diluted | | | 131,358 | | | | 125,296 | | | | 111,699 | | | | 111,520 | | | | 111,830 | |
Selected Quarterly Information
Associated Banc-Corp
| | | | | | | | | | | | | | | | | | | | | |
|
| (in thousands, except per share & full time equivalent employee data) | | 1st Qtr 2005 | | | 4th Qtr 2004 | | | 3rd Qtr 2004 | | | 2nd Qtr 2004 | | | 1st Qtr 2004 | |
Summary of Operations | | | | | | | | | | | | | | | | | | | | |
| Net interest income | | | 165,908 | | | | 158,457 | | | | 133,216 | | | | 131,879 | | | | 129,075 | |
| Provision for loan losses | | | 2,327 | | | | 3,603 | | | | — | | | | 5,889 | | | | 5,176 | |
| Asset sale gains (losses), net | | | (302 | ) | | | 432 | | | | 309 | | | | 218 | | | | 222 | |
| Investment securities gains (losses), net | | | — | | | | (719 | ) | | | (6 | ) | | | (569 | ) | | | 1,931 | |
| Noninterest income (excluding securities & asset gains) | | | 71,675 | | | | 59,324 | | | | 46,855 | | | | 58,216 | | | | 44,034 | |
| Noninterest expense | | | 121,242 | | | | 109,967 | | | | 89,031 | | | | 91,987 | | | | 86,884 | |
| Income before income taxes | | | 113,712 | | | | 103,924 | | | | 91,343 | | | | 91,868 | | | | 83,202 | |
| Income taxes | | | 36,242 | | | | 33,069 | | | | 27,977 | | | | 27,363 | | | | 23,642 | |
| Net income | | | 77,470 | | | | 70,855 | | | | 63,366 | | | | 64,505 | | | | 59,560 | |
| Taxable equivalent adjustment | | | 6,222 | | | | 6,342 | | | | 6,395 | | | | 6,387 | | | | 6,404 | |
| | | | | | | | | | | | | | | | | | | | | |
| |
Per Common Share Data (1) | | | | | | | | | | | | | | | | | | | | |
| Net income: | | | | | | | | | | | | | | | | | | | | |
| Basic | | $ | 0.60 | | | $ | 0.57 | | | $ | 0.58 | | | $ | 0.59 | | | $ | 0.54 | |
| Diluted | | | 0.59 | | | | 0.57 | | | | 0.57 | | | | 0.58 | | | | 0.53 | |
| Dividends | | | 0.2500 | | | | 0.2500 | | | | 0.2500 | | | | 0.2500 | | | | 0.2267 | |
| | | | | | | | | | | | | | | | | | | | | |
| Market Value: | | | | | | | | | | | | | | | | | | | | |
| High | | $ | 33.50 | | | $ | 34.85 | | | $ | 32.19 | | | $ | 30.13 | | | $ | 30.37 | |
| Low | | | 30.60 | | | | 32.08 | | | | 28.81 | | | | 27.09 | | | | 28.08 | |
| Close | | | 31.23 | | | | 33.23 | | | | 32.07 | | | | 29.63 | | | | 29.86 | |
| Book value | | | 15.61 | | | | 15.55 | | | | 13.18 | | | | 12.53 | | | | 12.67 | |
| | | | | | | | | | | | | | | | | | | | | |
| |
Performance Ratios (annualized) | | | | | | | | | | | | | | | | | | | | |
| Net interest margin | | | 3.68 | % | | | 3.74 | % | | | 3.76 | % | | | 3.80 | % | | | 3.80 | % |
| Return on average assets | | | 1.54 | | | | 1.49 | | | | 1.60 | | | | 1.67 | | | | 1.57 | |
| Return on average equity | | | 15.52 | | | | 15.46 | | | | 17.76 | | | | 18.87 | | | | 17.37 | |
| Return on tangible average equity (2) | | | 24.13 | | | | 22.47 | | | | 21.69 | | | | 23.15 | | | | 21.13 | |
| Efficiency ratio (3) | | | 49.73 | | | | 49.07 | | | | 47.75 | | | | 46.82 | | | | 48.40 | |
| Effective tax rate | | | 31.87 | | | | 31.82 | | | | 30.63 | | | | 29.78 | | | | 28.42 | |
| Dividend payout ratio (4) | | | 41.67 | | | | 43.86 | | | | 43.10 | | | | 42.37 | | | | 41.98 | |
| | | | | | | | | | | | | | | | | | | | | |
| |
Average Balances | | | | | | | | | | | | | | | | | | | | |
| Assets | | $ | 20,467,698 | | | $ | 18,956,445 | | | $ | 15,730,451 | | | $ | 15,498,005 | | | $ | 15,261,277 | |
| Earning assets | | | 18,756,555 | | | | 17,437,618 | | | | 14,688,914 | | | | 14,480,701 | | | | 14,185,569 | |
| Interest-bearing liabilities | | | 16,139,002 | | | | 14,761,878 | | | | 12,381,407 | | | | 12,231,733 | | | | 12,083,003 | |
| Loans | | | 13,977,621 | | | | 12,858,394 | | | | 10,708,701 | | | | 10,685,542 | | | | 10,433,411 | |
| Deposits | | | 12,359,040 | | | | 11,658,646 | | | | 9,621,557 | | | | 9,701,945 | | | | 9,585,074 | |
| Stockholders’ equity | | | 2,024,265 | | | | 1,822,715 | | | | 1,419,600 | | | | 1,374,632 | | | | 1,378,804 | |
| Stockholders’ equity / assets | | | 9.89 | % | | | 9.62 | % | | | 9.02 | % | | | 8.87 | % | | | 9.03 | % |
| | | | | | | | | | | | | | | | | | | | | |
| |
At Period End | | | | | | | | | | | | | | | | | | | | |
| Assets | | $ | 20,502,442 | | | $ | 20,520,136 | | | $ | 16,135,761 | | | $ | 15,502,556 | | | $ | 15,510,868 | |
| Loans | | | 13,923,196 | | | | 13,881,887 | | | | 10,830,627 | | | | 10,556,603 | | | | 10,486,610 | |
| Allowance for loan losses | | | 189,917 | | | | 189,762 | | | | 175,007 | | | | 177,980 | | | | 177,717 | |
| Goodwill | | | 679,993 | | | | 679,993 | | | | 232,564 | | | | 232,528 | | | | 224,388 | |
| Mortgage servicing rights, net | | | 78,182 | | | | 76,247 | | | | 45,555 | | | | 48,735 | | | | 39,649 | |
| Other intangible assets | | | 41,199 | | | | 43,193 | | | | 24,308 | | | | 25,242 | | | | 20,250 | |
| Deposits | | | 12,193,904 | | | | 12,786,239 | | | | 9,677,273 | | | | 9,583,592 | | | | 9,702,758 | |
| Stockholders’ equity | | | 2,025,071 | | | | 2,017,419 | | | | 1,453,465 | | | | 1,378,894 | | | | 1,395,293 | |
| Stockholders’ equity / assets | | | 9.88 | % | | | 9.83 | % | | | 9.01 | % | | | 8.89 | % | | | 9.00 | % |
| Shares outstanding, end of period | | | 129,697 | | | | 129,770 | | | | 110,281 | | | | 110,048 | | | | 110,168 | |
| Shares repurchased during period | | | 411 | | | | 376 | | | | — | | | | 205 | | | | 492 | |
| Average per share cost of shares repurchased during period | | $ | 32.76 | | | $ | 33.25 | | | $ | — | | | $ | 27.93 | | | $ | 29.32 | |
| Year-to-date shares repurchased during period | | | 411 | | | | 1,073 | | | | 697 | | | | 697 | | | | 492 | |
| YTD average per share cost of shares repurchased during period | | $ | 32.76 | | | $ | 30.43 | | | $ | 28.91 | | | $ | 28.91 | | | $ | 29.32 | |
| | | | | | | | | | | | | | | | | | | | | |
| |
Selected trend information | | | | | | | | | | | | | | | | | | | | |
| Average full time equivalent employees | | | 5,132 | | | | 4,746 | | | | 3,979 | | | | 4,010 | | | | 4,024 | |
| Trust assets under management, at market value | | $ | 4,700,000 | | | $ | 4,600,000 | | | $ | 4,400,000 | | | $ | 4,300,000 | | | $ | 4,300,000 | |
| Mortgage loans originated for sale | | | 337,406 | | | | 427,951 | | | | 253,917 | | | | 579,020 | | | | 359,791 | |
| Portfolio serviced for others | | | 9,528,000 | | | | 9,543,000 | | | | 6,011,000 | | | | 6,010,000 | | | | 5,904,000 | |
| Mortgage servicing rights, net / Portfolio serviced for others | | | 0.82 | % | | | 0.80 | % | | | 0.76 | % | | | 0.81 | % | | | 0.67 | % |
| | | | | | | | | | | | | | | | | | | | | |
| |
| (1) | Per share data adjusted retroactively for stock splits and stock dividends. |
| |
| (2) | Return on tangible average equity = Net income divided by average equity excluding average goodwill and other intangible assets. This is a non-GAAP financial measure. |
| |
| (3) | Efficiency ratio = Noninterest expense divided by sum of taxable equivalent net interest income plus noninterest income, excluding investment securities gains, net, and asset sales gains, net. |
| |
| (4) | Ratio is based upon basic earnings per share. |
Financial Summary and Comparison
Associated Banc-Corp
| | | | | | | | | | | | | |
| | | Three months ended |
| | | March 31, |
| (in thousands) | | 2005 | | 2004 | | %Change |
Allowance for Loan Losses | | | | | | | | | | | | |
| Beginning balance | | $ | 189,762 | | | $ | 177,622 | | | | 6.8 | % |
| Provision for loan losses | | | 2,327 | | | | 5,176 | | | | (55.0 | %) |
| Charge offs | | | (5,683 | ) | | | (6,062 | ) | | | (6.3 | %) |
| Recoveries | | | 3,511 | | | | 981 | | | | 257.9 | % |
| | | | | | | | | | | |
| Net charge offs | | | (2,172 | ) | | | (5,081 | ) | | | (57.3 | %) |
| | | | | | | | | | | |
| Ending Balance | | $ | 189,917 | | | $ | 177,717 | | | | 6.9 | % |
| | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Credit Quality | | | | | | | | | | 1Q05 vs 4Q04 | | | | | | | | | | | | | | 1Q05 vs 1Q04 |
| | | Mar 31, 2005 | | Dec 31, 2004 | | %Change | | Sept 30, 2004 | | June 30, 2004 | | Mar 31, 2004 | | %Change |
| Nonaccrual loans | | $ | 99,835 | | | $ | 112,761 | | | | (11.5 | %) | | $ | 81,124 | | | $ | 80,622 | | | $ | 88,313 | | | | 13.0 | % |
| Loans 90 or more days past due and still accruing | | | 3,068 | | | | 2,153 | | | | 42.5 | % | | | 10,309 | | | | 5,207 | | | | 5,258 | | | | (41.7 | %) |
| Restructured loans | | | 36 | | | | 37 | | | | (2.7 | %) | | | 39 | | | | 40 | | | | 42 | | | | (14.3 | %) |
| | | | | | | | | | | | | |
| Total nonperforming loans | | | 102,939 | | | | 114,951 | | | | (10.4 | %) | | | 91,472 | | | | 85,869 | | | | 93,613 | | | | 10.0 | % |
| Other real estate owned | | | 4,019 | | | | 3,915 | | | | 2.7 | % | | | 4,526 | | | | 6,613 | | | | 7,199 | | | | (44.2 | %) |
| | | | | | | | | | | | | |
| Total nonperforming assets | | | 106,958 | | | | 118,866 | | | | (10.0 | %) | | | 95,998 | | | | 92,482 | | | | 100,812 | | | | 6.1 | % |
| | | | | | | | | | | | | |
| Provision for loan losses | | | 2,327 | | | | 3,603 | | | | (35.4 | %) | | | — | | | | 5,889 | | | | 5,176 | | | | (55.0 | %) |
| Net charge offs | | | 2,172 | | | | 3,598 | | | | (39.6 | %) | | | 2,973 | | | | 5,626 | | | | 5,081 | | | | (57.3 | %) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Allowance for loan losses / loans | | | 1.36 | % | | | 1.37 | % | | | | | | | 1.62 | % | | | 1.69 | % | | | 1.69 | % | | | | |
| Allowance for loan losses / nonperforming loans | | | 184.49 | | | | 165.08 | | | | | | | | 191.32 | | | | 207.27 | | | | 189.84 | | | | | |
| Nonperforming loans / total loans | | | 0.74 | | | | 0.83 | | | | | | | | 0.84 | | | | 0.81 | | | | 0.89 | | | | | |
| Nonperforming assets / total assets | | | 0.52 | | | | 0.58 | | | | | | | | 0.59 | | | | 0.60 | | | | 0.65 | | | | | |
| Net charge offs / average loans (annualized) | | | 0.06 | | | | 0.11 | | | | | | | | 0.11 | | | | 0.21 | | | | 0.20 | | | | | |
| Year-to-date net charge offs / average loans | | | 0.06 | | | | 0.15 | | | | | | | | 0.17 | | | | 0.20 | | | | 0.20 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Period End Loan Composition | | | | | | | | | | 1Q05 vs 4Q04 | | | | | | | | | | | | | | 1Q05 vs 1Q04 |
| | | Mar 31, 2005 | | Dec 31, 2004 | | %Change | | Sept 30, 2004 | | June 30, 2004 | | Mar 31, 2004 | | %Change |
| Commercial, financial & agricultural | | $ | 2,852,462 | | | $ | 2,803,333 | | | | 1.8 | % | | $ | 2,479,764 | | | $ | 2,247,779 | | | $ | 2,123,846 | | | | 34.3 | % |
| Real estate — construction | | | 1,569,013 | | | | 1,459,629 | | | | 7.5 | % | | | 1,152,990 | | | | 1,118,284 | | | | 1,094,597 | | | | 43.3 | % |
| Commercial real estate | | | 3,813,465 | | | | 3,933,131 | | | | (3.0 | %) | | | 3,242,009 | | | | 3,292,783 | | | | 3,368,660 | | | | 13.2 | % |
| Lease financing | | | 50,181 | | | | 50,718 | | | | (1.1 | %) | | | 49,423 | | | | 48,979 | | | | 45,998 | | | | 9.1 | % |
| | | | | | | | | | | | | | | | | | | |
| Commercial | | | 8,285,121 | | | | 8,246,811 | | | | 0.5 | % | | | 6,924,186 | | | | 6,707,825 | | | | 6,633,101 | | | | 24.9 | % |
Home equity (a) | | | 1,744,676 | (b) | | | 1,866,485 | | | | (6.5 | %) | | | 1,290,436 | | | | 1,231,077 | | | | 1,204,541 | | | | 44.8 | % |
| Installment | | | 1,048,510 | | | | 1,054,011 | | | | (0.5 | %) | | | 672,806 | | | | 666,305 | | | | 679,903 | | | | 54.2 | % |
| | | | | | | | | | | | | | | | | | | |
| Retail | | | 2,793,186 | | | | 2,920,496 | | | | (4.4 | %) | | | 1,963,242 | | | | 1,897,382 | | | | 1,884,444 | | | | 48.2 | % |
| Residential mortgage | | | 2,844,889 | (b) | | | 2,714,580 | | | | 4.8 | % | | | 1,943,199 | | | | 1,951,396 | | | | 1,969,065 | | | | 44.5 | % |
| | | | | | | | | | | | | | | | | | | |
| Total loans | | $ | 13,923,196 | | | $ | 13,881,887 | | | | 0.3 | % | | $ | 10,830,627 | | | $ | 10,556,603 | | | $ | 10,486,610 | | | | 32.8 | % |
| | | | | | | | | | | | | | | | | | | |
| (a) | Home equity includes home equity lines and residential mortgage junior liens. |
| |
| (b) | At conversion, approximately $150 million of loan balances were reclassified from home equity to residential mortgage. |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Period End Deposit Composition | | | | | | | | | | 1Q05 vs 4Q04 | | | | | | | | | | | | | | 1Q05 vs 1Q04 |
| | | Mar 31, 2005 | | Dec 31, 2004 | | %Change | | Sept 30, 2004 | | June 30, 2004 | | Mar 31, 2004 | | %Change |
| Demand | | $ | 2,156,592 | | | $ | 2,347,611 | | | | (8.1 | %) | | $ | 1,867,905 | | | $ | 1,822,716 | | | $ | 1,755,485 | | | | 22.8 | % |
| Savings | | | 1,137,120 | | | | 1,116,158 | | | | 1.9 | % | | | 936,975 | | | | 948,755 | | | | 918,608 | | | | 23.8 | % |
| Interest-bearing demand | | | 2,485,548 | | | | 2,854,880 | | | | (12.9 | %) | | | 2,334,072 | | | | 2,355,287 | | | | 2,375,492 | | | | 4.6 | % |
| Money market | | | 2,112,490 | | | | 2,083,717 | | | | 1.4 | % | | | 1,516,423 | | | | 1,477,513 | | | | 1,542,875 | | | | 36.9 | % |
| Brokered CDs | | | 218,111 | | | | 361,559 | | | | (39.7 | %) | | | 186,326 | | | | 263,435 | | | | 230,983 | | | | (5.6 | %) |
| Other time deposits | | | 4,084,043 | | | | 4,022,314 | | | | 1.5 | % | | | 2,835,572 | | | | 2,715,886 | | | | 2,879,315 | | | | 41.8 | % |
| | | | | | | | | | | | | | | | | | | |
| Total deposits | | $ | 12,193,904 | | | $ | 12,786,239 | | | | (4.6 | %) | | $ | 9,677,273 | | | $ | 9,583,592 | | | $ | 9,702,758 | | | | 25.7 | % |
| | | | | | | | | | | | | | | | | | | |
Net Interest Income Analysis — Taxable Equivalent Basis
Associated Banc-Corp| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Three months ended March 31, 2005 | | Three months ended March 31, 2004 |
| | | Average | | | Interest | | | Average | | | Average | | | Interest | | | Average | |
| (in thousands) | | Balance | | | Income / Expense | | | Yield / Rate | | | Balance | | | Income / Expense | | | Yield / Rate | |
| | | | | |
| Earning assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Loans:(1)(2)(3) | | | | | | | | | | | | | | | | | | | | | | | | |
| Commercial | | $ | 8,265,444 | | | $ | 115,902 | | | | 5.61 | % | | $ | 6,532,215 | | | $ | 79,787 | | | | 4.83 | % |
| Residential mortgage | | | 2,836,893 | | | | 39,418 | | | | 5.58 | | | | 2,041,383 | | | | 29,109 | | | | 5.71 | |
| Retail | | | 2,875,284 | | | | 45,378 | | | | 6.40 | | | | 1,859,813 | | | | 26,619 | | | | 5.75 | |
| | | | | | | | | |
| Total loans | | | 13,977,621 | | | | 200,698 | | | | 5.77 | | | | 10,433,411 | | | | 135,515 | | | | 5.17 | |
| Investments and other | | | 4,778,934 | | | | 56,672 | | | | 4.75 | | | | 3,752,158 | | | | 47,435 | | | | 5.06 | |
| | | | | | | | | |
| Total earning assets | | | 18,756,555 | | | | 257,370 | | | | 5.51 | | | | 14,185,569 | | | | 182,950 | | | | 5.14 | |
| Other assets, net | | | 1,711,143 | | | | | | | | | | | | 1,075,708 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Total assets | | $ | 20,467,698 | | | | | | | | | | | $ | 15,261,277 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Interest-bearing liabilities: | | | | | | | | | | | | | | | | | | | | | | | | |
| Savings deposits | | $ | 1,119,263 | | | $ | 1,012 | | | | 0.37 | % | | $ | 898,526 | | | $ | 841 | | | | 0.38 | % |
| Interest-bearing demand deposits | | | 2,602,085 | | | | 6,746 | | | | 1.05 | | | | 2,364,013 | | | | 4,700 | | | | 0.80 | |
| Money market deposits | | | 2,116,014 | | | | 7,396 | | | | 1.42 | | | | 1,577,010 | | | | 3,163 | | | | 0.81 | |
| Time deposits, excluding Brokered CDs | | | 4,071,934 | | | | 27,247 | | | | 2.71 | | | | 2,937,071 | | | | 18,412 | | | | 2.52 | |
| | | | | | | | | |
| Total interest-bearing deposits, excluding Brokered CDs | | | 9,909,296 | | | | 42,401 | | | | 1.74 | | | | 7,776,620 | | | | 27,116 | | | | 1.40 | |
| Brokered CDs | | | 318,529 | | | | 2,032 | | | | 2.59 | | | | 144,345 | | | | 438 | | | | 1.22 | |
| | | | | | | | | |
| Total interest-bearing deposits | | | 10,227,825 | | | | 44,433 | | | | 1.76 | | | | 7,920,965 | | | | 27,554 | | | | 1.40 | |
| Wholesale funding | | | 5,911,177 | | | | 40,807 | | | | 2.76 | | | | 4,162,038 | | | | 19,917 | | | | 1.90 | |
| | | | | | | | | |
| Total interest-bearing liabilities | | | 16,139,002 | | | | 85,240 | | | | 2.13 | | | | 12,083,003 | | | | 47,471 | | | | 1.57 | |
| Noninterest-bearing demand | | | 2,131,215 | | | | | | | | | | | | 1,664,109 | | | | | | | | | |
| Other liabilities | | | 173,216 | | | | | | | | | | | | 135,361 | | | | | | | | | |
| Stockholders’ equity | | | 2,024,265 | | | | | | | | | | | | 1,378,804 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Total liabilities and stockholders’ equity | | $ | 20,467,698 | | | | | | | | | | | $ | 15,261,277 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Net interest income and rate spread(1) | | | | | | $ | 172,130 | | | | 3.38 | % | | | | | | $ | 135,479 | | | | 3.57 | % |
| | | | | | | | | | | | | | | | | | | | | | | |
| Net interest margin(1) | | | | | | | | | | | 3.68 | % | | | | | | | | | | | 3.80 | % |
| Taxable equivalent adjustment | | | | | | $ | 6,222 | | | | | | | | | | | $ | 6,404 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
| (1) | The yield on tax exempt loans and securities is computed on a taxable equivalent basis using a tax rate of 35% for all periods presented and is net of the effects of certain disallowed interest deductions. |
| |
| (2) | Nonaccrual loans and loans held for sale have been included in the average balances. |
| |
| (3) | Interest income includes net loan fees. |
