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Section 1: 8-K (FORM 8-K)

Document
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM
8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934


Date of Report (Date of earliest event reported)
October 24, 2019

                                                                            Associated Banc-Corp                                                                      
(Exact name of registrant as specified in its chapter)

Wisconsin
001-31343
39-1098068
(State or other jurisdiction of incorporation)

(Commission File Number)

(IRS Employer Identification No.)

433 Main Street
Green Bay
Wisconsin
54301
(Address of principal executive offices)
(Zip code)
Registrant’s telephone number, including area code
920
491-7500
 
(Former name or former address, if changed since last report)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities Registered Pursuant to Section 12(b) of the act:
Title of each class
Trading symbol
Name of each exchange on which registered
Common stock, par value $0.01 per share
ASB
New York Stock Exchange
Depositary Shrs, each representing 1/40th intrst in a shr of 6.125% Non-Cum. Perp Pref Stock, Srs C
ASB PrC
New York Stock Exchange
Depositary Shrs, each representing 1/40th intrst in a shr of 5.375% Non-Cum. Perp Pref Stock, Srs D
ASB PrD
New York Stock Exchange
Depositary Shrs, each representing 1/40th intrst in a shr of 5.875% Non-Cum. Perp Pref Stock, Srs E
ASB PrE
New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.






Item 2.02 Results of Operations and Financial Condition.
 
On October 24, 2019, Associated Banc-Corp announced its earnings for the quarter ended September 30, 2019. A copy of the registrant’s press release containing this information and the slide presentation discussed on the conference call for investors and analysts on October 24, 2019, are being furnished as Exhibit 99.1 and Exhibit 99.2, respectively, to this Report on Form 8-K and are incorporated herein by reference.
 
The information furnished pursuant to this Item 2.02, including Exhibit 99.1 and Exhibit 99.2, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities under that Section and shall not be deemed to be incorporated by reference into any filing of the registrant under the Securities Act of 1933 or the Exchange Act.

 
Item 9.01 Financial Statements and Exhibits.
 
(d)  Exhibits.
 
 The following exhibits are furnished as part of this Report on Form 8-K:
 








SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
Associated Banc-Corp
 
(Registrant)
 
 
 
 
Date: October 24, 2019
By: /s/ Christopher J. Del Moral-Niles
 
Christopher J. Del Moral-Niles
 
Chief Financial Officer
  
 
 


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Section 2: EX-99.1 (EXHIBIT 99.1)

Exhibit


Exhibit 99.1
400643329_asblogoa08.jpg
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 Third Quarter 2019 Earnings of $0.49 Per Common Share,
or $0.50 Per Common Share Excluding $2 million in Acquisition Related Costs1,
Year-to-Date Earnings Per Share up 7% from Prior Year

GREEN BAY, Wis. -- October 24, 2019 -- Associated Banc-Corp (NYSE: ASB) ("Associated" or "Company") today reported net income available to common equity ("earnings") of $80 million, or $0.49 per common share for the quarter ended September 30, 2019. These amounts compare to net income available to common equity of $84 million, or $0.48 per common share for the quarter ended September 30, 2018. Earnings for the first nine months of 2019 were $1.48 per common share compared to $1.38 per common share in the same period last year.
“We were pleased with our bottom-line results in the third quarter. We benefited from strong mortgage banking revenue and improving credit quality trends which drove our earnings per share," said President and CEO Philip B. Flynn. "We continued to reposition funding sources and adjust our securities portfolio, resulting in a lower cost of funds, smaller balance sheet, and more capital flexibility. We anticipate additional funding changes as we continue to fine-tune our balance sheet for a lower rate environment."
THIRD QUARTER 2019 SUMMARY (all comparisons to the third quarter of 2018)
Average loans of $23.3 billion were up 1%, or $278 million
Average deposits of $25.2 billion were up 2%, or $505 million
Net interest income of $206 million decreased $13 million, or 6%
Net interest margin of 2.81% declined 11 basis points from 2.92%
Provision for credit losses of $2 million compared to negative $5 million
Noninterest income of $101 million increased 14%, or $13 million
Noninterest expense of $201 million was down 2%, or $3 million
Income before income taxes of $104 million decreased 4%, or $4 million
During the quarter, the Company repurchased nearly 3 million shares, or $60 million, of common stock
Total dividends paid per common share were $0.17, up 13%
Return on average common equity Tier 1 decreased to 12.8% from 13.2%


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
Third quarter 2019 average loans of $23.3 billion were up $278 million, or 1%, from the year ago quarter, but declined $102 million from the second quarter.
With respect to third quarter 2019 average balances by loan category:
Commercial and business lending increased $564 million from the year ago quarter but decreased $119 million from the second quarter to $8.5 billion. General commercial lending drove the increase from the year ago quarter while planned de-risking of the oil & gas portfolio contributed to the decrease from the second quarter.
Consumer lending decreased $22 million from the year ago quarter and decreased $9 million from the second quarter to $9.6 billion.
Commercial real estate lending decreased $264 million from the year ago quarter to $5.2 billion. However, CRE increased $26 million from the second quarter as strong production continued to outpace paydown activity.

Investments
Third quarter 2019 average investment securities of $6.0 billion were purposefully decreased by $968 million, or 14% from the year ago quarter, and decreased by $516 million from the second quarter as the Company used its investment portfolio as a source of funds during the third quarter, seeking to reposition its balance sheet for a declining rate environment.
Taxable securities decreased $1.3 billion from the year ago quarter and decreased $491 million from the second quarter as lower yielding, primarily mortgage backed securities were sold.
Tax-exempt securities increased $291 million from the year ago quarter but decreased $25 million from the second quarter.




Deposits
Third quarter 2019 average deposits of $25.2 billion were up $505 million, or 2% from the year ago quarter and were up $120 million compared to the second quarter. Deposit inflows from the Huntington branch acquisition that closed in June were used to pay down network transaction deposits and other higher-cost funding.
With respect to third quarter 2019 average balances by deposit category:
Savings increased $716 million from the year ago quarter and increased $299 million from the second quarter to $2.6 billion.
Interest-bearing demand deposits increased $464 million from the year ago quarter and increased $468 million from the second quarter to $5.5 billion.
Time deposits increased $129 million from the year ago quarter but decreased $437 million from the second quarter to $3.1 billion.
Noninterest-bearing demand deposits increased $14 million from the year ago quarter and increased $235 million from the second quarter to $5.3 billion.
Network transaction deposits decreased $205 million from the year ago quarter and decreased $260 million from the second quarter to $1.8 billion.
Money market deposits decreased $613 million from the year ago quarter and decreased $185 million from the second quarter to $6.9 billion.

Net Interest Income and Net Interest Margin
Third quarter 2019 net interest income of $206 million was down 6%, or $13 million, and the net interest margin decreased 11 basis points to 2.81% from the year ago quarter. Third quarter 2019 net interest income decreased 3%, or $7 million, and the net interest margin decreased six basis points from the prior quarter. The decreases were driven by compression in LIBOR rates outpacing reductions in funding costs. The net interest margin for the first nine months of 2019 was 2.86%.
The average yield on total commercial loans for the third quarter of 2019 decreased seven basis points to 4.66% from the year ago quarter, and decreased 28 basis points from the prior quarter.
The average cost of total interest-bearing deposits for the third quarter of 2019 increased 20 basis points to 1.23% from the year ago quarter but decreased 12 basis points from the prior quarter.
The net free funds benefit, which is the net margin increase from noninterest-bearing deposits, increased four basis points in the third quarter of 2019 compared to the year ago quarter but was unchanged from the prior quarter.




Noninterest Income
Third quarter 2019 total noninterest income of $101 million increased $13 million from the year ago quarter and increased $5 million from the prior quarter.
With respect to third quarter 2019 noninterest income line items:
Net mortgage banking income was up $7 million from the year ago quarter and was up $1 million from the previous quarter, driven by increased settlements including the sale of approximately $240 million of loans from our portfolio.
Gains on sales of investment securities were up $4 million from the year ago quarter and up $3 million from the second quarter, reflecting our deleveraging strategy.
Insurance commissions and fees were down $1 million from the year ago quarter and were down $2 million from the previous quarter due to seasonally lower contingency fees in the third quarter.

Noninterest Expense
Third quarter 2019 total noninterest expense of $201 million decreased 2%, or $3 million from the year ago quarter, but increased $3 million from the prior quarter. The year ago quarter included $2 million of acquisition related costs while the current quarter and prior quarter included $2 million and $4 million of acquisition related costs, respectively.
With respect to third quarter 2019 noninterest expense line items:
Personnel expense decreased $1 million from the year ago quarter, but was essentially unchanged from the prior quarter despite the addition of personnel from the Huntington branch acquisition.
Occupancy expense increased $1 million from the year ago quarter and the prior quarter due primarily to the acquisition of Huntington branches.
Technology expense increased $3 million from the year ago quarter, but was relatively unchanged from 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 and decreased from the prior quarter.

Taxes
The third quarter 2019 effective tax rate was 20% compared to 21% in the year ago quarter and 18% in the prior quarter. The lower effective tax rate in the previous quarter was due to a one-time tax benefit as the Company contributed appreciated stock to its charitable trust.




Credit
The third quarter 2019 provision for credit losses was $2 million, up from negative $5 million in the year ago quarter but down from $8 million in the prior quarter.
With respect to third quarter 2019 credit quality:
Potential problem loans of $133 million were down $103 million, or 44%, from the year ago quarter and down $33 million, or 20%, from the prior quarter.
Nonaccrual loans of $129 million were down $25 million from the year ago quarter and down $38 million from the prior quarter. The nonaccrual loans to total loans ratio was 0.57% in the third quarter, compared to 0.67% in the year ago quarter and 0.72% in the prior quarter.
Other real estate owned (OREO) of $20 million was down $6 million from the year ago quarter, which was elevated due to pending Bank Mutual branch dispositions, and up $1 million from the prior quarter.
Net charge offs of $20 million were up $8 million from the year ago quarter and up $7 million from the prior quarter reflecting continued de-risking of the oil & gas portfolio.
The allowance for loan losses of $214 million was down $22 million from the year ago quarter and was down $19 million from the prior quarter. The allowance for loan losses to total loans ratio was 0.94% in the third quarter, down from 1.03% in the year ago quarter, and 1.00% in the prior quarter.

Capital
The Company’s capital position remains strong, with a CET1 capital ratio of 10.2% at September 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 3 million shares, or $60 million, of common stock at an average price of $20.75 per share.





THIRD 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, October 24, 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 third quarter 2019 earnings call. The third 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.
# # #




Associated Banc-Corp
Consolidated Balance Sheets (Unaudited)
 
 
 
 
 
 
($ in thousands)
Sep 30, 2019
Jun 30, 2019
Seql Qtr $ Change
Mar 31, 2019
Dec 31, 2018
Sep 30, 2018
Comp Qtr $ Change
Assets
 
 
 
 
 
 
 
Cash and due from banks
$
523,435

$
382,985

$
140,450

$
334,095

$
507,187

$
374,168

$
149,267

Interest-bearing deposits in other financial institutions
236,010

172,708

63,302

270,843

221,226

147,848

88,162

Federal funds sold and securities purchased under agreements to resell
100

1,385

(1,285
)
41,405

148,285

24,325

(24,225
)
Investment securities held to maturity, at amortized cost(a)
2,200,419

2,806,064

(605,645
)
2,846,689

2,740,511

2,661,755

(461,336
)
Investment securities available for sale, at fair value(a)
3,436,289

3,283,456

152,833

3,829,388

3,946,941

4,052,624

(616,335
)
Equity securities
15,096

15,066

30

1,609

1,568

1,573

13,523

Federal Home Loan Bank and Federal Reserve Bank stocks, at cost
207,443

202,758

4,685

216,940

250,534

220,825

(13,382
)
Residential loans held for sale
137,655

129,303

8,352

81,392

64,321

134,361

3,294

Commercial loans held for sale
11,597

11,000

597

15,467

14,943

30,452

(18,855
)
Loans(b)
22,754,710

23,249,967

(495,257
)
23,148,359

22,940,429

22,867,112

(112,402
)
Allowance for loan losses
(214,425
)
(233,659
)
19,234

(235,081
)
(238,023
)
(236,250
)
21,825

Loans, net
22,540,285

23,016,308

(476,023
)
22,913,278

22,702,406

22,630,861

(90,576
)
Bank and corporate owned life insurance
670,739

668,638

2,101

665,976

663,203

661,009

9,730

Investment in unconsolidated subsidiaries
256,220

222,812

33,408

194,670

161,181

156,878

99,342

Premises and equipment
436,268

432,058

4,210

411,040

363,225

358,926

77,342

Goodwill
1,176,230

1,176,019

211

1,168,944

1,169,023

1,168,922

7,308

Mortgage servicing rights, net
68,168

66,175

1,993

66,626

68,193

67,872

296

Other intangible assets, net
91,089

93,915

(2,826
)
73,610

75,836

78,069

13,020

Other assets(c)
589,420

566,216

23,204

549,356

516,538

657,326

(67,906
)
Total assets
$
32,596,460

$
33,246,869

$
(650,409
)
$
33,681,329

$
33,615,122

$
33,427,794

$
(831,334
)
Liabilities and stockholders’ equity
 
 
 
 
 
 
 
Noninterest-bearing demand deposits
$
5,503,223

$
5,354,987

$
148,236

$
5,334,154

$
5,698,530

$
5,421,270

$
81,953

Interest-bearing deposits
18,919,339

19,919,235

(999,896
)
20,198,903

19,198,863

19,410,342

(491,003
)
Total deposits
24,422,562

25,274,222

(851,660
)
25,533,057

24,897,393

24,831,612

(409,050
)
Federal funds purchased and securities sold under agreements to repurchase
78,028

83,195

(5,167
)
127,098

111,651

166,556

(88,528
)
Commercial paper
30,416

28,787

1,629

32,019

45,423

43,604

(13,188
)
FHLB advances
2,877,727

2,742,941

134,786

2,944,769

3,574,371

3,332,655

(454,928
)
Other long-term funding
796,799

796,403

396

796,007

795,611

795,215

1,584

Accrued expenses and other liabilities(c)
470,073

421,526

48,547

412,510

409,787

461,113

8,960

Total liabilities
28,675,605

29,347,075

(671,470
)
29,845,459

29,834,235

29,630,755

(955,150
)
Stockholders’ equity
 
 
 
 
 
 
 
Preferred equity
256,716

256,716


256,716

256,716

256,716


Common equity
3,664,139

3,643,077

21,061

3,579,153

3,524,171

3,540,322

123,816

Total stockholders’ equity
3,920,855

3,899,794

21,061

3,835,870

3,780,888

3,797,038

123,816

Total liabilities and stockholders’ equity
$
32,596,460

$
33,246,869

$
(650,409
)
$
33,681,329

$
33,615,122

$
33,427,794

$
(831,334
)
Numbers may not sum due to rounding.
(a) As permitted by ASU 2019-04, which was adopted during the third quarter of 2019, the Corporation made a one-time election to transfer municipal securities with a book value of $692 million from held to maturity to available for sale.
(b) During the third quarter of 2019, the Corporation sold approximately $240 million of portfolio mortgages as well as $33 million of nonaccrual and performing restructured loans.
(c) During the third quarter of 2019, the Corporation made a change in accounting policy to offset derivative assets and liabilities and cash collateral with the same counterparty where it has a legally enforceable master netting agreement in place. The change had no impact on either earnings or equity. The Corporation believes that this change is a preferable method of accounting as it provides a better reflection of the assets and liabilities on the face of the consolidated balance sheets. Adoption of this change was voluntary and has been adopted retrospectively with all prior periods presented herein restated.


Page 1




Associated Banc-Corp
Consolidated Statements of Income (Unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
($ in thousands, except per share data)
 
 
Comp Qtr
 
YTD
 
YTD
 
Comp YTD
3Q19
 
3Q18
 
$ Change
 
% Change
 
Sep 2019
 
Sep 2018
 
$ Change
 
% Change
Interest income
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest and fees on loans
$
248,579

 
$
249,649

 
$
(1,070
)
 
 %
 
$
768,216

 
$
716,329

 
$
51,887

 
7
 %
Interest and dividends on investment securities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Taxable
23,485

 
29,895

 
(6,410
)
 
(21
)%
 
79,248

 
90,622

 
(11,374
)
 
(13
)%
Tax-exempt
14,491

 
11,883

 
2,608

 
22
 %
 
42,950

 
31,883

 
11,067

 
35
 %
Other interest
4,865

 
4,036

 
829

 
21
 %
 
13,086

 
9,366

 
3,720

 
40
 %
Total interest income
291,420

 
295,464

 
(4,044
)
 
(1
)%
 
903,500

 
848,201

 
55,299

 
7
 %
Interest expense
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest on deposits
61,585

 
50,116

 
11,469

 
23
 %
 
191,408

 
121,959

 
69,449

 
57
 %
Interest on federal funds purchased and securities sold under agreements to repurchase
145

 
504

 
(359
)
 
(71
)%
 
1,058

 
1,564

 
(506
)
 
(32
)%
Interest on other short-term funding
33

 
38

 
(5
)
 
(13
)%
 
121

 
150

 
(29
)
 
(19
)%
Interest on FHLB advances
15,896

 
19,318

 
(3,422
)
 
(18
)%
 
53,194

 
53,720

 
(526
)
 
(1
)%
Interest on long-term funding
7,396

 
6,095

 
1,301

 
21
 %
 
22,188

 
15,183

 
7,005

 
46
 %
Total interest expense
85,054

 
76,072

 
8,982

 
12
 %
 
267,969

 
192,576

 
75,393

 
39
 %
Net interest income
206,365

 
219,392

 
(13,027
)
 
(6
)%
 
635,532

 
655,625

 
(20,093
)
 
(3
)%
Provision for credit losses
2,000

 
(5,000
)
 
7,000

 
N/M

 
16,000

 
(1,000
)
 
17,000

 
N/M

Net interest income after provision for credit losses
204,365

 
224,392

 
(20,027
)
 
(9
)%
 
619,532

 
656,625

 
(37,093
)
 
(6
)%
Noninterest income
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Insurance commissions and fees
20,954

 
21,636

 
(682
)
 
(3
)%
 
69,403

 
68,279

 
1,124

 
2
 %
Wealth management fees(a)
21,015

 
21,224

 
(209
)
 
(1
)%
 
61,885

 
62,198

 
(313
)
 
(1
)%
Service charges and deposit account fees
16,561

 
16,904

 
(343
)
 
(2
)%
 
47,102

 
49,714

 
(2,612
)
 
(5
)%
Card-based fees
10,456

 
9,783

 
673

 
7
 %
 
29,848

 
29,341

 
507

 
2
 %
Other fee-based revenue
5,085

 
4,307

 
778

 
18
 %
 
14,246

 
12,559

 
1,687

 
13
 %
Capital markets, net 
4,300

 
5,099

 
(799
)
 
(16
)%
 
12,215

 
15,189

 
(2,974
)
 
(20
)%
Mortgage banking, net
10,940

 
4,012

 
6,928

 
173
 %
 
25,118

 
16,640

 
8,478

 
51
 %
Bank and corporate owned life insurance
4,337

 
3,540

 
797

 
23
 %
 
11,482

 
10,705

 
777

 
7
 %
Asset gains (losses), net(b)
877

 
(1,037
)
 
1,914

 
N/M

 
2,316

 
1,353

 
963

 
71
 %
Investment securities gains (losses), net
3,788

 
30

 
3,758

 
N/M

 
5,931

 
(1,985
)
 
7,916

 
N/M

Other 
2,537

 
2,802

 
(265
)
 
(9
)%
 
8,344

 
7,529

 
815

 
11
 %
Total noninterest income
100,850

 
88,300

 
12,550

 
14
 %
 
287,890

 
271,522

 
16,368

 
6
 %
Noninterest expense
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Personnel
123,170

 
124,476

 
(1,306
)
 
(1
)%
 
366,449

 
366,141

 
308

 
 %
Technology
20,572

 
17,563

 
3,009

 
17
 %
 
59,698

 
54,730

 
4,968

 
9
 %
Occupancy
15,164

 
14,519

 
645

 
4
 %
 
45,466

 
44,947

 
519

 
1
 %
Business development and advertising
7,991

 
8,213

 
(222
)
 
(3
)%
 
21,284

 
21,973

 
(689
)
 
(3
)%
Equipment
6,335

 
5,838

 
497

 
9
 %
 
17,580

 
17,347

 
233

 
1
 %
Legal and professional
5,724

 
5,476

 
248

 
5
 %
 
14,342

 
17,173

 
(2,831
)
 
(16
)%
Loan and foreclosure costs
1,638

 
2,439

 
(801
)
 
(33
)%
 
5,599

 
5,844

 
(245
)
 
(4
)%
FDIC assessment
4,000

 
7,750

 
(3,750
)
 
(48
)%
 
12,250

 
24,250

 
(12,000
)
 
(49
)%
Other intangible amortization
2,686

 
2,233

 
453

 
20
 %
 
7,237

 
5,926

 
1,311

 
22
 %
Acquisition related costs(c)
1,629

 
2,271

 
(642
)
 
(28
)%
 
5,995

 
29,983

 
(23,988
)
 
(80
)%
Other
12,021

 
13,634

 
(1,613
)
 
(12
)%
 
34,479

 
40,323

 
(5,844
)
 
(14
)%
Total noninterest expense
200,930

 
204,413

 
(3,483
)
 
(2
)%
 
590,380

 
628,636

 
(38,256
)
 
(6
)%
Income before income taxes
104,286

 
108,279

 
(3,993
)
 
(4
)%
 
317,042

 
299,510

 
17,532

 
6
 %
Income tax expense
20,947

 
22,349

 
(1,402
)
 
(6
)%
 
62,356

 
54,932

 
7,424

 
14
 %
Net income
83,339

 
85,929

 
(2,590
)
 
(3
)%
 
254,686

 
244,578

 
10,108

 
4
 %
Preferred stock dividends
3,801

 
2,409

 
1,392

 
58
 %
 
11,402

 
7,077

 
4,325

 
61
 %
Net income available to common equity
$
79,539

 
$
83,521

 
$
(3,982
)
 
(5
)%
 
$
243,285

 
$
237,501

 
$
5,784

 
2
 %
Earnings per common share
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic
$
0.50

 
$
0.49

 
$
0.01

 
2
 %
 
$
1.49

 
$
1.40

 
$
0.09

 
6
 %
Diluted
$
0.49

 
$
0.48

 
$
0.01

 
2
 %
 
$
1.48

 
$
1.38

 
$
0.10

 
7
 %
Average common shares outstanding
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic
159,126

 
170,516

 
(11,390
)
 
(7
)%
 
161,727

 
168,249

 
(6,522
)
 
(4
)%
Diluted
160,382

 
172,802

 
(12,420
)
 
(7
)%
 
163,061

 
170,876

 
(7,815
)
 
(5
)%
N/M = Not meaningful
Numbers may not sum due to rounding.
(a) Includes trust, asset management, brokerage, and annuity fees.
(b)
YTD 2019 includes less than $1 million of Huntington related asset losses; 3Q18 and YTD Sep 2018 include approximately $1 million and $2 million of Bank Mutual acquisition related asset losses net of asset gains, respectively.
(c)
Includes Bank Mutual, Huntington branch, and First Staunton 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
3Q19
 
2Q19
 
$ Change
 
% Change
 
1Q19
 
4Q18
 
3Q18
 
$ Change
 
% Change
Interest income
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest and fees on loans
$
248,579

 
$
260,784

 
$
(12,205
)
 
(5
)%
 
$
258,853

 
$
260,661

 
$
249,649

 
$
(1,070
)
 
 %
Interest and dividends on investment securities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Taxable
23,485

 
26,710

 
(3,225
)
 
(12
)%
 
29,053

 
29,119

 
29,895

 
(6,410
)
 
(21
)%
Tax-exempt
14,491

 
14,643

 
(152
)
 
(1
)%
 
13,816

 
12,899

 
11,883

 
2,608

 
22
 %
Other interest
4,865

 
3,995

 
870

 
22
 %
 
4,226

 
3,257

 
4,036

 
829

 
21
 %
Total interest income
291,420

 
306,133

 
(14,713
)
 
(5
)%
 
305,948

 
305,936

 
295,464

 
(4,044
)
 
(1
)%
Interest expense
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest on deposits
61,585

 
67,050

 
(5,465
)
 
(8
)%
 
62,773

 
54,159

 
50,116

 
11,469

 
23
 %
Interest on federal funds purchased and securities sold under agreements to repurchase
145

 
286

 
(141
)
 
(49
)%
 
627

 
442

 
504

 
(359
)
 
(71
)%
Interest on other short-term funding
33

 
37

 
(4
)
 
(11
)%
 
51

 
36

 
38

 
(5
)
 
(13
)%
Interest on FHLB advances
15,896

 
17,744

 
(1,848
)
 
(10
)%
 
19,554

 
19,948

 
19,318

 
(3,422
)
 
(18
)%
Interest on long-term funding
7,396

 
7,396

 

 
 %
 
7,396

 
7,396

 
6,095

 
1,301

 
21
 %
Total interest expense
85,054

 
92,513

 
(7,459
)
 
(8
)%
 
90,401

 
81,980

 
76,072

 
8,982

 
12
 %
Net interest income
206,365

 
213,619

 
(7,254
)
 
(3
)%
 
215,547

 
223,955

 
219,392

 
(13,027
)
 
(6
)%
Provision for credit losses
2,000

 
8,000

 
(6,000
)
 
(75
)%
 
6,000

 
1,000

 
(5,000
)
 
7,000

 
N/M

Net interest income after provision for credit losses
204,365

 
205,619

 
(1,254
)
 
(1
)%
 
209,547

 
222,955

 
224,392

 
(20,027
)
 
(9
)%
Noninterest income
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Insurance commissions and fees
20,954

 
22,985

 
(2,031
)
 
(9
)%
 
25,464

 
21,232

 
21,636

 
(682
)
 
(3
)%
Wealth management fees(a)
21,015

 
20,691

 
324

 
2
 %
 
20,180

 
20,364

 
21,224

 
(209
)
 
(1
)%
Service charges and deposit account fees
16,561

 
15,426

 
1,135

 
7
 %
 
15,115

 
16,361

 
16,904

 
(343
)
 
(2
)%
Card-based fees
10,456

 
10,131

 
325

 
3
 %
 
9,261

 
10,316

 
9,783

 
673

 
7
 %
Other fee-based revenue
5,085

 
5,178

 
(93
)
 
(2
)%
 
3,983

 
5,260

 
4,307

 
778

 
18
 %
Capital markets, net
4,300

 
4,726

 
(426
)
 
(9
)%
 
3,189

 
4,931

 
5,099

 
(799
)
 
(16
)%
Mortgage banking, net
10,940

 
9,466

 
1,474

 
16
 %
 
4,712

 
3,271

 
4,012

 
6,928

 
173
 %
Bank and corporate owned life insurance
4,337

 
3,352

 
985

 
29
 %
 
3,792

 
3,247

 
3,540

 
797

 
23
 %
Asset gains (losses), net(b)
877

 
871

 
6

 
1
 %
 
567

 
(2,456
)
 
(1,037
)
 
1,914

 
N/M

Investment securities gains (losses), net
3,788

 
463

 
3,325

 
N/M

 
1,680

 

 
30

 
3,758

 
N/M

Other
2,537

 
2,547

 
(10
)
 
 %
 
3,260

 
1,522

 
2,802

 
(265
)
 
(9
)%
Total noninterest income
100,850

 
95,837

 
5,013

 
5
 %
 
91,202

 
84,046

 
88,300

 
12,550

 
14
 %
Noninterest expense
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Personnel
123,170

 
123,228

 
(58
)
 
 %
 
120,050

 
116,535

 
124,476

 
(1,306
)
 
(1
)%
Technology
20,572

 
20,114

 
458

 
2
 %
 
19,012

 
17,944

 
17,563

 
3,009

 
17
 %
Occupancy
15,164

 
13,830

 
1,334

 
10
 %
 
16,472

 
14,174

 
14,519

 
645

 
4
 %
Business development and advertising
7,991

 
6,658

 
1,333

 
20
 %
 
6,636

 
8,950

 
8,213

 
(222
)
 
(3
)%
Equipment
6,335

 
5,577

 
758

 
14
 %
 
5,668

 
5,897

 
5,838

 
497

 
9
 %
Legal and professional
5,724

 
4,668

 
1,056

 
23
 %
 
3,951

 
5,888

 
5,476

 
248

 
5
 %
Loan and foreclosure costs
1,638

 
1,814

 
(176
)
 
(10
)%
 
2,146

 
1,566

 
2,439

 
(801
)
 
(33
)%
FDIC assessment
4,000

 
4,500

 
(500
)
 
(11
)%
 
3,750

 
5,750

 
7,750

 
(3,750
)
 
(48
)%
Other intangible amortization
2,686

 
2,324

 
362

 
16
 %
 
2,226

 
2,233

 
2,233

 
453

 
20
 %
Acquisition related costs(c)
1,629

 
3,734

 
(2,105
)
 
(56
)%
 
632

 
(981
)
 
2,271

 
(642
)
 
(28
)%
Other
12,021

 
11,331

 
690

 
6
 %
 
11,128

 
15,207

 
13,634

 
(1,613
)
 
(12
)%
Total noninterest expense
200,930

 
197,779

 
3,151

 
2
 %
 
191,671

 
193,163

 
204,413

 
(3,483
)
 
(2
)%
Income before income taxes
104,286

 
103,678

 
608

 
1
 %
 
109,078

 
113,839

 
108,279

 
(3,993
)
 
(4
)%
Income tax expense
20,947

 
19,017

 
1,930

 
10
 %
 
22,392

 
24,854

 
22,349

 
(1,402
)
 
(6
)%
Net income
83,339

 
84,661

 
(1,321
)
 
(2
)%
 
86,686

 
88,985

 
85,929

 
(2,590
)
 
(3
)%
Preferred stock dividends
3,801

 
3,801

 

 
 %
 
3,801

 
3,707

 
2,409

 
1,392

 
58
 %
Net income available to common equity
$
79,539

 
$
80,860

 
$
(1,321
)
 
(2
)%
 
$
82,885

 
$
85,278

 
$
83,521

 
$
(3,982
)
 
(5
)%
Earnings per common share
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic
$
0.50

 
$
0.49

 
$
0.01

 
2
 %
 
$
0.50

 
$
0.52

 
$
0.49

 
$
0.01

 
2
 %
Diluted
$
0.49

 
$
0.49

 
$

 
 %
 
$
0.50

 
$
0.51

 
$
0.48

 
$
0.01

 
2
 %
Average common shares outstanding
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic
159,126

 
162,180

 
(3,054
)
 
(2
)%
 
163,928

 
164,662

 
170,516

 
(11,390
)
 
(7
)%
Diluted
160,382

 
163,672

 
(3,290
)
 
(2
)%
 
165,433

 
166,394

 
172,802

 
(12,420
)
 
(7
)%
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 includes approximately $1 million of Bank Mutual acquisition related asset losses net of asset gains.
(c) Includes Bank Mutual, Huntington branch, and First Staunton 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
Sep 2019
YTD
Sep 2018
3Q19
2Q19
1Q19
4Q18
3Q18
Per common share data
 
 
 
 
 
 
 
Dividends
$
0.51

$
0.45

$
0.17

$
0.17

$
0.17

$
0.17

$
0.15

Market value:
 
 
 
 
 
 
 
High
23.67

28.85

21.67

23.15

23.67

26.55

28.35

Low
18.64

23.60

18.64

19.81

19.77

18.72

26.00

Close
20.25

26.00

20.25

21.14

21.35

19.79

26.00

Book value
23.00

21.06

23.00

22.40

21.77

21.43

21.06

Tangible book value / share
15.05

13.64

15.05

14.59

14.21

13.86

13.64

Performance ratios (annualized)
 
 
 
 
 
 
 
Return on average assets
1.02
%
0.99
%
1.00
%
1.02
%
1.05
%
1.07
%
1.02
%
Effective tax rate
19.67
%
18.34
%
20.09
%
18.34
%
20.53
%
21.83
%
20.64
%
Dividend payout ratio(a)
34.23
%
32.14
%
34.00
%
34.69
%
34.00
%
32.69
%
30.61
%
Net interest margin
2.86
%
2.95
%
2.81
%
2.87
%
2.90
%
3.02
%
2.92
%
Selected trend information
 
 
 
 
 
 
 
Average full time equivalent employees(b)
4,703

4,712

4,782

4,666

4,660

4,659

4,707

Branch count
 
 
248

247

233

236

236

Assets under management, at market value(c)
 
 
$
11,604

$
11,475

$
11,192

$
10,291

$
11,206

Mortgage loans originated for sale during period
$
824

$
848

$
365

$
297

$
163

$
245

$
331

Mortgage loan settlements during period(d)
$
1,049

$
827

$
617

$
272

$
160

$
305

$
345

Mortgage portfolio serviced for others
 
 
$
8,688

$
8,504

$
8,543

$
8,601

$
8,547

Mortgage servicing rights, net / mortgage portfolio serviced for others
 
 
0.78
%
0.78
%
0.78
%
0.79
%
0.79
%
Shares repurchased during period
5,954

5,706

2,892

1,754

1,308

3,764

4,349

Shares outstanding, end of period
159,291

168,138

159,291

162,662

164,418

164,440

168,138

Selected quarterly ratios
 
 
 
 
 
 
 
Loans / deposits
 
 
93.17
%
91.99
%
90.66
%
92.14
%
92.09
%
Stockholders’ equity / assets
 
 
12.03
%
11.73
%
11.39
%
11.25
%
11.36
%
Risk-based capital(e)(f)
 
 
 
 
 
 
 
Total risk-weighted assets
 
 
$
24,311

$
24,466

$
24,121

$
23,843

$
23,846

Common equity Tier 1
 
 
$
2,482

$
2,481

$
2,485

$
2,450

$
2,475

Common equity Tier 1 capital ratio
 
 
10.21
%
10.14
%
10.30
%
10.27
%
10.38
%
Tier 1 capital ratio
 
 
11.27
%
11.19
%
11.36
%
11.35
%
11.45
%
Total capital ratio
 
 
13.26
%
13.25
%
13.48
%
13.49
%
13.59
%
Tier 1 leverage ratio
 
 
8.57
%
8.49
%
8.50
%
8.49
%
8.45
%
Loans
 
 
 
 
 
 
 
Recorded investment on loans
 
 
$
22,690

$
23,180

$
23,078

$
22,872

$
22,800

Net unaccreted purchase discount on performing loans(g)
 
 
(14
)
(16
)
(16
)
(18
)
(21
)
Net other deferred costs
 
 
79

85

86

87

87

Loans
 
 
$
22,755

$
23,250

$
23,148

$
22,940

$
22,867

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)
During the third quarter of 2019, the Corporation sold approximately $240 million of portfolio mortgages that resulted in an increase in the quarter and year to date periods.
(e)
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.
(f)
September 30, 2019 data is estimated.
(g)
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)
 
Sep 30, 2019
Jun 30, 2019
Seql Qtr %
Change
 
Mar 31, 2019
Dec 31, 2018
Sep 30, 2018
Comp Qtr %
Change
Allowance for loan losses
 
 
 
 
 
 
 
 
 
Balance at beginning of period
 
$
233,659

$
235,081

(1
)%
 
$
238,023

$
236,250

$
252,601

(7
)%
Provision for loan losses
 
1,000

12,000

(92
)%
 
4,500

2,000

(4,000
)
N/M

Charge offs
 
(26,313
)
(15,761
)
67
 %
 
(15,486
)
(6,151
)
(17,304
)
52
 %
Recoveries
 
6,079

2,339

160
 %
 
8,044

5,923

4,953

23
 %
Net charge offs
 
(20,234
)
(13,421
)
51
 %
 
(7,442
)
(228
)
(12,351
)
64
 %
Balance at end of period
 
$
214,425

$
233,659

(8
)%
 
$
235,081

$
238,023

$
236,250

(9
)%
Allowance for unfunded commitments
 
 
 
 
 
 
 
 
 
Balance at beginning of period
 
$
21,907

$
25,836

(15
)%
 
$
24,336

$
25,336

$
26,336

(17
)%
Provision for unfunded commitments
 
1,000

(4,000
)
N/M

 
1,500

(1,000
)
(1,000
)
N/M

Amount recorded at acquisition
 

70

(100
)%
 



N/M

Balance at end of period
 
$
22,907

$
21,907

5