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

Document




UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 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 20, 2016
Associated Banc-Corp
(Exact name of registrant as specified in its charter)
 
 
 
 
 
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))





















Item 2.02 Results of Operations and Financial Condition.
 
On October 20, 2016, Associated Banc-Corp announced its earnings for the quarter ended September 30, 2016. 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 20, 2016, 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:
 
99.1    Press release of the registrant dated October 20, 2016, containing financial information for the quarter ended September 30, 2016.
 
99.2 Slide presentation discussed on the conference call for investors and analysts on October 20, 2016.










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 20, 2016
By:
 /s/ Christopher J. Del Moral-Niles
 
 
Christopher J. Del Moral-Niles
 
 
Chief Financial Officer
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

















 
ASSOCIATED BANC-CORP
 
Exhibit Index to Current Report on Form 8-K
 
Exhibit
Number
    99.1
Press release of the registrant dated October 20, 2016, containing financial information for the quarter ended September 30, 2016.
 
 
    99.2
Slide presentation discussed on the conference call for investors and analysts on October 20, 2016.
 
 
 
 
 
 
 
 



(Back To Top)

Section 2: EX-99.1 (EXHIBIT 99.1)

Exhibit


Exhibit 99.1
36328197_associatedbanklogoa09.jpg
NEWS RELEASE
Investor Contact:
Teresa Gutierrez, Senior Vice President, Director of Investor Relations     
920-491-7059
Media Contact:
Jennifer Kaminski, Vice President, Manager of Public Relations
920-491-7576


Associated Banc-Corp Reports Third Quarter Earnings of $0.34 per share
Record deposits and capital markets revenues contribute to bottom line growth


GREEN BAY, Wis. -- October 20, 2016 -- Associated Banc-Corp (NYSE: ASB) today reported net income available to common equity of $52 million, or $0.34 per common share, for the quarter ended September 30, 2016. This compares to net income available to common equity of $47 million, or $0.31 per common share, for both the quarters ended June 30, 2016 and September 30, 2015.

“In the third quarter, we reached record deposit levels. We saw significant seasonal deposit inflows and we are particularly pleased with double-digit year over year growth in demand deposits. Average loans continued to grow and we remain on track to meet our 2016 loan guidance. Mortgage banking activity and record capital markets revenues drove noninterest income higher in the third quarter, which more than offset seasonally lower insurance commissions and additional loan loss provisions,” said President and CEO Philip B. Flynn.

THIRD QUARTER SUMMARY
Average loans of $20.1 billion increased $411 million, or 2% from the second quarter
Total commercial lending grew 10% year over year
Average deposits of $21.4 billion increased $1.1 billion, or 5% from the second quarter
Noninterest-bearing demand deposits grew 13% year over year
Net interest income of $179 million was up $2 million, or 1% from the second quarter
Net interest income grew 5% year over year
Net interest margin of 2.77%, down from 2.81% in the second quarter
Net interest margin was down 5 basis points year over year
Provision for credit losses of $21 million was up $7 million from the second quarter
Noninterest income of $95 million was up $13 million, or 16% from the second quarter
Noninterest expense of $175 million was up $1 million, or 1% from the second quarter
Return on average common equity Tier 1 (CET1) was 10.5%, up from 9.9% in the second quarter
Total dividends per common share of $0.11 were up 10% from the year ago quarter
Capital ratios remain strong with a CET1 ratio of 9.3% at quarter end, compared to 9.2% at prior quarter end





THIRD QUARTER RESULTS

Loans
Third quarter average loans of $20.1 billion increased $411 million, or 2% from the second quarter, and have increased $1.6 billion, or 9% from the year ago quarter.
With respect to third quarter average balances,
Commercial real estate lending grew $202 million, or 4% from the second quarter to $4.9 billion. Commercial real estate lending has increased $595 million, or 14% from the year ago quarter.
Consumer lending grew $106 million, net of $239 million of portfolio loan sales, or 1% from the second quarter to $7.6 billion, and has increased $517 million, or 7% from the year ago quarter.
Commercial and business lending grew $103 million, or 1% from the second quarter to $7.6 billion, with growth driven by mortgage warehouse and power and utilities. Commercial and business lending has increased $488 million, or 7% from the year ago quarter.

Deposits
Third quarter average deposits of $21.4 billion increased $1.1 billion, or 5% from the second quarter, and have increased $1.1 billion, or 5% from the year ago quarter.
With respect to third quarter average balances,
Interest-bearing demand deposits grew $511 million, or 14% from the second quarter to $4.2 billion, and have grown $952 million, or 30% from the year ago quarter.
Noninterest-bearing demand deposits grew $192 million, or 4% from the second quarter to $5.2 billion, and have grown $588 million, or 13% from the year ago quarter.
Savings and time deposits increased modestly from the second quarter. Savings deposits have grown $91 million, or 7% from the year ago quarter. Time deposits have decreased $71 million, or 4% from the year ago quarter.
Money market deposits grew $396 million, or 5% from the second quarter to $9.1 billion, but have decreased $449 million, or 5% from the year ago quarter as we continue to optimize our funding costs.





Net Interest Income and Net Interest Margin
Third quarter net interest income of $179 million was up $2 million, or 1% from the second quarter, and was up $8 million, or 5% from the year ago quarter. Third quarter net interest margin of 2.77% was 5 basis points lower than the year ago quarter.
Interest and fees on loans increased $4 million, or 3% from the second quarter. The total loan yield of 3.35% was unchanged from the second quarter.
Interest expense on deposits increased $1 million, or 12% from the second quarter. Total deposits costs, including the benefit of free funds, were essentially unchanged from the second quarter.
The yields on investment securities declined from the second quarter, and accounted for the majority of the margin compression.

Noninterest Income
Third quarter total noninterest income of $95 million was up $13 million, or 16% from the second quarter, and was up $15 million, or 19% from the year ago quarter.
Mortgage banking income increased $14 million to $18 million for the quarter. The Company benefitted from higher volumes of mortgage loans originated for sale during the quarter, and recorded a $2 million positive fair value mark on its loan pipeline at quarter end. Portfolio loan sales generated $9 million of gross gains during the quarter.
Capital market fees increased $3 million to $7 million for the quarter on higher derivative and syndication activity.
Fee-based revenue decreased $2 million from the second quarter due to seasonally lower insurance commissions. All other fee-based revenue categories were higher in the third quarter, including service charges on deposit accounts, trust service fees, card-based and other nondeposit fees, and brokerage and annuity commissions.
All other noninterest income categories, collectively, decreased $2 million from the second quarter, primarily attributable to lower investment securities gains. The Company did not engage in further restructuring of its investment portfolio during the third quarter.





Noninterest Expense
Third quarter total noninterest expense of $175 million was up $1 million, or 1% from the second quarter, and was up $4 million, or 2% from the year ago quarter.
Personnel expense increased $2 million from the second quarter and included $1 million of severance.
Occupancy expense increased from the second quarter, due to a $2 million lease termination charge related to planned consolidation of office space in Chicago.
All other noninterest expense categories, collectively, decreased $3 million from the prior quarter primarily related to lower business development and advertising expense.

Taxes
Third quarter income tax expense was $24 million with an effective tax rate of 31%, compared to $21 million and 30% in the second quarter, and $22 million and 30% in the year ago quarter.

Credit
The provision for credit losses was $21 million in the third quarter, up $7 million from the prior quarter, with the increase primarily attributable to the Company’s oil and gas portfolio.
Nonaccrual loans of $290 million were up $7 million from the second quarter. The nonaccrual loans to total loans ratio was 1.46% in the third quarter, compared to 1.43% in the prior quarter.
Net charge offs of $18 million were down $2 million from the second quarter. Net charge offs in the third quarter were primarily attributable to oil and gas related charge offs of $22 million, which were partially offset by recoveries in the commercial portfolio.
Potential problem loans of $441 million were down $16 million from the second quarter.
The allowance for loan losses of $270 million was up $2 million from the second quarter. The allowance for loan losses to total loans was 1.36% in the third quarter, compared to 1.35% in the second quarter.
The allowance related to the oil and gas portfolio was $38 million, compared to $42 million at June 30, 2016, and $29 million at September 30, 2015. The allowance on this portfolio reflects year to date net charge offs of $53 million. The allowance represented 5.5% of total oil and gas loans at September 30, 2016, compared to 5.6% at June 30, 2016, and 3.8% at September 30, 2015.

Capital
The Company’s capital position remains strong, with a common equity Tier 1 ratio of 9.3% at September 30, 2016. The Company’s capital ratios continue to be in excess of the Basel III “well-capitalized” regulatory benchmarks on a fully phased in basis.




THIRD QUARTER 2016 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 20, 2016. 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 2016 earnings call. The third quarter 2016 financial tables and 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 $29 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 over 200 banking locations serving more than 100 communities throughout Wisconsin, Illinois and Minnesota, and commercial financial services in Indiana, Michigan, Missouri, Ohio, and Texas. Associated Bank, N.A. is an Equal Housing Lender, Equal Opportunity Lender and Member FDIC. More information about Associated Banc-Corp is available at www.associatedbank.com.

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

NON-GAAP FINANCIAL MEASURES
This press release contains 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.
# # #







Associated Banc-Corp
Consolidated Balance Sheets (Unaudited)
 
 
 
 
 
 
(in thousands)
 
Sep 30, 2016
Jun 30, 2016
Seql Qtr $ Change
Mar 31, 2016
Dec 31, 2015
Sep 30, 2015
Comp Qtr $ Change
Assets
 
 
 
 
 
 
 
 
Cash and due from banks
 
$
356,047

$
333,000

$
23,047

$
287,183

$
374,921

$
303,701

$
52,346

Interest-bearing deposits in other financial institutions
 
240,010

131,680

108,330

68,025

79,764

70,023

169,987

Federal funds sold and securities purchased under agreements to resell
 
14,250

13,200

1,050

20,200

19,000

36,490

(22,240
)
Investment securities held to maturity, at amortized cost
 
1,253,494

1,236,140

17,354

1,176,821

1,168,230

604,799

648,695

Investment securities available for sale, at fair value
 
4,846,088

4,801,766

44,322

4,905,841

4,967,414

5,403,656

(557,568
)
Federal Home Loan Bank and Federal Reserve Bank stocks, at cost
 
140,215

194,501

(54,286
)
181,853

147,240

160,871

(20,656
)
Loans held for sale
 
230,795

284,376

(53,581
)
128,339

124,915

105,144

125,651

Loans
 
19,844,005

19,815,286

28,719

19,227,240

18,714,343

18,524,773

1,319,232

Allowance for loan losses
 
(269,540
)
(267,780
)
(1,760
)
(277,370
)
(274,264
)
(262,536
)
(7,004
)
Loans, net
 
19,574,465

19,547,506

26,959

18,949,870

18,440,079

18,262,237

1,312,228

Premises and equipment, net
 
329,726

331,427

(1,701
)
331,711

267,606

271,119

58,607

Goodwill
 
971,951

971,951


971,951

968,844

968,844

3,107

Mortgage servicing rights, net
 
58,414

57,474

940

59,414

61,341

61,402

(2,988
)
Other intangible assets, net
 
15,902

16,427

(525
)
16,966

16,458

16,978

(1,076
)
Trading assets
 
60,780

77,112

(16,332
)
53,087

32,192

43,752

17,028

Other assets
 
1,060,627

1,042,139

18,488

1,027,606

1,043,831

1,154,750

(94,123
)
Total assets
 
$
29,152,764

$
29,038,699

$
114,065

$
28,178,867

$
27,711,835

$
27,463,766

$
1,688,998

Liabilities and Stockholders’ Equity
 
 
 
 
 
 
 
 
Noninterest-bearing demand deposits
 
$
5,337,677

$
5,039,336

$
298,341

$
5,272,685

$
5,562,466

$
4,657,261

$
680,416

Interest-bearing deposits
 
16,410,035

15,253,514

1,156,521

15,412,775

15,445,199

15,901,134

508,901

Total deposits
 
21,747,712

20,292,850

1,454,862

20,685,460

21,007,665

20,558,395

1,189,317

Federal funds purchased and securities sold under agreements to repurchase
 
698,772

509,150

189,622

583,247

431,438

702,569

(3,797
)
Other short-term funding
 
541,321

1,402,407

(861,086
)
834,161

402,978

319,766

221,555

Long-term funding
 
2,761,635

3,511,475

(749,840
)
2,861,316

2,676,164

2,676,065

85,570

Trading liabilities
 
62,301

79,466

(17,165
)
55,223

33,430

45,817

16,484

Accrued expenses and other liabilities
 
243,908

213,204

30,704

176,962

222,914

207,357

36,551

Total liabilities
 
26,055,649

26,008,552

47,097

25,196,369

24,774,589

24,509,969

1,545,680

Stockholders’ Equity
 
 
 
 
 
 
 
 
Preferred equity
 
159,929

120,201

39,728

120,347

121,379

121,379

38,550

Common equity:
 
 
 
 
 
 
 
 
Common stock
 
1,630

1,630


1,630

1,642

1,642

(12
)
Surplus
 
1,459,161

1,453,285

5,876

1,447,368

1,458,522

1,455,034

4,127

Retained earnings
 
1,662,778

1,629,915

32,863

1,599,835

1,593,239

1,570,199

92,579

Accumulated other comprehensive income (loss)
 
(1,254
)
13,453

(14,707
)
2,167

(32,616
)
15,376

(16,630
)
Treasury stock, at cost
 
(185,129
)
(188,337
)
3,208

(188,849
)
(204,920
)
(209,833
)
24,704

Total common equity
 
2,937,186

2,909,946

27,240

2,862,151

2,815,867

2,832,418

104,768

Total stockholders’ equity
 
3,097,115

3,030,147

66,968

2,982,498

2,937,246

2,953,797

143,318

Total liabilities and stockholders’ equity
 
$
29,152,764

$
29,038,699

$
114,065

$
28,178,867

$
27,711,835

$
27,463,766

$
1,688,998





Page 1




Associated Banc-Corp
Consolidated Statements of Income (Unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Comp Qtr
 
YTD
 
YTD
 
Comp YTD
(in thousands, except per share data)
 
3Q16
 
3Q15
 
$ Change
 
% Change
 
Sep 2016
 
Sep 2015
 
$ Change
 
% Change
Interest Income
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest and fees on loans
 
$
167,350

 
$
155,663

 
$
11,687

 
8
 %
 
$
490,065

 
$
460,025

 
$
30,040

 
7
 %
Interest and dividends on investment securities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Taxable
 
22,948

 
24,937

 
(1,989
)
 
(8
)%
 
72,734

 
73,897

 
(1,163
)
 
(2
)%
Tax-exempt
 
8,141

 
7,917

 
224

 
3
 %
 
23,865

 
23,369

 
496

 
2
 %
Other interest
 
1,064

 
1,489

 
(425
)
 
(29
)%
 
3,449

 
4,952

 
(1,503
)
 
(30
)%
Total interest income
 
199,503

 
190,006

 
9,497

 
5
 %
 
590,113

 
562,243

 
27,870

 
5
 %
Interest Expense
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest on deposits
 
13,118

 
8,521

 
4,597

 
54
 %
 
36,562

 
24,281

 
12,281

 
51
 %
Interest on Federal funds purchased and securities sold under agreements to repurchase
 
326

 
248

 
78

 
31
 %
 
1,000

 
714

 
286

 
40
 %
Interest on other short-term funding
 
296

 
83

 
213

 
257
 %
 
1,656

 
279

 
1,377

 
494
 %
Interest on long-term funding
 
7,229

 
10,645

 
(3,416
)
 
(32
)%
 
23,657

 
32,159

 
(8,502
)
 
(26
)%
Total interest expense
 
20,969

 
19,497

 
1,472

 
8
 %
 
62,875

 
57,433

 
5,442

 
9
 %
Net Interest Income
 
178,534

 
170,509

 
8,025

 
5
 %
 
527,238

 
504,810

 
22,428

 
4
 %
Provision for credit losses
 
21,000

 
8,000

 
13,000

 
163
 %
 
55,000

 
17,500

 
37,500

 
214
 %
Net interest income after provision for credit losses
 
157,534

 
162,509

 
(4,975
)
 
(3
)%
 
472,238

 
487,310

 
(15,072
)
 
(3
)%
Noninterest Income
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Trust service fees
 
11,700

 
12,273

 
(573
)
 
(5
)%
 
34,656

 
36,875

 
(2,219
)
 
(6
)%
Service charges on deposit accounts
 
17,445

 
17,385

 
60

 
 %
 
50,162

 
48,894

 
1,268

 
3
 %
Card-based and other nondeposit fees
 
12,777

 
12,618

 
159

 
1
 %
 
37,485

 
38,631

 
(1,146
)
 
(3
)%
Insurance commissions
 
19,431

 
17,561

 
1,870

 
11
 %
 
62,818

 
57,366

 
5,452

 
10
 %
Brokerage and annuity commissions
 
4,155

 
3,809

 
346

 
9
 %
 
12,047

 
11,684

 
363

 
3
 %
Mortgage banking, net
 
18,291

 
6,643

 
11,648

 
175
 %
 
26,562

 
23,992

 
2,570

 
11
 %
Capital market fees, net
 
7,012

 
2,170

 
4,842

 
223
 %
 
14,343

 
7,329

 
7,014

 
96
 %
Bank owned life insurance income
 
3,290

 
2,448

 
842

 
34
 %
 
11,033

 
7,704

 
3,329

 
43
 %
Asset gains (losses), net
 
(1,034
)
 
244

 
(1,278
)
 
(524
)%
 
(853
)
 
2,931

 
(3,784
)
 
(129
)%
Investment securities gains (losses), net
 
(13
)
 
2,796

 
(2,809
)
 
(100
)%
 
6,201

 
4,038

 
2,163

 
54
 %
Other
 
2,180

 
2,118

 
62

 
3
 %
 
6,140

 
6,916

 
(776
)
 
(11
)%
Total noninterest income
 
95,234

 
80,065

 
15,169

 
19
 %
 
260,594

 
246,360

 
14,234

 
6
 %
Noninterest Expense
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Personnel expense
 
103,819

 
101,134

 
2,685

 
3
 %
 
307,346

 
304,272

 
3,074

 
1
 %
Occupancy
 
15,362

 
14,187

 
1,175

 
8
 %
 
42,379

 
46,178

 
(3,799
)
 
(8
)%
Equipment
 
5,319

 
6,003

 
(684
)
 
(11
)%
 
16,161

 
17,514

 
(1,353
)
 
(8
)%
Technology
 
14,173

 
14,748

 
(575
)
 
(4
)%
 
42,887

 
46,660

 
(3,773
)
 
(8
)%
Business development and advertising
 
5,251

 
5,964

 
(713
)
 
(12
)%
 
20,053

 
18,120

 
1,933

 
11
 %
Other intangible amortization
 
525

 
885

 
(360
)
 
(41
)%
 
1,568

 
2,574

 
(1,006
)
 
(39
)%
Loan expense
 
3,535

 
3,305

 
230

 
7
 %
 
10,198

 
9,982

 
216

 
2
 %
Legal and professional fees
 
4,804

 
4,207

 
597

 
14
 %
 
14,685

 
13,089

 
1,596

 
12
 %
Foreclosure / OREO expense, net
 
960

 
645

 
315

 
49
 %
 
4,167

 
3,071

 
1,096

 
36
 %
FDIC expense
 
9,000

 
6,000

 
3,000

 
50
 %
 
25,500

 
18,500

 
7,000

 
38
 %
Other
 
12,566

 
14,507

 
(1,941
)
 
(13
)%
 
38,701

 
42,394

 
(3,693
)
 
(9
)%
Total noninterest expense
 
175,314

 
171,585

 
3,729

 
2
 %
 
523,645

 
522,354

 
1,291

 
 %
Income before income taxes
 
77,454

 
70,989

 
6,465

 
9
 %
 
209,187

 
211,316

 
(2,129
)
 
(1
)%
Income tax expense
 
23,638

 
21,551

 
2,087

 
10
 %
 
63,746

 
65,806

 
(2,060
)
 
(3
)%
Net income
 
53,816

 
49,438

 
4,378

 
9
 %
 
145,441

 
145,510

 
(69
)
 
 %
Preferred stock dividends
 
2,188

 
2,184

 
4

 
 %
 
6,555

 
4,957

 
1,598

 
32
 %
Net income available to common equity
 
$
51,628

 
$
47,254

 
$
4,374

 
9
 %
 
$
138,886

 
$
140,553

 
$
(1,667
)
 
(1
)%
Earnings Per Common Share:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic
 
$
0.34

 
$
0.31

 
$
0.03

 
10
 %
 
$
0.92

 
$
0.93

 
$
(0.01
)
 
(1
)%
Diluted
 
$
0.34

 
$
0.31

 
$
0.03

 
10
 %
 
$
0.92

 
$
0.92

 
$

 
 %
Average Common Shares Outstanding:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic
 
148,708

 
148,614

 
94

 
 %
 
148,607

 
149,524

 
(917
)
 
(1
)%
Diluted
 
149,973

 
149,799

 
174

 
 %
 
149,645

 
150,704

 
(1,059
)
 
(1
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 


Page 2




Associated Banc-Corp
Consolidated Statements of Income (Unaudited)—Quarterly Trend
 
 
 
 
 
 
Seql Qtr
 
 
 
 
 
 
 
Comp Qtr
(in thousands, except per share data)
 
3Q16
 
2Q16
 
$ Change
 
% Change
 
1Q16
 
4Q15
 
3Q15
 
$ Change
 
% Change
Interest Income
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest and fees on loans
 
$
167,350

 
$
163,059

 
$
4,291

 
3
 %
 
$
159,656

 
$
155,602

 
$
155,663

 
$
11,687

 
8
 %
Interest and dividends on investment securities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Taxable
 
22,948

 
24,270

 
(1,322
)
 
(5
)%
 
25,516

 
26,395

 
24,937

 
(1,989
)
 
(8
)%
Tax-exempt
 
8,141

 
7,894

 
247

 
3
 %
 
7,830

 
7,783

 
7,917

 
224

 
3
 %
Other interest
 
1,064

 
1,318

 
(254
)
 
(19
)%
 
1,067

 
1,639

 
1,489

 
(425
)
 
(29
)%
Total interest income
 
199,503

 
196,541

 
2,962

 
2
 %
 
194,069

 
191,419

 
190,006

 
9,497

 
5
 %
Interest Expense
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest on deposits
 
13,118

 
11,678

 
1,440

 
12
 %
 
11,766

 
8,844

 
8,521

 
4,597

 
54
 %
Interest on Federal funds purchased and securities sold under agreements to repurchase
 
326

 
378

 
(52
)
 
(14
)%
 
296

 
229

 
248

 
78

 
31
 %
Interest on other short-term funding
 
296

 
845

 
(549
)
 
(65
)%
 
515

 
186

 
83

 
213

 
257
 %
Interest on long-term funding
 
7,229

 
6,923

 
306

 
4
 %
 
9,505

 
10,692

 
10,645

 
(3,416
)
 
(32
)%
Total interest expense
 
20,969

 
19,824

 
1,145

 
6
 %
 
22,082

 
19,951

 
19,497

 
1,472

 
8
 %
Net Interest Income
 
178,534

 
176,717

 
1,817

 
1
 %
 
171,987

 
171,468

 
170,509

 
8,025

 
5
 %
Provision for credit losses
 
21,000

 
14,000

 
7,000

 
50
 %
 
20,000

 
20,000

 
8,000

 
13,000

 
163
 %
Net interest income after provision for credit losses
 
157,534

 
162,717

 
(5,183
)
 
(3
)%
 
151,987

 
151,468

 
162,509

 
(4,975
)
 
(3
)%
Noninterest Income
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Trust service fees
 
11,700

 
11,509

 
191

 
2
 %
 
11,447

 
11,965

 
12,273

 
(573
)
 
(5
)%
Service charges on deposit accounts
 
17,445

 
16,444

 
1,001

 
6
 %
 
16,273

 
16,577

 
17,385

 
60

 
 %
Card-based and other nondeposit fees
 
12,777

 
12,717

 
60

 
 %
 
11,991

 
12,694

 
12,618

 
159

 
1
 %
Insurance commissions
 
19,431

 
22,005

 
(2,574
)
 
(12
)%
 
21,382

 
17,997

 
17,561

 
1,870

 
11
 %
Brokerage and annuity commissions
 
4,155

 
4,098

 
57

 
1
 %
 
3,794

 
3,694

 
3,809

 
346

 
9
 %
Mortgage banking, net
 
18,291

 
4,067

 
14,224

 
350
 %
 
4,204

 
8,271

 
6,643

 
11,648

 
175
 %
Capital market fees, net
 
7,012

 
3,793

 
3,219

 
85
 %
 
3,538

 
3,423

 
2,170

 
4,842

 
223
 %
Bank owned life insurance income
 
3,290

 
2,973

 
317

 
11
 %
 
4,770

 
2,092

 
2,448

 
842

 
34
 %
Asset gains (losses), net
 
(1,034
)
 
(343
)
 
(691
)
 
201
 %
 
524

 
(391
)
 
244

 
(1,278
)
 
(524
)%
Investment securities gains (losses), net
 
(13
)
 
3,116

 
(3,129
)
 
(100
)%
 
3,098

 
4,095

 
2,796

 
(2,809
)
 
(100
)%
Other
 
2,180

 
1,789

 
391

 
22
 %
 
2,171

 
2,580

 
2,118

 
62

 
3
 %
Total noninterest income
 
95,234

 
82,168

 
13,066

 
16
 %
 
83,192

 
82,997

 
80,065

 
15,169

 
19
 %
Noninterest Expense
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Personnel expense
 
103,819

 
102,129

 
1,690

 
2
 %
 
101,398

 
100,469

 
101,134

 
2,685

 
3
 %
Occupancy
 
15,362

 
13,215

 
2,147

 
16
 %
 
13,802

 
14,718

 
14,187

 
1,175

 
8
 %
Equipment
 
5,319

 
5,396

 
(77
)
 
(1
)%
 
5,446

 
5,695

 
6,003

 
(684
)
 
(11
)%
Technology
 
14,173

 
14,450

 
(277
)
 
(2
)%
 
14,264

 
13,953

 
14,748

 
(575
)
 
(4
)%
Business development and advertising
 
5,251

 
6,591

 
(1,340
)
 
(20
)%
 
8,211

 
7,652

 
5,964

 
(713
)
 
(12
)%
Other intangible amortization
 
525

 
539

 
(14
)
 
(3
)%
 
504

 
520

 
885

 
(360
)
 
(41
)%
Loan expense
 
3,535

 
3,442

 
93

 
3
 %
 
3,221

 
4,120

 
3,305

 
230

 
7
 %
Legal and professional fees
 
4,804

 
4,856

 
(52
)
 
(1
)%
 
5,025

 
3,963

 
4,207

 
597

 
14
 %
Foreclosure / OREO expense, net
 
960

 
1,330

 
(370
)
 
(28
)%
 
1,877

 
2,371

 
645

 
315

 
49
 %
FDIC expense
 
9,000

 
8,750

 
250

 
3
 %
 
7,750

 
7,500

 
6,000

 
3,000

 
50
 %
Other
 
12,566

 
13,662

 
(1,096
)
 
(8
)%
 
12,473

 
15,032

 
14,507

 
(1,941
)
 
(13
)%
Total noninterest expense
 
175,314

 
174,360

 
954

 
1
 %
 
173,971

 
175,993

 
171,585

 
3,729

 
2
 %
Income before income taxes
 
77,454

 
70,525

 
6,929

 
10
 %
 
61,208

 
58,472

 
70,989

 
6,465

 
9
 %
Income tax expense
 
23,638

 
21,434

 
2,204

 
10
 %
 
18,674

 
15,681

 
21,551

 
2,087

 
10
 %
Net income
 
53,816

 
49,091

 
4,725

 
10
 %
 
42,534

 
42,791

 
49,438

 
4,378

 
9
 %
Preferred stock dividends
 
2,188

 
2,169

 
19

 
1
 %
 
2,198

 
2,198

 
2,184

 
4

 
 %
Net income available to common equity
 
$
51,628

 
$
46,922

 
$
4,706

 
10
 %
 
$
40,336

 
$
40,593

 
$
47,254

 
$
4,374

 
9
 %
Earnings Per Common Share:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic
 
$
0.34

 
$
0.31

 
$
0.03

 
10
 %
 
$
0.27

 
$
0.27

 
$
0.31

 
$
0.03

 
10
 %
Diluted
 
$
0.34

 
$
0.31

 
$
0.03

 
10
 %
 
$
0.27

 
$
0.27

 
$
0.31

 
$
0.03

 
10
 %
Average Common Shares Outstanding:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic
 
148,708

 
148,511

 
197

 
 %
 
148,601

 
148,834

 
148,614

 
94

 
 %
Diluted
 
149,973

 
149,530

 
443

 
 %
 
149,454

 
150,163

 
149,799

 
174

 
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Page 3




Associated Banc-Corp
Selected Quarterly Information
 
 
 
 
 
 
 
 
($ in millions, except share and per share, full time equivalent employee data and branch count)
 
YTD
Sep 2016
YTD 
Sep 2015
3Q16
2Q16
1Q16
4Q15
3Q15
Per Common Share Data
 
 
 
 
 
 
 
 
Dividends
 
$
0.33

$
0.30

$
0.11

$
0.11

$
0.11

$
0.11

$
0.10

Market value:
 
 
 
 
 
 
 
 
High
 
19.91

20.84

19.91

18.84

18.79

20.61

20.55

Low
 
15.48

16.62

16.49

15.84

15.48

17.98

17.17

Close
 
19.59

17.97

19.59

17.15

17.94

18.75

17.97

Book value
 
19.42

18.77

19.42

19.27

18.96

18.62

18.77

Tangible book value / share
 
$
12.89

$
12.23

$
12.89

$
12.72

$
12.41

$
12.10

$
12.23

Performance Ratios (annualized)
 
 
 
 
 
 
 
 
Return on average assets
 
0.68
%
0.72
%
0.74
%
0.69
%
0.62
%
0.62
%
0.72
%
Effective tax rate
 
30.47
%
31.14
%
30.52
%
30.39
%
30.51
%
26.82
%
30.36
%
Dividend payout ratio(1)
 
35.87
%
32.26
%
32.35
%
35.48
%
40.74
%
40.74
%
32.26
%
Selected Trend Information
 
 
 
 
 
 
 
 
Average full time equivalent employees
 
4,422

4,436

4,477

4,415

4,374

4,378

4,421

Branch count
 
 
 
217

215

215

215

225

Trust assets under management, at market value
 
 
 
$
8,179

$
7,944

$
7,844

$
7,729

$
7,626

Mortgage loans originated for sale during period
 
$
984

$
911

$
466

$
324

$
194

$
317

$
292

Mortgage portfolio serviced for others
 
 
 
$
8,011

$
7,776

$
7,877

$
7,915

$
7,907

Mortgage servicing rights, net / mortgage portfolio serviced for others
 
 
 
0.73
%
0.74
%
0.75
%
0.77
%
0.78
%
Shares outstanding, end of period
 
 
 
151,243

151,036

150,994

151,239

150,928

Selected Quarterly Ratios
 
 
 
 
 
 
 
 
Loans / deposits
 
 
 
91.25
%
97.65
%
92.95
%
89.08
%
90.11
%
Stockholders’ equity / assets
 
 
 
10.62
%
10.43
%
10.58
%
10.60
%
10.76
%
Risk-based Capital (2) (3)
 
 
 
 
 
 
 
 
Total risk-weighted assets
 
 
 
$
21,268

$
21,168

$
20,454

$
19,930

$
19,866

Common equity Tier 1
 
 
 
$
1,984

$
1,941

$
1,903

$
1,898

$
1,865

Common equity Tier 1 capital ratio
 
 
 
9.33
%
9.17
%
9.30
%
9.52
%
9.39
%
Tier 1 capital ratio
 
 
 
10.08
%
9.73
%
9.88
%
10.12
%
9.98
%
Total capital ratio
 
 
 
12.50
%
12.16
%
12.35
%
12.62
%
12.49
%
Tier 1 leverage ratio
 
 
 
7.66
%
7.43
%
7.55
%
7.60
%
7.53
%

(1)
Ratio is based upon basic earnings per common share.
(2)
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.
(3)
September 30, 2016 data is estimated.


Page 4




Associated Banc-Corp
Selected Asset Quality Information
 
 
 
 
 
 
(in thousands)
 
Sep 30, 2016
Jun 30, 2016
Seql Qtr % Change
 
Mar 31, 2016
Dec 31, 2015
Sep 30, 2015
Comp Qtr % Change
Allowance for Loan Losses
 
 
 
 
 
 
 
 
 
Balance at beginning of period
 
$
267,780

$
277,370

(3
)%
 
$
274,264

$
262,536

$
261,538

2
 %
Provision for loan losses
 
20,000

11,000

82
 %
 
20,000

19,500

9,000

122
 %
Charge offs
 
(28,964
)
(24,621
)
18
 %
 
(21,245
)
(12,741
)
(11,732
)
147
 %
Recoveries
 
10,724

4,031

166
 %
 
4,351

4,969

3,730

188
 %
Net charge offs
 
(18,240
)
(20,590
)
(11
)%
 
(16,894
)
(7,772
)
(8,002
)
128
 %
Balance at end of period
 
$
269,540

$
267,780

1
 %
 
$
277,370

$
274,264

$
262,536

3
 %
Allowance for Unfunded Commitments
 
 
 
 
 
 
 
 
 
Balance at beginning of period
 
$
27,400

$
24,400

12
 %
 
$
24,400

$
23,900

$
24,900

10
 %
Provision for unfunded commitments
 
1,000

3,000

(67
)%
 

500

(1,000
)
(200
)%
Balance at end of period
 
$
28,400

$
27,400

4
 %
 
$
24,400

$
24,400

$
23,900

19
 %
Allowance for credit losses
 
$
297,940

$
295,180

1
 %
 
$
301,770

$
298,664

$
286,436

4
 %
Provision for credit losses
 
$
21,000

$
14,000

50
 %
 
$
20,000

$
20,000

$
8,000

163
 %
Net Charge Offs
 
Sep 30, 2016
Jun 30, 2016
Seql Qtr % Change