ASSOCIATED BANC-CORP - FORM 8-K - EX-99.1 - EXHIBIT 99.1

Attached files

file	filename
EX-99.2 - EXHIBIT 99.2 - ASSOCIATED BANC-CORP	asb2q18earningspresentat.htm
8-K - FORM 8-K - ASSOCIATED BANC-CORP	asb06302018form8-kpressrel.htm

Exhibit 99.1



	NEWS RELEASE Investor Contact: Robb Timme, Vice President, Investor Relations 920-491-7059 Media Contact: Jennifer Kaminski, Vice President, Public Relations Senior Manager 920-491-7576

Associated Banc-Corp Reports Second Quarter Earnings of $0.50 Per Common Share, or $0.53 Per Common Share Excluding $7 million in Acquisition Related Costs¹

Earnings per share up 39% from the prior year

GREEN BAY, Wis. -- July 19, 2018 -- Associated Banc-Corp (NYSE: ASB) ("Associated" or "Company") today reported net income available to common equity ("earnings") of $87 million, or $0.50 per common share for the quarter ended June 30, 2018. This compares to net income available to common equity of $56 million, or $0.36 per common share for the quarter ended June 30, 2017.

“In June, we welcomed over 92,000 Bank Mutual customers to Associated Bank. We re-branded 22 Bank Mutual branches and expanded Associated Bank's network into 12 new communities. We look forward to demonstrating to our new customers the greater range of services that Associated offers," said President and CEO Philip B. Flynn. "We are also pleased with the strong bottom line results this quarter. We had solid growth in our commercial and business lending portfolios. We benefited from rising rates and a credit environment that remains benign, enabling us to take a very modest provision for credit loss in the quarter."

SECOND QUARTER 2018 SUMMARY (all comparisons to the second quarter of 2017)


•	Average loans of $23.0 billion were up 12%, or $2.5 billion


•	Average deposits of $23.6 billion were up 10%, or $2.1 billion


•	Net interest income of $226 million increased $43 million, or 23%


•	Net interest margin of 3.02% improved 19 basis points from 2.83%


•	Provision for credit losses was $4 million, down from $12 million


•	Noninterest income of $93 million was up $10 million, or 13%


•	Noninterest expense of $211 million was up $35 million and included $7 million of acquisition related costs


•	Income before income taxes was up 33%, or $26 million


•	During the quarter, the Company repurchased approximately 250,000 shares, or $7 million, of common stock


•	Total dividends paid per common share were $0.15, up 25%

¹This is a non-GAAP financial measure. Management believes these measures are meaningful because they reflect adjustments commonly made by management, investors, regulators, and analysts to evaluate the adequacy of earnings per common share, provide greater understanding of ongoing operations and enhance comparability of results with prior periods. See page 10 of the attached tables for a reconciliation of GAAP financial measures to non-GAAP financial measures which exclude acquisition related costs.

Loans

Second quarter 2018 average loans of $23.0 billion were up 12%, or $2.5 billion from the second quarter of 2017, and were up $0.9 billion from the first quarter of 2018.

With respect to second quarter 2018 average balances by loan category:


•	Consumer lending increased $1.4 billion from the year ago quarter, and grew $237 million from the first quarter of 2018 to $9.6 billion.


•	Commercial real estate lending increased $742 million from the second quarter of 2017 and increased $306 million from the first quarter of 2018 to $5.7 billion.


•	Commercial and business lending increased $376 million from the year ago quarter and increased $383 million from the first quarter of 2018 to $7.7 billion. C&I loan growth was spread across most specialized lines of business and in the general commercial portfolio.

Deposits

Second quarter 2018 average deposits of $23.6 billion were up $2.1 billion, or 10% from the year ago quarter, and were flat compared to the first quarter of 2018.

With respect to second quarter 2018 average balances by deposit category:


•	Money market deposits increased $1.1 billion from the year ago quarter, but decreased $25 million from the first quarter of 2018 to $7.2 billion.


•	Interest-bearing demand deposits increased $911 million from the year ago quarter and increased $232 million from the first quarter of 2018 to $4.7 billion.


•	Time deposits increased $813 million from the year ago quarter, but decreased $150 million from the first quarter of 2018 to $2.6 billion.


•	Noninterest-bearing demand deposits increased $240 million from the year ago quarter and increased $47 million from the first quarter of 2018 to $5.1 billion.


•	Savings increased $352 million from the year ago quarter and increased $170 million from the first quarter of 2018 to $1.9 billion.


•	Network transaction deposits decreased $1.2 billion from the year ago quarter and decreased $278 million from the first quarter of 2018 to $2.1 billion.

Net Interest Income and Net Interest Margin

Second quarter 2018 net interest income of $226 million was up 23%, or $43 million from the year ago quarter, with net interest margin increasing 19 basis points to 3.02%. Second quarter 2018 net interest income increased 8%, or $16 million from the first quarter of 2018.


•	The average yield on total commercial loans for the second quarter of 2018 increased 106 basis points to 4.75% from the year ago quarter and increased 41 basis points from the prior quarter.


•	The average cost of total interest-bearing deposits for the second quarter of 2018 increased 32 basis points to 0.83% from the year ago quarter and increased 10 basis points from the prior quarter.


•	The net free funds benefit, the benefit of holding noninterest-bearing demand deposits, increased 8 basis points in the second quarter of 2018 compared to the year ago quarter and increased 4 basis points from the prior quarter.

Noninterest Income

Second quarter 2018 total noninterest income of $93 million increased $10 million from the year ago quarter and increased $2 million from the prior quarter.

With respect to second quarter 2018 noninterest income line items:


•	Insurance commissions and fees were up $3 million from the year ago quarter, driven by the acquisitions of Diversified Insurance Solutions and Anderson Insurance, and were up $1 million from the prior quarter on seasonal strength of the employee benefits business.


•	Card-based and loan fees were up $1 million from both the year ago quarter and the prior quarter.

Noninterest Expense

Second quarter 2018 total noninterest expense of $211 million increased 20%, or $35 million from the year ago quarter, but decreased $2 million from the first quarter of 2018. Second quarter 2018 noninterest expense includes $7 million of Bank Mutual acquisition related costs.

With respect to second quarter 2018 noninterest expense line items:


•	Personnel expense increased $17 million from the year ago quarter, and increased by $6 million from the first quarter of 2018, primarily driven by the additional cost of Bank Mutual staff.


•	Technology expense increased $4 million from the year ago quarter, and increased by $2 million from the prior quarter, largely driven by the additional cost of Bank Mutual operations.


•	Occupancy expense increased $2 million from the year ago quarter, with most of the increase coming from the additional expense of acquired Bank Mutual facilities. Occupancy expense was down slightly from the prior quarter.


•	Acquisition related costs decreased $13 million from the prior quarter.

Taxes

The second quarter 2018 effective tax rate was 14% compared to 26% in the year ago quarter. The decrease is primarily due to the Tax Cut and Jobs Act (TCJA) signed into law on December 22, 2017. In the second quarter, the Company received one-time tax benefits from implementing tax planning strategies to maximize the positive impact of the TCJA. Going forward, the Company expects its quarterly effective tax rate to be approximately 22% for the remainder of 2018, and approximately 20% for the full year.

Credit

The second quarter provision for credit losses was $4 million, down from $12 million in the year ago quarter, but up from zero in the prior quarter, primarily due to loan growth.

With respect to second quarter 2018 credit quality:


•	Potential problem loans of $242 million were down $21 million from the year ago quarter and were down $41 million from the prior quarter.


•	Nonaccrual loans of $204 million were down $27 million from the year ago quarter and were down $4 million from the prior quarter. The nonaccrual loans to total loans ratio was 0.89% in the second quarter, compared to 1.12% in the year ago quarter, and 0.91% in the prior quarter.


•	Net charge offs of $8 million were down $4 million from the year ago quarter and were down $1 million from the prior quarter. Net oil and gas charge offs were $7 million in the second quarter.


•	The allowance for loan losses of $253 million was down $29 million from the year ago quarter and was down $4 million from the prior quarter. The allowance for loan losses to total loans ratio was 1.10% in the second quarter of 2018, compared to 1.35% in the year ago quarter, and 1.13% in the prior quarter.


•	The allowance related to the oil and gas portfolio was $17 million at June 30, 2018 and represented 2.5% of total oil and gas loans compared to 5.4% in the year ago quarter, and 2.9% in the prior quarter.

Capital

The Company’s capital position remains strong, with a CET1 capital ratio of 10.5% at June 30, 2018. The Company’s capital ratios continue to be in excess of the Basel III “well-capitalized” regulatory benchmarks on a fully phased in basis.

During the quarter, the Company repurchased approximately 250,000 shares, or $7 million, of common stock, at an average price of $26.52 per share.

SECOND QUARTER 2018 EARNINGS RELEASE CONFERENCE CALL

The Company will host a conference call for investors and analysts at 4:00 p.m. Central Time (CT) today, July 19, 2018. Interested parties can access the live webcast of the call through the Investor Relations section of the Company's website, http://investor.associatedbank.com. Parties may also dial into the call at 877-407-8037 (domestic) or 201-689-8037 (international) and request the Associated Banc-Corp second quarter 2018 earnings call. The second quarter 2018 financial tables with an accompanying slide presentation will be available on the Company's website just prior to the call. An audio archive of the webcast will be available on the Company's website approximately fifteen minutes after the call is over.

ABOUT ASSOCIATED BANC-CORP

Associated Banc-Corp (NYSE: ASB) has total assets of $34 billion and is one of the top 50 publicly traded U.S. bank holding companies. Headquartered in Green Bay, Wisconsin, Associated is a leading Midwest banking franchise, offering a full range of financial products and services from more than 230 banking locations serving more than 110 communities throughout Wisconsin, Illinois and Minnesota, and commercial financial services in Indiana, Michigan, Missouri, Ohio and Texas. Associated Bank, N.A. is an Equal Housing Lender, Equal Opportunity Lender and Member FDIC. More information about Associated Banc-Corp is available at www.associatedbank.com.

FORWARD-LOOKING STATEMENTS

Statements made in this document which are not purely historical are forward-looking statements, as defined in the Private Securities Litigation Reform Act of 1995. This includes any statements regarding management’s plans, objectives, or goals for future operations, products or services, and forecasts of its revenues, earnings, or other measures of performance. Such forward-looking statements may be identified by the use of words such as “believe,” “expect,” “anticipate,” “plan,” “estimate,” “should,” “will,” “intend,” “outlook,” or similar expressions. Forward-looking statements are based on current management expectations and, by their nature, are subject to risks and uncertainties. Actual results may differ materially from those contained in the forward-looking statements. Factors which may cause actual results to differ materially from those contained in such forward-looking statements include those identified in the Company’s most recent Form 10-K and subsequent SEC filings. Such factors are incorporated herein by reference.

NON-GAAP FINANCIAL MEASURES

This press release and related materials may contain references to measures which are not defined in generally accepted accounting principles (“GAAP”). Information concerning these non-GAAP financial measures can be found in the financial tables. Management believes these measures are meaningful because they reflect adjustments commonly made by management, investors, regulators, and analysts to evaluate the adequacy of earnings per common share, provide a greater understanding of ongoing operations and enhance comparability of results with prior periods.

# # #



Associated Banc-Corp Consolidated Balance Sheets (Unaudited)
(In thousands)	Jun 30, 2018			Mar 31, 2018			Seql Qtr $ Change			Dec 31, 2017			Sep 30, 2017			Jun 30, 2017			Comp Qtr $ Change
Assets
Cash and due from banks	$	396,761		$	328,260		$	68,501		$	483,666		$	354,331		$	396,677		$	84
Interest-bearing deposits in other financial institutions	71,462			94,918			(23,456		)	199,702			109,596			126,232			(54,770		)
Federal funds sold and securities purchased under agreements to resell	3,150			10,000			(6,850		)	32,650			27,700			43,000			(39,850		)
Investment securities held to maturity, at amortized cost	2,602,247			2,443,203			159,044			2,282,853			2,233,579			2,255,395			346,852
Investment securities available for sale, at fair value	4,261,651			4,485,875			(224,224		)	4,043,446			3,801,699			3,687,470			574,181
Federal Home Loan Bank and Federal Reserve Bank stocks, at cost	249,040			233,216			15,824			165,331			172,446			181,180			67,860
Residential loans held for sale	143,022			103,953			39,069			85,544			113,064			41,620			101,402
Commercial loans held for sale	—			6,091			(6,091		)	—			9,718			4,772			(4,772		)
Loans	22,976,786			22,810,491			166,295			20,784,991			20,931,460			20,783,069			2,193,717
Allowance for loan losses	(252,601		)	(257,058		)	4,457			(265,880		)	(276,551		)	(281,101		)	28,500
Loans, net	22,724,184			22,553,433			170,751			20,519,111			20,654,909			20,501,968			2,222,216
Bank and corporate owned life insurance	659,592			657,841			1,751			591,057			589,093			588,440			71,152
Tax credit and other investments	137,051			142,368			(5,317		)	147,099			120,927			95,710			41,341
Trading assets	132,919			102,890			30,029			69,675			48,429			48,576			84,343
Premises and equipment	361,385			381,327			(19,942		)	330,963			330,065			328,404			32,981
Goodwill	1,166,665			1,153,156			13,509			976,239			972,006			972,006			194,659
Mortgage servicing rights, net	66,980			66,407			573			58,384			58,377			59,395			7,585
Other intangible assets, net	80,346			79,714			632			15,580			14,080			14,530			65,816
Other assets	596,190			523,855			72,335			482,294			454,528			423,650			172,540
Total assets	$	33,652,647		$	33,366,505		$	286,142		$	30,483,594		$	30,064,547		$	29,769,025		$	3,883,622
Liabilities and stockholders’ equity
Noninterest-bearing demand deposits	$	5,341,361		$	5,458,473		$	(117,112	)	$	5,478,416		$	5,177,734		$	5,038,162		$	303,199
Interest-bearing deposits	18,474,953			18,367,129			107,824			17,307,546			17,155,717			16,580,018			1,894,935
Total deposits	23,816,314			23,825,602			(9,288		)	22,785,962			22,333,451			21,618,180			2,198,134
Federal funds purchased and securities sold under agreements to repurchase	203,733			283,954			(80,221		)	324,815			476,550			607,669			(403,936		)
Commercial paper	52,791			82,420			(29,629		)	67,467			68,067			97,813			(45,022		)
FHLB advances	4,797,857			4,515,887			281,970			3,184,168			3,170,172			3,462,176			1,335,681
Other long-term funding	497,619			497,451			168			497,282			497,113			496,944			675
Trading liabilities	131,612			100,247			31,365			67,660			46,812			47,143			84,469
Accrued expenses and other liabilities	382,476			348,246			34,230			318,797			268,781			247,598			134,878
Total liabilities	29,882,403			29,653,806			228,597			27,246,151			26,860,946			26,577,523			3,304,880
Stockholders’ equity
Preferred equity	159,401			159,853			(452		)	159,929			159,929			159,929			(528		)
Common equity
Common stock	1,751			1,741			10			1,618			1,615			1,630			121
Surplus	1,828,965			1,823,800			5,165			1,454,188			1,442,328			1,474,301			354,664
Retained earnings	1,920,579			1,859,068			61,511			1,819,230			1,792,184			1,747,632			172,947
Accumulated other comprehensive income (loss)	(119,888		)	(107,673		)	(12,215		)	(62,758		)	(54,288		)	(53,470		)	(66,418		)
Treasury stock, at cost	(20,564		)	(24,089		)	3,525			(134,764		)	(138,167		)	(138,520		)	117,956
Total common equity	3,610,843			3,552,847			57,996			3,077,514			3,043,672			3,031,573			579,270
Total stockholders’ equity	3,770,244			3,712,699			57,545			3,237,443			3,203,601			3,191,502			578,742
Total liabilities and stockholders’ equity	$	33,652,647		$	33,366,505		$	286,142		$	30,483,594		$	30,064,547		$	29,769,025		$	3,883,622

Numbers may not sum due to rounding.

Page 1



Associated Banc-Corp Consolidated Statements of Income (Unaudited)
(In thousands, except per share data)							Comp Qtr					YTD			YTD			Comp YTD
(In thousands, except per share data)	2Q18			2Q17			$ Change			% Change		Jun 2018			Jun 2017			$ Change			% Change
Interest income
Interest and fees on loans	$	246,646		$	184,246		$	62,400		34	%	$	466,680		$	357,895		$	108,785		30	%
Interest and dividends on investment securities
Taxable	30,623			23,658			6,965			29	%	60,727			47,133			13,594			29	%
Tax-exempt	10,783			8,143			2,640			32	%	20,000			16,272			3,728			23	%
Other interest	3,153			1,553			1,600			103	%	5,330			3,089			2,241			73	%
Total interest income	291,205			217,600			73,605			34	%	552,737			424,389			128,348			30	%
Interest expense
Interest on deposits	38,431			21,180			17,251			81	%	71,843			38,104			33,739			89	%
Interest on Federal funds purchased and securities sold under agreements to repurchase	538			824			(286		)	(35	)%	1,060			1,339			(279		)	(21	)%
Interest on other short-term funding	51			84			(33		)	(39	)%	111			169			(58		)	(34	)%
Interest on FHLB advances	21,279			7,149			14,130			198	%	34,402			11,596			22,806			197	%
Interest on long-term funding	4,544			4,544			—			—	%	9,088			9,088			—			—	%
Total interest expense	64,843			33,781			31,062			92	%	116,504			60,296			56,208			93	%
Net interest income	226,362			183,819			42,543			23	%	436,233			364,093			72,140			20	%
Provision for credit losses	4,000			12,000			(8,000		)	(67	)%	4,000			21,000			(17,000		)	(81	)%
Net interest income after provision for credit losses	222,362			171,819			50,543			29	%	432,233			343,093			89,140			26	%
Noninterest income
Insurance commissions and fees	23,996			20,853			3,143			15	%	46,644			42,473			4,171			10	%
Service charges and deposit account fees	16,390			16,030			360			2	%	32,810			32,386			424			1	%
Card-based and loan fees	14,387			13,764			623			5	%	27,809			26,229			1,580			6	%
Trust and asset management fees	13,437			12,346			1,091			9	%	26,806			24,281			2,525			10	%
Brokerage commissions and fees	6,896			4,346			2,550			59	%	14,169			8,679			5,490			63	%
Mortgage banking, net	6,258			5,027			1,231			24	%	12,628			9,606			3,022			31	%
Capital markets, net	4,783			4,042			741			18	%	10,089			7,925			2,164			27	%
Bank and corporate owned life insurance	3,978			3,899			79			2	%	7,165			6,514			651			10	%
Asset gains (losses), net	2,497			(466		)	2,963			N/M		2,390			(700		)	3,090			N/M
Investment securities gains (losses), net	(2,015		)	356			(2,371		)	N/M		(2,015		)	356			(2,371		)	N/M
Other	2,235			2,213			22			1	%	4,727			4,492			235			5	%
Total noninterest income	92,842			82,410			10,432			13	%	183,222			162,241			20,981			13	%
Noninterest expense
Personnel	123,980			107,066			16,914			16	%	241,665			213,848			27,817			13	%
Occupancy	15,071			12,832			2,239			17	%	30,428			28,051			2,377			8	%
Technology	19,452			15,473			3,979			26	%	37,167			29,893			7,274			24	%
Equipment	5,953			5,234			719			14	%	11,509			10,719			790			7	%
Business development and advertising	7,067			7,152			(85		)	(1	)%	13,760			12,987			773			6	%
Legal and professional	6,284			5,711			573			10	%	11,697			9,877			1,820			18	%
Card issuance and loan costs	3,173			2,974			199			7	%	6,477			5,594			883			16	%
Foreclosure / OREO expense, net	1,021			1,182			(161		)	(14	)%	1,744			2,687			(943		)	(35	)%
FDIC assessment	8,250			8,000			250			3	%	16,500			16,000			500			3	%
Other intangible amortization	2,168			496			1,672			N/M		3,693			1,009			2,684			N/M
Acquisition related costs ⁽¹⁾	7,107			—			7,107			N/M		27,712			—			27,712			N/M
Other	11,732			10,196			1,536			15	%	21,873			19,342			2,531			13	%
Total noninterest expense	211,258			176,316			34,942			20	%	424,223			350,007			74,216			21	%
Income before income taxes	103,947			77,913			26,034			33	%	191,232			155,327			35,905			23	%
Income tax expense	14,754			19,930			(5,176		)	(26	)%	32,583			41,074			(8,491		)	(21	)%
Net income	89,192			57,983			31,209			54	%	158,648			114,253			44,395			39	%
Preferred stock dividends	2,329			2,339			(10		)	—	%	4,668			4,669			(1		)	—	%
Net income available to common equity	$	86,863		$	55,644		$	31,219		56	%	$	153,980		$	109,584		$	44,396		41	%
Earnings per common share
Basic	$	0.51		$	0.36		$	0.15		42	%	$	0.92		$	0.72		$	0.20		28	%
Diluted	$	0.50		$	0.36		$	0.14		39	%	$	0.90		$	0.71		$	0.19		27	%
Average common shares outstanding
Basic	170,633			151,573			19,060			13	%	167,096			151,196			15,900			11	%
Diluted	173,409			154,302			19,107			12	%	169,920			154,147			15,773			10	%

N/M = Not meaningful

Numbers may not sum due to rounding.


(1)	Includes Bank Mutual acquisition related costs only.

Page 2



Associated Banc-Corp Consolidated Statements of Income (Unaudited) - Quarterly Trend
(In thousands, except per share data)							Seql Qtr														Comp Qtr
(In thousands, except per share data)	2Q18			1Q18			$ Change			% Change		4Q17			3Q17			2Q17			$ Change			% Change
Interest income
Interest and fees on loans	$	246,646		$	220,034		$	26,612		12	%	$	194,133		$	196,972		$	184,246		$	62,400		34	%
Interest and dividends on investment securities
Taxable	30,623			30,104			519			2	%	25,614			24,162			23,658			6,965			29	%
Tax-exempt	10,783			9,217			1,566			17	%	8,437			8,268			8,143			2,640			32	%
Other interest	3,153			2,177			976			45	%	2,138			2,492			1,553			1,600			103	%
Total interest income	291,205			261,532			29,673			11	%	230,322			231,894			217,600			73,605			34	%
Interest expense
Interest on deposits	38,431			33,412			5,019			15	%	28,143			27,778			21,180			17,251			81	%
Interest on Federal funds purchased and securities sold under agreements to repurchase	538			522			16			3	%	420			768			824			(286		)	(35	)%
Interest on other short-term funding	51			60			(9		)	(15	)%	54			70			84			(33		)	(39	)%
Interest on FHLB advances	21,279			13,123			8,156			62	%	10,156			8,612			7,149			14,130			198	%
Interest on long-term funding	4,544			4,544			—			—	%	4,544			4,544			4,544			—			—	%
Total interest expense	64,843			51,661			13,182			26	%	43,317			41,772			33,781			31,062			92	%
Net Interest income	226,362			209,871			16,491			8	%	187,005			190,122			183,819			42,543			23	%
Provision for credit losses	4,000			—			4,000			N/M		—			5,000			12,000			(8,000		)	(67	)%
Net interest income after provision for credit losses	222,362			209,871			12,491			6	%	187,005			185,122			171,819			50,543			29	%
Noninterest income
Insurance commissions and fees	23,996			22,648			1,348			6	%	19,186			19,815			20,853			3,143			15	%
Service charges and deposit account fees	16,390			16,420			(30		)	—	%	15,773			16,268			16,030			360			2	%
Card-based and loan fees	14,387			13,422			965			7	%	13,840			12,619			13,764			623			5	%
Trust and asset management fees	13,437			13,369			68			1	%	13,125			12,785			12,346			1,091			9	%
Brokerage commissions and fees	6,896			7,273			(377		)	(5	)%	6,864			4,392			4,346			2,550			59	%
Mortgage banking, net	6,258			6,370			(112		)	(2	)%	3,169			6,585			5,027			1,231			24	%
Capital markets, net	4,783			5,306			(523		)	(10	)%	7,107			4,610			4,042			741			18	%
Bank and corporate owned life insurance	3,978			3,187			791			25	%	3,156			6,580			3,899			79			2	%
Asset gains (losses), net	2,497			(107		)	2,604			N/M		(528		)	(16		)	(466		)	2,963			N/M
Investment securities gains (losses), net	(2,015		)	—			(2,015		)	N/M		75			3			356			(2,371		)	N/M
Other	2,235			2,492			(257		)	(10	)%	2,777			2,254			2,213			22			1	%
Total noninterest income	92,842			90,380			2,462			3	%	84,544			85,895			82,410			10,432			13	%
Noninterest expense
Personnel	123,980			117,685			6,295			5	%	107,031			108,098			107,066			16,914			16	%
Occupancy	15,071			15,357			(286		)	(2	)%	13,497			12,294			12,832			2,239			17	%
Technology	19,452			17,715			1,737			10	%	17,878			15,233			15,473			3,979			26	%
Equipment	5,953			5,556			397			7	%	5,250			5,232			5,234			719			14	%
Business development and advertising	7,067			6,693			374			6	%	8,195			7,764			7,152			(85		)	(1	)%
Legal and professional	6,284			5,413			871			16	%	6,384			6,248			5,711			573			10	%
Card issuance and loan costs	3,173			3,304			(131		)	(4	)%	2,836			3,330			2,974			199			7	%
Foreclosure / OREO expense, net	1,021			723			298			41	%	1,285			906			1,182			(161		)	(14	)%
FDIC assessment	8,250			8,250			—			—	%	7,500			7,800			8,000			250			3	%
Other intangible amortization	2,168			1,525			643			42	%	500			450			496			1,672			N/M
Acquisition related costs ⁽¹⁾	7,107			20,605			(13,498		)	(66	)%	—			—			—			7,107			N/M
Other	11,732			10,140			1,592			16	%	11,343			10,072			10,196			1,536			15	%
Total noninterest expense	211,258			212,965			(1,707		)	(1	)%	181,699			177,427			176,316			34,942			20	%
Income before income taxes	103,947			87,285			16,662			19	%	89,850			93,590			77,913			26,034			33	%
Income tax expense	14,754			17,829			(3,075		)	(17	)%	39,840			28,589			19,930			(5,176		)	(26	)%
Net income	89,192			69,456			19,736			28	%	50,010			65,001			57,983			31,209			54	%
Preferred stock dividends	2,329			2,339			(10		)	—	%	2,339			2,339			2,339			(10		)	—	%
Net income available to common equity	$	86,863		$	67,117		$	19,746		29	%	$	47,671		$	62,662		$	55,644		$	31,219		56	%
Earnings per common share
Basic	$	0.51		$	0.41		$	0.10		24	%	$	0.31		$	0.41		$	0.36		$	0.15		42	%
Diluted	$	0.50		$	0.40		$	0.10		25	%	$	0.31		$	0.41		$	0.36		$	0.14		39	%
Average common shares outstanding
Basic	170,633			163,520			7,113			4	%	150,563			150,565			151,573			19,060			13	%
Diluted	173,409			166,432			6,977			4	%	153,449			152,968			154,302			19,107			12	%

N/M = Not meaningful

Numbers may not sum due to rounding.


(1)	Includes Bank Mutual acquisition related costs only.

Page 3



Associated Banc-Corp Selected Quarterly Information
(In millions, except share and per share, full time equivalent employee and branch count data)	YTD Jun 2018			YTD Jun 2017			2Q18			1Q18			4Q17			3Q17			2Q17
Per common share data
Dividends	$	0.30		$	0.24		$	0.15		$	0.15		$	0.14		$	0.12		$	0.12
Market value:
High	28.85			26.50			28.85			26.90			26.10			25.70			25.50
Low	23.60			23.25			24.20			23.60			24.00			21.25			23.25
Close	27.30			25.20			27.30			24.85			25.40			24.25			25.20
Book value	20.81			19.70			20.81			20.63			20.13			19.98			19.70
Tangible book value / share	$	13.62		$	13.29		$	13.62		$	13.47		$	13.65		$	13.51		$	13.29
Performance ratios (annualized)
Return on average assets	0.98		%	0.79		%	1.07		%	0.88		%	0.66		%	0.86		%	0.80		%
Effective tax rate	17.04		%	26.44		%	14.19		%	20.43		%	44.34		%	30.55		%	25.58		%
Dividend payout ratio ⁽¹⁾	32.61		%	33.33		%	29.41		%	36.59		%	45.16		%	29.27		%	33.33		%
Net interest margin	2.97		%	2.83		%	3.02		%	2.92		%	2.79		%	2.84		%	2.83		%
Selected trend information
Average full time equivalent employees	4,780			4,361			4,865			4,693			4,367			4,384			4,352
Branch count							237			271			213			214			214
Assets under management, at market value ⁽²⁾							$	10,776		$	10,540		$	10,555		$	9,243		$	8,997
Mortgage loans originated for sale during period	$	516		$	220		$	319		$	198		$	249		$	246		$	119
Mortgage loan settlements during period	$	482		$	364		$	294		$	188		$	268		$	188		$	167
Mortgage portfolio serviced for others							$	8,501		$	8,507		$	7,647		$	7,653		$	7,768
Mortgage servicing rights, net / mortgage portfolio serviced for others							0.79		%	0.78		%	0.76		%	0.76		%	0.76		%
Shares outstanding, end of period							173,526			172,182			152,846			152,316			153,848
Net shares issuable to Associated Banc-Corp warrant ("ASBWS") holders ⁽⁵⁾							136			1,023			1,134			903			1,094
Selected quarterly ratios
Loans / deposits							96.47		%	95.74		%	91.22		%	93.72		%	96.14		%
Stockholders’ equity / assets							11.20		%	11.13		%	10.62		%	10.66		%	10.72		%
Risk-based capital ^{(3) (4)}
Total risk-weighted assets							$	24,059		$	23,535		$	21,544		$	21,657		$	21,590
Common equity Tier 1							$	2,528		$	2,474		$	2,172		$	2,144		$	2,130
Common equity Tier 1 capital ratio							10.51		%	10.51		%	10.08		%	9.90		%	9.87		%
Tier 1 capital ratio							11.17		%	11.19		%	10.82		%	10.64		%	10.61		%
Total capital ratio							13.36		%	13.45		%	13.22		%	13.04		%	13.01		%
Tier 1 leverage ratio							8.32		%	8.48		%	8.02		%	7.93		%	8.09		%
Loans
Recorded investment on loans							$	22,916		$	22,756		$	20,699		$	20,849		$	20,708
Net unaccreted Bank Mutual purchase discount							(26		)	(34		)	—			—			—
Net other deferred costs							87			88			86			83			75
Loans							$	22,977		$	22,810		$	20,785		$	20,931		$	20,783

Numbers may not sum due to rounding.


(1)	Ratio is based upon basic earnings per common share.


(2)	Excludes assets held in brokerage accounts.


(3)	The Federal Reserve establishes regulatory capital requirements, including well-capitalized standards for the Corporation. The regulatory capital requirements effective for the Corporation follow Basel III, subject to certain transition provisions.


(4)	June 30, 2018 data is estimated.


(5)	Based on the treasury stock method and the period-end close price. The ASBWS warrants will expire on November 21, 2018.

Page 4



Associated Banc-Corp Selected Asset Quality Information
(In thousands)	Jun 30, 2018			Mar 31, 2018			Seql Qtr % Change		Dec 31, 2017			Sep 30, 2017			Jun 30, 2017			Comp Qtr % Change
Allowance for loan losses
Balance at beginning of period	$	257,058		$	265,880		(3	)%	$	276,551		$	281,101		$	282,672		(9	)%
Provision for loan losses	4,000			500			N/M		—			6,000			11,000			(64	)%
Charge offs	(14,926		)	(12,155		)	23	%	(14,289		)	(14,727		)	(15,376		)	(3	)%
Recoveries	6,470			2,832			128	%	3,618			4,177			2,805			131	%
Net charge offs	(8,456		)	(9,323		)	(9	)%	(10,671		)	(10,550		)	(12,571		)	(33	)%
Balance at end of period	$	252,601		$	257,058		(2	)%	$	265,880		$	276,551		$	281,101		(10	)%
Allowance for unfunded commitments
Balance at beginning of period	$	26,336		$	24,400		8	%	$	24,400		$	25,400		$	24,400		8	%
Provision for unfunded commitments	—			(500		)	(100	)%	—			(1,000		)	1,000			(100	)%
Amount recorded at acquisition	—			2,436			(100	)%	—			—			—			N/M
Balance at end of period	$	26,336		$	26,336		—	%	$	24,400		$	24,400		$	25,400		4	%
Allowance for credit losses	$	278,937		$	283,394		(2	)%	$	290,280		$	300,951		$	306,501		(9	)%
Provision for credit losses	$	4,000		$	—		N/M		$	—		$	5,000		$	12,000		(67	)%
	Jun 30, 2018			Mar 31, 2018			Seql Qtr % Change		Dec 31, 2017			Sep 30, 2017			Jun 30, 2017			Comp Qtr % Change
Net charge offs
Commercial and industrial	$	(6,606	)	$	(6,599	)	—	%	$	(8,212	)	$	(9,442	)	$	(11,046	)	(40	)%
Commercial real estate—owner occupied	270			(1,025		)	(126	)%	(246		)	13			43			N/M
Commercial and business lending	(6,336		)	(7,624		)	(17	)%	(8,458		)	(9,429		)	(11,003		)	(42	)%
Commercial real estate—investor	(1,189		)	8			N/M		(164		)	55			(126		)	N/M
Real estate construction	48			189			(75	)%	(365		)	(150		)	(26		)	N/M
Commercial real estate lending	(1,141		)	197			N/M		(529		)	(95		)	(152		)	N/M
Total commercial	(7,477		)	(7,427		)	1	%	(8,987		)	(9,524		)	(11,155		)	(33	)%
Residential mortgage	(135		)	(131		)	3	%	(966		)	(26		)	(564		)	(76	)%
Home equity	140			(677		)	(121	)%	330			(87		)	54			159	%
Other consumer	(984		)	(1,088		)	(10	)%	(1,048		)	(913		)	(906		)	9	%
Total consumer	(979		)	(1,896		)	(48	)%	(1,684		)	(1,026		)	(1,416		)	(31	)%
Total net charge offs	$	(8,456	)	$	(9,323	)	(9	)%	$	(10,671	)	$	(10,550	)	$	(12,571	)	(33	)%

(In basis points)	Jun 30, 2018			Mar 31, 2018					Dec 31, 2017			Sep 30, 2017			Jun 30, 2017
Net charge offs to average loans (annualized)
Commercial and industrial	(39		)	(41		)			(51		)	(58		)	(69		)
Commercial real estate—owner occupied	12			(48		)			(12		)	1			2
Commercial and business lending	(33		)	(42		)			(47		)	(51		)	(60		)
Commercial real estate—investor	(12		)	N/M					(2		)	1			(2		)
Real estate construction	1			5					(10		)	(4		)	(1		)
Commercial real estate lending	(8		)	1					(4		)	(1		)	(1		)
Total commercial	(22		)	(24		)			(30		)	(31		)	(36		)
Residential mortgage	(1		)	(1		)			(5		)	N/M			(3		)
Home equity	6			(28		)			15			(4		)	2
Other consumer	(105		)	(115		)			(109		)	(97		)	(98		)
Total consumer	(4		)	(8		)			(8		)	(5		)	(7		)
Total net charge offs	(15		)	(17		)			(20		)	(20		)	(25		)

(In thousands)	Jun 30, 2018			Mar 31, 2018			Seql Qtr % Change		Dec 31, 2017			Sep 30, 2017			Jun 30, 2017			Comp Qtr % Change
Credit Quality
Nonaccrual loans	$	204,460		$	208,553		(2	)%	$	208,546		$	210,517		$	231,888		(12	)%
Other real estate owned (OREO)^(a)	27,207			16,919			61	%	12,608			8,483			7,782			N/M
Other nonperforming assets	7,059			7,117			(1	)%	7,418			7,418			7,418			(5	)%
Total nonperforming assets	$	238,726		$	232,589		3	%	$	228,572		$	226,418		$	247,088		(3	)%

Loans 90 or more days past due and still accruing	$	1,839		$	3,393		(46	)%	$	1,867		$	1,611		$	1,535		20	%
Allowance for loan losses to loans	1.10		%	1.13		%			1.28		%	1.32		%	1.35		%
Net unaccreted purchase discount to net purchased loans	1.58		%	1.80		%			—		%	—		%	—		%
Allowance for loan losses to nonaccrual loans	123.55		%	123.26		%			127.49		%	131.37		%	121.22		%
Nonaccrual loans to total loans	0.89		%	0.91		%			1.00		%	1.01		%	1.12		%
Nonperforming assets to total loans plus OREO	1.04		%	1.02		%			1.10		%	1.08		%	1.19		%
Nonperforming assets to total assets	0.71		%	0.70		%			0.75		%	0.75		%	0.83		%
Year-to-date net charge offs to average loans (annualized)	0.16		%	0.17		%			0.19		%	0.19		%	0.18		%


(a)	The June 30, 2018 change in OREO is primarily due to the closure of Bank Mutual properties.

Page 5



Associated Banc-Corp Selected Asset Quality Information (continued)
(In thousands)	Jun 30, 2018		Mar 31, 2018		Seql Qtr % Change		Dec 31, 2017		Sep 30, 2017		Jun 30, 2017		Comp Qtr % Change
Nonaccrual loans
Commercial and industrial	$	81,776	$	102,667	(20	)%	$	112,786	$	122,284	$	141,475	(42	)%
Commercial real estate—owner occupied	18,649		20,636		(10	)%	22,740		15,598		15,800		18	%
Commercial and business lending	100,425		123,303		(19	)%	135,526		137,882		157,275		(36	)%
Commercial real estate—investor	26,503		15,574		70	%	4,729		3,543		7,206		N/M
Real estate construction	1,544		1,219		27	%	974		1,540		1,717		(10	)%
Commercial real estate lending	28,047		16,793		67	%	5,703		5,083		8,923		N/M
Total commercial	128,472		140,096		(8	)%	141,229		142,965		166,198		(23	)%
Residential mortgage	62,896		55,100		14	%	53,632		54,654		51,975		21	%
Home equity	12,958		13,218		(2	)%	13,514		12,639		13,482		(4	)%
Other consumer	134		139		(4	)%	171		259		233		(42	)%
Total consumer	75,988		68,456		11	%	67,317		67,552		65,690		16	%
Total nonaccrual loans	$	204,460	$	208,553	(2	)%	$	208,546	$	210,517	$	231,888	(12	)%

	Jun 30, 2018		Mar 31, 2018		Seql Qtr % Change		Dec 31, 2017		Sep 30, 2017		Jun 30, 2017		Comp Qtr % Change
Restructured loans (accruing)
Commercial and industrial	$	32,438	$	29,580	10	%	$	30,047	$	32,572	$	31,540	3	%
Commercial real estate—owner occupied	3,820		3,892		(2	)%	3,989		4,077		4,145		(8	)%
Commercial and business lending	36,258		33,472		8	%	34,036		36,649		35,685		2	%
Commercial real estate—investor	372		13,683		(97	)%	14,389		14,294		14,628		(97	)%
Real estate construction	222		305		(27	)%	310		316		321		(31	)%
Commercial real estate lending	594		13,988		(96	)%	14,699		14,610		14,949		(96	)%
Total commercial	36,852		47,460		(22	)%	48,735		51,259		50,634		(27	)%
Residential mortgage	17,934		19,902		(10	)%	17,068		16,859		17,624		2	%
Home equity	7,900		8,098		(2	)%	7,705		7,987		7,985		(1	)%
Other consumer	1,037		1,041		—	%	1,110		1,073		1,082		(4	)%
Total consumer	26,871		29,041		(7	)%	25,883		25,919		26,691		1	%
Total restructured loans (accruing)	$	63,723	$	76,501	(17	)%	$	74,618	$	77,178	$	77,325	(18	)%
Restructured loans included in nonaccrual loans (not included with restructured loans (accruing))	$	38,005	$	23,827	60	%	$	23,486	$	33,520	$	51,715	(27	)%
	Jun 30, 2018		Mar 31, 2018		Seql Qtr % Change		Dec 31, 2017		Sep 30, 2017		Jun 30, 2017		Comp Qtr % Change
Accruing Loans 30-89 Days Past Due
Commercial and industrial	$	588	$	880	(33	)%	$	271	$	1,378	$	1,255	(53	)%
Commercial real estate—owner occupied	193		511		(62	)%	48		1,522		1,284		(85	)%
Commercial and business lending	781		1,391		(44	)%	319		2,900		2,539		(69	)%
Commercial real estate—investor	828		240		N/M		374		1,109		899		(8	)%
Real estate construction	19,765		490		N/M		251		700		135		N/M
Commercial real estate lending	20,593		730		N/M		625		1,809		1,034		N/M
Total commercial	21,374		2,121		N/M		944		4,709		3,573		N/M
Residential mortgage	9,341		15,133		(38	)%	9,552		8,870		9,165		2	%
Home equity	7,270		5,868		24	%	6,825		7,191		5,924		23	%
Other consumer	1,735		1,811		(4	)%	2,007		1,686		1,746		(1	)%
Total consumer	18,346		22,812		(20	)%	18,384		17,747		16,835		9	%
Total accruing loans 30-89 days past due	$	39,720	$	24,934	59	%	$	19,328	$	22,456	$	20,408	95	%

	Jun 30, 2018		Mar 31, 2018		Seql Qtr % Change		Dec 31, 2017		Sep 30, 2017		Jun 30, 2017		Comp Qtr % Change
Potential Problem Loans
Commercial and industrial	$	172,177	$	196,766	(12	)%	$	113,778	$	153,779	$	142,607	21	%
Commercial real estate—owner occupied	38,879		34,410		13	%	41,997		57,468		60,724		(36	)%
Commercial and business lending	211,056		231,176		(9	)%	155,775		211,247		203,331		4	%
Commercial real estate—investor	24,790		46,970		(47	)%	19,291		46,770		48,569		(49	)%
Real estate construction	3,168		1,695		87	%	—		118		8,901		(64	)%
Commercial real estate lending	27,958		48,665		(43	)%	19,291		46,888		57,470		(51	)%
Total commercial	239,014		279,841		(15	)%	175,066		258,135		260,801		(8	)%
Residential mortgage	2,355		2,155		9	%	1,616		650		1,576		49	%
Home equity	142		188		(24	)%	195		124		208		(32	)%
Other consumer	6		—		N/M		—		—		—		N/M
Total consumer	2,503		2,343		7	%	1,811		774		1,784		40	%
Total potential problem loans	$	241,517	$	282,184	(14	)%	$	176,877	$	258,909	$	262,585	(8	)%

N/M = Not meaningful

Numbers may not sum due to rounding.

Page 6



Associated Banc-Corp Net Interest Income Analysis - Fully Tax-Equivalent Basis - Sequential and Comparable Quarter
	Three Months Ended
	June 30, 2018						March 31, 2018						June 30, 2017
(In thousands)	Average Balance		Interest Income /Expense		Average Yield /Rate		Average Balance		Interest Income /Expense		Average Yield /Rate		Average Balance		Interest Income /Expense		Average Yield /Rate
Assets
Earning assets
Loans^{(1) (2) (3)}
Commercial and business lending	$	7,697,057	$	86,771	4.52	%	$	7,313,621	$	74,706	4.14	%	$	7,321,523	$	65,507	3.59	%
Commercial real estate lending	5,705,817		72,049		5.06	%	5,399,429		61,504		4.62	%	4,964,257		47,562		3.84	%
Total commercial	13,402,874		158,820		4.75	%	12,713,050		136,210		4.34	%	12,285,780		113,069		3.69	%
Residential mortgage	8,237,457		69,030		3.35	%	8,010,381		66,402		3.32	%	6,957,865		56,097		3.23	%
Retail	1,365,097		19,210		5.63	%	1,355,098		17,852		5.29	%	1,278,345		16,048		5.03	%
Total loans	23,005,428		247,060		4.30	%	22,078,529		220,464		4.03	%	20,521,990		185,214		3.62	%
Investment securities
Taxable	5,518,077		30,623		2.22	%	5,576,826		30,104		2.16	%	4,781,488		23,658		1.98	%
Tax-exempt ⁽¹⁾	1,497,192		13,587		3.63	%	1,312,913		11,613		3.54	%	1,143,736		12,459		4.36	%
Other short-term investments	392,009		3,153		3.22	%	313,864		2,177		2.80	%	297,341		1,553		2.09	%
Investments and other	7,407,277		47,363		2.56	%	7,203,603		43,894		2.44	%	6,222,565		37,670		2.42	%
Total earning assets	30,412,705		$	294,423	3.88	%	29,282,132		$	264,358	3.64	%	26,744,555		$	222,884	3.34	%
Other assets, net	3,022,659						2,884,248						2,454,351
Total assets	$	33,435,364					$	32,166,380					$	29,198,906
Liabilities and stockholders' equity
Interest-bearing liabilities
Interest-bearing deposits
Savings	$	1,892,808	$	210	0.04	%	$	1,722,665	$	202	0.05	%	$	1,541,129	$	201	0.05	%
Interest-bearing demand	4,735,514		9,918		0.84	%	4,503,974		7,818		0.70	%	3,824,759		4,401		0.46	%
Money market	7,190,178		12,045		0.67	%	7,215,329		9,785		0.55	%	6,135,222		4,851		0.32	%
Network Transaction Deposits	2,130,854		9,503		1.79	%	2,408,681		8,778		1.48	%	3,377,513		8,017		0.95	%
Time deposits	2,565,001		6,755		1.06	%	2,715,292		6,830		1.02	%	1,752,255		3,710		0.85	%
Total interest-bearing deposits	18,514,355		38,431		0.83	%	18,565,941		33,412		0.73	%	16,630,878		21,180		0.51	%
Federal funds purchased and securities sold under agreements to repurchase	259,713		538		0.83	%	275,578		522		0.77	%	489,571		824		0.67	%
Other short-term funding	65,631		51		0.31	%	73,722		60		0.33	%	105,558		84		0.32	%
FHLB advances	4,809,071		21,279		1.77	%	3,736,510		13,123		1.42	%	3,172,254		7,149		0.90	%
Long-term funding	497,517		4,544		3.65	%	497,348		4,544		3.66	%	496,841		4,544		3.66	%
Total short and long-term funding	5,631,932		26,412		1.88	%	4,583,158		18,249		1.61	%	4,264,224		12,601		1.18	%
Total interest-bearing liabilities	24,146,287		$	64,843	1.08	%	23,149,099		$	51,661	0.90	%	20,895,102		$	33,781	0.65	%
Noninterest-bearing demand deposits	5,131,894						5,084,957						4,892,271
Other liabilities	436,130						395,008						246,395
Stockholders’ equity	3,721,053						3,537,316						3,165,138
Total liabilities and stockholders’ equity	$	33,435,364					$	32,166,380					$	29,198,906
Interest rate spread					2.80	%					2.74	%					2.69	%
Net free funds					0.22	%					0.18	%					0.14	%
Fully tax-equivalent net interest income and net interest margin ("NIM")			$	229,580	3.02	%			$	212,697	2.92	%			$	189,103	2.83	%
Fully tax-equivalent adjustment			3,217						2,826						5,284
Net interest income			$	226,362					$	209,871					$	183,819

Numbers may not sum due to rounding.


(1)	Beginning in 2018, the yield on tax-exempt loans and securities is computed on a fully tax-equivalent basis using a tax rate of 21% and is net of the effects of certain disallowed interest deductions. Prior to 2018, the yield on tax-exempt loans and securities was computed on a fully tax-equivalent basis using a tax rate of 35% and was net of the effects of certain disallowed interest deductions.


(2)	Nonaccrual loans and loans held for sale have been included in the average balances.


(3)	Interest income includes amortization of net deferred loan origination costs and net accreted purchase loan discount.

Page 7



Associated Banc-Corp Net Interest Income Analysis - Fully Tax-Equivalent Basis - Year Over Year
	Six months ended June 30,
	2018						2017
(In thousands)	Average Balance		Interest Income /Expense		Average Yield / Rate		Average Balance		Interest Income /Expense		Average Yield / Rate
Assets
Earning assets
Loans^{(1) (2) (3)}
Commercial and business lending	$	7,506,399	$	161,476	4.34	%	$	7,260,839	$	126,187	3.50	%
Commercial real estate lending	5,553,469		133,554		4.85	%	4,982,027		92,697		3.75	%
Total commercial	13,059,868		295,030		4.55	%	12,242,866		218,884		3.60	%
Residential mortgage	8,124,546		135,432		3.34	%	6,762,319		109,404		3.24	%
Retail	1,360,125		37,061		5.46	%	1,293,414		31,497		4.88	%
Total loans	22,544,539		467,523		4.17	%	20,298,599		359,785		3.56	%
Investment securities
Taxable	5,547,289		60,727		2.19	%	4,805,819		47,133		1.96	%
Tax-exempt⁽¹⁾	1,405,561		25,200		3.59	%	1,140,889		24,897		4.36	%
Other short-term investments	353,152		5,330		3.04	%	297,747		3,089		2.09	%
Investments and other	7,306,003		91,257		2.50	%	6,244,455		75,119		2.41	%
Total earning assets	29,850,541		$	558,780	3.76	%	26,543,054		$	434,904	3.29	%
Other assets, net	2,953,835						2,447,719
Total assets	$	32,804,377					$	28,990,773
Liabilities and stockholders' equity
Interest-bearing liabilities
Interest-bearing deposits
Savings	$	1,808,207	$	412	0.05	%	$	1,503,678	$	389	0.05	%
Interest-bearing demand	4,620,383		17,736		0.77	%	3,822,996		8,001		0.42	%
Money market	7,202,684		21,830		0.61	%	6,070,492		8,748		0.29	%
Network transaction deposits	2,269,000		18,281		1.62	%	3,485,279		14,119		0.82	%
Time deposits	2,639,731		13,585		1.04	%	1,683,177		6,849		0.82	%
Total interest-bearing deposits	18,540,005		71,843		0.78	%	16,565,621		38,104		0.46	%
Federal funds purchased and securities sold under agreements to repurchase	267,602		1,060		0.80	%	492,425		1,339		0.55	%
Other short-term funding	69,654		111		0.32	%	107,035		169		0.32	%
FHLB advances	4,275,753		34,402		1.62	%	3,007,025		11,596		0.78	%
Long-term funding	497,433		9,088		3.65	%	496,755		9,088		3.66	%
Total short and long-term funding	5,110,442		44,661		1.76	%	4,103,240		22,192		1.09	%
Total interest-bearing liabilities	23,650,448		$	116,504	0.99	%	20,668,861		$	60,296	0.59	%
Noninterest-bearing demand deposits	5,108,554						4,928,973
Other liabilities	415,683						248,559
Stockholders’ equity	3,629,692						3,144,380
Total liabilities and stockholders’ equity	$	32,804,377					$	28,990,773
Interest rate spread					2.77	%					2.70	%
Net free funds					0.20	%					0.13	%
Fully tax-equivalent net interest income and net interest margin			$	442,277	2.97	%			$	374,608	2.83	%
Fully tax-equivalent adjustment			6,043						10,515
Net interest income			$	436,233					$	364,093

Numbers may not sum due to rounding.


(1)	Beginning in 2018, the yield on tax-exempt loans and securities is computed on a fully tax-equivalent basis using a tax rate of 21% and is net of the effects of certain disallowed interest deductions. Prior to 2018, the yield on tax-exempt loans and securities was computed on a fully tax-equivalent basis using a tax rate of 35% and was net of the effects of certain disallowed interest deductions.


(2)	Nonaccrual loans and loans held for sale have been included in the average balances.


(3)	Interest income includes amortization of net deferred loan origination costs and net accreted purchase loan discount.

Page 8



Associated Banc-Corp Loan and Deposit Composition
(In thousands)
Period end loan composition (3)	Jun 30, 2018		Mar 31, 2018		Seql Qtr % Change		Dec 31, 2017		Sep 30, 2017		Jun 30, 2017		Comp Qtr % Change
Commercial and industrial	$	7,109,796	$	6,756,983	5	%	$	6,399,693	$	6,534,660	$	6,571,000	8	%
Commercial real estate—owner occupied	888,330		900,913		(1	)%	802,209		827,064		845,336		5	%
Commercial and business lending	7,998,126		7,657,896		4	%	7,201,902		7,361,724		7,416,336		8	%
Commercial real estate—investor	3,996,415		4,077,671		(2	)%	3,315,254		3,345,536		3,329,585		20	%
Real estate construction	1,487,159		1,579,778		(6	)%	1,451,684		1,552,135		1,651,805		(10	)%
Commercial real estate lending	5,483,574		5,657,449		(3	)%	4,766,938		4,897,671		4,981,390		10	%
Total commercial	13,481,700		13,315,345		1	%	11,968,840		12,259,395		12,397,726		9	%
Residential mortgage	8,207,253		8,197,223		—	%	7,546,534		7,408,471		7,115,457		15	%
Home equity	911,363		923,470		(1	)%	883,804		890,130		897,111		2	%
Other consumer	376,470		374,453		1	%	385,813		373,464		372,775		1	%
Total consumer	9,495,086		9,495,146		—	%	8,816,151		8,672,065		8,385,343		13	%
Total loans	$	22,976,786	$	22,810,491	1	%	$	20,784,991	$	20,931,460	$	20,783,069	11	%
Purchased credit-impaired loans	$	15,900	$	14,838	7	%	$	—	$	—	$	—	N/M
Period end deposit and customer funding composition ⁽⁴⁾	Jun 30, 2018		Mar 31, 2018		Seql Qtr % Change		Dec 31, 2017		Sep 30, 2017		Jun 30, 2017		Comp Qtr % Change
Noninterest-bearing demand	$	5,341,361	$	5,458,473	(2	)%	$	5,478,416	$	5,177,734	$	5,038,162	6	%
Savings	1,887,777		1,883,638		—	%	1,524,992		1,544,037		1,552,820		22	%
Interest-bearing demand	4,650,407		4,719,566		(1	)%	4,603,157		4,990,891		3,858,739		21	%
Money market	9,208,993		9,086,553		1	%	8,830,328		8,299,512		9,228,129		—	%
Brokered CDs	228,029		44,503		N/M		18,609		3,554		131,184		74	%
Other time	2,499,747		2,632,869		(5	)%	2,330,460		2,317,723		1,809,146		38	%
Total deposits	23,816,314		23,825,602		—	%	22,785,962		22,333,451		21,618,180		10	%
Customer funding ⁽¹⁾	235,804		297,289		(21	)%	250,332		324,042		360,131		(35	)%
Total deposits and customer funding	$	24,052,118	$	24,122,891	—	%	$	23,036,294	$	22,657,493	$	21,978,311	9	%
Network transaction deposits ⁽²⁾	$	2,094,670	$	2,244,739	(7	)%	$	2,520,968	$	2,622,787	$	3,220,956	(35	)%
Net deposits and customer funding (Total deposits and customer funding, excluding Brokered CDs and network transaction deposits)	$	21,729,419	$	21,833,649	—	%	$	20,496,717	$	20,031,152	$	18,626,171	17	%

Quarter average loan composition⁽³⁾	Jun 30, 2018		Mar 31, 2018		Seql Qtr % Change		Dec 31, 2017		Sep 30, 2017		Jun 30, 2017		Comp Qtr % Change
Commercial and industrial	$	6,804,311	$	6,449,898	5	%	$	6,366,626	$	6,487,378	$	6,449,250	6	%
Commercial real estate—owner occupied	892,746		863,723		3	%	811,758		831,216		872,273		2	%
Commercial and business lending	7,697,057		7,313,621		5	%	7,178,384		7,318,594		7,321,523		5	%
Commercial real estate—investor	4,117,675		3,866,286		7	%	3,369,785		3,346,669		3,359,817		23	%
Real estate construction	1,588,141		1,533,143		4	%	1,504,104		1,626,767		1,604,440		(1	)%
Commercial real estate lending	5,705,817		5,399,429		6	%	4,873,889		4,973,436		4,964,257		15	%
Total commercial	13,402,874		12,713,050		5	%	12,052,273		12,292,030		12,285,780		9	%
Residential mortgage	8,237,457		8,010,381		3	%	7,546,288		7,339,827		6,957,865		18	%
Home equity	990,590		972,918		2	%	885,235		894,596		906,208		9	%
Other consumer	374,508		382,180		(2	)%	379,820		372,684		372,137		1	%
Total consumer	9,602,555		9,365,479		3	%	8,811,343		8,607,107		8,236,210		17	%
Total loans	$	23,005,428	$	22,078,529	4	%	$	20,863,616	$	20,899,137	$	20,521,990	12	%

Quarter average deposit composition⁽⁴⁾	Jun 30, 2018		Mar 31, 2018		Seql Qtr % Change		Dec 31, 2017		Sep 30, 2017		Jun 30, 2017		Comp Qtr % Change
Noninterest-bearing demand	$	5,131,894	$	5,084,957	1	%	$	5,133,977	$	4,992,118	$	4,892,271	5	%
Savings	1,892,808		1,722,665		10	%	1,554,639		1,545,884		1,541,129		23	%
Interest-bearing demand	4,735,514		4,503,974		5	%	4,168,550		3,993,275		3,824,759		24	%
Money market	7,190,178		7,215,329		—	%	6,520,052		6,617,185		6,135,222		17	%
Network transaction deposits	2,130,854		2,408,681		(12	)%	2,517,737		3,104,997		3,377,513		(37	)%
Time deposits	2,565,001		2,715,292		(6	)%	2,354,828		2,187,986		1,752,255		46	%
Total deposits	$	23,646,250	$	23,650,898	—	%	$	22,249,783	$	22,441,445	$	21,523,149	10	%

N/M = Not meaningful

Numbers may not sum due to rounding.


(1)	Includes repurchase agreements and commercial paper.

(2) Included above in interest-bearing demand and money market.

(3) On February 1, 2018, the Corporation acquired Bank Mutual and added $1.9 billion of loans.

(4) On February 1, 2018, the Corporation acquired Bank Mutual and assumed $1.8 billion of deposits.

Page 9



Associated Banc-Corp Non-GAAP Financial Measures Reconciliation
(In millions, except per share data)	YTD Jun 2018			YTD Jun 2017			2Q18			1Q18			4Q17			3Q17			2Q17
Tangible common equity reconciliation ⁽¹⁾
Common equity							$	3,611		$	3,553		$	3,078		$	3,044		$	3,032
Goodwill and other intangible assets, net							(1,247		)	(1,233		)	(992		)	(986		)	(987		)
Tangible common equity							$	2,364		$	2,320		$	2,086		$	2,058		$	2,045
Tangible assets reconciliation ⁽¹⁾
Total assets							$	33,653		$	33,367		$	30,484		$	30,065		$	29,769
Goodwill and other intangible assets, net							(1,247		)	(1,233		)	(992		)	(986		)	(987		)
Tangible assets							$	32,406		$	32,134		$	29,492		$	29,079		$	28,782
Average tangible common equity and average common equity tier 1 reconciliation⁽¹⁾
Common equity	$	3,470		$	2,985		$	3,561		$	3,377		$	3,056		$	3,025		$	3,005
Goodwill and other intangible assets, net	(1,172		)	(987		)	(1,236		)	(1,108		)	(992		)	(986		)	(987		)
Tangible common equity	2,298			1,998			2,325			2,269			2,064			2,039			2,018
Less: Accumulated other comprehensive income / loss	103			52			117			89			62			49			50
Less: Deferred tax assets / deferred tax liabilities, net	38			31			47			32			29			32			32
Average common equity Tier 1	$	2,439		$	2,081		$	2,489		$	2,390		$	2,155		$	2,120		$	2,100
Selected Trend Information ⁽²⁾
Insurance commissions and fees							$	24		$	23		$	19		$	20		$	21
Service charges and deposit account fees							16			16			16			16			16
Card-based and loan fees							14			13			14			13			14
Trust and asset management fees							13			13			13			13			12
Brokerage commissions and fees							7			7			7			4			4
Fee-based revenue							75			73			69			66			67
Other							18			17			16			20			15
Total noninterest income							$	93		$	90		$	85		$	86		$	82
Selected equity and performance ratios ^{(1) (3)}
Tangible common equity / tangible assets							7.29		%	7.22		%	7.07		%	7.08		%	7.11		%
Return on average equity	8.81		%	7.33		%	9.61		%	7.96		%	6.17		%	8.10		%	7.35		%
Return on average tangible common equity	13.51		%	11.06		%	14.98		%	11.99		%	9.16		%	12.20		%	11.06		%
Return on average common equity Tier 1	12.73		%	10.62		%	14.00		%	11.39		%	8.77		%	11.73		%	10.63		%
Efficiency ratio reconciliation ⁽⁴⁾
Federal Reserve efficiency ratio	68.18		%	66.54		%	65.77		%	70.76		%	66.93		%	63.92		%	66.69		%
Fully tax-equivalent adjustment	(0.66		)%	(1.30		)%	(0.65		)%	(0.66		)%	(1.30		)%	(1.21		)%	(1.30		)%
Other intangible amortization	(0.59		)%	(0.19		)%	(0.68		)%	(0.51		)%	(0.18		)%	(0.16		)%	(0.18		)%
Fully tax-equivalent efficiency ratio	66.94		%	65.05		%	64.45		%	69.60		%	65.45		%	62.55		%	65.21		%
Acquisition related costs adjustment	(4.42		)%	—		%	(2.19		)%	(6.60		)%	—		%	—		%	—		%
Fully tax-equivalent efficiency ratio, excluding acquisition related costs	62.52		%	65.05		%	62.26		%	63.00		%	65.45		%	62.55		%	65.21		%

Acquisition Related Costs	YTD 2018			YTD 2018 per share data⁽⁶⁾			2Q 2018			2Q 2018 per share data⁽⁶⁾			1Q 2018			1Q 2018 per share data⁽⁶⁾
GAAP earnings	$	154		$	0.90		$	87		$	0.50		$	67		$	0.40
Change of control and severance	7						(1		)				7
Merger advisors and consultants	4						—						4
Facilities and other	7						2						5
Contract terminations and conversion costs	10						6						5
Total acquisition related costs	$	28					$	7					$	21
Less additional tax expense	$	6					$	1					$	5
Earnings, excluding acquisition related costs ⁽⁵⁾	$	176		$	1.03		$	93		$	0.53		$	83		$	0.50

Numbers may not sum due to rounding.


(1)	The ratio tangible common equity to tangible assets excludes goodwill and other intangible assets, net. This financial measure has been included as it is considered to be a critical metric with which to analyze and evaluate financial condition and capital strength.


(2)	These financial measures have been included as they provide meaningful supplemental information to assess trends in the Corporation’s results of operations.


(3)	These capital measurements are used by management, regulators, investors, and analysts to assess, monitor and compare the quality and composition of our capital with the capital of other financial services companies.

(4)

The efficiency ratio as defined by the Federal Reserve guidance is noninterest expense (which includes the provision for unfunded commitments) divided by the sum of net interest income plus noninterest income, excluding investment securities gains / losses, net. The fully tax-equivalent efficiency ratio is noninterest expense (which includes the provision for unfunded commitments), excluding other intangible amortization, divided by the sum of fully tax-equivalent net interest income plus noninterest income, excluding investment securities gains / losses, net. Management believes the fully tax-equivalent efficiency ratio, which adjusts net interest income for the tax-favored status of certain loans and investment securities, to be the preferred industry measurement as it enhances the comparability of net interest income arising from taxable and tax-exempt sources.


(5)	This is a non-GAAP financial measure. Management believes these measures are meaningful because they reflect adjustments commonly made by management, investors, regulators, and analysts to evaluate the adequacy of earnings per common share and provide greater understanding of ongoing operations and enhanced comparability of results with prior periods.


(6)	Earnings and per share data presented after-tax.

Page 10

Attached files

Stock widget

Investing forum

ASSOCIATED BANC-CORP Reports