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Exhibit 99.1

 

LOGO                

NEWS RELEASE

 

Investor Contact:

Tim Sedabres, VP of Finance, Investor Relations

920-491-7059

 

Media Contact:

Autumn Latimore, Senior Vice President, Public Relations Director

414-278-1860

 

Associated Reports Fourth Quarter Earnings of $0.26 per share

Full year net income to common shareholders up 51% from a year ago

GREEN BAY, Wis. — January 17, 2013 — Associated Banc-Corp (NASDAQ: ASBC) today reported net income to common shareholders of $45 million, or $0.26 per common share, for the quarter ended December 31, 2012. This compares to net income to common shareholders of $40 million, or $0.23 per common share, for the quarter ended December 31, 2011.

For the year ended December 31, 2012, the Company reported net income to common shareholders of $174 million, or $1.00 per common share. This compares to net income to common shareholders of $115 million, or $0.66 per common share for the year ended December 31, 2011.

“This year’s strong performance was the result of the commitment of our colleagues to serving the needs of customers across the footprint,” said President and CEO Philip B. Flynn. “We are proud to have restored Associated to its position as a strong Upper Midwestern franchise and we are pleased to have been able to deliver value for our shareholders over the course of 2012. We continue to be encouraged by the momentum throughout the company and we look forward to the opportunity to continue to grow Associated.”

HIGHLIGHTS

 

   

Full year 2012 net income to common shareholders of $174 million, up 51% from a year ago

 

   

Fourth quarter net income to common shareholders of $45 million

 

   

Return on Tier 1 common equity for full year 2012 of 9.5%, compared to 6.7% for full year 2011

 

   

Loan balances have grown by $1.4 billion, or 10%, from a year ago to $15.4 billion

 

   

Loans increased by $445 million, or 3%, during the fourth quarter

 

   

Total commercial loan balances grew by $426 million, or 5% from the third quarter and accounted for the majority of the quarter’s net loan growth

 

   

Average deposits for the fourth quarter increased by $1.8 billion, or 12% from a year ago to $16.7 billion

 

   

Average deposits increased by $1.0 billion, or 7%, from the third quarter

 

   

Credit quality continued to improve with net charge offs, nonaccrual loans, and potential problem loans all declining from the prior year

 

   

Quarterly dividend increased to $0.08 per common share in the fourth quarter, up from $0.05 per common share

 

   

During the fourth quarter, the Company repurchased $30 million, or approximately 2 million shares, of common stock at an average cost of $12.70

 

   

Capital ratios remain very strong with a Tier 1 common equity ratio of 11.58%

– More –


FOURTH QUARTER 2012 FINANCIAL RESULTS

Loans

At December 31, 2012, the Company’s loan portfolio was $15.4 billion, up $445 million, or 3%, from $15.0 billion at September 30, 2012. For full year 2012, loans increased by $1.4 billion, or 10%, from $14.0 billion a year ago.

Commercial and business lending balances increased by $262 million, or 5% from the prior quarter. Commercial real estate lending balances grew by $164 million, or 5% on a linked-quarter basis. The residential mortgage portfolio grew by $172 million, or 5%, during the quarter while the retail portfolio, which includes home equity and installment loan balances, experienced net run-off of $153 million during the quarter.

Deposits

Average deposits of $16.7 billion were up $1.0 billion, or 7%, from the third quarter. On a full year basis, average deposits increased by $1.2 billion, or 8%, from a year ago.

Total deposits of $16.9 billion at the end of the fourth quarter were up $489 million, or 3%, compared to third quarter levels. Period-end noninterest-bearing account balances grew by $439 million, or 10%, from the third quarter, and have increased by $831 million, or 21%, from a year ago. The increase in fourth quarter noninterest-bearing deposit balances was partially the result of customers’ seasonal year-end account activity. Interest-bearing demand balances increased by $324 million, or 15%, from the third quarter, and have increased by $257 million, or 11%, from a year ago. During the quarter, the Company continued to reduce its reliance on higher cost funding sources, including term repurchase agreements, which were down $334 million, and brokered and other CD balances, which were down $103 million from the prior quarter.

Net Interest Income and Net Interest Margin

Fourth quarter net interest income of $161 million increased by $6 million, or 4%, compared to the prior quarter and was up 6% compared to the year-ago quarter. Net interest income for the fourth quarter included $2 million of interest related to a tax refund. For the full year, net interest income of $626 million increased by $13 million, or 2% from the prior year.

The net interest margin for the fourth quarter was 3.32%, which included a 3 basis point benefit related to interest received on the tax refund. On a full year basis, the net interest margin was 3.30% compared to 3.26% for full year 2011.

Fourth quarter net interest margin benefited from an 11 basis point decline in the cost of deposits and interest-bearing liabilities, partially offset by a 4 basis point decline in loan yields, contributing to a net increase in overall net interest margin of 6 basis points compared to the prior quarter.

Noninterest Income and Expense

Noninterest income for the quarter was $78 million, down $3 million, or 4%, from the third quarter. Noninterest income for the full year was $313 million, up 15% from full year 2011.

– More –


The decline in fourth quarter fee income was primarily attributable to the establishment of a $3 million repurchase reserve against previously sold mortgage loans that reduced net mortgage banking income during the quarter.

Total noninterest expense for the quarter ended December 31, 2012 was $176 million, up $7 million, or 4%, from the third quarter. For the full year, noninterest expense increased by 5% to $682 million.

Personnel and occupancy expenses increased by $6 million during the fourth quarter which included $4 million of severance cost and lease breakage expense related to the Company’s recently announced efficiency initiatives.

Credit

The Company reported another quarter of improving credit quality with nonaccrual loans down 9%, to $253 million compared to the third quarter, and down 29% from a year ago. Nonaccrual loans to total loans now stand at 1.64% and have improved for the 11th consecutive quarter. Nonperforming assets declined 8% from the prior quarter to $288 million, and have declined 28% from a year ago.

Net charge offs of $21 million for the fourth quarter were up $3 million from the third quarter, and were $2 million lower than a year ago. For the full year, net charge offs declined by 44% to $84 million.

Fourth quarter provision for loan losses was $3 million. The Company’s allowance for loan losses was $297 million, representing an allowance equal to 1.93% of loans and representing a coverage ratio of over 117% of nonaccrual loans at December 31, 2012.

Taxes

Income tax expense was lower by $7 million compared to the third quarter, due to a net $5 million income tax benefit recorded during the period, primarily related to the reversal of certain prior years’ tax reserves.

Capital Ratios

The Company’s capital position remains very strong, with a Tier 1 common equity ratio of 11.58% at December 31, 2012. The Company’s capital ratios continue to be well in excess of both current and proposed “well-capitalized” regulatory benchmarks.

– More –


FOURTH QUARTER 2012 EARNINGS RELEASE CONFERENCE CALL

The Company will host a conference call for investors and analysts at 4:00 p.m. Central Time (CT) today, January 17, 2013. Interested parties can listen to the call live on the Internet through the investor relations section of the Company’s website,
http://investor.associatedbank.com/ or by dialing 877-317-6016. The slide presentation for the call will be available on the Company’s website just prior to the call. The number for international callers is 412-317-6016. Participants should ask the operator for the Associated Banc-Corp fourth quarter 2012 earnings call.

An audio archive of the webcast will be available on the Company’s website. A telephone replay will be available two hours after the completion of the call through 8:00 a.m. CT on February 18, 2013, by dialing 877-344-7529 and entering the conference ID number 10022452. The replay number for international callers is 412-317-0088.

ABOUT ASSOCIATED BANC-CORP

Associated Banc-Corp (NASDAQ: ASBC) has total assets of $24 billion and is one of the top 50, publicly traded, U.S. bank holding companies. Headquartered in Green Bay, Wis., Associated is a leading Midwest banking franchise, offering a full range of financial products and services through more than 250 banking locations serving more than 150 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”, “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.

# # #


Consolidated Balance Sheets (Unaudited)

Associated Banc-Corp

 

(in thousands)

   December 31,
2012
    September 30,
2012
    Seql Qtr
$ Change
    June 30,
2012
    March 31,
2012
    December 31,
2011
    Comp Qtr
$ Change
 

Assets

              

Cash and due from banks

   $ 563,304      $ 419,529      $ 143,775      $ 414,760      $ 360,728      $ 454,958      $ 108,346   

Interest-bearing deposits in other financial institutions

     147,434        531,303        (383,869     180,050        344,148        154,562        (7,128

Federal funds sold and securities purchased under agreements to resell

     27,135        2,460        24,675        3,800        7,100        7,075        20,060   

Securities held to maturity, at amortized cost

     39,877        21,852        18,025        —          —          —          39,877   

Securities available for sale, at fair value

     4,926,758        4,496,198        430,560        4,521,436        4,669,100        4,937,483        (10,725

Federal Home Loan Bank and Federal Reserve Bank stocks, at cost

     166,774        166,100        674        176,041        177,808        191,188        (24,414

Loans held for sale

     261,410        157,093        104,317        157,481        196,570        249,195        12,215   

Loans

     15,411,022        14,966,214        444,808        14,698,902        14,253,725        14,031,071        1,379,951   

Allowance for loan losses

     (297,409     (315,150     17,741        (332,658     (356,298     (378,151     80,742   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Loans, net

     15,113,613        14,651,064        462,549        14,366,244        13,897,427        13,652,920        1,460,693   

Premises and equipment, net

     253,958        238,756        15,202        225,245        225,164        223,736        30,222   

Goodwill

     929,168        929,168        —          929,168        929,168        929,168        —     

Other intangible assets, net

     61,176        61,294        (118     64,812        68,374        67,574        (6,398

Trading assets

     70,711        76,159        (5,448     73,484        69,081        73,253        (2,542

Other assets

     970,472        987,378        (16,906     968,579        969,002        983,105        (12,633
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total assets

   $ 23,531,790        22,738,354      $ 793,436      $ 22,081,100      $ 21,913,670      $ 21,924,217      $ 1,607,573   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Liabilities and Stockholders’ Equity

              

Noninterest-bearing demand deposits

   $ 4,759,556        4,320,437      $ 439,119      $ 3,874,429      $ 3,989,156      $ 3,928,792      $ 830,764   

Interest-bearing deposits

     12,180,309        12,130,155        50,154        11,232,442        11,664,220        11,161,863        1,018,446   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total deposits

     16,939,865        16,450,592        489,273        15,106,871        15,653,376        15,090,655        1,849,210   

Federal funds purchased and securities sold under agreements to repurchase

     750,455        1,138,027        (387,572     1,253,270        1,236,219        1,514,485        (764,030

Other short-term funding

     1,576,484        615,258        961,226        1,400,000        700,000        1,000,000        576,484   

Long-term funding

     1,015,346        1,305,422        (290,076     1,150,729        1,176,736        1,177,071        (161,725

Trading liabilities

     76,343        82,861        (6,518     80,107        75,130        80,046        (3,703

Accrued expenses and other liabilities

     236,898        195,742        41,156        180,502        171,336        196,166        40,732   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total liabilities

     20,595,391        19,787,902        807,489        19,171,479        19,012,797        19,058,423        1,536,968   

Stockholders’ Equity

              

Preferred equity

     63,272        63,272        —          63,272        63,272        63,272        —     

Common stock

     1,750        1,750        —          1,750        1,750        1,746        4   

Surplus

     1,602,136        1,599,070        3,066        1,594,995        1,590,336        1,586,401        15,735   

Retained earnings

     1,281,811        1,250,189        31,622        1,213,735        1,181,247        1,148,773        133,038   

Accumulated other comprehensive income

     48,603        67,303        (18,700     66,579        65,278        65,602        (16,999

Treasury stock

     (61,173     (31,132     (30,041     (30,710     (1,010     —          (61,173
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total stockholders’ equity

     2,936,399        2,950,452        (14,053     2,909,621        2,900,873        2,865,794        70,605   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total liabilities and stockholders’ equity

   $ 23,531,790        22,738,354      $ 793,436      $ 22,081,100      $ 21,913,670      $ 21,924,217      $ 1,607,573   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

Page 1


Consolidated Statements of Income (Unaudited)

Associated Banc-Corp

 

     For The Three Months Ended
December 31,
    Quarter     For The Year Ended,
December 31,
    Year-to-Date  

(in thousands, except per share amounts)

   2012     2011     $ Change     % Change     2012     2011     $ Change     % Change  

Interest Income

                

Interest and fees on loans

   $ 150,107      $ 149,832      $ 275        0.2  %    $ 595,965      $ 582,739      $ 13,226        2.3  % 

Interest and dividends on investment securities:

                

Taxable

     20,368        22,855        (2,487     (10.9 )%      86,945        123,371        (36,426     (29.5 )% 

Tax-exempt

     7,119        7,344        (225     (3.1 )%      28,655        29,937        (1,282     (4.3 )% 

Other interest

     2,876        1,251        1,625        129.9  %      6,719        5,575        1,144        20.5  % 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

Total interest income

     180,470        181,282        (812     (0.4 )%      718,284        741,622        (23,338     (3.1 )% 

Interest Expense

                

Interest on deposits

     9,091        14,954        (5,863     (39.2 )%      41,431        65,748        (24,317     (37.0 )% 

Interest on Federal funds purchased and securities sold under agreements to repurchase

     558        1,278        (720     (56.3 )%      2,687        6,196        (3,509     (56.6 )% 

Interest on other short-term funding

     226        879        (653     (74.3 )%      3,294        6,215        (2,921     (47.0 )% 

Interest on long-term funding

     9,140        12,346        (3,206     (26.0 )%      44,880        50,632        (5,752     (11.4 )% 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

Total interest expense

     19,015        29,457        (10,442     (35.4 )%      92,292        128,791        (36,499     (28.3 )% 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

Net Interest Income

     161,455        151,825        9,630        6.3  %      625,992        612,831        13,161        2.1  % 

Provision for loan losses

     3,000        1,000        2,000        200.0  %      3,000        52,000        (49,000     (94.2 )% 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

Net interest income after provision for loan losses

     158,455        150,825        7,630        5.1  %      622,992        560,831        62,161        11.1  % 

Noninterest Income

                

Trust service fees

     10,429        9,511        918        9.7  %      40,737        39,145        1,592        4.1  % 

Service charges on deposit accounts

     16,817        17,783        (966     (5.4 )%      68,917        75,908        (6,991     (9.2 )% 

Card-based and other nondeposit fees

     12,690        11,269        1,421        12.6  %      47,862        57,905        (10,043     (17.3 )% 

Insurance commissions

     10,862        11,216        (354     (3.2 )%      47,014        45,554        1,460        3.2  % 

Brokerage and annuity commissions

     3,678        3,665        13        0.4  %      15,643        17,230        (1,587     (9.2 )% 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

Total core fee-based revenue

     54,476        53,444        1,032        1.9  %      220,173        235,742        (15,569     (6.6 )% 

Mortgage banking, net

     13,530        9,677        3,853        39.8  %      63,500        12,723        50,777        399.1  % 

Capital market fees, net

     4,243        3,950        293        7.4  %      14,241        8,711        5,530        63.5  % 

Bank owned life insurance income

     3,206        3,820        (614     (16.1 )%      13,952        14,896        (944     (6.3 )% 

Asset losses, net

     (209     (1,799     1,590        (88.4 )%      (12,096     (12,199     103        (0.8 )% 

Investment securities gains (losses), net

     152        (310     462        (149.0 )%      4,261        (1,112     5,373        483.2  % 

Other

     2,507        2,750        (243     (8.8 )%      9,259        14,358        (5,099     (35.5 )% 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

Total noninterest income

     77,905        71,532        6,373        8.9  %      313,290        273,119        40,171        14.7  % 

Noninterest Expense

                

Personnel expense

     98,073        90,306        7,767        8.6  %      381,404        360,144        21,260        5.9  % 

Occupancy

     17,273        13,796        3,477        25.2  %      60,794        55,939        4,855        8.7  % 

Equipment

     6,444        5,286        1,158        21.9  %      23,566        19,873        3,693        18.6  % 

Data processing

     11,706        9,080        2,626        28.9  %      43,548        32,475        11,073        34.1  % 

Business development and advertising

     5,395        6,904        (1,509     (21.9 )%      21,303        23,038        (1,735     (7.5 )% 

Other intangible amortization

     1,049        1,179        (130     (11.0 )%      4,195        4,714        (519     (11.0 )% 

Loan expense

     3,130        3,469        (339     (9.8 )%      12,285        12,008        277        2.3  % 

Legal and professional fees

     8,174        4,651        3,523        75.7  %      31,232        18,205        13,027        71.6  % 

Losses other than loans

     3,071        11,890        (8,819     (74.2 )%      12,258        17,921        (5,663     (31.6 )% 

Foreclosure/OREO expense

     3,293        5,169        (1,876     (36.3 )%      15,069        21,393        (6,324     (29.6 )% 

FDIC expense

     4,813        6,136        (1,323     (21.6 )%      19,478        28,484        (9,006     (31.6 )% 

Other

     13,907        14,461        (554     (3.8 )%      56,691        56,329        362        0.6  % 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

Total noninterest expense

     176,328        172,327        4,001        2.3  %      681,823        650,523        31,300        4.8  % 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

Income before income taxes

     60,032        50,030        10,002        20.0  %      254,459        183,427        71,032        38.7  % 

Income tax expense

     13,404        8,905        4,499        50.5  %      75,486        43,728        31,758        72.6  % 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

Net income

     46,628        41,125        5,503        13.4  %      178,973        139,699      $ 39,274        28.1

Preferred stock dividends and discount

     1,300        1,300        —          0.0  %      5,200        24,830        (19,630     (79.1 )% 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

Net income available to common equity

   $ 45,328      $ 39,825      $ 5,503        13.8  %    $ 173,773      $ 114,869      $ 58,904        51.3  % 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

Earnings Per Common Share:

                

Basic

   $ 0.26      $ 0.23      $ 0.03        13.0  %    $ 1.00      $ 0.66      $ 0.34        51.5  % 

Diluted

   $ 0.26      $ 0.23      $ 0.03        13.0  %    $ 1.00      $ 0.66      $ 0.34        51.5  % 

Average Common Shares Outstanding:

                

Basic

     170,707        173,523        (2,816     (1.6 )%      172,255        173,370        (1,115     (0.6 )% 

Diluted

     170,896        173,523        (2,627     (1.5 )%      172,357        173,372        (1,015     (0.6 )% 

N/M = Not meaningful.

 

Page 2


Consolidated Statements of Income (Unaudited) - Quarterly Trend

Associated Banc-Corp

 

                 Sequential Qtr                       Comparable Qtr  

(in thousands, except per share amounts)

   4Q12     3Q12     $ Change     % Change     2Q12     1Q12     4Q11     $ Change     % Change  

Interest Income

                  

Interest and fees on loans

   $ 150,107      $ 149,647      $ 460        0.3  %    $ 147,188      $ 149,023      $ 149,832      $ 275        0.2  % 

Interest and dividends on investment securities:

                  

Taxable

     20,368        20,548        (180     (0.9 )%      23,000        23,029        22,855        (2,487     (10.9 )% 

Tax-exempt

     7,119        7,127        (8     (0.1 )%      7,135        7,274        7,344        (225     (3.1 )% 

Other interest

     2,876        1,334        1,542        115.6  %      1,262        1,247        1,251        1,625        129.9  % 
  

 

 

   

 

 

   

 

 

     

 

 

   

 

 

   

 

 

   

 

 

   

Total interest income

     180,470        178,656        1,814        1.0  %      178,585        180,573        181,282        (812     (0.4 )% 

Interest Expense

                  

Interest on deposits

     9,091        9,751        (660     (6.8 )%      10,553        12,036        14,954        (5,863     (39.2 )% 

Interest on Federal funds purchased and securities sold under agreements to repurchase

     558        750        (192     (25.6 )%      612        767        1,278        (720     (56.3 )% 

Interest on other short-term funding

     226        815        (589     (72.3 )%      1,197        1,056        879        (653     (74.3 )% 

Interest on long-term funding

     9,140        11,738        (2,598     (22.1 )%      11,956        12,046        12,346        (3,206     (26.0 )% 
  

 

 

   

 

 

   

 

 

     

 

 

   

 

 

   

 

 

   

 

 

   

Total interest expense

     19,015        23,054        (4,039     (17.5 )%      24,318        25,905        29,457        (10,442     (35.4 )% 
  

 

 

   

 

 

   

 

 

     

 

 

   

 

 

   

 

 

   

 

 

   

Net Interest Income

     161,455        155,602        5,853        3.8  %      154,267        154,668        151,825        9,630        6.3  % 

Provision for loan losses

     3,000        —          3,000          —          —          1,000        2,000        200.0  % 
  

 

 

   

 

 

   

 

 

     

 

 

   

 

 

   

 

 

   

 

 

   

Net interest income after provision for loan losses

     158,455        155,602        2,853        1.8  %      154,267        154,668        150,825        7,630        5.1  % 

Noninterest Income

                  

Trust service fees

     10,429        10,396        33        0.3  %      10,125        9,787        9,511        918        9.7  % 

Service charges on deposit accounts

     16,817        17,290        (473     (2.7 )%      16,768        18,042        17,783        (966     (5.4 )% 

Card-based and other nondeposit fees

     12,690        12,209        481        3.9  %      12,084        10,879        11,269        1,421        12.6

Insurance commissions

     10,862        11,650        (788     (6.8 )%      12,912        11,590        11,216        (354     (3.2 )% 

Brokerage and annuity commissions

     3,678        3,632        46        1.3  %      4,206        4,127        3,665        13        0.4  % 
  

 

 

   

 

 

   

 

 

     

 

 

   

 

 

   

 

 

   

 

 

   

Total core fee-based revenue

     54,476        55,177        (701     (1.3 )%      56,095        54,425        53,444        1,032        1.9  % 

Mortgage banking, net

     13,530        15,581        (2,051     (13.2 )%      16,735        17,654        9,677        3,853        39.8  % 

Capital market fees, net

     4,243        3,609        634        17.6  %      2,673        3,716        3,950        293        7.4  % 

Bank owned life insurance income

     3,206        3,290        (84     (2.6 )%      3,164        4,292        3,820        (614     (16.1 )% 

Asset losses, net

     (209     (3,309     3,100        (93.7 )%      (4,984     (3,594     (1,799     1,590        (88.4 )% 

Investment securities gains (losses), net

     152        3,506        (3,354     (95.7 )%      563        40        (310     462        (149.0 )% 

Other

     2,507        3,134        (627     (20.0 )%      1,705        1,913        2,750        (243     (8.8 )% 
  

 

 

   

 

 

   

 

 

     

 

 

   

 

 

   

 

 

   

 

 

   

Total noninterest income

     77,905        80,988        (3,083     (3.8 )%      75,951        78,446        71,532        6,373        8.9  % 

Noninterest Expense

                  

Personnel expense

     98,073        95,231        2,842        3.0  %      93,819        94,281        90,306        7,767        8.6  % 

Occupancy

     17,273        14,334        2,939        20.5  %      14,008        15,179        13,796        3,477        25.2  % 

Equipment

     6,444        5,935        509        8.6  %      5,719        5,468        5,286        1,158        21.9  % 

Data processing

     11,706        11,022        684        6.2  %      11,304        9,516        9,080        2,626        28.9  % 

Business development and advertising

     5,395        5,059        336        6.6  %      5,468        5,381        6,904        (1,509     (21.9 )% 

Other intangible amortization

     1,049        1,048        1        0.1  %      1,049        1,049        1,179        (130     (11.0 )% 

Loan expense

     3,130        3,297        (167     (5.1 )%      2,948        2,910        3,469        (339     (9.8 )% 

Legal and professional fees

     8,174        7,686        488        6.3  %      5,657        9,715        4,651        3,523        75.7  % 

Losses other than loans

     3,071        3,577        (506     (14.1 )%      2,060        3,550        11,890        (8,819     (74.2 )% 

Foreclosure/OREO expense

     3,293        4,071        (778     (19.1 )%      4,343        3,362        5,169        (1,876     (36.3 )% 

FDIC expense

     4,813        5,017        (204     (4.1 )%      4,778        4,870        6,136        (1,323     (21.6 )% 

Other

     13,907        13,426        481        3.6  %      14,877        14,481        14,461        (554     (3.8 )% 
  

 

 

   

 

 

   

 

 

     

 

 

   

 

 

   

 

 

   

 

 

   

Total noninterest expense

     176,328        169,703        6,625        3.9  %      166,030        169,762        172,327        4,001        2.3  % 
  

 

 

   

 

 

   

 

 

     

 

 

   

 

 

   

 

 

   

 

 

   

Income before income taxes

     60,032        66,887        (6,855     (10.2 )%      64,188        63,352        50,030        10,002        20.0  % 

Income tax expense

     13,404        20,492        (7,088     (34.6 )%      20,871        20,719        8,905        4,499        50.5  % 
  

 

 

   

 

 

   

 

 

     

 

 

   

 

 

   

 

 

   

 

 

   

Net income

     46,628        46,395        233        0.5  %      43,317        42,633        41,125        5,503        13.4  % 

Preferred stock dividends and discount

     1,300        1,300        —          0.0  %      1,300        1,300        1,300        —          0.0  % 
  

 

 

   

 

 

   

 

 

     

 

 

   

 

 

   

 

 

   

 

 

   

Net income available to common equity

   $ 45,328      $ 45,095      $ 233        0.5  %    $ 42,017      $ 41,333      $ 39,825      $ 5,503        13.8  % 
  

 

 

   

 

 

   

 

 

     

 

 

   

 

 

   

 

 

   

 

 

   

Earnings Per Common Share:

                  

Basic

   $ 0.26      $ 0.26      $ —          0.0  %    $ 0.24      $ 0.24      $ 0.23      $ 0.03        13.0  % 

Diluted

   $ 0.26      $ 0.26      $ —          0.0  %    $ 0.24      $ 0.24      $ 0.23      $ 0.03        13.0  % 

Average Common Shares Outstanding:

                  

Basic

     170,707        171,650        (943     (0.5 )%      172,839        173,846        173,523        (2,816     (1.6 )% 

Diluted

     170,896        171,780        (884     (0.5 )%      172,841        173,848        173,523        (2,627     (1.5 )% 

N/M = Not meaningful.

 

Page 3


Selected Quarterly Information

Associated Banc-Corp

 

(in thousands, except per share, full time equivalent employee data
and otherwise noted)

  YTD 2012     YTD 2011     4th Qtr 2012     3rd Qtr 2012     2nd Qtr 2012     1st Qtr 2012     4th Qtr 2011  

Summary of Operations

             

Net interest income

  $ 625,992      $ 612,831      $ 161,455      $ 155,602      $ 154,267      $ 154,668      $ 151,825   

Provision for loan losses

    3,000        52,000        3,000        —          —          —          1,000   

Asset losses, net

    (12,096     (12,199     (209     (3,309     (4,984     (3,594     (1,799

Investment securities gains (losses), net

    4,261        (1,112     152        3,506        563        40        (310

Noninterest income (excluding securities & asset gains)

    321,125        286,430        77,962        80,791        80,372        82,000        73,641   

Noninterest expense

    681,823        650,523        176,328        169,703        166,030        169,762        172,327   

Income before income taxes

    254,459        183,427        60,032        66,887        64,188        63,352        50,030   

Income tax expense

    75,486        43,728        13,404        20,492        20,871        20,719        8,905   

Net income

    178,973        139,699        46,628        46,395        43,317        42,633        41,125   

Net income available to common equity

    173,773        114,869        45,328        45,095        42,017        41,333        39,825   

Taxable equivalent adjustment

    21,046        21,374        5,221        5,268        5,254        5,303        5,307   

Per Common Share Data

             

Net income:

             

Basic

  $ 1.00      $ 0.66      $ 0.26      $ 0.26      $ 0.24      $ 0.24      $ 0.23   

Diluted

    1.00        0.66        0.26        0.26        0.24        0.24        0.23   

Dividends

    0.23        0.04        0.08        0.05        0.05        0.05        0.01   

Market Value:

             

High

  $ 14.63      $ 15.36      $ 13.54      $ 13.79      $ 13.97      $ 14.63      $ 11.78   

Low

    11.43        8.95        12.19        12.04        11.76        11.43        9.15   

Close

    13.12        11.17        13.12        13.16        13.19        13.96        11.17   

Book value

    16.97        16.15        16.97        16.82        16.59        16.32        16.15   

Tier 1 common equity / share

    11.08        10.28        11.08        10.89        10.66        10.46        10.28   

Tangible book value

    11.39        10.68        11.39        11.31        11.07        10.87        10.68   

Performance Ratios (annualized)

             

Earning assets yield

    3.77     3.92     3.70     3.73     3.80     3.85     3.81

Interest-bearing liabilities rate

    0.62        0.85        0.51        0.62        0.65        0.70        0.78   

Net interest margin

    3.30        3.26        3.32        3.26        3.30        3.31        3.21   

Return on average assets

    0.81        0.65        0.83        0.84        0.80        0.79        0.75   

Return on average tangible common equity

    8.96        6.45        9.15        9.32        8.87        8.85        8.57   

Return on average Tier 1 common equity (1)

    9.45        6.71        9.61        9.69        9.26        9.23        8.96   

Efficiency ratio (2)

    70.42        70.66        72.08        70.22        69.21        70.16        74.67   

Effective tax rate

    29.67        23.84        22.33        30.64        32.52        32.70        17.80   

Dividend payout ratio (3)

    23.00        6.06        30.77        19.23        20.83        20.83        4.35   

Average Balances

             

Assets

  $ 21,976,357      $ 21,588,620      $ 22,461,886      $ 22,016,748      $ 21,684,600      $ 21,659,139      $ 21,755,870   

Earning assets

    19,613,777        19,442,263        20,032,432        19,659,796        19,386,046        19,371,729        19,506,627   

Interest-bearing liabilities

    14,905,735        15,120,824        14,840,162        14,940,697        14,922,006        14,920,413        15,095,689   

Loans (4)

    14,741,785        13,278,848        15,131,102        14,916,793        14,602,602        14,310,441        14,043,585   

Deposits

    15,582,369        14,401,127        16,650,268        15,615,856        15,050,684        15,000,567        14,893,469   

Short and long-term funding

    3,272,212        4,100,825        2,638,661        3,286,943        3,566,346        3,603,700        3,857,252   

Common stockholders’ equity

    2,885,716        2,730,643        2,915,346        2,870,438        2,852,050        2,826,913        2,792,823   

Stockholders’ equity

    2,948,988        2,997,290        2,978,618        2,933,710        2,915,322        2,890,185        2,856,095   

Average Tier 1 common equity (5)

    1,838,424        1,713,155        1,876,686        1,850,610        1,825,441        1,801,649        1,763,522   

At Period End

             

Assets

      $ 23,531,790      $ 22,738,354      $ 22,081,100      $ 21,913,670      $ 21,924,217   

Loans

        15,411,022        14,966,214        14,698,902        14,253,725        14,031,071   

Allowance for loan losses

        297,409        315,150        332,658        356,298        378,151   

Goodwill

        929,168        929,168        929,168        929,168        929,168   

Mortgage servicing rights, net

        45,949        45,018        47,488        50,001        48,152   

Other intangible assets, net

        15,227        16,276        17,324        18,373        19,422   

Deposits

        16,939,865        16,450,592        15,106,871        15,653,376        15,090,655   

Loans / deposits

        90.97     90.98     97.30     91.06     92.98

Risk weighted assets ($ in millions) (6)

        16,194        15,575        15,188        14,570        14,568   

Tier 1 common equity (5)

        1,875,534        1,869,931        1,828,529        1,819,782        1,783,515   

Stockholders’ equity / assets

        12.48     12.98     13.18     13.24     13.07

Tangible common equity / tangible assets (7)

        8.54     8.91     8.99     9.01     8.84

Tangible equity / tangible assets (8)

        8.82     9.20     9.29     9.32     9.14

Tier 1 common equity / risk-weighted assets (6)

        11.58     12.01     12.04     12.49     12.24

Tier 1 leverage ratio (6)

        8.98     9.99     9.95     10.03     9.81

Tier 1 risk-based capital ratio (6)

        11.97     13.57     13.64     14.33     14.08

Total risk-based capital ratio (6)

        13.39     15.00     15.08     15.78     15.53

Shares outstanding, end of period

        169,304        171,657        171,611        173,923        173,575   

Selected trend information

             

Average full time equivalent employees

        4,915        4,965        4,951        5,045        5,056   

Trust assets under management, at market value ($ in millions)

      $ 6,454      $ 6,163      $ 5,934      $ 5,983      $ 5,616   

Mortgage loans originated for sale during period

        780,469        715,184        738,091        563,688        843,614   

Mortgage portfolio serviced for others ($ in millions)

        7,453        7,547        7,511        7,284        7,321   

Mortgage servicing rights, net / Portfolio serviced for others

        0.62     0.60     0.63     0.69     0.66

 

(1) Return on average Tier 1 common equity = Net income available to common equity divided by average Tier 1 common equity. This is a non-GAAP financial measure.
(2) Efficiency ratio = Noninterest expense divided by sum of taxable equivalent net interest income plus noninterest income, excluding investment securities gains, net, and asset gains, net. This is a non-GAAP financial measure.
(3) Ratio is based upon basic earnings per common share.
(4) Loans held for sale have been included in the average balances.
(5) Tier 1 common equity (period end and average) is Tier 1 capital excluding qualifying perpetual preferred stock and qualifying trust preferred securities.
(6) December 31, 2012 data is estimated.
(7) Tangible common equity to tangible assets = Common stockholders’ equity excluding goodwill and other intangible assets divided by assets excluding goodwill and other intangible assets. This is a non-GAAP financial measure.
(8) Tangible equity to tangible assets = Stockholders’ equity excluding goodwill and other intangible assets divided by assets excluding goodwill and other intangible assets. This is a non-GAAP financial measure.

 

Page 4


Selected Asset Quality Information

Associated Banc-Corp

 

(in thousands)

  Dec 31, 2012     Sep 30, 2012     Dec 12 vs Sep 12
% Change
    Jun 30, 2012     Mar 31, 2012     Dec 31, 2011     Dec 12 vs Dec 11
% Change
 

Allowance for Loan Losses

             

Beginning balance

  $ 315,150      $ 332,658        (5.3 )%    $ 356,298      $ 378,151      $ 399,723        (21.2 )% 

Provision for loan losses

    3,000        —          0.0  %      —          —          1,000        200.0  % 

Charge offs

    (30,417     (25,030     21.5  %      (30,340     (31,259     (34,056     (10.7 )% 

Recoveries

    9,676        7,522        28.6  %      6,700        9,406        11,484        (15.7 )% 
 

 

 

   

 

 

     

 

 

   

 

 

   

 

 

   

Net charge offs

    (20,741     (17,508     18.5  %      (23,640     (21,853     (22,572     (8.1 )% 
 

 

 

   

 

 

     

 

 

   

 

 

   

 

 

   

Ending balance

  $ 297,409      $ 315,150        (5.6 )%    $ 332,658      $ 356,298      $ 378,151        (21.4 )% 
 

 

 

   

 

 

     

 

 

   

 

 

   

 

 

   

Reserve for losses on unfunded commitments

  $ 21,800      $ 19,800        10.1  %    $ 18,900      $ 15,600      $ 14,700        48.3  % 
     Dec 31, 2012     Sep 30, 2012     Dec 12 vs Sep 12
% Change
    Jun 30, 2012     Mar 31, 2012     Dec 31, 2011     Dec 12 vs Dec 11
% Change
 

Net Charge Offs

             

Commercial and industrial

  $ 2,630      $ 3,831        (31.3 )%    $ 14,544      $ 3,872      $ 231        N/M   

Commercial real estate - owner occupied

    2,056        (8     N/M        1,164        415        539        N/M   

Lease financing

    754        (20     N/M        —          (1,836     19        N/M   
 

 

 

   

 

 

     

 

 

   

 

 

   

 

 

   

Commercial and business lending

    5,440        3,803        43.0  %      15,708        2,451        789        N/M   

Commercial real estate - investor

    (232     1,905        (112.2 )%      177        7,354        2,394        (109.7 )% 

Real estate construction

    858        (187     N/M        558        230        7,088        (87.9 )% 
 

 

 

   

 

 

     

 

 

   

 

 

   

 

 

   

Commercial real estate lending

    626        1,718        (63.6 )%      735        7,584        9,482        (93.4 )% 
 

 

 

   

 

 

     

 

 

   

 

 

   

 

 

   

Total commercial

    6,066        5,521        9.9  %      16,443        10,035        10,271        (40.9 )% 

Home equity

    8,071        7,922        1.9  %      5,284        8,950        8,113        (0.5 )% 

Installment

    1,027        324        N/M        371        101        452        127.2  % 
 

 

 

   

 

 

     

 

 

   

 

 

   

 

 

   

Total retail

    9,098        8,246        10.3  %      5,655        9,051        8,565        6.2  % 

Residential mortgage

    5,577        3,741        49.1  %      1,542        2,767        3,736        49.3  % 
 

 

 

   

 

 

     

 

 

   

 

 

   

 

 

   

Total net charge offs

  $ 20,741      $ 17,508        18.5  %    $ 23,640      $ 21,853      $ 22,572        (8.1 )% 
 

 

 

   

 

 

     

 

 

   

 

 

   

 

 

   
     Dec 31, 2012     Sep 30, 2012           Jun 30, 2012     Mar 31, 2012     Dec 31, 2011        

Net Charge Offs to Average Loans (in basis points) *

             

Commercial and industrial

    25        37          151        42        3     

Commercial real estate - owner occupied

    69        (0       43        16        20     

Lease financing

    480        (13       —          N/M        14     
 

 

 

   

 

 

     

 

 

   

 

 

   

 

 

   

Commercial and business lending

    40        29          126        20        7     

Commercial real estate - investor

    (3     27          3        113        38     

Real estate construction

    54        (12       40        16        N/M     
 

 

 

   

 

 

     

 

 

   

 

 

   

 

 

   

Commercial real estate lending

    7        20          9        96        122     
 

 

 

   

 

 

     

 

 

   

 

 

   

 

 

   

Total commercial

    27        25          79        50        53     

Home equity

    140        132          86        144        127     

Installment

    86        26          28        7        32     
 

 

 

   

 

 

     

 

 

   

 

 

   

 

 

   

Total retail

    131        114          76        119        110     

Residential mortgage

    64        45          19        34        46     
 

 

 

   

 

 

     

 

 

   

 

 

   

 

 

   

Total net charge offs

    55        47          65        61        64     
 

 

 

   

 

 

     

 

 

   

 

 

   

 

 

   
     Dec 31, 2012     Sep 30, 2012     Dec 12 vs Sep 12
% Change
    Jun 30, 2012     Mar 31, 2012     Dec 31, 2011     Dec 12 vs Dec 11
% Change
 

Credit Quality

             

Nonaccrual loans

  $ 252,868      $ 278,172        (9.1 )%    $ 317,872      $ 327,085      $ 356,772        (29.1 )% 

Other real estate owned (OREO)

    34,900        36,053        (3.2 )%      40,029        34,425        41,571        (16.0 )% 
 

 

 

   

 

 

     

 

 

   

 

 

   

 

 

   

Total nonperforming assets

  $ 287,768      $ 314,225        (8.4 )%    $ 357,901      $ 361,510      $ 398,343        (27.8 )% 
 

 

 

   

 

 

     

 

 

   

 

 

   

 

 

   

Loans 90 or more days past due and still accruing

    2,289        2,334        (1.9 )%      5,224        2,497        4,925        (53.5 )% 

Restructured loans (accruing)

    121,087        135,791        (10.8 )%      122,229        120,719        113,164        7.0  % 

Allowance for loan losses / loans

    1.93     2.11       2.26     2.50     2.70  

Allowance for loan losses / nonaccrual loans

    117.61        113.29          104.65        108.93        105.99     

Nonaccrual loans / total loans

    1.64        1.86          2.16        2.29        2.54     

Nonperforming assets / total loans plus OREO

    1.86        2.09          2.43        2.53        2.83     

Nonperforming assets / total assets

    1.22        1.38          1.62        1.65        1.82     

Net charge offs / average loans (annualized)

    0.55        0.47          0.65        0.61        0.64     

Year-to-date net charge offs / average loans

    0.57        0.58          0.63        0.61        1.13     

Nonaccrual loans by type:

             

Commercial and industrial

  $ 39,182      $ 41,694        (6.0 )%    $ 46,111      $ 50,641      $ 56,075        (30.1 )% 

Commercial real estate - owner occupied

    24,254        27,161        (10.7 )%      33,417        31,888        35,718        (32.1 )% 

Lease financing

    3,031        5,927        (48.9 )%      8,260        9,040        10,644        (71.5 )% 
 

 

 

   

 

 

     

 

 

   

 

 

   

 

 

   

Commercial and business lending

    66,467        74,782        (11.1 )%      87,788        91,569        102,437        (35.1 )% 

Commercial real estate - investor

    58,687        71,522        (17.9 )%      88,806        89,030        99,352        (40.9 )% 

Real estate construction

    27,302        31,684        (13.8 )%      36,403        36,471        41,806        (34.7 )% 
 

 

 

   

 

 

     

 

 

   

 

 

   

 

 

   

Commercial real estate lending

    85,989        103,206        (16.7 )%      125,209        125,501        141,158        (39.1 )% 
 

 

 

   

 

 

     

 

 

   

 

 

   

 

 

   

Total commercial

    152,456        177,988        (14.3 )%      212,997        217,070        243,595        (37.4 )% 

Home equity

    39,215        38,467        1.9  %      41,536        44,628        46,907        (16.4 )% 

Installment

    1,838        2,893        (36.5 )%      3,047        2,627        2,715        (32.3 )% 
 

 

 

   

 

 

     

 

 

   

 

 

   

 

 

   

Total retail

    41,053        41,360        (0.7 )%      44,583        47,255        49,622        (17.3 )% 

Residential mortgage

    59,359        58,824        0.9  %      60,292        62,760        63,555        (6.6 )% 
 

 

 

   

 

 

     

 

 

   

 

 

   

 

 

   

Total consumer

    100,412        100,184        0.2  %      104,875        110,015        113,177        (11.3 )% 
 

 

 

   

 

 

     

 

 

   

 

 

   

 

 

   

Total nonaccrual loans

  $ 252,868      $ 278,172        (9.1 )%    $ 317,872      $ 327,085      $ 356,772        (29.1 )% 
 

 

 

   

 

 

     

 

 

   

 

 

   

 

 

   

 

* Annualized.

N/M = Not meaningful.

 

Page 5


Selected Asset Quality Information (continued)

Associated Banc-Corp

 

(in thousands)

  Dec 31, 2012     Sep 30, 2012     Dec 12 vs Sep 12
% Change
    Jun 30, 2012     Mar 31, 2012     Dec 31, 2011     Dec 12 vs Dec 11
% Change
 

Restructured loans (accruing)

             

Commercial and industrial

  $ 28,140      $ 35,015        (19.6 )%    $ 28,399      $ 25,622      $ 22,552        24.8  % 

Commercial real estate - owner occupied

    13,852        15,706        (11.8 )%      7,115        6,926        8,138        70.2  % 

Lease financing

    —          —          0.0  %      —          —          —          0.0  % 
 

 

 

   

 

 

     

 

 

   

 

 

   

 

 

   

Commercial and business lending

    41,992        50,721        (17.2 )%      35,514        32,548        30,690        36.8  % 

Commercial real estate - investor

    41,660        49,249        (15.4 )%      49,325        45,845        43,417        (4.0 )% 

Real estate construction

    4,530        3,561        27.2  %      5,838        11,770        10,977        (58.7 )% 
 

 

 

   

 

 

     

 

 

   

 

 

   

 

 

   

Commercial real estate lending

    46,190        52,810        (12.5 )%      55,163        57,615        54,394        (15.1 )% 
 

 

 

   

 

 

     

 

 

   

 

 

   

 

 

   

Total commercial

    88,182        103,531        (14.8 )%      90,677        90,163        85,084        3.6  % 

Home equity

    9,968        9,467        5.3  %      9,471        9,092        8,950        11.4  % 

Installment

    653        672        (2.8 )%      779        999        1,015        (35.7 )% 
 

 

 

   

 

 

     

 

 

   

 

 

   

 

 

   

Total retail

    10,621        10,139        4.8  %      10,250        10,091        9,965        6.6  % 

Residential mortgage

    22,284        22,121        0.7  %      21,302        20,465        18,115        23.0  % 
 

 

 

   

 

 

     

 

 

   

 

 

   

 

 

   

Total consumer

    32,905        32,260        2.0  %      31,552        30,556        28,080        17.2  % 
 

 

 

   

 

 

     

 

 

   

 

 

   

 

 

   

Total restructured loans (accruing)

  $ 121,087      $ 135,791        (10.8 )%    $ 122,229      $ 120,719      $ 113,164        7.0  % 
 

 

 

   

 

 

     

 

 

   

 

 

   

 

 

   

Restructured loans in nonaccrual loans (not included above)

  $ 80,590      $ 74,251        8.5  %    $ 86,395      $ 79,946      $ 87,493        (7.9 )% 
    Dec 31, 2012     Sep 30, 2012     Dec 12 vs Sep 12
% Change
    Jun 30, 2012     Mar 31, 2012     Dec 31, 2011     Dec 12 vs Dec 11
% Change
 

Loans Past Due 30-89 Days

             

Commercial and industrial

  $ 11,339      $ 3,795        N/M      $ 4,465      $ 12,643      $ 8,743        29.7  % 

Commercial real estate - owner occupied

    11,053        4,843        128.2  %      2,125        7,532        7,092        55.9  % 

Lease financing

    12        17        (29.4 )%      39        40        104        (88.5 )% 
 

 

 

   

 

 

     

 

 

   

 

 

   

 

 

   

Commercial and business lending

    22,404        8,655        158.9  %      6,629        20,215        15,939        40.6  % 

Commercial real estate - investor

    13,472        8,809        52.9  %      12,854        8,313        4,970        171.1  % 

Real estate construction

    3,155        1,254        151.6  %      1,618        1,736        996        216.8  % 
 

 

 

   

 

 

     

 

 

   

 

 

   

 

 

   

Commercial real estate lending

    16,627        10,063        65.2  %      14,472        10,049        5,966        178.7  % 
 

 

 

   

 

 

     

 

 

   

 

 

   

 

 

   

Total commercial

    39,031        18,718        108.5  %      21,101        30,264        21,905        78.2  % 

Home equity

    13,538        14,823        (8.7 )%      15,302        18,007        12,189        11.1  % 

Installment

    2,109        1,693        24.6  %      1,558        2,813        2,592        (18.6 )% 
 

 

 

   

 

 

     

 

 

   

 

 

   

 

 

   

Total retail

    15,647        16,516        (5.3 )%      16,860        20,820        14,781        5.9  % 

Residential mortgage

    9,403        6,878        36.7  %      9,836        10,114        7,224        30.2  % 
 

 

 

   

 

 

     

 

 

   

 

 

   

 

 

   

Total consumer

    25,050        23,394        7.1  %      26,696        30,934        22,005        13.8  % 
 

 

 

   

 

 

     

 

 

   

 

 

   

 

 

   

Total loans past due 30-89 days

  $ 64,081      $ 42,112        52.2  %    $ 47,797      $ 61,198      $ 43,910        45.9  % 
 

 

 

   

 

 

     

 

 

   

 

 

   

 

 

   
    Dec 31, 2012     Sep 30, 2012     Dec 12 vs Sep 12
% Change
    Jun 30, 2012     Mar 31, 2012     Dec 31, 2011     Dec 12 vs Dec 11
% Change
 

Potential Problem Loans

             

Commercial and industrial

  $ 128,434      $ 120,888        6.2  %    $ 121,764      $ 157,778      $ 153,306        (16.2 )% 

Commercial real estate - owner occupied

    99,592        120,034        (17.0 )%      108,508        112,673        136,366        (27.0 )% 

Lease financing

    264        214        23.4  %      324        487        158        67.1  % 
 

 

 

   

 

 

     

 

 

   

 

 

   

 

 

   

Commercial and business lending

    228,290        241,136        (5.3 )%      230,596        270,938        289,830        (21.2 )% 

Commercial real estate - investor

    107,068        133,046        (19.5 )%      142,453        167,339        230,206        (53.5 )% 

Real estate construction

    13,092        18,477        (29.1 )%      23,905        27,654        27,649        (52.6 )% 
 

 

 

   

 

 

     

 

 

   

 

 

   

 

 

   

Commercial real estate lending

    120,160        151,523        (20.7 )%      166,358        194,993        257,855        (53.4 )% 
 

 

 

   

 

 

     

 

 

   

 

 

   

 

 

   

Total commercial

    348,450        392,659        (11.3 )%      396,954        465,931        547,685        (36.4 )% 

Home equity

    3,670        3,343        9.8  %      4,173        4,441        5,451        (32.7 )% 

Installment

    111        131        (15.3 )%      127        142        233        (52.4 )% 
 

 

 

   

 

 

     

 

 

   

 

 

   

 

 

   

Total retail

    3,781        3,474        8.8  %      4,300        4,583        5,684        (33.5 )% 

Residential mortgage

    8,762        8,197        6.9  %      8,658        9,580        13,037        (32.8 )% 
 

 

 

   

 

 

     

 

 

   

 

 

   

 

 

   

Total consumer

    12,543        11,671        7.5  %      12,958        14,163        18,721        (33.0 )% 
 

 

 

   

 

 

     

 

 

   

 

 

   

 

 

   

Total potential problem loans

  $ 360,993      $ 404,330        (10.7 )%    $ 409,912      $ 480,094      $ 566,406        (36.3 )% 
 

 

 

   

 

 

     

 

 

   

 

 

   

 

 

   

 

Page 6


Net Interest Income Analysis - Taxable Equivalent Basis

Associated Banc-Corp

 

    Year ended December 31, 2012     Year ended December 31, 2011  
(in thousands)   Average
Balance
    Interest
Income / Expense
    Average
Yield / Rate
    Average
Balance
    Interest
Income / Expense
    Average
Yield / Rate
 

Earning assets:

           

Loans: (1) (2) (3)

           

Commercial and business lending

  $ 5,139,155      $ 202,444        3.94   $ 4,301,377      $ 182,362        4.24

Commercial real estate lending

    3,350,190        140,881        4.21        2,973,351        132,789        4.47   
 

 

 

   

 

 

     

 

 

   

 

 

   

Total commercial

    8,489,345        343,325        4.04      $ 7,274,728      $ 315,151        4.33   

Residential mortgage

    3,330,123        121,399        3.65        2,819,702        116,207        4.12   

Retail

    2,922,317        135,094        4.62        3,184,418        154,793        4.86   
 

 

 

   

 

 

     

 

 

   

 

 

   

Total loans

    14,741,785        599,818        4.07        13,278,848        586,151        4.41   

Investment securities

    4,469,541        132,793        2.97        5,497,297        171,270        3.12   

Other short-term investments

    402,451        6,719        1.67        666,118        5,575        0.84   
 

 

 

   

 

 

     

 

 

   

 

 

   

Investments and other

    4,871,992        139,512        2.86        6,163,415        176,845        2.87   
 

 

 

   

 

 

     

 

 

   

 

 

   

Total earning assets

    19,613,777        739,330        3.77        19,442,263        762,996        3.92   

Other assets, net

    2,362,580            2,146,357       
 

 

 

       

 

 

     

Total assets

  $ 21,976,357          $ 21,588,620       
 

 

 

       

 

 

     

Interest-bearing liabilities:

           

Savings deposits

  $ 1,096,692      $ 851        0.08   $ 987,198      $ 1,091        0.11

Interest-bearing demand deposits

    2,148,459        3,741        0.17        1,947,506        3,429        0.18   

Money market deposits

    6,148,663        15,336        0.25        5,147,437        16,385        0.32   

Time deposits

    2,239,709        21,503        0.96        2,937,858        44,843        1.53   
 

 

 

   

 

 

     

 

 

   

 

 

   

Total interest-bearing deposits

    11,633,523        41,431        0.36        11,019,999        65,748        0.60   

Federal funds purchased and securities sold under agreements to repurchase

    1,177,105        2,687        0.23        1,926,474        6,196        0.32   

Other short-term funding

    936,376        3,294        0.35        767,230        6,215        0.81   

Total long-term funding

    1,158,731        44,880        3.87        1,407,121        50,632        3.60   
 

 

 

   

 

 

     

 

 

   

 

 

   

Total short and long-term funding

    3,272,212        50,861        1.55        4,100,825        63,043        1.54   
 

 

 

   

 

 

     

 

 

   

 

 

   

Total interest-bearing liabilities

    14,905,735        92,292        0.62        15,120,824        128,791        0.85   

Noninterest-bearing demand deposits

    3,948,846            3,381,128       

Other liabilities

    172,788            89,378       

Stockholders’ equity

    2,948,988            2,997,290       
 

 

 

       

 

 

     

Total liabilities and stockholders’ equity

  $ 21,976,357          $ 21,588,620       
 

 

 

       

 

 

     
   

 

 

       

 

 

   

Net interest income and rate spread (1)

    $ 647,038        3.15     $ 634,205        3.07
   

 

 

       

 

 

   

Net interest margin (1)

        3.30         3.26

Taxable equivalent adjustment

    $ 21,046          $ 21,374     
   

 

 

       

 

 

   

Net Interest Income Analysis - Taxable Equivalent Basis

Associated Banc-Corp

                         
    Three months ended December 31, 2012     Three months ended December 31, 2011  
(in thousands)   Average
Balance
    Interest
Income / Expense
    Average
Yield / Rate
    Average
Balance
    Interest
Income / Expense
    Average
Yield / Rate
 

Earning assets:

           

Loans: (1) (2) (3)

           

Commercial and business lending

  $ 5,431,195      $ 53,442        3.92   $ 4,638,160      $ 48,243        4.13

Commercial real estate lending

    3,451,104        35,623        4.11        3,090,643        34,181        4.39   
 

 

 

   

 

 

     

 

 

   

 

 

   

Total commercial

    8,882,299        89,065        3.99      $ 7,728,803      $ 82,424        4.23   

Residential mortgage

    3,485,719        30,126        3.46        3,216,466        31,643        3.93   

Retail

    2,763,084        31,865        4.59        3,098,316        36,666        4.71   
 

 

 

   

 

 

     

 

 

   

 

 

   

Total loans

    15,131,102        151,056        3.98        14,043,585        150,733        4.27   

Investment securities

    4,545,178        31,759        2.79        5,020,429        34,605        2.76   

Other short-term investments

    356,152        2,876        3.22        442,613        1,251        1.13   
 

 

 

   

 

 

     

 

 

   

 

 

   

Investments and other

    4,901,330        34,635        2.83        5,463,042        35,856        2.63   
 

 

 

   

 

 

     

 

 

   

 

 

   

Total earning assets

    20,032,432        185,691        3.70        19,506,627        186,589        3.81   

Other assets, net

    2,429,454            2,249,243       
 

 

 

       

 

 

     

Total assets

  $ 22,461,886          $ 21,755,870       
 

 

 

       

 

 

     

Interest-bearing liabilities:

           

Savings deposits

  $ 1,129,983      $ 225        0.08   $ 1,017,271      $ 230        0.09

Interest-bearing demand deposits

    2,236,826        954        0.17        2,152,518        1,115        0.21   

Money market deposits

    6,797,306        4,103        0.24        5,308,174        3,649        0.27   

Time deposits

    2,037,386        3,809        0.74        2,760,474        9,960        1.43   
 

 

 

   

 

 

     

 

 

   

 

 

   

Total interest-bearing deposits

    12,201,501        9,091        0.30        11,238,437        14,954        0.53   

Federal funds purchased and securities sold under agreements to repurchase

    984,869        558        0.23        1,824,999        1,278        0.28   

Other short-term funding

    550,137        226        0.16        691,960        879        0.50   

Total long-term funding

    1,103,655        9,140        3.31        1,340,293        12,346        3.68   
 

 

 

   

 

 

     

 

 

   

 

 

   

Total short and long-term funding

    2,638,661        9,924        1.50        3,857,252        14,503        1.50   
 

 

 

   

 

 

     

 

 

   

 

 

   

Total interest-bearing liabilities

    14,840,162        19,015        0.51        15,095,689        29,457        0.78   

Noninterest-bearing demand deposits

    4,448,767            3,655,032       

Other liabilities

    194,339            149,054       

Stockholders’ equity

    2,978,618            2,856,095       
 

 

 

       

 

 

     

Total liabilities and stockholders’ equity

  $ 22,461,886          $ 21,755,870       
 

 

 

       

 

 

     
   

 

 

       

 

 

   

Net interest income and rate spread (1)

    $ 166,676        3.19     $ 157,132        3.03
   

 

 

       

 

 

   

Net interest margin (1)

        3.32         3.21

Taxable equivalent adjustment

    $ 5,221          $ 5,307     
   

 

 

       

 

 

   

 

(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.

 

Page 7


Net Interest Income Analysis - Taxable Equivalent Basis

Associated Banc-Corp

 

     Three months ended December 31, 2012     Three months ended September 30, 2012  
(in thousands)    Average
Balance
     Interest
Income / Expense
     Average
Yield / Rate
    Average
Balance
     Interest
Income / Expense
     Average
Yield / Rate
 

Earning assets:

                

Loans: (1) (2) (3)

                

Commercial and business lending

   $ 5,431,195       $ 53,442         3.92   $ 5,275,069       $ 51,432         3.88

Commercial real estate lending

     3,451,104         35,623         4.11        3,440,220         35,913         4.16   
  

 

 

    

 

 

      

 

 

    

 

 

    

Total commercial

     8,882,299         89,065         3.99      $ 8,715,289       $ 87,345         3.99   

Residential mortgage

     3,485,719         30,126         3.46        3,320,212         30,044         3.62   

Retail

     2,763,084         31,865         4.59        2,881,292         33,251         4.60   
  

 

 

    

 

 

      

 

 

    

 

 

    

Total loans

     15,131,102         151,056         3.98        14,916,793         150,640         4.02   

Investment securities

     4,545,178         31,759         2.79        4,319,404         31,950         2.96   

Other short-term investments

     356,152         2,876         3.22        423,599         1,334         1.26   
  

 

 

    

 

 

      

 

 

    

 

 

    

Investments and other

     4,901,330         34,635         2.83        4,743,003         33,284         2.81   
  

 

 

    

 

 

      

 

 

    

 

 

    

Total earning assets

     20,032,432         185,691         3.70        19,659,796         183,924         3.73   

Other assets, net

     2,429,454              2,356,952         
  

 

 

         

 

 

       

Total assets

   $ 22,461,886            $ 22,016,748         
  

 

 

         

 

 

       

Interest-bearing liabilities:

                

Savings deposits

   $ 1,129,983       $ 225         0.08   $ 1,117,194       $ 229         0.08

Interest-bearing demand deposits

     2,236,826         954         0.17        2,136,280         926         0.17   

Money market deposits

     6,797,306         4,103         0.24        6,240,596         3,932         0.25   

Time deposits

     2,037,386         3,809         0.74        2,159,684         4,664         0.86   
  

 

 

    

 

 

      

 

 

    

 

 

    

Total interest-bearing deposits

     12,201,501         9,091         0.30        11,653,754         9,751         0.33   

Federal funds purchased and securities sold under agreements to repurchase

     984,869         558         0.23        1,266,995         750         0.24   

Other short-term funding

     550,137         226         0.16        837,316         815         0.39   

Total long-term funding

     1,103,655         9,140         3.31        1,182,632         11,738         3.97   
  

 

 

    

 

 

      

 

 

    

 

 

    

Total short and long-term funding

     2,638,661         9,924         1.50        3,286,943         13,303         1.62   
  

 

 

    

 

 

      

 

 

    

 

 

    

Total interest-bearing liabilities

     14,840,162         19,015         0.51        14,940,697         23,054         0.62   

Noninterest-bearing demand deposits

     4,448,767              3,962,102         

Other liabilities

     194,339              180,239         

Stockholders’ equity

     2,978,618              2,933,710         
  

 

 

         

 

 

       

Total liabilities and stockholders’ equity

   $ 22,461,886            $ 22,016,748         
  

 

 

         

 

 

       
     

 

 

         

 

 

    

Net interest income and rate spread (1)

      $ 166,676         3.19      $ 160,870         3.11
     

 

 

         

 

 

    

Net interest margin (1)

           3.32           3.26

Taxable equivalent adjustment

      $ 5,221            $ 5,268      
     

 

 

         

 

 

    

 

(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.

Financial Summary and Comparison

Associated Banc-Corp

Period End Loan Composition

 

     Dec 31, 2012      Sep 30, 2012      Dec 12 vs Sep  12
% Change
    Jun 30, 2012      Mar 31, 2012      Dec 31, 2011      Dec 12 vs Dec 11
% Change
 

Commercial and industrial

   $ 4,502,021       $ 4,265,356         5.5  %    $ 4,076,370       $ 3,719,016       $ 3,724,736         20.9  % 

Commercial real estate - owner occupied

     1,219,747         1,197,517         1.9  %      1,116,815         1,074,755         1,086,829         12.2  % 

Lease financing

     64,196         60,818         5.6  %      62,750         61,208         58,194         10.3  % 
  

 

 

    

 

 

      

 

 

    

 

 

    

 

 

    

Commercial and business lending

     5,785,964         5,523,691         4.7  %      5,255,935         4,854,979         4,869,759         18.8  % 

Commercial real estate - investor

     2,906,759         2,787,158         4.3  %      2,810,521         2,664,251         2,563,767         13.4  % 

Real estate construction

     655,381         611,186         7.2  %      612,556         565,953         584,046         12.2  % 
  

 

 

    

 

 

      

 

 

    

 

 

    

 

 

    

Commercial real estate lending

     3,562,140         3,398,344         4.8  %      3,423,077         3,230,204         3,147,813         13.2  % 
  

 

 

    

 

 

      

 

 

    

 

 

    

 

 

    

Total commercial

     9,348,104         8,922,035         4.8  %      8,679,012         8,085,183         8,017,572         16.6  % 

Home equity

     2,219,494         2,356,900         (5.8 )%      2,429,594         2,501,770         2,504,704         (11.4 )% 

Installment

     466,727         482,451         (3.3 )%      510,831         537,628         557,782         (16.3 )% 
  

 

 

    

 

 

      

 

 

    

 

 

    

 

 

    

Total retail

     2,686,221         2,839,351         (5.4 )%      2,940,425         3,039,398         3,062,486         (12.3 )% 

Residential mortgage

     3,376,697         3,204,828         5.4  %      3,079,465         3,129,144         2,951,013         14.4  % 
  

 

 

    

 

 

      

 

 

    

 

 

    

 

 

    

Total consumer

     6,062,918         6,044,179         0.3  %      6,019,890         6,168,542         6,013,499         0.8  % 
  

 

 

    

 

 

      

 

 

    

 

 

    

 

 

    

Total loans

   $ 15,411,022       $ 14,966,214         3.0  %    $ 14,698,902       $ 14,253,725       $ 14,031,071         9.8  % 
  

 

 

    

 

 

      

 

 

    

 

 

    

 

 

    

Period End Deposit and Customer Funding Composition

 

     Dec 31, 2012      Sep 30, 2012      Dec 12 vs Sep  12
% Change
    Jun 30, 2012      Mar 31, 2012      Dec 31, 2011      Dec 12 vs Dec 11
% Change
 

Noninterest-bearing demand

   $ 4,759,556       $ 4,320,437         10.2  %    $ 3,874,429       $ 3,989,156       $ 3,928,792         21.1  % 

Savings

     1,109,861         1,115,783         (0.5 )%      1,117,593         1,098,975         986,766         12.5  % 

Interest-bearing demand

     2,554,479         2,230,740         14.5  %      2,078,037         2,040,900         2,297,454         11.2  % 

Money market

     6,518,075         6,682,640         (2.5 )%      5,822,449         6,176,981         5,150,275         26.6  % 

Brokered CDs

     26,270         33,612         (21.8 )%      41,104         46,493         202,948         (87.1 )% 

Other time

     1,971,624         2,067,380         (4.6 )%      2,173,259         2,300,871         2,524,420         (21.9 )% 
  

 

 

    

 

 

      

 

 

    

 

 

    

 

 

    

Total deposits

     16,939,865         16,450,592         3.0  %      15,106,871         15,653,376         15,090,655         12.3  % 

Customer repo sweeps

     564,038         600,225         (6.0 )%      592,203         635,697         664,624         (15.1 )% 

Customer repo term

     115,032         448,782         (74.4 )%      619,897         509,332         695,131         (83.5 )% 
  

 

 

    

 

 

      

 

 

    

 

 

    

 

 

    

Total customer funding

     679,070         1,049,007         (35.3 )%      1,212,100         1,145,029         1,359,755         (50.1 )% 
  

 

 

    

 

 

      

 

 

    

 

 

    

 

 

    

Total deposits and customer funding

   $ 17,618,935       $ 17,499,599         0.7  %    $ 16,318,971       $ 16,798,405       $ 16,450,410         7.1  % 
  

 

 

    

 

 

      

 

 

    

 

 

    

 

 

    

Network transaction deposits included above in interest-bearing demand and money market

     1,684,745         1,740,434         (3.2 )%      1,234,010         1,171,679         875,052         92.5  % 

Brokered CDs

     26,270         33,612         (21.8 )%      41,104         46,493         202,948         (87.1 )% 
  

 

 

    

 

 

      

 

 

    

 

 

    

 

 

    

Total network and brokered funding

     1,711,015         1,774,046         (3.6 )%      1,275,114         1,218,172         1,078,000         58.7  % 
  

 

 

    

 

 

      

 

 

    

 

 

    

 

 

    

Net customer deposits and funding (4)

     15,907,920         15,725,553         1.2  %      15,043,857         15,580,233         15,372,410         3.5  % 
  

 

 

    

 

 

      

 

 

    

 

 

    

 

 

    

 

(4) Total deposits and customer funding excluding total network and brokered funding.

 

Page 8