Exhibit 99.1
NEWS RELEASE Investor Contact: Robb Timme, Senior Vice President, Director of Investor Relations 920-491-7059 Media Contact: Jennifer Kaminski, Vice President, Public Relations Senior Manager 920-491-7576 |
Associated Banc-Corp Reports Second Quarter 2019 Earnings of $0.49 Per Common Share,
or $0.51 Per Common Share Excluding $4 million in Acquisition Related Costs1,
Year-to-Date Earnings Per Share up 10% from Prior Year
GREEN BAY, Wis. -- July 25, 2019 -- Associated Banc-Corp (NYSE: ASB) ("Associated" or "Company") today reported net income available to common equity ("earnings") of $81 million, or $0.49 per common share for the quarter ended June 30, 2019. These amounts compare to net income available to common equity of $87 million, or $0.50 per common share for the quarter ended June 30, 2018. Year to date earnings were $0.99 per share compared to $0.90 per share in the same period last year.
“Our commercial and business lending remained strong in the second quarter and, as anticipated, our commercial real estate portfolio has returned to growth. Our results were also aided by improved fee income, driven by mortgage banking and capital markets fees," said President and CEO Philip B. Flynn. "We completed the Huntington Bank branch acquisition in June and expect these deposits, along with our efforts to reposition other funding sources, will result in stable to improving net interest margin for the balance of the year."
SECOND QUARTER 2019 SUMMARY (all comparisons to the second quarter of 2018)
• | Average loans of $23.4 billion were up 2%, or $349 million |
• | Average deposits of $25.1 billion were up 6%, or $1.4 billion |
• | Net interest income of $214 million decreased $13 million, or 6% |
• | Net interest margin of 2.87% declined 15 basis points from 3.02% |
• | Provision for credit losses of $8 million increased $4 million |
• | Noninterest income of $96 million increased 3%, or $3 million |
• | Noninterest expense of $198 million was down 6%, or $13 million |
• | Income before income taxes was essentially unchanged |
• | During the quarter, the Company repurchased nearly 2 million shares, or $40 million, of common stock |
• | Total dividends paid per common share were $0.17, up 13% |
• | Return on average common equity Tier 1 decreased to 13.1% from 14.0% |
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 2019 average loans of $23.4 billion were up $349 million, or 2%, from the year ago quarter, and were up $251 million from the first quarter driven by increased commercial and business lending.
With respect to second quarter 2019 average balances by loan category:
• | Commercial and business lending increased $925 million from the year ago quarter and increased $245 million from the first quarter to $8.6 billion. General commercial lending and power & utilities specialized lending drove the increase from the year ago quarter. |
• | Consumer lending decreased $1 million from the year ago quarter and decreased $8 million from the first quarter to $9.6 billion. |
• | Commercial real estate lending decreased $575 million from the year ago quarter to $5.1 billion. However, CRE increased $13 million from the first quarter as strong production outpaced paydown activity. |
Investments
Second quarter 2019 average investment securities of $6.5 billion were managed lower by $549 million, or 8% from the year ago quarter, and were down $356 million compared to the first quarter as the company used its investment portfolio as a source of funds during the quarter and sought to reposition its investments for a stable to declining rate environment.
• | Taxable securities decreased $995 million from the year ago quarter and decreased $455 million from the first quarter as lower yielding, primarily mortgage backed securities were sold. Losses realized on the sales were mitigated by gains on equity securities. |
• | Tax-exempt securities increased $446 million from the year ago quarter and increased $98 million from the first quarter. |
Deposits
Second quarter 2019 average deposits of $25.1 billion were up $1.4 billion, or 6% from the year ago quarter and were up $525 million compared to the first quarter. During the quarter, the Company reduced its higher-cost deposits in anticipation of the approximately $730 million in lower-cost deposits received in the Huntington transaction in late June.
With respect to second quarter 2019 average balances by deposit category:
• | Time deposits increased $979 million from the year ago quarter and increased $422 million from the first quarter to $3.5 billion. |
• | Savings increased $427 million from the year ago quarter and increased $221 million from the first quarter to $2.3 billion. |
• | Interest-bearing demand deposits increased $249 million from the year ago quarter and increased $245 million from the first quarter to $5.0 billion. |
• | Noninterest-bearing demand deposits decreased $42 million from the year ago quarter, but increased $107 million from the first quarter to $5.1 billion. |
• | Money market deposits decreased $72 million from the year ago quarter and decreased $270 million from the first quarter to $7.1 billion. |
• | Network transaction deposits decreased $106 million from the year ago quarter and decreased $200 million from the first quarter to $2.0 billion. |
Net Interest Income and Net Interest Margin
Second quarter 2019 net interest income of $214 million was down 6%, or $13 million, while the net interest margin decreased 15 basis points to 2.87% from the year ago quarter, primarily due to lower prepayments and accretion related to the Bank Mutual acquisition. Second quarter 2019 net interest income decreased 1%, or $2 million, and the net interest margin decreased 3 basis points from the prior quarter, driven by compression in LIBOR rates.
• | The average yield on total commercial loans for the second quarter of 2019 increased 19 basis points to 4.94% from the year ago quarter, but decreased 4 basis points from the prior quarter. |
• | The average cost of total interest-bearing deposits for the second quarter of 2019 increased 52 basis points to 1.35% from the year ago quarter and increased 5 basis points from the prior quarter. |
• | The net free funds benefit, which is the net margin increase from noninterest-bearing deposits, increased 9 basis points in the second quarter of 2019 compared to the year ago quarter and increased 1 basis point from the prior quarter. |
Noninterest Income
Second quarter 2019 total noninterest income of $96 million increased $3 million from the year ago quarter and increased $5 million from the prior quarter.
With respect to second quarter 2019 noninterest income line items:
• | Mortgage banking revenues were up $3 million from the year ago quarter and were up $5 million from the previous quarter. |
• | Capital markets fees were essentially unchanged from the year ago quarter but were up $2 million from the previous quarter. |
• | Insurance commissions and fees were down $1 million from the year ago quarter and were down $2 million from the previous quarter as timing of contingency fees enhanced results in the first quarter of 2019. |
Noninterest Expense
Second quarter 2019 total noninterest expense of $198 million decreased 6%, or $13 million from the year ago quarter, but increased $6 million from the prior quarter. The year ago quarter included $7 million of Bank Mutual acquisition related costs while the current quarter and prior quarter included $4 million and $1 million of Huntington branch acquisition related costs, respectively.
With respect to second quarter 2019 noninterest expense line items:
• | Personnel expense decreased $1 million from the year ago quarter, and increased $3 million from the prior quarter due primarily to severance costs and increased commissions expense. |
• | Occupancy expense decreased $1 million from the year ago quarter, and decreased $3 million from the prior quarter due primarily to lower snow removal expense. |
• | Technology expense increased $1 million from the year ago quarter and the prior quarter as the company continued to make investments to enhance its online and mobile product offerings. |
• | The Company's FDIC assessment decreased $4 million from the year ago quarter with the removal of the FDIC surcharge but increased $1 million from the prior quarter due to loan growth. |
Taxes
The second quarter 2019 effective tax rate was 18% compared to 14% in the year ago quarter and 21% in the prior quarter. The lower effective tax rates in the current quarter and in the year ago quarter were due to one-time tax benefits; in the current quarter the Company contributed appreciated stock to its charitable trust and in the second quarters of 2018 and 2019 the Company received tax benefits from implementing tax planning strategies to maximize the positive impact of the Tax Cut and Jobs Act. Going forward, the company expects its tax rate to be approximately 21% for full-year 2019.
Credit
The second quarter 2019 provision for credit losses was $8 million, up from $4 million in the year ago quarter and up from $6 million in the prior quarter. With respect to second quarter 2019 credit quality:
• | Potential problem loans of $166 million were down $76 million from both the year ago quarter and the prior quarter. |
• | Nonaccrual loans of $167 million were down $38 million from the year ago quarter, but were up $11 million from the prior quarter. The nonaccrual loans to total loans ratio was 0.72% in the second quarter, compared to 0.89% in the year ago quarter and 0.67% in the prior quarter. |
• | Other real estate owned (OREO) of $18 million was down $9 million from the year ago quarter, which was elevated due to pending Bank Mutual branch dispositions. OREO was up $6 million from the prior quarter due to the pending disposition of recently consolidated branches related to the Huntington branch acquisition. |
• | Net charge offs of $13 million were up $5 million from the year ago quarter and up $6 million from the prior quarter. |
• | The allowance for loan losses of $234 million was down $19 million from the year ago quarter and was down $1 million from the prior quarter. The allowance for loan losses to total loans ratio was 1.00% in the second quarter of 2019, compared to 1.10% in the year ago quarter, and 1.02% in the prior quarter. |
Capital
The Company’s capital position remains strong, with a CET1 capital ratio of 10.1% at June 30, 2019. 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 nearly 2 million shares, or $40 million, of common stock at an average price of $22.57 per share.
SECOND QUARTER 2019 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 25, 2019. 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 2019 earnings call. The second quarter 2019 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 $33 billion and is one of the top 50 publicly traded U.S. bank holding companies. Headquartered in Green Bay, Wisconsin, Associated is a leading Midwest banking franchise, offering a full range of financial products and services from more than 240 banking locations serving more than 120 communities throughout Wisconsin, Illinois and Minnesota, and commercial financial services in Indiana, Michigan, Missouri, Ohio and Texas. Associated Bank, N.A. is an Equal Housing Lender, Equal Opportunity Lender and Member FDIC. More information about Associated Banc-Corp is available at www.associatedbank.com.
FORWARD-LOOKING STATEMENTS
Statements made in this document which are not purely historical are forward-looking statements, as defined in the Private Securities Litigation Reform Act of 1995. This includes any statements regarding management’s plans, objectives, or goals for future operations, products or services, and forecasts of its revenues, earnings, or other measures of performance. Such forward-looking statements may be identified by the use of words such as “believe,” “expect,” “anticipate,” “plan,” “estimate,” “should,” “will,” “intend,” "target," “outlook,” or similar expressions. Forward-looking statements are based on current management expectations and, by their nature, are subject to risks and uncertainties. Actual results may differ materially from those contained in the forward-looking statements. Factors which may cause actual results to differ materially from those contained in such forward-looking statements include those identified in the Company’s most recent Form 10-K and subsequent SEC filings. Such factors are incorporated herein by reference.
NON-GAAP FINANCIAL MEASURES
This press release and related materials may contain references to measures which are not defined in generally accepted accounting principles (“GAAP”). Information concerning these non-GAAP financial measures can be found in the financial tables. Management believes these measures are meaningful because they reflect adjustments commonly made by management, investors, regulators, and analysts to evaluate the adequacy of earnings per common share, provide a greater understanding of ongoing operations and enhance comparability of results with prior periods.
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Associated Banc-Corp Consolidated Balance Sheets (Unaudited) | |||||||||||||||||||||
($ in thousands) | Jun 30, 2019 | Mar 31, 2019 | Seql Qtr $ Change | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Comp Qtr $ Change | ||||||||||||||
Assets | |||||||||||||||||||||
Cash and due from banks | $ | 382,985 | $ | 334,095 | $ | 48,890 | $ | 507,187 | $ | 374,168 | $ | 396,761 | $ | (13,776 | ) | ||||||
Interest-bearing deposits in other financial institutions | 172,708 | 270,843 | (98,135 | ) | 221,226 | 147,848 | 71,462 | 101,246 | |||||||||||||
Federal funds sold and securities purchased under agreements to resell | 1,385 | 41,405 | (40,020 | ) | 148,285 | 24,325 | 3,150 | (1,765 | ) | ||||||||||||
Investment securities held to maturity, at amortized cost | 2,806,064 | 2,846,689 | (40,625 | ) | 2,740,511 | 2,661,755 | 2,602,247 | 203,817 | |||||||||||||
Investment securities available for sale, at fair value | 3,283,456 | 3,829,388 | (545,932 | ) | 3,946,941 | 4,052,624 | 4,260,037 | (976,581 | ) | ||||||||||||
Equity securities | 15,066 | 1,609 | 13,457 | 1,568 | 1,573 | 1,613 | 13,453 | ||||||||||||||
Federal Home Loan Bank and Federal Reserve Bank stocks, at cost | 202,758 | 216,940 | (14,182 | ) | 250,534 | 220,825 | 249,040 | (46,282 | ) | ||||||||||||
Residential loans held for sale | 129,303 | 81,392 | 47,911 | 64,321 | 134,361 | 143,022 | (13,719 | ) | |||||||||||||
Commercial loans held for sale | 11,000 | 15,467 | (4,467 | ) | 14,943 | 30,452 | — | 11,000 | |||||||||||||
Loans | 23,249,967 | 23,148,359 | 101,608 | 22,940,429 | 22,867,112 | 22,976,786 | 273,181 | ||||||||||||||
Allowance for loan losses | (233,659 | ) | (235,081 | ) | 1,422 | (238,023 | ) | (236,250 | ) | (252,601 | ) | 18,942 | |||||||||
Loans, net | 23,016,308 | 22,913,278 | 103,030 | 22,702,406 | 22,630,861 | 22,724,184 | 292,124 | ||||||||||||||
Bank and corporate owned life insurance | 668,638 | 665,976 | 2,662 | 663,203 | 661,009 | 659,592 | 9,046 | ||||||||||||||
Investment in unconsolidated subsidiaries | 222,812 | 194,670 | 28,142 | 161,181 | 156,878 | 161,676 | 61,136 | ||||||||||||||
Premises and equipment (a) | 432,058 | 411,040 | 21,018 | 363,225 | 358,926 | 361,385 | 70,673 | ||||||||||||||
Goodwill | 1,176,019 | 1,168,944 | 7,075 | 1,169,023 | 1,168,922 | 1,166,665 | 9,354 | ||||||||||||||
Mortgage servicing rights, net | 66,175 | 66,626 | (451 | ) | 68,193 | 67,872 | 66,980 | (805 | ) | ||||||||||||
Other intangible assets, net | 93,915 | 73,610 | 20,305 | 75,836 | 78,069 | 80,346 | 13,569 | ||||||||||||||
Other assets (a) | 591,976 | 568,894 | 23,082 | 549,274 | 718,534 | 704,484 | (112,508 | ) | |||||||||||||
Total assets | $ | 33,272,628 | $ | 33,700,866 | $ | (428,238 | ) | $ | 33,647,859 | $ | 33,489,002 | $ | 33,652,647 | $ | (380,019 | ) | |||||
Liabilities and stockholders’ equity | |||||||||||||||||||||
Noninterest-bearing demand deposits | $ | 5,354,987 | $ | 5,334,154 | $ | 20,833 | $ | 5,698,530 | $ | 5,421,270 | $ | 5,341,361 | $ | 13,626 | |||||||
Interest-bearing deposits | 19,919,235 | 20,198,903 | (279,668 | ) | 19,198,863 | 19,410,342 | 18,474,953 | 1,444,282 | |||||||||||||
Total deposits | 25,274,222 | 25,533,057 | (258,835 | ) | 24,897,393 | 24,831,612 | 23,816,314 | 1,457,908 | |||||||||||||
Federal funds purchased and securities sold under agreements to repurchase | 83,195 | 127,098 | (43,903 | ) | 111,651 | 166,556 | 203,733 | (120,538 | ) | ||||||||||||
Commercial paper | 28,787 | 32,019 | (3,232 | ) | 45,423 | 43,604 | 52,791 | (24,004 | ) | ||||||||||||
FHLB advances | 2,742,941 | 2,944,769 | (201,828 | ) | 3,574,371 | 3,332,655 | 4,797,857 | (2,054,916 | ) | ||||||||||||
Other long-term funding | 796,403 | 796,007 | 396 | 795,611 | 795,215 | 497,619 | 298,784 | ||||||||||||||
Accrued expenses and other liabilities | 447,286 | 432,047 | 15,239 | 442,522 | 522,321 | 514,087 | (66,801 | ) | |||||||||||||
Total liabilities | 29,372,835 | 29,864,996 | (492,161 | ) | 29,866,971 | 29,691,963 | 29,882,403 | (509,568 | ) | ||||||||||||
Stockholders’ equity | |||||||||||||||||||||
Preferred equity | 256,716 | 256,716 | — | 256,716 | 256,716 | 159,401 | 97,315 | ||||||||||||||
Common equity | |||||||||||||||||||||
Common stock | 1,752 | 1,752 | — | 1,752 | 1,752 | 1,751 | 1 | ||||||||||||||
Surplus | 1,695,715 | 1,689,792 | 5,923 | 1,712,615 | 1,709,078 | 1,704,587 | (8,872 | ) | |||||||||||||
Retained earnings | 2,288,909 | 2,235,824 | 53,085 | 2,181,414 | 2,128,490 | 2,070,872 | 218,037 | ||||||||||||||
Accumulated other comprehensive income (loss) | (59,063 | ) | (103,375 | ) | 44,312 | (124,972 | ) | (135,520 | ) | (119,888 | ) | 60,825 | |||||||||
Treasury stock, at cost | (284,235 | ) | (244,840 | ) | (39,395 | ) | (246,638 | ) | (163,478 | ) | (46,479 | ) | (237,756 | ) | |||||||
Total common equity | 3,643,077 | 3,579,153 | 63,924 | 3,524,171 | 3,540,322 | 3,610,843 | 32,234 | ||||||||||||||
Total stockholders’ equity | 3,899,794 | 3,835,870 | 63,924 | 3,780,888 | 3,797,038 | 3,770,244 | 129,550 | ||||||||||||||
Total liabilities and stockholders’ equity | $ | 33,272,628 | $ | 33,700,866 | $ | (428,238 | ) | $ | 33,647,859 | $ | 33,489,002 | $ | 33,652,647 | $ | (380,019 | ) |
Numbers may not sum due to rounding.
(a) During the second quarter of 2019, the Corporation reclassified operating leases from Other Assets to Premises and Equipment. March 31, 2019 balances were restated for comparability.
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Associated Banc-Corp Consolidated Statements of Income (Unaudited) | |||||||||||||||||||||||||||||
($ in thousands, except per share data) | Comp Qtr | YTD | YTD | Comp YTD | |||||||||||||||||||||||||
2Q19 | 2Q18 | $ Change | % Change | Jun 2019 | Jun 2018 | $ Change | % Change | ||||||||||||||||||||||
Interest income | |||||||||||||||||||||||||||||
Interest and fees on loans | $ | 260,784 | $ | 246,646 | $ | 14,138 | 6 | % | $ | 519,637 | $ | 466,680 | $ | 52,957 | 11 | % | |||||||||||||
Interest and dividends on investment securities | |||||||||||||||||||||||||||||
Taxable | 26,710 | 30,623 | (3,913 | ) | (13 | )% | 55,764 | 60,727 | (4,963 | ) | (8 | )% | |||||||||||||||||
Tax-exempt | 14,643 | 10,783 | 3,860 | 36 | % | 28,459 | 20,000 | 8,459 | 42 | % | |||||||||||||||||||
Other interest | 3,995 | 3,153 | 842 | 27 | % | 8,221 | 5,330 | 2,891 | 54 | % | |||||||||||||||||||
Total interest income | 306,133 | 291,205 | 14,928 | 5 | % | 612,081 | 552,737 | 59,344 | 11 | % | |||||||||||||||||||
Interest expense | |||||||||||||||||||||||||||||
Interest on deposits | 67,050 | 38,431 | 28,619 | 74 | % | 129,823 | 71,843 | 57,980 | 81 | % | |||||||||||||||||||
Interest on federal funds purchased and securities sold under agreements to repurchase | 286 | 538 | (252 | ) | (47 | )% | 913 | 1,060 | (147 | ) | (14 | )% | |||||||||||||||||
Interest on other short-term funding | 37 | 51 | (14 | ) | (27 | )% | 88 | 111 | (23 | ) | (21 | )% | |||||||||||||||||
Interest on FHLB advances | 17,744 | 21,279 | (3,535 | ) | (17 | )% | 37,298 | 34,402 | 2,896 | 8 | % | ||||||||||||||||||
Interest on long-term funding | 7,396 | 4,544 | 2,852 | 63 | % | 14,792 | 9,088 | 5,704 | 63 | % | |||||||||||||||||||
Total interest expense | 92,513 | 64,843 | 27,670 | 43 | % | 182,914 | 116,504 | 66,410 | 57 | % | |||||||||||||||||||
Net interest income | 213,619 | 226,362 | (12,743 | ) | (6 | )% | 429,167 | 436,233 | (7,066 | ) | (2 | )% | |||||||||||||||||
Provision for credit losses | 8,000 | 4,000 | 4,000 | 100 | % | 14,000 | 4,000 | 10,000 | N/M | ||||||||||||||||||||
Net interest income after provision for credit losses | 205,619 | 222,362 | (16,743 | ) | (8 | )% | 415,167 | 432,233 | (17,066 | ) | (4 | )% | |||||||||||||||||
Noninterest income | |||||||||||||||||||||||||||||
Insurance commissions and fees | 22,985 | 23,996 | (1,011 | ) | (4 | )% | 48,449 | 46,644 | 1,805 | 4 | % | ||||||||||||||||||
Wealth management fees (a) | 20,691 | 20,333 | 358 | 2 | % | 40,870 | 40,975 | (105 | ) | — | % | ||||||||||||||||||
Service charges and deposit account fees | 15,426 | 16,390 | (964 | ) | (6 | )% | 30,542 | 32,810 | (2,268 | ) | (7 | )% | |||||||||||||||||
Card-based fees | 10,131 | 10,115 | 16 | — | % | 19,392 | 19,557 | (165 | ) | (1 | )% | ||||||||||||||||||
Other fee-based revenue | 5,178 | 4,272 | 906 | 21 | % | 9,161 | 8,252 | 909 | 11 | % | |||||||||||||||||||
Capital markets, net | 4,726 | 4,783 | (57 | ) | (1 | )% | 7,916 | 10,089 | (2,173 | ) | (22 | )% | |||||||||||||||||
Mortgage banking, net | 9,466 | 6,258 | 3,208 | 51 | % | 14,178 | 12,628 | 1,550 | 12 | % | |||||||||||||||||||
Bank and corporate owned life insurance | 3,352 | 3,978 | (626 | ) | (16 | )% | 7,144 | 7,165 | (21 | ) | — | % | |||||||||||||||||
Asset gains (losses), net (b) | 871 | 2,497 | (1,626 | ) | (65 | )% | 1,438 | 2,390 | (952 | ) | (40 | )% | |||||||||||||||||
Investment securities gains (losses), net | 463 | (2,015 | ) | 2,478 | N/M | 2,143 | (2,015 | ) | 4,158 | N/M | |||||||||||||||||||
Other | 2,547 | 2,235 | 312 | 14 | % | 5,807 | 4,727 | 1,080 | 23 | % | |||||||||||||||||||
Total noninterest income | 95,837 | 92,842 | 2,995 | 3 | % | 187,040 | 183,222 | 3,818 | 2 | % | |||||||||||||||||||
Noninterest expense | |||||||||||||||||||||||||||||
Personnel | 123,228 | 123,980 | (752 | ) | (1 | )% | 243,279 | 241,665 | 1,614 | 1 | % | ||||||||||||||||||
Technology | 20,114 | 19,452 | 662 | 3 | % | 39,126 | 37,167 | 1,959 | 5 | % | |||||||||||||||||||
Occupancy | 13,830 | 15,071 | (1,241 | ) | (8 | )% | 30,302 | 30,428 | (126 | ) | — | % | |||||||||||||||||
Business development and advertising | 6,658 | 7,067 | (409 | ) | (6 | )% | 13,293 | 13,760 | (467 | ) | (3 | )% | |||||||||||||||||
Equipment | 5,577 | 5,953 | (376 | ) | (6 | )% | 11,245 | 11,509 | (264 | ) | (2 | )% | |||||||||||||||||
Legal and professional | 4,668 | 6,284 | (1,616 | ) | (26 | )% | 8,619 | 11,697 | (3,078 | ) | (26 | )% | |||||||||||||||||
Card issuance costs | 1,290 | 2,412 | (1,122 | ) | (47 | )% | 2,266 | 4,744 | (2,478 | ) | (52 | )% | |||||||||||||||||
Loan costs | 952 | 761 | 191 | 25 | % | 2,316 | 1,733 | 583 | 34 | % | |||||||||||||||||||
Foreclosure / OREO expense, net | 924 | 1,021 | (97 | ) | (10 | )% | 1,491 | 1,744 | (253 | ) | (15 | )% | |||||||||||||||||
FDIC assessment | 4,500 | 8,250 | (3,750 | ) | (45 | )% | 8,250 | 16,500 | (8,250 | ) | (50 | )% | |||||||||||||||||
Other intangible amortization | 2,324 | 2,168 | 156 | 7 | % | 4,551 | 3,693 | 858 | 23 | % | |||||||||||||||||||
Acquisition related costs (c) | 3,734 | 7,107 | (3,373 | ) | (47 | )% | 4,366 | 27,712 | (23,346 | ) | (84 | )% | |||||||||||||||||
Other | 9,979 | 11,732 | (1,753 | ) | (15 | )% | 20,346 | 21,873 | (1,527 | ) | (7 | )% | |||||||||||||||||
Total noninterest expense | 197,779 | 211,258 | (13,479 | ) | (6 | )% | 389,450 | 424,223 | (34,773 | ) | (8 | )% | |||||||||||||||||
Income before income taxes | 103,678 | 103,947 | (269 | ) | — | % | 212,756 | 191,232 | 21,524 | 11 | % | ||||||||||||||||||
Income tax expense | 19,017 | 14,754 | 4,263 | 29 | % | 41,409 | 32,583 | 8,826 | 27 | % | |||||||||||||||||||
Net income | 84,661 | 89,192 | (4,531 | ) | (5 | )% | 171,347 | 158,648 | 12,699 | 8 | % | ||||||||||||||||||
Preferred stock dividends | 3,801 | 2,329 | 1,472 | 63 | % | 7,601 | 4,668 | 2,933 | 63 | % | |||||||||||||||||||
Net income available to common equity | $ | 80,860 | $ | 86,863 | $ | (6,003 | ) | (7 | )% | $ | 163,746 | $ | 153,980 | $ | 9,766 | 6 | % | ||||||||||||
Earnings per common share | |||||||||||||||||||||||||||||
Basic | $ | 0.49 | $ | 0.51 | $ | (0.02 | ) | (4 | )% | $ | 1.00 | $ | 0.92 | $ | 0.08 | 9 | % | ||||||||||||
Diluted | $ | 0.49 | $ | 0.50 | $ | (0.01 | ) | (2 | )% | $ | 0.99 | $ | 0.90 | $ | 0.09 | 10 | % | ||||||||||||
Average common shares outstanding | |||||||||||||||||||||||||||||
Basic | 162,180 | 170,633 | (8,453 | ) | (5 | )% | 163,049 | 167,096 | (4,047 | ) | (2 | )% | |||||||||||||||||
Diluted | 163,672 | 173,409 | (9,737 | ) | (6 | )% | 164,518 | 169,920 | (5,402 | ) | (3 | )% |
N/M = Not meaningful
Numbers may not sum due to rounding.
(a) Includes trust, asset management, brokerage, and annuity fees.
(b) | 2Q19 and YTD 2019 include less than $1 million of Huntington related asset losses; 2Q18 and YTD June 2018 include approximately $1 million of Bank Mutual acquisition related asset losses net of asset gains. |
(c) | Includes Bank Mutual and Huntington branch acquisition related costs only. |
Page 2
Associated Banc-Corp Consolidated Statements of Income (Unaudited) - Quarterly Trend | |||||||||||||||||||||||||||||||||
($ in thousands, except per share data) | Seql Qtr | Comp Qtr | |||||||||||||||||||||||||||||||
2Q19 | 1Q19 | $ Change | % Change | 4Q18 | 3Q18 | 2Q18 | $ Change | % Change | |||||||||||||||||||||||||
Interest income | |||||||||||||||||||||||||||||||||
Interest and fees on loans | $ | 260,784 | $ | 258,853 | $ | 1,931 | 1 | % | $ | 260,661 | $ | 249,649 | $ | 246,646 | $ | 14,138 | 6 | % | |||||||||||||||
Interest and dividends on investment securities | |||||||||||||||||||||||||||||||||
Taxable | 26,710 | 29,053 | (2,343 | ) | (8 | )% | 29,119 | 29,895 | 30,623 | (3,913 | ) | (13 | )% | ||||||||||||||||||||
Tax-exempt | 14,643 | 13,816 | 827 | 6 | % | 12,899 | 11,883 | 10,783 | 3,860 | 36 | % | ||||||||||||||||||||||
Other interest | 3,995 | 4,226 | (231 | ) | (5 | )% | 3,257 | 4,036 | 3,153 | 842 | 27 | % | |||||||||||||||||||||
Total interest income | 306,133 | 305,948 | 185 | — | % | 305,936 | 295,464 | 291,205 | 14,928 | 5 | % | ||||||||||||||||||||||
Interest expense | |||||||||||||||||||||||||||||||||
Interest on deposits | 67,050 | 62,773 | 4,277 | 7 | % | 54,159 | 50,116 | 38,431 | 28,619 | 74 | % | ||||||||||||||||||||||
Interest on federal funds purchased and securities sold under agreements to repurchase | 286 | 627 | (341 | ) | (54 | )% | 442 | 504 | 538 | (252 | ) | (47 | )% | ||||||||||||||||||||
Interest on other short-term funding | 37 | 51 | (14 | ) | (27 | )% | 36 | 38 | 51 | (14 | ) | (27 | )% | ||||||||||||||||||||
Interest on FHLB advances | 17,744 | 19,554 | (1,810 | ) | (9 | )% | 19,948 | 19,318 | 21,279 | (3,535 | ) | (17 | )% | ||||||||||||||||||||
Interest on long-term funding | 7,396 | 7,396 | — | — | % | 7,396 | 6,095 | 4,544 | 2,852 | 63 | % | ||||||||||||||||||||||
Total interest expense | 92,513 | 90,401 | 2,112 | 2 | % | 81,980 | 76,072 | 64,843 | 27,670 | 43 | % | ||||||||||||||||||||||
Net interest income | 213,619 | 215,547 | (1,928 | ) | (1 | )% | 223,955 | 219,392 | 226,362 | (12,743 | ) | (6 | )% | ||||||||||||||||||||
Provision for credit losses | 8,000 | 6,000 | 2,000 | 33 | % | 1,000 | (5,000 | ) | 4,000 | 4,000 | 100 | % | |||||||||||||||||||||
Net interest income after provision for credit losses | 205,619 | 209,547 | (3,928 | ) | (2 | )% | 222,955 | 224,392 | 222,362 | (16,743 | ) | (8 | )% | ||||||||||||||||||||
Noninterest income | |||||||||||||||||||||||||||||||||
Insurance commissions and fees | 22,985 | 25,464 | (2,479 | ) | (10 | )% | 21,232 | 21,636 | 23,996 | (1,011 | ) | (4 | )% | ||||||||||||||||||||
Wealth management fees (a) | 20,691 | 20,180 | 511 | 3 | % | 20,364 | 21,224 | 20,333 | 358 | 2 | % | ||||||||||||||||||||||
Service charges and deposit account fees | 15,426 | 15,115 | 311 | 2 | % | 16,361 | 16,904 | 16,390 | (964 | ) | (6 | )% | |||||||||||||||||||||
Card-based fees | 10,131 | 9,261 | 870 | 9 | % | 10,316 | 9,783 | 10,115 | 16 | — | % | ||||||||||||||||||||||
Other fee-based revenue | 5,178 | 3,983 | 1,195 | 30 | % | 5,260 | 4,307 | 4,272 | 906 | 21 | % | ||||||||||||||||||||||
Capital markets, net | 4,726 | 3,189 | 1,537 | 48 | % | 4,931 | 5,099 | 4,783 | (57 | ) | (1 | )% | |||||||||||||||||||||
Mortgage banking, net | 9,466 | 4,712 | 4,754 | 101 | % | 3,271 | 4,012 | 6,258 | 3,208 | 51 | % | ||||||||||||||||||||||
Bank and corporate owned life insurance | 3,352 | 3,792 | (440 | ) | (12 | )% | 3,247 | 3,540 | 3,978 | (626 | ) | (16 | )% | ||||||||||||||||||||
Asset gains (losses), net (b) | 871 | 567 | 304 | 54 | % | (2,456 | ) | (1,037 | ) | 2,497 | (1,626 | ) | (65 | )% | |||||||||||||||||||
Investment securities gains (losses), net | 463 | 1,680 | (1,217 | ) | (72 | )% | — | 30 | (2,015 | ) | 2,478 | N/M | |||||||||||||||||||||
Other | 2,547 | 3,260 | (713 | ) | (22 | )% | 1,522 | 2,802 | 2,235 | 312 | 14 | % | |||||||||||||||||||||
Total noninterest income | 95,837 | 91,202 | 4,635 | 5 | % | 84,046 | 88,300 | 92,842 | 2,995 | 3 | % | ||||||||||||||||||||||
Noninterest expense | |||||||||||||||||||||||||||||||||
Personnel | 123,228 | 120,050 | 3,178 | 3 | % | 116,535 | 124,476 | 123,980 | (752 | ) | (1 | )% | |||||||||||||||||||||
Technology | 20,114 | 19,012 | 1,102 | 6 | % | 17,944 | 17,563 | 19,452 | 662 | 3 | % | ||||||||||||||||||||||
Occupancy | 13,830 | 16,472 | (2,642 | ) | (16 | )% | 14,174 | 14,519 | 15,071 | (1,241 | ) | (8 | )% | ||||||||||||||||||||
Business development and advertising | 6,658 | 6,636 | 22 | — | % | 8,950 | 8,213 | 7,067 | (409 | ) | (6 | )% | |||||||||||||||||||||
Equipment | 5,577 | 5,668 | (91 | ) | (2 | )% | 5,897 | 5,838 | 5,953 | (376 | ) | (6 | )% | ||||||||||||||||||||
Legal and professional | 4,668 | 3,951 | 717 | 18 | % | 5,888 | 5,476 | 6,284 | (1,616 | ) | (26 | )% | |||||||||||||||||||||
Card issuance costs | 1,290 | 977 | 313 | 32 | % | 1,442 | 2,247 | 2,412 | (1,122 | ) | (47 | )% | |||||||||||||||||||||
Loan costs | 952 | 1,364 | (412 | ) | (30 | )% | 790 | 1,430 | 761 | 191 | 25 | % | |||||||||||||||||||||
Foreclosure / OREO expense, net | 924 | 567 | 357 | 63 | % | 909 | 950 | 1,021 | (97 | ) | (10 | )% | |||||||||||||||||||||
FDIC assessment | 4,500 | 3,750 | 750 | 20 | % | 5,750 | 7,750 | 8,250 | (3,750 | ) | (45 | )% | |||||||||||||||||||||
Other intangible amortization | 2,324 | 2,226 | 98 | 4 | % | 2,233 | 2,233 | 2,168 | 156 | 7 | % | ||||||||||||||||||||||
Acquisition related costs (c) | 3,734 | 632 | 3,102 | N/M | (981 | ) | 2,271 | 7,107 | (3,373 | ) | (47 | )% | |||||||||||||||||||||
Other | 9,979 | 10,366 | (387 | ) | (4 | )% | 13,632 | 11,445 | 11,732 | (1,753 | ) | (15 | )% | ||||||||||||||||||||
Total noninterest expense | 197,779 | 191,671 | 6,108 | 3 | % | 193,163 | 204,413 | 211,258 | (13,479 | ) | (6 | )% | |||||||||||||||||||||
Income before income taxes | 103,678 | 109,078 | (5,400 | ) | (5 | )% | 113,839 | 108,279 | 103,947 | (269 | ) | — | % | ||||||||||||||||||||
Income tax expense | 19,017 | 22,392 | (3,375 | ) | (15 | )% | 24,854 | 22,349 | 14,754 | 4,263 | 29 | % | |||||||||||||||||||||
Net income | 84,661 | 86,686 | (2,025 | ) | (2 | )% | 88,985 | 85,929 | 89,192 | (4,531 | ) | (5 | )% | ||||||||||||||||||||
Preferred stock dividends | 3,801 | 3,801 | — | — | % | 3,707 | 2,409 | 2,329 | 1,472 | 63 | % | ||||||||||||||||||||||
Net income available to common equity | $ | 80,860 | $ | 82,885 | $ | (2,025 | ) | (2 | )% | $ | 85,278 | $ | 83,521 | $ | 86,863 | $ | (6,003 | ) | (7 | )% | |||||||||||||
Earnings per common share | |||||||||||||||||||||||||||||||||
Basic | $ | 0.49 | $ | 0.50 | $ | (0.01 | ) | (2 | )% | $ | 0.52 | $ | 0.49 | $ | 0.51 | $ | (0.02 | ) | (4 | )% | |||||||||||||
Diluted | $ | 0.49 | $ | 0.50 | $ | (0.01 | ) | (2 | )% | $ | 0.51 | $ | 0.48 | $ | 0.50 | $ | (0.01 | ) | (2 | )% | |||||||||||||
Average common shares outstanding | |||||||||||||||||||||||||||||||||
Basic | 162,180 | 163,928 | (1,748 | ) | (1 | )% | 164,662 | 170,516 | 170,633 | (8,453 | ) | (5 | )% | ||||||||||||||||||||
Diluted | 163,672 | 165,433 | (1,761 | ) | (1 | )% | 166,394 | 172,802 | 173,409 | (9,737 | ) | (6 | )% |
N/M = Not meaningful
Numbers may not sum due to rounding.
(a) Includes trust, asset management, brokerage, and annuity fees.
(b) | 2Q19 includes less than $1 million of Huntington related asset losses; 3Q18 and 2Q18 include approximately $1 million of Bank Mutual acquisition related asset losses net of asset gains. |
(c) | Includes Bank Mutual and Huntington branch acquisition related costs only. |
Page 3
Associated Banc-Corp Selected Quarterly Information | |||||||||||||||||||||
($ in millions except per share data; shares repurchased and outstanding in thousands) | YTD Jun 2019 | YTD Jun 2018 | 2Q19 | 1Q19 | 4Q18 | 3Q18 | 2Q18 | ||||||||||||||
Per common share data | |||||||||||||||||||||
Dividends | $ | 0.34 | $ | 0.30 | $ | 0.17 | $ | 0.17 | $ | 0.17 | $ | 0.15 | $ | 0.15 | |||||||
Market value: | |||||||||||||||||||||
High | 23.67 | 28.85 | 23.15 | 23.67 | 26.55 | 28.35 | 28.85 | ||||||||||||||
Low | 19.77 | 23.60 | 19.81 | 19.77 | 18.72 | 26.00 | 24.20 | ||||||||||||||
Close | 21.14 | 27.30 | 21.14 | 21.35 | 19.79 | 26.00 | 27.30 | ||||||||||||||
Book value | 22.40 | 20.95 | 22.40 | 21.77 | 21.43 | 21.06 | 20.95 | ||||||||||||||
Tangible book value / share | 14.59 | 13.71 | 14.59 | 14.21 | 13.86 | 13.64 | 13.71 | ||||||||||||||
Performance ratios (annualized) | |||||||||||||||||||||
Return on average assets | 1.03 | % | 0.98 | % | 1.01 | % | 1.05 | % | 1.07 | % | 1.02 | % | 1.07 | % | |||||||
Effective tax rate | 19.46 | % | 17.04 | % | 18.34 | % | 20.53 | % | 21.83 | % | 20.64 | % | 14.19 | % | |||||||
Dividend payout ratio (a) | 34.00 | % | 32.61 | % | 34.69 | % | 34.00 | % | 32.69 | % | 30.61 | % | 29.41 | % | |||||||
Net interest margin | 2.89 | % | 2.97 | % | 2.87 | % | 2.90 | % | 3.02 | % | 2.92 | % | 3.02 | % | |||||||
Selected trend information | |||||||||||||||||||||
Average full time equivalent employees (b) | 4,663 | 4,715 | 4,666 | 4,660 | 4,659 | 4,707 | 4,792 | ||||||||||||||
Branch count | 247 | 233 | 236 | 236 | 237 | ||||||||||||||||
Assets under management, at market value (c) | $ | 11,475 | $ | 11,192 | $ | 10,291 | $ | 11,206 | $ | 10,776 | |||||||||||
Mortgage loans originated for sale during period | $ | 459 | $ | 516 | $ | 297 | $ | 163 | $ | 245 | $ | 331 | $ | 319 | |||||||
Mortgage loan settlements during period | $ | 432 | $ | 482 | $ | 272 | $ | 160 | $ | 305 | $ | 345 | $ | 294 | |||||||
Mortgage portfolio serviced for others | $ | 8,504 | $ | 8,543 | $ | 8,601 | $ | 8,547 | $ | 8,501 | |||||||||||
Mortgage servicing rights, net / mortgage portfolio serviced for others | 0.78 | % | 0.78 | % | 0.79 | % | 0.79 | % | 0.79 | % | |||||||||||
Shares repurchased during period | 3,063 | 1,357 | 1,754 | 1,308 | 3,764 | 4,349 | 249 | ||||||||||||||
Shares outstanding, end of period | 162,662 | 172,358 | 162,662 | 164,418 | 164,440 | 168,138 | 172,358 | ||||||||||||||
Selected quarterly ratios | |||||||||||||||||||||
Loans / deposits | 91.99 | % | 90.66 | % | 92.14 | % | 92.09 | % | 96.47 | % | |||||||||||
Stockholders’ equity / assets | 11.72 | % | 11.38 | % | 11.24 | % | 11.34 | % | 11.20 | % | |||||||||||
Risk-based capital (d) (e) | |||||||||||||||||||||
Total risk-weighted assets | $ | 24,490 | $ | 24,140 | $ | 23,875 | $ | 23,907 | $ | 24,059 | |||||||||||
Common equity Tier 1 | $ | 2,481 | $ | 2,485 | $ | 2,450 | $ | 2,475 | $ | 2,528 | |||||||||||
Common equity Tier 1 capital ratio | 10.13 | % | 10.29 | % | 10.26 | % | 10.35 | % | 10.51 | % | |||||||||||
Tier 1 capital ratio | 11.18 | % | 11.36 | % | 11.33 | % | 11.42 | % | 11.17 | % | |||||||||||
Total capital ratio | 13.24 | % | 13.46 | % | 13.47 | % | 13.56 | % | 13.36 | % | |||||||||||
Tier 1 leverage ratio | 8.49 | % | 8.49 | % | 8.48 | % | 8.43 | % | 8.32 | % | |||||||||||
Loans | |||||||||||||||||||||
Recorded investment on loans | $ | 23,180 | $ | 23,078 | $ | 22,872 | $ | 22,800 | $ | 22,916 | |||||||||||
Net unaccreted purchase discount on performing loans (f) | (16 | ) | (16 | ) | (18 | ) | (21 | ) | (26 | ) | |||||||||||
Net other deferred costs | 85 | 86 | 87 | 87 | 87 | ||||||||||||||||
Loans | $ | 23,250 | $ | 23,148 | $ | 22,940 | $ | 22,867 | $ | 22,977 |
Numbers may not sum due to rounding.
(a) | Ratio is based upon basic earnings per common share. |
(b) | Average full time equivalent employees without overtime. |
(c) | Excludes assets held in brokerage accounts. |
(d) | 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. |
(e) | June 30, 2019 data is estimated. |
(f) | Includes loans obtained from the acquisition of Bank Mutual and the Huntington branch acquisition. |
Page 4
Associated Banc-Corp Selected Asset Quality Information | |||||||||||||||||||||
($ in thousands) | Jun 30, 2019 | Mar 31, 2019 | Seql Qtr % Change | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Comp Qtr % Change | ||||||||||||||
Allowance for loan losses | |||||||||||||||||||||
Balance at beginning of period | $ | 235,081 | $ | 238,023 | (1 | )% | $ | 236,250 | $ | 252,601 | $ | 257,058 | (9 | )% | |||||||
Provision for loan losses | 12,000 | 4,500 | 167 | % | 2,000 | (4,000 | ) | 4,000 | N/M | ||||||||||||
Charge offs | (15,761 | ) | (15,486 | ) | 2 | % | (6,151 | ) | (17,304 | ) | (14,926 | ) | 6 | % | |||||||
Recoveries | 2,339 | 8,044 | (71 | )% | 5,923 | 4,953 | 6,470 | (64 | )% | ||||||||||||
Net charge offs | (13,421 | ) | (7,442 | ) | 80 | % | (228 | ) | (12,351 | ) | (8,456 | ) | 59 | % | |||||||
Balance at end of period | $ | 233,659 | $ | 235,081 | (1 | )% | $ | 238,023 | $ | 236,250 | $ | 252,601 | (7 | )% | |||||||
Allowance for unfunded commitments | |||||||||||||||||||||
Balance at beginning of period | $ | 25,836 | $ | 24,336 | 6 | % | $ | 25,336 | $ | 26,336 | $ | 26,336 | (2 | )% | |||||||
Provision for unfunded commitments | (4,000 | ) | 1,500 | N/M | (1,000 | ) | (1,000 | ) | — | N/M | |||||||||||
Amount recorded at acquisition | 70 | — | N/M | — | — | — | N/M | ||||||||||||||
Balance at end of period | $ | 21,907 | $ | 25,836 | (15 | )% | $ | 24,336 | $ | 25,336 | $ | 26,336 | (17 | )% | |||||||
Allowance for credit losses | $ | 255,566 | $ | 260,917 | (2 | )% | $ | 262,359 | $ | 261,586 | $ | 278,937 | (8 | )% | |||||||
Provision for credit losses | $ | 8,000 | $ | 6,000 | 33 | % | $ | 1,000 | $ | (5,000 | ) | $ | 4,000 | 100 | % | ||||||
($ in thousands) | Jun 30, 2019 | Mar 31, 2019 | Seql Qtr % Change | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Comp Qtr % Change | ||||||||||||||
Net charge offs | |||||||||||||||||||||
Commercial and industrial | $ | (12,177 | ) | $ | (7,428 | ) | 64 | % | $ | 2,974 | $ | (6,893 | ) | $ | (6,606 | ) | 84 | % | |||
Commercial real estate—owner occupied | (104 | ) | 1,193 | N/M | 282 | (252 | ) | 270 | N/M | ||||||||||||
Commercial and business lending | (12,281 | ) | (6,235 | ) | 97 | % | 3,256 | (7,145 | ) | (6,336 | ) | 94 | % | ||||||||
Commercial real estate—investor | 3 | 31 | (90 | )% | (2,107 | ) | (3,958 | ) | (1,189 | ) | N/M | ||||||||||
Real estate construction | 151 | — | N/M | 106 | (195 | ) | 48 | N/M | |||||||||||||
Commercial real estate lending | 153 | 31 | N/M | (2,001 | ) | (4,153 | ) | (1,141 | ) | N/M | |||||||||||
Total commercial | (12,127 | ) | (6,203 | ) | 96 | % | 1,255 | (11,298 | ) | (7,477 | ) | 62 | % | ||||||||
Residential mortgage | (365 | ) | (457 | ) | (20 | )% | (94 | ) | 5 | (135 | ) | 170 | % | ||||||||
Home equity | 239 | 309 | (23 | )% | (270 | ) | 200 | 140 | 71 | % | |||||||||||
Other consumer | (1,169 | ) | (1,090 | ) | 7 | % | (1,118 | ) | (1,258 | ) | (984 | ) | 19 | % | |||||||
Total consumer | (1,294 | ) | (1,239 | ) | 4 | % | (1,482 | ) | (1,053 | ) | (979 | ) | 32 | % | |||||||
Total net charge offs | $ | (13,421 | ) | $ | (7,442 | ) | 80 | % | $ | (228 | ) | $ | (12,351 | ) | $ | (8,456 | ) | 59 | % | ||
(In basis points) | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | ||||||||||||||||
Net charge offs to average loans (annualized) | |||||||||||||||||||||
Commercial and industrial | (64 | ) | (40 | ) | 16 | (39 | ) | (39 | ) | ||||||||||||
Commercial real estate—owner occupied | (4 | ) | 53 | 13 | (11 | ) | 12 | ||||||||||||||
Commercial and business lending | (57 | ) | (30 | ) | 16 | (36 | ) | (33 | ) | ||||||||||||
Commercial real estate—investor | — | — | (22 | ) | (40 | ) | (12 | ) | |||||||||||||
Real estate construction | 5 | — | 3 | (5 | ) | 1 | |||||||||||||||
Commercial real estate lending | 1 | — | (15 | ) | (30 | ) | (8 | ) | |||||||||||||
Total commercial | (35 | ) | (19 | ) | 4 | (34 | ) | (22 | ) | ||||||||||||
Residential mortgage | (2 | ) | (2 | ) | — | — | (1 | ) | |||||||||||||
Home equity | 11 | 14 | (12 | ) | 9 | 6 | |||||||||||||||
Other consumer | (132 | ) | (123 | ) | (121 | ) | (133 | ) | (105 | ) | |||||||||||
Total consumer | (5 | ) | (5 | ) | (6 | ) | (4 | ) | (4 | ) | |||||||||||
Total net charge offs | (23 | ) | (13 | ) | — | (21 | ) | (15 | ) | ||||||||||||
($ in thousands) | Jun 30, 2019 | Mar 31, 2019 | Seql Qtr % Change | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Comp Qtr % Change | ||||||||||||||
Credit Quality | |||||||||||||||||||||
Nonaccrual loans | $ | 166,707 | $ | 155,556 | 7 | % | $ | 127,901 | $ | 154,092 | $ | 204,460 | (18 | )% | |||||||
Other real estate owned (OREO) (a) | 18,355 | 12,286 | 49 | % | 11,984 | 25,653 | 27,207 | (33 | )% | ||||||||||||
Other nonperforming assets | — | — | N/M | — | 6,379 | 7,059 | (100 | )% | |||||||||||||
Total nonperforming assets | $ | 185,062 | $ | 167,843 | 10 | % | $ | 139,885 | $ | 186,124 | $ | 238,726 | (22 | )% | |||||||
Loans 90 or more days past due and still accruing | $ | 2,088 | $ | 2,218 | (6 | )% | $ | 2,165 | $ | 2,175 | $ | 1,839 | 14 | % | |||||||
Allowance for loan losses to loans | 1.00 | % | 1.02 | % | 1.04 | % | 1.03 | % | 1.10 | % | |||||||||||
Net unaccreted purchase discount to net purchased loans | 1.35 | % | 1.41 | % | 1.44 | % | 1.48 | % | 1.58 | % | |||||||||||
Allowance for loan losses to nonaccrual loans | 140.16 | % | 151.12 | % | 186.10 | % | 153.32 | % | 123.55 | % | |||||||||||
Nonaccrual loans to total loans | 0.72 | % | 0.67 | % | 0.56 | % | 0.67 | % | 0.89 | % | |||||||||||
Nonperforming assets to total loans plus OREO | 0.80 | % | 0.72 | % | 0.61 | % | 0.81 | % | 1.04 | % | |||||||||||
Nonperforming assets to total assets | 0.56 | % | 0.50 | % | 0.42 | % | 0.56 | % | 0.71 | % | |||||||||||
Year-to-date net charge offs to average loans (annualized) | 0.18 | % | 0.13 | % | 0.13 | % | 0.18 | % | 0.16 | % |
(a) | The increase from the first quarter 2019 was primarily driven by the pending disposition of recently consolidated branches as a result of the Huntington branch acquisition. The decrease from the second quarter 2018 was due to the sale of pending Bank Mutual branch dispositions during the fourth quarter of 2018. |
Page 5
Associated Banc-Corp Selected Asset Quality Information (continued) | |||||||||||||||||||||
(In thousands) | Jun 30, 2019 | Mar 31, 2019 | Seql Qtr % Change | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Comp Qtr % Change | ||||||||||||||
Nonaccrual loans | |||||||||||||||||||||
Commercial and industrial | $ | 84,151 | $ | 73,379 | 15 | % | $ | 41,021 | $ | 50,146 | $ | 81,776 | 3 | % | |||||||
Commercial real estate—owner occupied | 571 | 890 | (36 | )% | 3,957 | 4,779 | 18,649 | (97 | )% | ||||||||||||
Commercial and business lending | 84,722 | 74,269 | 14 | % | 44,978 | 54,925 | 100,425 | (16 | )% | ||||||||||||
Commercial real estate—investor | 1,485 | 776 | 91 | % | 1,952 | 19,725 | 26,503 | (94 | )% | ||||||||||||
Real estate construction | 427 | 739 | (42 | )% | 979 | 1,154 | 1,544 | (72 | )% | ||||||||||||
Commercial real estate lending | 1,912 | 1,516 | 26 | % | 2,931 | 20,879 | 28,047 | (93 | )% | ||||||||||||
Total commercial | 86,634 | 75,784 | 14 | % | 47,909 | 75,804 | 128,472 | (33 | )% | ||||||||||||
Residential mortgage | 68,166 | 67,323 | 1 | % | 67,574 | 65,896 | 62,896 | 8 | % | ||||||||||||
Home equity | 11,835 | 12,300 | (4 | )% | 12,339 | 12,324 | 12,958 | (9 | )% | ||||||||||||
Other consumer | 72 | 149 | (52 | )% | 79 | 68 | 134 | (46 | )% | ||||||||||||
Total consumer | 80,073 | 79,772 | — | % | 79,992 | 78,288 | 75,988 | 5 | % | ||||||||||||
Total nonaccrual loans | $ | 166,707 | $ | 155,556 | 7 | % | $ | 127,901 | $ | 154,092 | $ | 204,460 | (18 | )% | |||||||
Jun 30, 2019 | Mar 31, 2019 | Seql Qtr % Change | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Comp Qtr % Change | |||||||||||||||
Restructured loans (accruing) | |||||||||||||||||||||
Commercial and industrial | $ | 16,850 | $ | 15,443 | 9 | % | $ | 25,478 | $ | 38,885 | $ | 32,438 | (48 | )% | |||||||
Commercial real estate—owner occupied | 1,970 | 2,026 | (3 | )% | 2,080 | 3,746 | 3,820 | (48 | )% | ||||||||||||
Commercial and business lending | 18,820 | 17,469 | 8 | % | 27,558 | 42,631 | 36,258 | (48 | )% | ||||||||||||
Commercial real estate—investor | 315 | 1,700 | (81 | )% | 799 | 350 | 372 | (15 | )% | ||||||||||||
Real estate construction | 232 | 311 | (25 | )% | 311 | 218 | 222 | 5 | % | ||||||||||||
Commercial real estate lending | 547 | 2,011 | (73 | )% | 1,110 | 568 | 594 | (8 | )% | ||||||||||||
Total commercial | 19,367 | 19,480 | (1 | )% | 28,668 | 43,199 | 36,852 | (47 | )% | ||||||||||||
Residential mortgage | 17,645 | 18,226 | (3 | )% | 16,036 | 16,986 | 17,934 | (2 | )% | ||||||||||||
Home equity | 7,247 | 7,688 | (6 | )% | 7,385 | 7,792 | 7,900 | (8 | )% | ||||||||||||
Other consumer | 1,222 | 1,154 | 6 | % | 1,174 | 1,177 | 1,037 | 18 | % | ||||||||||||
Total consumer | 26,114 | 27,068 | (4 | )% | 24,595 | 25,955 | 26,871 | (3 | )% | ||||||||||||
Total restructured loans (accruing) | $ | 45,481 | $ | 46,548 | (2 | )% | $ | 53,263 | $ | 69,154 | $ | 63,723 | (29 | )% | |||||||
Nonaccrual restructured loans (included in nonaccrual loans) | $ | 24,332 | $ | 24,172 | 1 | % | $ | 26,292 | $ | 33,757 | $ | 38,005 | (36 | )% | |||||||
Jun 30, 2019 | Mar 31, 2019 | Seql Qtr % Change | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Comp Qtr % Change | |||||||||||||||
Accruing Loans 30-89 Days Past Due | |||||||||||||||||||||
Commercial and industrial | $ | 4,909 | $ | 3,295 | 49 | % | $ | 525 | $ | 5,732 | $ | 588 | N/M | ||||||||
Commercial real estate—owner occupied | 2,018 | 6,066 | (67 | )% | 2,699 | 6,126 | 193 | N/M | |||||||||||||
Commercial and business lending | 6,926 | 9,361 | (26 | )% | 3,224 | 11,858 | 781 | N/M | |||||||||||||
Commercial real estate—investor | 1,382 | 1,090 | 27 | % | 3,767 | 373 | 828 | 67 | % | ||||||||||||
Real estate construction | 151 | 6,773 | (98 | )% | 330 | 517 | 19,765 | (99 | )% | ||||||||||||
Commercial real estate lending | 1,532 | 7,863 | (81 | )% | 4,097 | 890 | 20,593 | (93 | )% | ||||||||||||
Total commercial | 8,459 | 17,224 | (51 | )% | 7,321 | 12,748 | 21,374 | (60 | )% | ||||||||||||
Residential mortgage | 9,756 | 13,274 | (27 | )% | 9,706 | 8,899 | 9,341 | 4 | % | ||||||||||||
Home equity | 5,827 | 6,363 | (8 | )% | 6,049 | 8,080 | 7,270 | (20 | )% | ||||||||||||
Other consumer | 1,838 | 2,364 | (22 | )% | 2,269 | 1,979 | 1,735 | 6 | % | ||||||||||||
Total consumer | 17,422 | 22,001 | (21 | )% | 18,024 | 18,958 | 18,346 | (5 | )% | ||||||||||||
Total accruing loans 30-89 days past due | $ | 25,881 | $ | 39,225 | (34 | )% | $ | 25,345 | $ | 31,706 | $ | 39,720 | (35 | )% | |||||||
Jun 30, 2019 | Mar 31, 2019 | Seql Qtr % Change | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Comp Qtr % Change | |||||||||||||||
Potential Problem Loans | |||||||||||||||||||||
Commercial and industrial | $ | 58,658 | $ | 111,772 | (48 | )% | $ | 116,578 | $ | 144,468 | $ | 172,177 | (66 | )% | |||||||
Commercial real estate—owner occupied | 24,237 | 48,929 | (50 | )% | 55,964 | 32,526 | 38,879 | (38 | )% | ||||||||||||
Commercial and business lending | 82,895 | 160,701 | (48 | )% | 172,542 | 176,994 | 211,056 | (61 | )% | ||||||||||||
Commercial real estate—investor | 77,766 | 70,613 | 10 | % | 67,481 | 49,842 | 24,790 | N/M | |||||||||||||
Real estate construction | 3,166 | 4,600 | (31 | )% | 3,834 | 3,392 | 3,168 | — | % | ||||||||||||
Commercial real estate lending | 80,932 | 75,213 | 8 | % | 71,315 | 53,234 | 27,958 | 189 | % | ||||||||||||
Total commercial | 163,828 | 235,914 | (31 | )% | 243,856 | 230,228 | 239,014 | (31 | )% | ||||||||||||
Residential mortgage | 1,983 | 5,351 | (63 | )% | 5,975 | 6,073 | 2,355 | (16 | )% | ||||||||||||
Home equity | 32 | 91 | (65 | )% | 103 | 148 | 142 | (77 | )% | ||||||||||||
Other consumer | — | — | N/M | — | — | 6 | (100 | )% | |||||||||||||
Total consumer | 2,014 | 5,443 | (63 | )% | 6,078 | 6,221 | 2,503 | (20 | )% | ||||||||||||
Total potential problem loans | $ | 165,842 | $ | 241,357 | (31 | )% | $ | 249,935 | $ | 236,449 | $ | 241,517 | (31 | )% |
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, 2019 | March 31, 2019 | June 30, 2018 | ||||||||||||||||||||||||
($ in thousands) | Average Balance | Interest Income /Expense | Average Yield /Rate | Average Balance | Interest Income /Expense | Average Yield /Rate | Average Balance | Interest Income /Expense | Average Yield /Rate | |||||||||||||||||
Assets | ||||||||||||||||||||||||||
Earning assets | ||||||||||||||||||||||||||
Loans (a) (b) (c) | ||||||||||||||||||||||||||
Commercial and business lending | $ | 8,621,609 | $ | 103,029 | 4.79 | % | $ | 8,376,163 | $ | 100,298 | 4.86 | % | $ | 7,697,057 | $ | 86,771 | 4.52 | % | ||||||||
Commercial real estate lending | 5,130,954 | 66,522 | 5.19 | % | 5,117,926 | 65,512 | 5.19 | % | 5,705,817 | 72,049 | 5.06 | % | ||||||||||||||
Total commercial | 13,752,563 | 169,551 | 4.94 | % | 13,494,089 | 165,810 | 4.98 | % | 13,402,874 | 158,820 | 4.75 | % | ||||||||||||||
Residential mortgage | 8,378,082 | 72,692 | 3.47 | % | 8,366,452 | 73,981 | 3.54 | % | 8,310,358 | 69,774 | 3.36 | % | ||||||||||||||
Retail | 1,223,726 | 19,095 | 6.25 | % | 1,242,973 | 19,355 | 6.26 | % | 1,292,196 | 18,466 | 5.72 | % | ||||||||||||||
Total loans | 23,354,371 | 261,338 | 4.48 | % | 23,103,514 | 259,147 | 4.53 | % | 23,005,428 | 247,060 | 4.30 | % | ||||||||||||||
Investment securities | ||||||||||||||||||||||||||
Taxable | 4,523,260 | 26,710 | 2.36 | % | 4,977,866 | 29,053 | 2.34 | % | 5,518,077 | 30,623 | 2.22 | % | ||||||||||||||
Tax-exempt (a) | 1,943,485 | 18,304 | 3.77 | % | 1,845,352 | 17,270 | 3.74 | % | 1,497,192 | 13,587 | 3.63 | % | ||||||||||||||
Other short-term investments | 479,590 | 3,995 | 3.34 | % | 468,449 | 4,226 | 3.65 | % | 392,009 | 3,153 | 3.22 | % | ||||||||||||||
Investments and other | 6,946,335 | 49,009 | 2.81 | % | 7,291,666 | 50,549 | 2.78 | % | 7,407,277 | 47,363 | 2.56 | % | ||||||||||||||
Total earning assets | 30,300,707 | $ | 310,347 | 4.10 | % | 30,395,180 | $ | 309,695 | 4.11 | % | 30,412,705 | $ | 294,423 | 3.88 | % | |||||||||||
Other assets, net | 3,161,076 | 3,049,123 | 3,022,659 | |||||||||||||||||||||||
Total assets | $ | 33,461,783 | $ | 33,444,303 | $ | 33,435,364 | ||||||||||||||||||||
Liabilities and stockholders' equity | ||||||||||||||||||||||||||
Interest-bearing liabilities | ||||||||||||||||||||||||||
Interest-bearing deposits | ||||||||||||||||||||||||||
Savings | $ | 2,319,556 | $ | 1,686 | 0.29 | % | $ | 2,098,834 | $ | 1,150 | 0.22 | % | $ | 1,892,808 | $ | 210 | 0.04 | % | ||||||||
Interest-bearing demand | 4,984,511 | 15,309 | 1.23 | % | 4,739,662 | 13,920 | 1.19 | % | 4,735,514 | 9,918 | 0.84 | % | ||||||||||||||
Money market | 7,118,594 | 20,883 | 1.18 | % | 7,388,174 | 20,786 | 1.14 | % | 7,190,178 | 12,045 | 0.67 | % | ||||||||||||||
Network transaction deposits | 2,024,604 | 12,456 | 2.47 | % | 2,225,027 | 13,626 | 2.48 | % | 2,130,854 | 9,503 | 1.79 | % | ||||||||||||||
Time deposits | 3,544,317 | 16,717 | 1.89 | % | 3,121,960 | 13,291 | 1.73 | % | 2,565,001 | 6,755 | 1.06 | % | ||||||||||||||
Total interest-bearing deposits | 19,991,581 | 67,050 | 1.35 | % | 19,573,656 | 62,773 | 1.30 | % | 18,514,355 | 38,431 | 0.83 | % | ||||||||||||||
Federal funds purchased and securities sold under agreements to repurchase | 115,694 | 286 | 0.99 | % | 177,361 | 627 | 1.43 | % | 259,713 | 538 | 0.83 | % | ||||||||||||||
Commercial paper | 30,612 | 37 | 0.49 | % | 41,640 | 51 | 0.50 | % | 65,631 | 51 | 0.31 | % | ||||||||||||||
FHLB advances | 3,171,353 | 17,744 | 2.24 | % | 3,639,660 | 19,554 | 2.18 | % | 4,809,071 | 21,279 | 1.77 | % | ||||||||||||||
Long-term funding | 796,169 | 7,396 | 3.72 | % | 795,757 | 7,396 | 3.72 | % | 497,517 | 4,544 | 3.65 | % | ||||||||||||||
Total short and long-term funding | 4,113,829 | 25,463 | 2.48 | % | 4,654,418 | 27,628 | 2.40 | % | 5,631,932 | 26,412 | 1.88 | % | ||||||||||||||
Total interest-bearing liabilities | 24,105,410 | $ | 92,513 | 1.54 | % | 24,228,074 | $ | 90,401 | 1.51 | % | 24,146,287 | $ | 64,843 | 1.08 | % | |||||||||||
Noninterest-bearing demand deposits | 5,089,928 | 4,982,553 | 5,131,894 | |||||||||||||||||||||||
Other liabilities | 413,550 | 418,546 | 436,130 | |||||||||||||||||||||||
Stockholders’ equity | 3,852,894 | 3,815,130 | 3,721,053 | |||||||||||||||||||||||
Total liabilities and stockholders’ equity | $ | 33,461,783 | $ | 33,444,303 | $ | 33,435,364 | ||||||||||||||||||||
Interest rate spread | 2.56 | % | 2.60 | % | 2.80 | % | ||||||||||||||||||||
Net free funds | 0.31 | % | 0.30 | % | 0.22 | % | ||||||||||||||||||||
Fully tax-equivalent net interest income and net interest margin ("NIM") | $ | 217,834 | 2.87 | % | $ | 219,294 | 2.90 | % | $ | 229,580 | 3.02 | % | ||||||||||||||
Fully tax-equivalent adjustment | 4,215 | 3,747 | 3,217 | |||||||||||||||||||||||
Net interest income | $ | 213,619 | $ | 215,547 | $ | 226,362 |
Numbers may not sum due to rounding.
(a) | The yield on tax-exempt loans and securities is computed on a fully tax-equivalent basis using a tax rate of 21% and is net of the effects of certain disallowed interest deductions. |
(b) | Nonaccrual loans and loans held for sale have been included in the average balances. |
(c) | Interest income includes amortization of net deferred loan origination costs and net accreted purchase loan discount. |
Page 7
Associated Banc-Corp Net Interest Income Analysis - Fully Tax-Equivalent Basis - Year Over Year | ||||||||||||||||||||||
Six Months Ended June 30, | ||||||||||||||||||||||
2019 | 2018 | |||||||||||||||||||||
($ in thousands) | Average Balance | Interest Income /Expense | Average Yield / Rate | Average Balance | Interest Income /Expense | Average Yield / Rate | ||||||||||||||||
Assets | ||||||||||||||||||||||
Earning assets | ||||||||||||||||||||||
Loans (a) (b) (c) | ||||||||||||||||||||||
Commercial and business lending | $ | 8,499,564 | $ | 203,327 | 4.82 | % | $ | 7,506,399 | $ | 161,476 | 4.34 | % | ||||||||||
Commercial real estate lending | 5,124,476 | 132,034 | 5.19 | % | 5,553,469 | 133,554 | 4.85 | % | ||||||||||||||
Total commercial | 13,624,040 | 335,361 | 4.96 | % | 13,059,868 | 295,030 | 4.55 | % | ||||||||||||||
Residential mortgage (d) | 8,372,299 | 146,673 | 3.50 | % | 8,188,955 | 136,729 | 3.34 | % | ||||||||||||||
Retail (d) | 1,233,297 | 38,450 | 6.25 | % | 1,295,716 | 35,765 | 5.54 | % | ||||||||||||||
Total loans | 23,229,636 | 520,485 | 4.51 | % | 22,544,539 | 467,523 | 4.17 | % | ||||||||||||||
Investment securities | ||||||||||||||||||||||
Taxable | 4,749,307 | 55,764 | 2.35 | % | 5,547,289 | 60,727 | 2.19 | % | ||||||||||||||
Tax-exempt (a) | 1,894,689 | 35,573 | 3.76 | % | 1,405,561 | 25,200 | 3.59 | % | ||||||||||||||
Other short-term investments | 474,050 | 8,221 | 3.49 | % | 353,152 | 5,330 | 3.04 | % | ||||||||||||||
Investments and other | 7,118,047 | 99,558 | 2.79 | % | 7,306,003 | 91,257 | 2.50 | % | ||||||||||||||
Total earning assets | 30,347,682 | $ | 620,043 | 4.10 | % | 29,850,541 | $ | 558,780 | 3.76 | % | ||||||||||||
Other assets, net | 3,105,409 | 2,953,835 | ||||||||||||||||||||
Total assets | $ | 33,453,091 | $ | 32,804,377 | ||||||||||||||||||
Liabilities and stockholders' equity | ||||||||||||||||||||||
Interest-bearing liabilities | ||||||||||||||||||||||
Interest-bearing deposits | ||||||||||||||||||||||
Savings | $ | 2,209,804 | $ | 2,836 | 0.26 | % | $ | 1,808,207 | $ | 412 | 0.05 | % | ||||||||||
Interest-bearing demand | 4,862,763 | 29,229 | 1.21 | % | 4,620,383 | 17,736 | 0.77 | % | ||||||||||||||
Money market | 7,252,639 | 41,669 | 1.16 | % | 7,202,684 | 21,830 | 0.61 | % | ||||||||||||||
Network transaction deposits | 2,124,262 | 26,082 | 2.48 | % | 2,269,000 | 18,281 | 1.62 | % | ||||||||||||||
Time deposits | 3,334,305 | 30,007 | 1.82 | % | 2,639,731 | 13,585 | 1.04 | % | ||||||||||||||
Total interest-bearing deposits | 19,783,773 | 129,823 | 1.32 | % | 18,540,005 | 71,843 | 0.78 | % | ||||||||||||||
Federal funds purchased and securities sold under agreements to repurchase | 146,357 | 913 | 1.26 | % | 267,602 | 1,060 | 0.80 | % | ||||||||||||||
Commercial paper | 36,096 | 88 | 0.49 | % | 69,654 | 111 | 0.32 | % | ||||||||||||||
FHLB advances | 3,404,213 | 37,298 | 2.21 | % | 4,275,753 | 34,402 | 1.62 | % | ||||||||||||||
Long-term funding | 795,964 | 14,792 | 3.72 | % | 497,433 | 9,088 | 3.65 | % | ||||||||||||||
Total short and long-term funding | 4,382,630 | 53,091 | 2.44 | % | 5,110,442 | 44,661 | 1.76 | % | ||||||||||||||
Total interest-bearing liabilities | 24,166,403 | $ | 182,914 | 1.53 | % | 23,650,448 | $ | 116,504 | 0.99 | % | ||||||||||||
Noninterest-bearing demand deposits | 5,036,537 | 5,108,554 | ||||||||||||||||||||
Other liabilities | 416,034 | 415,683 | ||||||||||||||||||||
Stockholders’ equity | 3,834,116 | 3,629,692 | ||||||||||||||||||||
Total liabilities and stockholders’ equity | $ | 33,453,091 | $ | 32,804,377 | ||||||||||||||||||
Interest rate spread | 2.57 | % | 2.77 | % | ||||||||||||||||||
Net free funds | 0.32 | % | 0.20 | % | ||||||||||||||||||
Fully tax-equivalent net interest income and net interest margin ("NIM") | $ | 437,128 | 2.89 | % | $ | 442,277 | 2.97 | % | ||||||||||||||
Fully tax-equivalent adjustment | 7,962 | 6,043 | ||||||||||||||||||||
Net interest income | $ | 429,167 | $ | 436,233 |
Numbers may not sum due to rounding.
(a) | The yield on tax-exempt loans and securities is computed on a fully tax-equivalent basis using a tax rate of 21% and is net of the effects of certain disallowed interest deductions. |
(b) | Nonaccrual loans and loans held for sale have been included in the average balances. |
(c) | Interest income includes amortization of net deferred loan origination costs and net accreted purchase loan discount. |
(d) Upon conversion, certain Bank Mutual loans were reclassified from home equity to residential mortgage. June 30, 2018 balances have been adjusted to reflect this change.
Page 8
Associated Banc-Corp Loan and Deposit Composition | ||||||||||||||||||||||||||
($ in thousands) | ||||||||||||||||||||||||||
Period end loan composition | Jun 30, 2019 | Mar 31, 2019 | Seql Qtr % Change | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Comp Qtr % Change | |||||||||||||||||||
Commercial and industrial | $ | 7,579,384 | $ | 7,587,597 | — | % | $ | 7,398,044 | $ | 7,159,941 | $ | 7,109,796 | 7 | % | ||||||||||||
Commercial real estate—owner occupied | 942,811 | 932,393 | 1 | % | 920,443 | 867,682 | 888,330 | 6 | % | |||||||||||||||||
Commercial and business lending | 8,522,194 | 8,519,990 | — | % | 8,318,487 | 8,027,622 | 7,998,126 | 7 | % | |||||||||||||||||
Commercial real estate—investor | 3,779,201 | 3,809,253 | (1 | )% | 3,751,554 | 3,924,499 | 3,996,415 | (5 | )% | |||||||||||||||||
Real estate construction | 1,394,815 | 1,273,782 | 10 | % | 1,335,031 | 1,416,209 | 1,487,159 | (6 | )% | |||||||||||||||||
Commercial real estate lending | 5,174,016 | 5,083,035 | 2 | % | 5,086,585 | 5,340,708 | 5,483,574 | (6 | )% | |||||||||||||||||
Total commercial | 13,696,210 | 13,603,025 | 1 | % | 13,405,072 | 13,368,330 | 13,481,700 | 2 | % | |||||||||||||||||
Residential mortgage | 8,277,479 | 8,323,846 | (1 | )% | 8,277,712 | 8,227,649 | 8,207,253 | 1 | % | |||||||||||||||||
Home equity | 916,213 | 868,886 | 5 | % | 894,473 | 901,275 | 911,363 | 1 | % | |||||||||||||||||
Other consumer | 360,065 | 352,602 | 2 | % | 363,171 | 369,858 | 376,470 | (4 | )% | |||||||||||||||||
Total consumer | 9,553,757 | 9,545,333 | — | % | 9,535,357 | 9,498,782 | 9,495,086 | 1 | % | |||||||||||||||||
Total loans | $ | 23,249,967 | $ | 23,148,359 | — | % | $ | 22,940,429 | $ | 22,867,112 | $ | 22,976,786 | 1 | % | ||||||||||||
Purchased credit-impaired loans | $ | 2,145 | $ | 4,907 | $ | 4,852 | $ | 13,133 | $ | 15,900 | ||||||||||||||||
Period end deposit and customer funding composition | Jun 30, 2019 | Mar 31, 2019 | Seql Qtr % Change | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Comp Qtr % Change | |||||||||||||||||||
Noninterest-bearing demand | $ | 5,354,987 | $ | 5,334,154 | — | % | $ | 5,698,530 | $ | 5,421,270 | $ | 5,341,361 | — | % | ||||||||||||
Savings | 2,591,173 | 2,215,857 | 17 | % | 2,012,841 | 1,937,006 | 1,887,777 | 37 | % | |||||||||||||||||
Interest-bearing demand | 6,269,035 | 5,226,362 | 20 | % | 5,336,952 | 5,096,998 | 4,650,407 | 35 | % | |||||||||||||||||
Money market | 7,691,775 | 9,005,018 | (15 | )% | 9,033,669 | 9,087,587 | 9,208,993 | (16 | )% | |||||||||||||||||
Brokered CDs | 77,543 | 387,459 | (80 | )% | 192,234 | 235,711 | 228,029 | (66 | )% | |||||||||||||||||
Other time | 3,289,709 | 3,364,206 | (2 | )% | 2,623,167 | 3,053,041 | 2,499,747 | 32 | % | |||||||||||||||||
Total deposits | 25,274,222 | 25,533,057 | (1 | )% | 24,897,393 | 24,831,612 | 23,816,314 | 6 | % | |||||||||||||||||
Customer funding (a) | 104,973 | 146,027 | (28 | )% | 137,364 | 184,269 | 235,804 | (55 | )% | |||||||||||||||||
Total deposits and customer funding | $ | 25,379,195 | $ | 25,679,083 | (1 | )% | $ | 25,034,757 | $ | 25,015,882 | $ | 24,052,118 | 6 | % | ||||||||||||
Network transaction deposits (b) | $ | 1,805,141 | $ | 2,204,204 | (18 | )% | $ | 2,276,296 | $ | 1,852,863 | $ | 2,094,670 | (14 | )% | ||||||||||||
Net deposits and customer funding (Total deposits and customer funding, excluding Brokered CDs and network transaction deposits) | $ | 23,496,510 | $ | 23,087,421 | 2 | % | $ | 22,566,227 | $ | 22,927,308 | $ | 21,729,419 | 8 | % | ||||||||||||
Quarter average loan composition | Jun 30, 2019 | Mar 31, 2019 | Seql Qtr % Change | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Comp Qtr % Change | |||||||||||||||||||
Commercial and industrial | $ | 7,688,462 | $ | 7,459,318 | 3 | % | $ | 7,166,092 | $ | 7,059,946 | $ | 6,804,311 | 13 | % | ||||||||||||
Commercial real estate—owner occupied | 933,146 | 916,845 | 2 | % | 853,162 | 878,793 | 892,746 | 5 | % | |||||||||||||||||
Commercial and business lending | 8,621,609 | 8,376,163 | 3 | % | 8,019,254 | 7,938,739 | 7,697,057 | 12 | % | |||||||||||||||||
Commercial real estate—investor | 3,806,828 | 3,777,520 | 1 | % | 3,788,398 | 3,948,922 | 4,117,675 | (8 | )% | |||||||||||||||||
Real estate construction | 1,324,126 | 1,340,406 | (1 | )% | 1,421,344 | 1,471,758 | 1,588,141 | (17 | )% | |||||||||||||||||
Commercial real estate lending | 5,130,954 | 5,117,926 | — | % | 5,209,743 | 5,420,680 | 5,705,817 | (10 | )% | |||||||||||||||||
Total commercial | 13,752,563 | 13,494,089 | 2 | % | 13,228,997 | 13,359,419 | 13,402,874 | 3 | % | |||||||||||||||||
Residential mortgage | 8,378,082 | 8,366,452 | — | % | 8,314,421 | 8,333,303 | 8,310,358 | 1 | % | |||||||||||||||||
Home equity | 869,248 | 883,735 | (2 | )% | 895,412 | 906,364 | 917,688 | (5 | )% | |||||||||||||||||
Other consumer | 354,478 | 359,238 | (1 | )% | 365,895 | 374,632 | 374,508 | (5 | )% | |||||||||||||||||
Total consumer | 9,601,809 | 9,609,426 | — | % | 9,575,728 | 9,614,298 | 9,602,555 | — | % | |||||||||||||||||
Total loans | $ | 23,354,371 | $ | 23,103,514 | 1 | % | $ | 22,804,725 | $ | 22,973,717 | $ | 23,005,428 | 2 | % | ||||||||||||
Quarter average deposit composition | Jun 30, 2019 | Mar 31, 2019 | Seql Qtr % Change | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Comp Qtr % Change | |||||||||||||||||||
Noninterest-bearing demand | $ | 5,089,928 | $ | 4,982,553 | 2 | % | $ | 5,366,711 | $ | 5,310,977 | $ | 5,131,894 | (1 | )% | ||||||||||||
Savings | 2,319,556 | 2,098,834 | 11 | % | 1,995,160 | 1,901,960 | 1,892,808 | 23 | % | |||||||||||||||||
Interest-bearing demand | 4,984,511 | 4,739,662 | 5 | % | 4,837,223 | 4,988,694 | 4,735,514 | 5 | % | |||||||||||||||||
Money market | 7,118,594 | 7,388,174 | (4 | )% | 7,089,449 | 7,546,059 | 7,190,178 | (1 | )% | |||||||||||||||||
Network transaction deposits | 2,024,604 | 2,225,027 | (9 | )% | 1,880,595 | 1,969,915 | 2,130,854 | (5 | )% | |||||||||||||||||
Time deposits | 3,544,317 | 3,121,960 | 14 | % | 3,060,896 | 2,978,314 | 2,565,001 | 38 | % | |||||||||||||||||
Total deposits | $ | 25,081,509 | $ | 24,556,209 | 2 | % | $ | 24,230,034 | $ | 24,695,918 | $ | 23,646,250 | 6 | % |
N/M = Not meaningful
Numbers may not sum due to rounding.
(a) | Includes repurchase agreements and commercial paper. |
(b) Included above in interest-bearing demand and money market.
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Associated Banc-Corp Non-GAAP Financial Measures Reconciliation | ||||||||||||||||||||||||
($ in millions, except per share data) | YTD Jun 2019 | YTD Jun 2018 | 2Q19 | 1Q19 | 4Q18 | 3Q18 | 2Q18 | |||||||||||||||||
Tangible common equity reconciliation (a) | ||||||||||||||||||||||||
Common equity | $ | 3,643 | $ | 3,579 | $ | 3,524 | $ | 3,540 | $ | 3,611 | ||||||||||||||
Goodwill and other intangible assets, net | (1,270 | ) | (1,243 | ) | (1,245 | ) | (1,247 | ) | (1,247 | ) | ||||||||||||||
Tangible common equity | $ | 2,373 | $ | 2,337 | $ | 2,279 | $ | 2,293 | $ | 2,364 | ||||||||||||||
Tangible assets reconciliation (a) | ||||||||||||||||||||||||
Total assets | $ | 33,273 | $ | 33,701 | $ | 33,648 | $ | 33,489 | $ | 33,653 | ||||||||||||||
Goodwill and other intangible assets, net | (1,270 | ) | (1,243 | ) | (1,245 | ) | (1,247 | ) | (1,247 | ) | ||||||||||||||
Tangible assets | $ | 32,003 | $ | 32,458 | $ | 32,403 | $ | 32,242 | $ | 32,406 | ||||||||||||||
Average tangible common equity and average common equity tier 1 reconciliation (a) | ||||||||||||||||||||||||
Common equity | $ | 3,577 | $ | 3,470 | $ | 3,596 | $ | 3,558 | $ | 3,490 | $ | 3,589 | $ | 3,561 | ||||||||||
Goodwill and other intangible assets, net | (1,246 | ) | (1,172 | ) | (1,247 | ) | (1,244 | ) | (1,246 | ) | (1,246 | ) | (1,236 | ) | ||||||||||
Tangible common equity | 2,332 | 2,298 | 2,349 | 2,314 | 2,244 | 2,343 | 2,325 | |||||||||||||||||
Accumulated other comprehensive loss (income) | 99 | 103 | 82 | 116 | 137 | 125 | 117 | |||||||||||||||||
Deferred tax assets (liabilities), net | 46 | 38 | 46 | 45 | 46 | 45 | 47 | |||||||||||||||||
Average common equity Tier 1 | $ | 2,476 | $ | 2,439 | $ | 2,477 | $ | 2,475 | $ | 2,427 | $ | 2,513 | $ | 2,489 | ||||||||||
Selected Trend Information (b) | ||||||||||||||||||||||||
Insurance commissions and fees | $ | 48 | $ | 47 | $ | 23 | $ | 25 | $ | 21 | $ | 22 | $ | 24 | ||||||||||
Wealth management fees (c) | 41 | 41 | 21 | 20 | 20 | 21 | 20 | |||||||||||||||||
Service charges and deposit account fees | 31 | 33 | 15 | 15 | 16 | 17 | 16 | |||||||||||||||||
Card-based fees | 19 | 20 | 10 | 9 | 10 | 10 | 10 | |||||||||||||||||
Other fee-based revenue | 9 | 8 | 5 | 4 | 5 | 4 | 4 | |||||||||||||||||
Fee-based revenue | 148 | 148 | 74 | 74 | 74 | 74 | 75 | |||||||||||||||||
Other | 39 | 35 | 21 | 17 | 11 | 14 | 18 | |||||||||||||||||
Total noninterest income | $ | 187 | $ | 183 | $ | 96 | $ | 91 | $ | 84 | $ | 88 | $ | 93 | ||||||||||
Selected equity and performance ratios (a) (d) | ||||||||||||||||||||||||
Tangible common equity / tangible assets | 7.42 | % | 7.20 | % | 7.03 | % | 7.11 | % | 7.29 | % | ||||||||||||||
Return on average equity | 9.01 | % | 8.81 | % | 8.81 | % | 9.21 | % | 9.42 | % | 9.06 | % | 9.61 | % | ||||||||||
Return on average tangible common equity | 14.16 | % | 13.51 | % | 13.81 | % | 14.52 | % | 15.08 | % | 14.14 | % | 14.98 | % | ||||||||||
Return on average common equity Tier 1 | 13.33 | % | 12.73 | % | 13.09 | % | 13.58 | % | 13.94 | % | 13.18 | % | 14.00 | % | ||||||||||
Efficiency ratio reconciliation (e) | ||||||||||||||||||||||||
Federal Reserve efficiency ratio | 63.01 | % | 68.18 | % | 62.71 | % | 63.32 | % | 62.39 | % | 66.12 | % | 65.77 | % | ||||||||||
Fully tax-equivalent adjustment | (0.81 | )% | (0.66 | )% | (0.84 | )% | (0.77 | )% | (0.75 | )% | (0.75 | )% | (0.65 | )% | ||||||||||
Other intangible amortization | (0.74 | )% | (0.59 | )% | (0.75 | )% | (0.73 | )% | (0.72 | )% | (0.73 | )% | (0.68 | )% | ||||||||||
Fully tax-equivalent efficiency ratio | 61.48 | % | 66.94 | % | 61.13 | % | 61.83 | % | 60.93 | % | 64.66 | % | 64.45 | % | ||||||||||
Acquisition related costs adjustment | (0.71 | )% | (4.52 | )% | (1.21 | )% | (0.20 | )% | 0.31 | % | (0.94 | )% | (2.40 | )% | ||||||||||
Fully tax-equivalent efficiency ratio, excluding acquisition related costs (adjusted efficiency ratio) | 60.76 | % | 62.41 | % | 59.91 | % | 61.63 | % | 61.24 | % | 63.72 | % | 62.05 | % | ||||||||||
Acquisition Related Costs | YTD 2019 | YTD 2019 per share data (g) | 2Q 2019 | 2Q 2019 per share data (g) | 1Q 2019 | 1Q 2019 per share data (g) | ||||||||||||||||||
GAAP earnings | $ | 164 | $ | 0.99 | $ | 81 | $ | 0.49 | $ | 83 | $ | 0.50 | ||||||||||||
Change of control and severance | 1 | 1 | — | |||||||||||||||||||||
Facilities and other | 2 | 2 | — | |||||||||||||||||||||
Contract terminations and conversion costs | 1 | 1 | — | |||||||||||||||||||||
Total acquisition related costs | $ | 4 | $ | 4 | $ | 1 | ||||||||||||||||||
Less additional tax expense | $ | 1 | $ | 1 | $ | — | ||||||||||||||||||
Earnings, excluding acquisition related costs (f) | $ | 167 | $ | 1.02 | $ | 84 | $ | 0.51 | $ | 84 | $ | 0.50 |
Numbers may not sum due to rounding.
(a) | The ratio tangible common equity to tangible assets excludes goodwill and other intangible assets, net. This financial measure has been included as it is considered to be a critical metric with which to analyze and evaluate financial condition and capital strength. |
(b) | These financial measures have been included as they provide meaningful supplemental information to assess trends in the Corporation’s results of operations. |
(c) | Includes trust, asset management, brokerage, and annuity fees. |
(d) | 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. |
(e) | The efficiency ratio as defined by the Federal Reserve guidance is noninterest expense (which includes the provision for unfunded commitments) divided by the sum of net interest income plus noninterest income, excluding investment securities gains / losses, net. The fully tax-equivalent efficiency ratio is noninterest expense (which includes the provision for unfunded commitments), excluding other intangible amortization, divided by the sum of fully tax-equivalent net interest income plus noninterest income, excluding investment securities gains / losses, net. The adjusted efficiency ratio is noninterest expense (which includes the provision for unfunded commitments), excluding other intangible amortization and acquisition related costs, divided by the sum of fully tax-equivalent net interest income plus noninterest income, excluding investment securities gains / losses, net and acquisition related costs. Management believes the adjusted efficiency ratio, which adjusts net interest income for the tax-favored status of certain loans and investment securities and acquisition related costs, to be a meaningful measure as it enhances the comparability of net interest income arising from taxable and tax-exempt sources and excludes acquisition related costs. |
(f) | 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. |
(g) | Earnings and per share data presented after-tax. |
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