UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest reported) July 19, 2001
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Associated Banc-Corp
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(Exact name of registrant as specified in its chapter)
Wisconsin 39-1098068
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(State or other jurisdiction of Commission(IRS Employer Identification No.)
incorporation) File Number)
1200 Hansen Road, Green Bay, Wisconsin 54304
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(Address of principal executive offices) (Zip code)
920-491-7000
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(Registrant's telephone number, including area code)
(Former name or former address, if changed since last report)
Item 5. Other Events.
On July 19, 2001, Associated Banc-Corp reported second quarter of 2001 earnings
of 69 cents per diluted share. Associated Banc-Corp is placing on file as
Exhibit 99 a copy of the Company's financial results for the quarter ended June
30, 2001. Final financial statements with additional analyses will be filed as
part of the Company's Form 10-Q for the quarter ended June 30, 2001.
Item 7. Financial Statements and Exhibits.
(c) Exhibits.
Exhibit 99. Earnings news release of Associated Banc-Corp, dated July 19, 2001,
of financial results for the quarter ended June 30, 2001.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Associated Banc-Corp
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(Registrant)
Date: July 26, 2001 /s/ Joseph B. Selner
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Joseph B. Selner
Chief Financial Officer
EXHIBIT 99
[GRAPHIC OMITTED]
Contacts:
Investors:
Joe Selner, Chief Financial Officer
920-491-7120
Media:
Jon Drayna, Corporate Communications
920-491-7006
News Release
Associated Banc-Corp reports record 2nd quarter earnings of 69 cents per share
GREEN BAY, Wis. - July 19, 2001 - Associated Banc-Corp (NASDAQ: ASBC)
reported record earnings of 69 cents per diluted share for the second quarter of
2001, compared to 63 cents in the second quarter of 2000, an increase of 9.5
percent. Net income was $46.0 million, compared to $43.7 million in the
year-earlier quarter.
Return on average assets rose to 1.42 percent, compared to 1.39 percent in the
comparable 2000 quarter. Return on average equity was 18.02 percent, compared to
19.06 percent in the year-earlier period.
Net interest income rose to $104.0 million in the second quarter, compared to
$96.4 million in the year-earlier quarter, as the company's net interest margin
continued to benefit from declining interest rates. Associated's net interest
margin was 3.56 percent for the second quarter, compared to 3.37 percent in the
year-earlier quarter and 3.34 percent in the first quarter.
Commercial loans grew by 12.2 percent while overall loan growth was 3.3 percent
over the second quarter of 2000. As the company experienced heavy mortgage
refinancing in the quarter, the resulting new mortgages were sold into the
secondary market, tempering total loan growth. Associated retained servicing for
these residential mortgage loans.
Credit quality remained strong overall, with second quarter net charge-offs of
16 basis points of average loans, annualized. Net charge-offs in the second
quarter totaled $3.6 million, compared to $1.9 million in the year-earlier
quarter, and $2.1 million in the first quarter, reflecting economic softening,
which is affecting the bank's customers.
Non-interest income for the second quarter of 2001 was $51.0 million, up from
$50.5 million for the same quarter in 2000. The year-earlier quarter reflected a
net $7.6 million gain from both the sale of Associated's credit card portfolio
and certain investment securities.
Second quarter mortgage banking income increased by $10.5 million from the
year-earlier quarter due to record origination and sale of fixed rate first
mortgage loans of $664 million, compared to $97 million in the second quarter of
2000. In addition, this quarter reflects a gain of $3 million from the sale of
mortgage loan servicing rights.
- More -
ASBC 2Q, add one
The increase in second quarter non-interest income overall was tempered by a
decline in wealth management revenue resulting from weaker financial markets.
Non-interest expenses were $82.3 million for the second quarter, up 1.5 percent
from the $81.0 million in the year-earlier quarter. While total non-interest
expenses have increased modestly, the company's efficiency ratio improved from
56.03 percent last year to 51.38 percent for the second quarter of 2001.
Also in the second quarter, the company continued progress on its initiative to
streamline operations in a way that improves Associated's ability to build
customer relationships and improve productivity, most notably by successfully
completing the consolidation of its six Wisconsin banking charters into a single
national bank.
Associated President and CEO Robert C. Gallagher said he was pleased with the
company's positioning for the future and its ability to effectively capitalize
on declining interest rates.
"Earning $15 million in mortgage banking income and growing commercial loans by
12.2 percent are highlights of our financial improvement. These results
demonstrate our commitment to providing value to both customers and
shareholders.
"Certainly, declining interest rates, our pricing discipline, and shifting mix
toward greater growth in commercial loans have significantly improved our net
interest margin and helped our strong second quarter results. At the same time,
our associates' commitment to providing value to customer relationships, in
conjunction with our recent organizational changes, position us for strong
performance over the long term," Gallagher said.
He reiterated Associated's previously stated expectation for 2001 earnings of
$2.60 to $2.65 per diluted share, noting the relatively large contribution of
mortgage banking fee income to the quarter's earnings, and that mortgage banking
activity may have peaked in the second quarter due to the rapid decline in
interest rates.
Associated Banc-Corp, headquartered in Green Bay, Wis., is a diversified
multibank holding company with $13.2 billion in total assets. Associated has
approximately 4,000 associates serving individuals, small, and large businesses
with a full array of deposit, lending and wealth management services through
more than 200 banking locations across Wisconsin, Illinois and Minnesota.
Associated has paid a dividend for 125 consecutive quarters, with increases in
each of the last 10 years, including an increase from 29 cents to 31 cents per
share in the second quarter.
This news release contains forward-looking statements that involve a number of
risks and uncertainties. Among the important factors that could cause actual
results to differ materially from those indicated by such forward-looking
statements are interest rates, changes in the mix of the company's business,
competitive pressures, general economic conditions and the risk factors detailed
in the company's periodic reports and registration statements filed with the
Securities and Exchange Commission.
- 30 -
Tables follow.
Consolidated Balance Sheets (Unaudited)
Associated Banc-Corp
June 30, December 31, June 30,
(in thousands) 2001 2000 2000
Assets
Cash and due from banks $ 309,521 $ 368,186 $ 338,727
Interest-bearing deposits in other
financial institutions 4,692 5,024 4,721
Federal funds sold and securities
purchased under agreements to resell 42,350 23,310 116,320
Securities held to maturity, at
amortized cost - 368,558 391,414
Securities available for sale, at fair
value 3,249,373 2,891,647 2,848,595
Loans held for sale 128,192 24,593 11,773
Loans 3,983,678 8,913,379 8,696,417
Allowance for loan losses (126,390) (120,232) (115,395)
Loans, net 8,857,288 8,793,147 8,581,022
Premises and equipment 122,592 127,600 134,924
Other assets 498,281 526,329 570,763
Total assets $13,212,289 $ 13,128,394 $12,998,259
Liabilities and Stockholders' Equity
Noninterest-bearing deposits $ 1,175,615 $ 1,243,949 $ 1,131,871
Interest-bearing deposits 7,324,611 8,047,697 8,113,520
Total deposits 8,500,226 9,291,646 9,245,391
Short-term borrowings 2,958,835 2,598,203 2,555,837
Long-term debt 522,234 122,420 122,792
Accrued expenses and other liabilities 180,316 147,429 144,016
Total liabilities 12,161,611 12,159,698 12,068,036
Stockholders' Equity
Preferred stock - - -
Common stock 664 664 688
Surplus 297,289 296,479 355,279
Retained earnings 710,052 663,566 624,661
Accumulated other comprehensive
income (loss) 51,857 15,581 (42,861)
Treasury stock at cost (9,184) (7,594) (7,544)
Total stockholders' equity 1,050,678 968,696 930,223
Total liabilities and stockholders'
equity $13,212,289 $ 13,128,394 $12,998,259
Consolidated Statements of Income (Unaudited)
Associated Banc-Corp
For The Three Months Ended, For The Six Months Ended,
June 30, June 30,
(in thousands, except per share amounts) 2001 2000 2001 2000
Interest Income
Interest and fees on loans $ 178,236 $ 177,650 $ 362,611 $ 349,889
Interest and dividends on investment securities:
Taxable 37,082 40,782 75,654 82,504
Tax-exempt 10,042 9,171 20,206 17,367
Interest on deposits in other financial
institutions 94 106 215 170
Interest on federal funds sold and securities
purchased under agreements to resell 194 589 641 1,141
Total interest income 225,648 228,298 459,327 451,071
Interest Expense
Interest on deposits 78,965 92,137 170,392 173,695
Interest on short-term borrowings 38,140 38,074 81,444 79,495
Interest on long-term debt 4,591 1,725 6,536 3,170
Total interest expense 121,696 131,936 258,372 256,360
Net Interest Income 103,952 96,362 200,955 194,711
Provision for loan losses 6,365 5,166 11,947 10,881
Net interest income after provision for
loan losses 97,587 91,196 189,008 183,830
Noninterest Income
Trust service fees 7,339 9,526 15,411 19,649
Service charges on deposit accounts 9,550 8,207 18,295 15,681
Mortgage banking 15,391 4,902 24,565 9,492
Credit card and other nondeposit fees 7,234 7,260 14,020 12,536
Retail commissions 4,265 5,337 8,749 10,945
Asset sale gains, net 383 13,043 915 21,307
Investment securities gains (losses), net (4) (5,490) 242 (7,192)
Other 6,871 7,703 13,151 14,014
Total noninterest income 51,029 50,488 95,348 96,432
Noninterest Expense
Personnel expense 41,233 38,916 81,538 77,554
Occupancy 5,927 5,672 12,281 11,816
Equipment 3,650 3,755 7,330 7,852
Data processing 4,822 6,708 9,665 12,387
Business development and advertising 3,191 3,269 6,192 6,499
Stationery and supplies 2,330 1,999 4,062 3,823
FDIC expense 446 421 880 898
Other 20,679 20,291 38,780 38,813
Total noninterest expense 82,278 81,031 160,728 159,642
Income before income taxes 66,338 60,653 123,628 120,620
Income tax expense 20,319 16,956 35,523 33,842
Net Income $ 46,019 $ 43,697 $ 88,105 $ 86,778
Earnings Per Share:
Basic $ 0.70 $ 0.63 $ 1.33 $ 1.25
Diluted $ 0.69 $ 0.63 $ 1.32 $ 1.25
Average Shares Outstanding:
Basic 66,146 68,918 66,148 69,211
Diluted 66,691 69,206 66,676 69,508
Selected Quarterly Information
Associated Banc-Corp
(in thousands, except per share data) 2nd Qtr 2001 1st Qtr 2001 4th Qtr 2000 3rd Qtr 2000 2nd Qtr 2000
Summary of Operations
Interest income $ 225,648 $ 233,679 $ 242,194 $ 237,892 $ 228,298
Interest expense 121,696 136,676 147,876 143,354 131,936
Net interest income 103,952 97,003 94,318 94,538 96,362
Provision for loan losses 6,365 5,582 5,203 4,122 5,166
Net interest income after provision for
loan losses 97,587 91,421 89,115 90,416 91,196
Asset sale gains, net 383 532 (66) 3,179 13,043
Investment securities gains (losses) (4) 246 (455) (2) (5,490)
Noninterest income (excluding securities &
asset gains) 50,650 43,541 43,916 41,192 42,935
Noninterest expense 82,278 78,450 77,929 80,165 81,031
Income taxes 20,319 15,204 14,880 13,116 16,956
Net income 46,019 42,086 39,701 41,504 43,697
Taxable equivalent adjustment 5,541 5,601 5,869 5,840 5,321
At Period End
Assets $13,212,289 $13,122,386 $13,128,394 $13,120,002 $12,998,259
Earning assets 12,408,285 12,336,663 12,226,511 12,223,247 12,069,240
Loans 8,983,678 8,935,543 8,913,379 8,858,665 8,696,417
Allowance for loan losses 126,390 123,668 120,232 117,607 115,395
Deposits 8,500,226 8,687,691 9,291,646 9,331,316 9,245,391
Stockholders' equity 1,050,678 1,023,978 968,696 930,183 930,223
Stockholders' equity / assets 7.95% 7.80% 7.38% 7.09% 7.16%
Goodwill and core deposit intangibles 102,497 104,598 106,700 108,885 111,165
Average Balances
Assets $13,036,595 $13,014,503 $13,086,752 $12,903,544 $12,674,173
Earning assets 12,228,357 12,197,015 12,288,402 12,122,879 11,930,943
Interest-bearing liabilities 10,760,548 10,805,833 10,854,175 10,724,729 10,563,782
Loans 9,063,780 8,985,659 8,921,729 8,771,251 8,596,649
Deposits 8,504,760 8,788,540 9,435,473 9,252,903 9,086,902
Stockholders' equity 1,024,287 993,284 931,665 930,256 921,985
Stockholders' equity / assets 7.86% 7.63% 7.12% 7.21% 7.27%
Credit Quality
Nonaccrual loans $ 49,147 $ 50,310 $ 41,045 $ 39,907 $ 35,155
Loans 90 or more days past due and
still accruing (4) 3,779 4,788 6,492 5,520 4,886
Restructured loans 143 146 159 23 -
Total nonperforming loans 53,069 55,244 47,696 45,450 40,041
Other real estate owned (ORE) 2,603 3,285 4,032 3,710 3,954
Total nonperforming assets 55,672 58,529 51,728 49,160 43,995
Net charge-offs 3,643 2,146 2,578 1,910 1,852
Allowance for loan losses / loans 1.41% 1.38% 1.35% 1.33% 1.33%
Allowance for loan losses / nonperforming assets 227.03 211.29 232.43 239.23 262.29
Allowance for loan losses / nonperforming loans 238.16 223.86 252.08 258.76 288.19
Nonperforming assets / loans plus ORE 0.62 0.65 0.58 0.55 0.51
Nonperforming assets / total assets 0.42 0.45 0.39 0.37 0.34
Net charge-offs / average loans (annualized) 0.16 0.10 0.11 0.09 0.09
Per Common Share Data (1)
Net income:
Basic $ 0.70 $ 0.64 $ 0.60 $ 0.61 $ 0.63
Diluted 0.69 0.63 0.60 0.61 0.63
Cash diluted (2) 0.72 0.66 0.63 0.63 0.66
Dividends 0.31 0.29 0.29 0.29 0.2636
Market Value:
High $ 35.99 $ 36.19 $ 30.63 $ 26.63 $ 27.27
Low 31.63 29.75 21.84 22.13 21.81
Close 35.99 33.25 30.38 26.25 21.81
Book value 15.89 15.48 14.65 13.94 13.57
Shares outstanding, end of period 66,105 66,135 66,116 66,725 68,536
Performance Ratios (annualized)
Net interest margin 3.56% 3.34% 3.20% 3.25% 3.37%
Return on average assets 1.42 1.31 1.21 1.28 1.39
Return on average equity 18.02 17.18 16.95 17.75 19.06
Efficiency ratio (3) 51.38 53.68 54.08 56.63 56.03
Effective tax rate 30.63 26.54 27.26 24.01 27.96
Dividend payout ratio (basic) 44.29 45.31 48.33 47.54 41.84
(1) Per share data adjusted retroactively for stock splits and stock dividends.
(2) Cash diluted EPS excludes the after-tax effect of the amortization of
goodwill related intangibles in net income.
(3) Efficiency ratio = Noninterest expense divided by sum of taxable equivalent
net interest income plus noninterest income, excluding investment securities
gain, net, and asset sales gains, net.
(4) Does not include guaranteed student loans. Guaranteed student loans 90+ days
past due and still accruing totaled $18.4 million as of June 30, 2001.
Financial Summary and Comparison
Associated Banc-Corp
Three months ended Six months ended
June 30, June 30,
(in thousands, except per share data) 2001 2000 % Change 2001 2000 % Change
Summary of Operations
Interest income $ 225,648 $ 228,298 (1.2) $ 459,327 $ 451,071 1.8
Interest expense 121,696 131,936 (7.8) 258,372 256,360 0.8
Net interest income 103,952 96,362 7.9 200,955 194,711 3.2
Provision for loan losses 6,365 5,166 23.2 11,947 10,881 9.8
Net interest income after provision
for loan losses 97,587 91,196 7.0 189,008 183,830 2.8
Asset sale gains, net 383 13,043 (97.1) 915 21,307 (95.7)
Investment securities gains (losses) (4) (5,490) (99.9) 242 (7,192) (103.4)
Noninterest income (excluding securities
& asset gains) 50,650 42,935 18.0 94,191 82,317 14.4
Noninterest expense 82,278 81,031 1.5 160,728 159,642 0.7
Income taxes 20,319 16,956 19.8 35,523 33,842 5.0
Net income 46,019 43,697 5.3 88,105 86,778 1.5
Taxable equivalent adjustment 5,541 5,321 4.1 11,142 10,038 11.0
At Period End
Assets $ 13,212,289 $ 12,998,259 1.6
Earning assets 12,408,285 12,069,240 2.8
Loans 8,983,678 8,696,417 3.3
Allowance for loan losses 126,390 115,395 9.5
Deposits 8,500,226 9,245,391 (8.1)
Stockholders' equity 1,050,678 930,223 12.9
Average Balances
Assets $ 13,036,595 $ 12,674,173 2.9 $ 13,024,517 $ 12,623,312 3.2
Earning assets 12,228,357 11,930,943 2.5 12,212,773 11,886,427 2.7
Interest-bearing liabilities 10,760,548 10,563,782 1.9 10,783,065 10,552,405 2.2
Loans 9,063,780 8,596,649 5.4 9,024,935 8,527,965 5.8
Deposits 8,504,760 9,086,902 (6.4) 8,645,866 8,859,041 (2.4)
Stockholders' equity 1,024,287 921,985 11.1 1,008,871 909,262 11.0
Stockholders' equity / assets 7.86% 7.27% 7.75% 7.20%
Per Common Share Data (1)
Net income:
Basic $ 0.70 $ 0.63 11.1 $ 1.33 $ 1.25 6.4
Diluted 0.69 0.63 9.5 1.32 1.25 5.6
Cash diluted (2) 0.72 0.66 9.1 1.38 1.31 5.3
Dividends 0.31 0.2636 17.6 0.60 0.5272 13.8
Market Value:
High $ 35.99 $ 27.27 32.0 $ 36.19 $ 30.06 20.4
Low 31.63 21.81 45.0 29.75 20.29 46.6
Close 35.99 21.81 65.0 35.99 21.81 65.0
Book value 15.89 13.57 17.1 15.89 13.57 17.1
Shares outstanding, end of period 66,105 68,536 (3.5) 66,105 68,536 (3.5)
Performance Ratios (annualized)
Net interest margin 3.56% 3.37% 3.45% 3.41%
Return on average assets 1.42 1.39 1.36 1.38
Return on average equity 18.02 19.06 17.61 19.19
Efficiency ratio (3) 51.38 56.03 52.48 55.61
Effective tax rate 30.63 27.96 28.73 28.06
Dividend payout ratio (basic) 44.29 41.84 45.11 42.18
(1) Per share data adjusted retroactively for stock splits and stock dividends.
(2) Cash diluted EPS excludes the after-tax effect of the amortization of
goodwill related intangibles in net income.
(3) Efficiency ratio = Noninterest expense divided by sum of taxable equivalent
net interest income plus noninterest income, excluding investment securities
gain, net, and asset sales gains, net.