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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) January 19, 2017
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 January 19, 2017, Associated Banc-Corp announced its earnings for the quarter ended December 31, 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 January 19, 2017, 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 January 19, 2017, containing financial information for the quarter ended December 31, 2016.
 
99.2    Slide presentation discussed on the conference call for investors and analysts on January 19, 2017.










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: January 19, 2017
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 January 19, 2017, containing financial information for the quarter ended December 31, 2016.
 
 
    99.2
Slide presentation discussed on the conference call for investors and analysts on January 19, 2017.
 
 
 
 
 
 
 
 



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Section 2: EX-99.1 (EXHIBIT 99.1)

Exhibit


Exhibit 99.1
37597412_associatedbanklogoa16.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 2016 Earnings of $1.26 per share
Record loan levels and improved operating leverage drive bottom line growth
GREEN BAY, Wis. -- January 19, 2017 -- Associated Banc-Corp (NYSE: ASB) today reported net income available to common equity of $191 million, or $1.26 per common share for the year ended December 31, 2016. This compares to net income available to common equity of $181 million, or $1.19 per common share for the year ended December 31, 2015. The Company reported earnings of $0.34 per common share for the quarter ended December 31, 2016, compared to $0.27 per common share for the quarter ended December 31, 2015.
“We are pleased to report full year results in line with our guidance. We delivered loan, revenue, and bottom line growth in 2016. We ended the year with over $20 billion of loans, a new high-water mark for us, reflecting 8% annual average loan growth. Our commercial real estate, residential lending, and capital markets businesses, in particular, performed well,” said President and CEO Philip B. Flynn. “We grew earnings throughout the year and finished strong driven by higher revenues in the second half of the year. We improved our efficiency ratio for the fifth consecutive year. With another successful year now behind us, we remain committed to delivering quality solutions for our customers and communities.”
2016 HIGHLIGHTS
Average loans of $19.7 billion grew $1.4 billion, or 8% from a year ago
Total commercial lending accounted for 62% of average loan growth
Average deposits of $21.0 billion grew $1.1 billion, or 6% from a year ago
Noninterest-bearing demand deposits accounted for 51% of average deposit growth
Net interest income of $707 million increased $31 million, or 5% from last year
Net interest margin of 2.80% declined from 2.84% in 2015
Provision for credit losses of $70 million increased $33 million from last year
Noninterest income of $353 million increased $24 million, or 7% from last year
Noninterest expense of $703 million increased $4 million, or 1% from last year
During the year, the Company repurchased $20 million, or approximately 1.2 million shares, of common stock at an average cost of $17.10 per share
Return on average common equity Tier 1 (CET1) was 9.9%
Total dividends per common share of $0.45 were up 10% from last year
Capital ratios remain strong with a CET1 ratio of 9.5% at year end




2016 AND FOURTH QUARTER FINANCIAL RESULTS

Loans
Full year average loans of $19.7 billion were up 8%, or $1.4 billion from 2015.
With respect to full year average balances as compared to 2015:
Commercial real estate lending was up 12%, or $502 million to $4.7 billion.
Consumer lending was up 8%, or $536 million to $7.5 billion.
Commercial and business lending was up 5%, or $360 million to $7.4 billion.

Fourth quarter average loans of $20.0 billion were down $0.1 billion from the third quarter, and were up 8%, or $1.4 billion from the year ago quarter.
With respect to fourth quarter average balances:
Commercial real estate lending was up 1%, or $59 million from the third quarter to $4.9 billion. Commercial real estate lending was up 12%, or $541 million from the year ago quarter.
Consumer lending was up $36 million from the third quarter to $7.7 billion. Consumer lending was up 5%, or $379 million from the year ago quarter.
Commercial and business lending was down 2%, or $171 million from the third quarter to $7.4 billion, with the decline primarily driven by seasonally lower line utilization. Commercial and business lending was up 7%, or $515 million from the year ago quarter.

For the year ended December 31, 2016, total loans of $20.0 billion were up 7%, or $1.3 billion from December 31, 2015, and were up 1%, or $0.2 billion from September 30, 2016.
With respect to period end balances:
Commercial real estate lending was up 14%, or $611 million from the prior year end to $5.0 billion. Commercial real estate lending was up 3%, or $162 million from the prior quarter end.
Consumer lending was up 6%, or $431 million from the prior year end to $7.6 billion. Consumer lending was up 3%, or $255 million from the prior quarter end.
Commercial and business lending was up 4%, or $278 million from the prior year end to $7.4 billion. Commercial and business lending was down 3%, or $227 million from the prior quarter end.





Deposits
Full year average deposits of $21.0 billion were up 6%, or $1.1 billion from 2015.
With respect to full year average balances as compared to 2015:
Interest-bearing demand deposits were up 18%, or $589 million to $3.8 billion.
Noninterest-bearing demand deposits were up 12%, or $565 million to $5.1 billion.
Time and savings deposits, combined, were up 1%, or $31 million to $3.0 billion.
Money market deposits were down 1%, or $82 million to $9.1 billion.

Fourth quarter average deposits of $21.7 billion were up 2%, or $0.3 billion from the third quarter, and were up 5%, or $1.1 billion from the year ago quarter.
With respect to fourth quarter average balances:
Noninterest-bearing demand deposits were up 3%, or $132 million from the third quarter to $5.3 billion, and were up 7%, or $326 million from the year ago quarter.
Money market deposits were up 2%, or $207 million from the third quarter to $9.3 billion, and were down 2%, or $238 million from the year ago quarter.
Time and savings deposits were up modestly from the third quarter to $3.0 billion. Time and savings deposits, combined, were up 2%, or $49 million from the year ago quarter.
Interest-bearing demand deposits were down slightly from the third quarter to $4.1 billion, and were up 31%, or $989 million from the year ago quarter.

For the year ended December 31, 2016, total deposits of $21.9 billion were up 4%, or $0.9 billion from December 31, 2015, and were up 1%, or $0.1 billion from September 30, 2016.
With respect to period end balances:
Interest-bearing demand deposits were up 36%, or $1.2 billion from the prior year end to $4.7 billion, and were up 3%, or $139 million from the prior quarter end.
Time and savings deposits, combined, were up 5%, or $140 million from the prior year end to $3.0 billion, and were up 2%, or $70 million from the prior quarter end.
Noninterest-bearing demand deposits were down 3%, or $170 million from the prior year end to $5.4 billion, and were up 1%, or $55 million from the prior quarter end.
Money market deposits were down 4%, or $332 million to $8.8 billion from the prior year end, and were down 1%, or $123 million from the prior quarter end.






Net Interest Income and Net Interest Margin
Full year net interest income of $707 million was up $31 million, or 5% from 2015. Net interest margin of 2.80% was down 4 basis points from the prior year.
Interest and fees on loans increased $44 million, or 7% from the prior year. The total loan yield of 3.38% decreased 2 basis points from the prior year.
Total interest expense increased $7 million, or 9% from the prior year. The total cost of interest-bearing liabilities of 0.42% increased 2 basis points from the prior year.

Fourth quarter net interest income of $180 million was up $1.5 million, or 1% from the third quarter, and was up $9 million, or 5% from the year ago quarter. Net interest margin of 2.80% was up 3 basis points from the third quarter.
Interest and fees on loans increased $2 million, or 1% from the third quarter. The total loan yield of 3.40% increased 5 basis points from the prior quarter and accounted for the majority of the margin expansion in the quarter.
Interest expense on deposits increased $1 million, or 5% from the third quarter. The cost of total interest-bearing deposits increased 1 basis point from the prior quarter.
Lower investment income was more than offset by lower cost of short and long-term funding for the fourth quarter, driven by noninterest-bearing deposit growth.

Noninterest Income
Full year total noninterest income of $353 million was up $24 million, or 7% from 2015.
Capital market fees of $22 million increased significantly from the prior year on higher customer hedging transactions and higher loan syndication activity.
Mortgage banking income increased $6 million, or 18% from the prior year primarily attributable to portfolio loan sales.
Insurance commissions increased $5 million, or 7% from the prior year.
All other noninterest income categories, collectively, increased $5 million from the prior year.

Noninterest Income cont.    
Fourth quarter total noninterest income of $92 million was down $3 million, or 3% from the third quarter, and was up $9 million, or 11% from the year ago quarter.
Mortgage banking income decreased $7 million in the fourth quarter, principally related to portfolio sales generating $9 million of gross gains in the prior quarter.
Investment securities gains increased $3 million in the fourth quarter, and reflected the Company’s continued shift away from Agency MBS investments and net reduced investment positions.




All other noninterest income categories, collectively, increased $1 million from the prior quarter.

Noninterest Expense
Full year noninterest expense of $703 million was up $4 million, or 1% from the prior year.
Personnel increased $10 million from the prior year, and included severance of $5 million, principally related to the restructuring of the Company's commercial and business lending areas.
Year over year increases in FDIC expense, legal and professional fees, and business development and advertising were more than offset by decreases in all other expense categories.

Fourth quarter total noninterest expense of $179 million was up $4 million, or 2% from the third quarter, and was up $3 million, or 2% from the year ago quarter.
Personnel expense increased $4 million from the third quarter, and included severance of $3 million, principally related to the restructuring of the Company's commercial and business lending areas.
Quarter over quarter decreases in occupancy, foreclosure / OREO expense, and loan expense were offset by increases in all other expense categories.

Taxes
Full year income tax expense was $87 million and was up $6 million from 2015. The effective tax rate was 30% in 2016 and 2015.
Fourth quarter income tax expense was $24 million with an effective tax rate of 30%, compared to $24 million and 31% in the third quarter, and $16 million and 27% in the year ago quarter.

Credit
Full year provision for credit losses of $70 million was up $33 million from the prior year, principally related to a $35 million increase in net charge offs year over year, primarily related to oil and gas loans.

Fourth quarter provision for credit losses of $15 million was down $6 million from the prior quarter.
Potential problem loans of $351 million were down $90 million from the prior quarter, and were up $49 million from the prior year quarter.
Nonaccrual loans of $275 million were down $15 million from the prior quarter, and were up $97 million from the prior year quarter. The nonaccrual loans to total loans ratio was 1.37% in the fourth quarter, compared to 1.46% in the prior quarter, and 0.95% in the prior year quarter.
Fourth quarter net charge offs of $9 million were down $9 million from the prior quarter. Full year net charge offs of $65 million were up $35 million year over year, primarily related to oil and gas loans.




The allowance for loan losses of $278 million was up $9 million from the prior quarter, and was up $4 million from the prior year quarter. The allowance for loan losses to total loans ratio was 1.39% in the fourth quarter, compared to 1.36% in the prior quarter, and 1.47% in the prior year quarter.
The allowance related to the oil and gas portfolio was $38 million at December 31, 2016, compared to $38 million at September 30, 2016, and $42 million at December 31, 2015. Full year charge offs related to the oil and gas portfolio were $59 million. The allowance represented 5.7% of total oil and gas loans at December 31, 2016, compared to 5.5% at September 30, 2016, and 5.6% at December 31, 2015.

Capital
The Company’s capital position remains strong, with a CET1 ratio of 9.5% at December 31, 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.




FOURTH 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, January 19, 2017. 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 fourth quarter 2016 earnings call. The fourth quarter and full year 2016 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 $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 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.

# # #







Associated Banc-Corp
Consolidated Balance Sheets (Unaudited)
 
 
 
 
 
 
(in thousands)
Dec 31, 2016
Sep 30, 2016
Seql Qtr $ Change
Jun 30, 2016
Mar 31, 2016
Dec 31, 2015
Comp Qtr $ Change
Assets
 
 
 
 
 
 
 
Cash and due from banks
$
446,558

$
356,047

$
90,511

$
333,000

$
287,183

$
374,921

$
71,637

Interest-bearing deposits in other financial institutions
149,175

240,010

(90,835
)
131,680

68,025

79,764

69,411

Federal funds sold and securities purchased under agreements to resell
46,500

14,250

32,250

13,200

20,200

19,000

27,500

Investment securities held to maturity, at amortized cost
1,273,536

1,253,494

20,042

1,236,140

1,176,821

1,168,230

105,306

Investment securities available for sale, at fair value
4,680,226

4,846,088

(165,862
)
4,801,766

4,905,841

4,967,414

(287,188
)
Federal Home Loan Bank and Federal Reserve Bank stocks, at cost
140,001

140,215

(214
)
194,501

181,853

147,240

(7,239
)
Loans held for sale
141,383

230,795

(89,412
)
284,376

128,339

124,915

16,468

Loans
20,033,817

19,844,005

189,812

19,815,286

19,227,240

18,714,343

1,319,474

Allowance for loan losses
(278,335
)
(269,540
)
(8,795
)
(267,780
)
(277,370
)
(274,264
)
(4,071
)
Loans, net
19,755,482

19,574,465

181,017

19,547,506

18,949,870

18,440,079

1,315,403

Premises and equipment, net
330,315

329,726

589

331,427

331,711

267,606

62,709

Goodwill
971,951

971,951


971,951

971,951

968,844

3,107

Mortgage servicing rights, net
61,476

58,414

3,062

57,474

59,414

61,341

135

Other intangible assets, net
15,377

15,902

(525
)
16,427

16,966

16,458

(1,081
)
Trading assets
52,398

60,780

(8,382
)
77,112

53,087

32,192

20,206

Other assets
1,074,937

1,060,627

14,310

1,042,139

1,027,606

1,043,831

31,106

Total assets
$
29,139,315

$
29,152,764

$
(13,449
)
$
29,038,699

$
28,178,867

$
27,711,835

$
1,427,480

Liabilities and Stockholders’ Equity
 
 
 
 
 
 
 
Noninterest-bearing demand deposits
$
5,392,208

$
5,337,677

$
54,531

$
5,039,336

$
5,272,685

$
5,562,466

$
(170,258
)
Interest-bearing deposits
16,496,240

16,410,035

86,205

15,253,514

15,412,775

15,445,199

1,051,041

Total deposits
21,888,448

21,747,712

140,736

20,292,850

20,685,460

21,007,665

880,783

Federal funds purchased and securities sold under agreements to repurchase
508,347

698,772

(190,425
)
509,150

583,247

431,438

76,909

Other short-term funding
583,688

541,321

42,367

1,402,407

834,161

402,978

180,710

Long-term funding
2,761,795

2,761,635

160

3,511,475

2,861,316

2,676,164

85,631

Trading liabilities
51,103

62,301

(11,198
)
79,466

55,223

33,430

17,673

Accrued expenses and other liabilities
254,622

243,908

10,714

213,204

176,962

222,914

31,708

Total liabilities
26,048,003

26,055,649

(7,646
)
26,008,552

25,196,369

24,774,589

1,273,414

Stockholders’ Equity
 
 
 
 
 
 
 
Preferred equity
159,929

159,929


120,201

120,347

121,379

38,550

Common equity:
 
 
 
 
 
 
 
Common stock
1,630

1,630


1,630

1,630

1,642

(12
)
Surplus
1,459,498

1,459,161

337

1,453,285

1,447,368

1,458,522

976

Retained earnings
1,695,764

1,662,778

32,986

1,629,915

1,599,835

1,593,239

102,525

Accumulated other comprehensive income (loss)
(54,679
)
(1,254
)
(53,425
)
13,453

2,167

(32,616
)
(22,063
)
Treasury stock, at cost
(170,830
)
(185,129
)
14,299

(188,337
)
(188,849
)
(204,920
)
34,090

Total common equity
2,931,383

2,937,186

(5,803
)
2,909,946

2,862,151

2,815,867

115,516

Total stockholders’ equity
3,091,312

3,097,115

(5,803
)
3,030,147

2,982,498

2,937,246

154,066

Total liabilities and stockholders’ equity
$
29,139,315

$
29,152,764

$
(13,449
)
$
29,038,699

$
28,178,867

$
27,711,835

$
1,427,480





Page 1




Associated Banc-Corp
Consolidated Statements of Income (Unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Comp Qtr
 
YTD
 
YTD
 
Comp YTD
(in thousands, except per share data)
 
4Q16
 
4Q15
 
$ Change
 
% Change
 
Dec 2016
 
Dec 2015
 
$ Change
 
% Change
Interest Income
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest and fees on loans
 
$
169,473

 
$
155,602

 
$
13,871

 
9
 %
 
$
659,538

 
$
615,627

 
$
43,911

 
7
 %
Interest and dividends on investment securities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Taxable
 
22,418

 
26,395

 
(3,977
)
 
(15
)%
 
95,152

 
100,292

 
(5,140
)
 
(5
)%
Tax-exempt
 
8,184

 
7,783

 
401

 
5
 %
 
32,049

 
31,152

 
897

 
3
 %
Other interest
 
1,380

 
1,639

 
(259
)
 
(16
)%
 
4,829

 
6,591

 
(1,762
)
 
(27
)%
Total interest income
 
201,455

 
191,419

 
10,036

 
5
 %
 
791,568

 
753,662

 
37,906

 
5
 %
Interest Expense
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest on deposits
 
13,773

 
8,844

 
4,929

 
56
 %
 
50,335

 
33,125

 
17,210

 
52
 %
Interest on Federal funds purchased and securities sold under agreements to repurchase
 
314

 
229

 
85

 
37
 %
 
1,314

 
943

 
371

 
39
 %
Interest on other short-term funding
 
458

 
186

 
272

 
146
 %
 
2,114

 
465

 
1,649

 
N/M

Interest on long-term funding
 
6,875

 
10,692

 
(3,817
)
 
(36
)%
 
30,532

 
42,851

 
(12,319
)
 
(29
)%
Total interest expense
 
21,420

 
19,951

 
1,469

 
7
 %
 
84,295

 
77,384

 
6,911

 
9
 %
Net Interest Income
 
180,035

 
171,468

 
8,567

 
5
 %
 
707,273

 
676,278

 
30,995

 
5
 %
Provision for credit losses
 
15,000

 
20,000

 
(5,000
)
 
(25
)%
 
70,000

 
37,500

 
32,500

 
87
 %
Net interest income after provision for credit losses
 
165,035

 
151,468

 
13,567

 
9
 %
 
637,273

 
638,778

 
(1,505
)
 
 %
Noninterest Income
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Trust service fees
 
12,211

 
11,965

 
246

 
2
 %
 
46,867

 
48,840

 
(1,973
)
 
(4
)%
Service charges on deposit accounts
 
16,447

 
16,577

 
(130
)
 
(1
)%
 
66,609

 
65,471

 
1,138

 
2
 %
Card-based and other nondeposit fees (1)
 
12,592

 
11,485

 
1,107

 
10
 %
 
50,077

 
47,912

 
2,165

 
5
 %
Insurance commissions
 
17,977

 
17,997

 
(20
)
 
 %
 
80,795

 
75,363

 
5,432

 
7
 %
Brokerage and annuity commissions
 
4,188

 
3,694

 
494

 
13
 %
 
16,235

 
15,378

 
857

 
6
 %
Mortgage banking, net
 
11,559

 
8,271

 
3,288

 
40
 %
 
38,121

 
32,263

 
5,858

 
18
 %
Capital market fees, net (1)(2)
 
7,716

 
4,820

 
2,896

 
60
 %
 
22,059

 
14,558

 
7,501

 
52
 %
Bank owned life insurance income
 
3,338

 
2,092

 
1,246

 
60
 %
 
14,371

 
9,796

 
4,575

 
47
 %
Asset gains (losses), net
 
767

 
(391
)
 
1,158

 
N/M

 
(86
)
 
2,540

 
(2,626
)
 
(103
)%
Investment securities gains (losses), net
 
3,115

 
4,095

 
(980
)
 
(24
)%
 
9,316

 
8,133

 
1,183

 
15
 %
Other (2)
 
2,379

 
2,392

 
(13
)
 
(1
)%
 
8,519

 
9,103

 
(584
)
 
(6
)%
Total noninterest income
 
92,289

 
82,997

 
9,292

 
11
 %
 
352,883

 
329,357

 
23,526

 
7
 %
Noninterest Expense
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Personnel expense
 
107,491

 
100,469

 
7,022

 
7
 %
 
414,837

 
404,741

 
10,096

 
2
 %
Occupancy
 
13,690

 
14,718

 
(1,028
)
 
(7
)%
 
56,069

 
60,896

 
(4,827
)
 
(8
)%
Equipment
 
5,328

 
5,695

 
(367
)
 
(6
)%
 
21,489

 
23,209

 
(1,720
)
 
(7
)%
Technology
 
14,413

 
13,953

 
460

 
3
 %
 
57,300

 
60,613

 
(3,313
)
 
(5
)%
Business development and advertising
 
6,298

 
7,652

 
(1,354
)
 
(18
)%
 
26,351

 
25,772

 
579

 
2
 %
Other intangible amortization
 
525

 
520

 
5

 
1
 %
 
2,093

 
3,094

 
(1,001
)
 
(32
)%
Loan expense
 
3,443

 
4,120

 
(677
)
 
(16
)%
 
13,641

 
14,102

 
(461
)
 
(3
)%
Legal and professional fees
 
5,184

 
3,963

 
1,221

 
31
 %
 
19,869

 
17,052

 
2,817

 
17
 %
Foreclosure / OREO expense, net
 
677

 
2,371

 
(1,694
)
 
(71
)%
 
4,844

 
5,442

 
(598
)
 
(11
)%
FDIC expense
 
9,250

 
7,500

 
1,750

 
23
 %
 
34,750

 
26,000

 
8,750

 
34
 %
Other
 
12,616

 
15,032

 
(2,416
)
 
(16
)%
 
51,317

 
57,426

 
(6,109
)
 
(11
)%
Total noninterest expense
 
178,915

 
175,993

 
2,922

 
2
 %
 
702,560

 
698,347

 
4,213

 
1
 %
Income before income taxes
 
78,409

 
58,472

 
19,937

 
34
 %
 
287,596

 
269,788

 
17,808

 
7
 %
Income tax expense
 
23,576

 
15,681

 
7,895

 
50
 %
 
87,322

 
81,487

 
5,835

 
7
 %
Net income
 
54,833

 
42,791

 
12,042

 
28
 %
 
200,274

 
188,301

 
11,973

 
6
 %
Preferred stock dividends
 
2,348

 
2,198

 
150

 
7
 %
 
8,903

 
7,155

 
1,748

 
24
 %
Net income available to common equity
 
$
52,485

 
$
40,593

 
$
11,892

 
29
 %
 
$
191,371

 
$
181,146

 
$
10,225

 
6
 %
Earnings Per Common Share:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic
 
$
0.35

 
$
0.27

 
$
0.08

 
30
 %
 
$
1.27

 
$
1.20

 
$
0.07

 
6
 %
Diluted
 
$
0.34

 
$
0.27

 
$
0.07

 
26
 %
 
$
1.26

 
$
1.19

 
$
0.07

 
6
 %
Average Common Shares Outstanding:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic
 
149,253

 
148,834

 
419

 
 %
 
148,769

 
149,350

 
(581
)
 
 %
Diluted
 
151,563

 
150,163

 
1,400

 
1
 %
 
149,961

 
150,603

 
(642
)
 
 %
N/M - Not meaningful
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1) During the fourth quarter of 2016, the consolidated statements of income were modified from prior periods' presentation to conform with the current period presentation, which reflects loan syndications as a component of Capital Market fees, net. In prior periods' presentation, loan syndications were reported as a component of Card-based and other nondeposit fees. All prior periods have been restated to reflect this change in presentation.
(2) During the fourth quarter of 2016, the consolidated statements of income were modified from prior periods' presentation to conform with the current period presentation, which reflects bond underwriting as a component of Capital Market fees, net. In prior periods' presentation, bond underwriting was reported as a component of Other. All prior periods have been restated to reflect this change in presentation.

Page 2




Associated Banc-Corp
Consolidated Statements of Income (Unaudited)—Quarterly Trend
 
 
 
 
 
 
Seql Qtr
 
 
 
 
 
 
 
Comp Qtr
(in thousands, except per share data)
 
4Q16
 
3Q16
 
$ Change
 
% Change
 
2Q16
 
1Q16
 
4Q15
 
$ Change
 
% Change
Interest Income
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest and fees on loans
 
$
169,473

 
$
167,350

 
$
2,123

 
1
 %
 
$
163,059

 
$
159,656

 
$
155,602

 
$
13,871

 
9
 %
Interest and dividends on investment securities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Taxable
 
22,418

 
22,948

 
(530
)
 
(2
)%
 
24,270

 
25,516

 
26,395

 
(3,977
)
 
(15
)%
Tax-exempt
 
8,184

 
8,141

 
43

 
1
 %
 
7,894

 
7,830

 
7,783

 
401

 
5
 %
Other interest
 
1,380

 
1,064

 
316

 
30
 %
 
1,318

 
1,067

 
1,639

 
(259
)
 
(16
)%
Total interest income
 
201,455

 
199,503

 
1,952

 
1
 %
 
196,541

 
194,069

 
191,419

 
10,036

 
5
 %
Interest Expense
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest on deposits
 
13,773

 
13,118

 
655

 
5
 %
 
11,678

 
11,766

 
8,844

 
4,929

 
56
 %
Interest on Federal funds purchased and securities sold under agreements to repurchase
 
314

 
326

 
(12
)
 
(4
)%
 
378

 
296

 
229

 
85

 
37
 %
Interest on other short-term funding
 
458

 
296

 
162

 
55
 %
 
845

 
515

 
186

 
272

 
146
 %
Interest on long-term funding
 
6,875

 
7,229

 
(354
)
 
(5
)%
 
6,923

 
9,505

 
10,692

 
(3,817
)
 
(36
)%
Total interest expense
 
21,420

 
20,969

 
451

 
2
 %
 
19,824

 
22,082

 
19,951

 
1,469

 
7
 %
Net Interest Income
 
180,035

 
178,534

 
1,501

 
1
 %
 
176,717

 
171,987

 
171,468

 
8,567

 
5
 %
Provision for credit losses
 
15,000

 
21,000

 
(6,000
)
 
(29
)%
 
14,000

 
20,000

 
20,000

 
(5,000
)
 
(25
)%
Net interest income after provision for credit losses
 
165,035

 
157,534

 
7,501

 
5
 %
 
162,717

 
151,987

 
151,468

 
13,567

 
9
 %
Noninterest Income
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Trust service fees
 
12,211

 
11,700

 
511

 
4
 %
 
11,509

 
11,447

 
11,965

 
246

 
2
 %
Service charges on deposit accounts
 
16,447

 
17,445

 
(998
)
 
(6
)%
 
16,444

 
16,273

 
16,577

 
(130
)
 
(1
)%
Card-based and other nondeposit fees (1)
 
12,592

 
12,777

 
(185
)
 
(1
)%
 
12,717

 
11,991

 
11,485

 
1,107

 
10
 %
Insurance commissions
 
17,977

 
19,431

 
(1,454
)
 
(7
)%
 
22,005

 
21,382

 
17,997

 
(20
)
 
 %
Brokerage and annuity commissions
 
4,188

 
4,155

 
33

 
1
 %
 
4,098

 
3,794

 
3,694

 
494

 
13
 %
Mortgage banking, net
 
11,559

 
18,291

 
(6,732
)
 
(37
)%
 
4,067

 
4,204

 
8,271

 
3,288

 
40
 %
Capital market fees, net (1)(2)
 
7,716

 
7,012

 
704

 
10
 %
 
3,793

 
3,538

 
4,820

 
2,896

 
60
 %
Bank owned life insurance income
 
3,338

 
3,290

 
48

 
1
 %
 
2,973

 
4,770

 
2,092

 
1,246

 
60
 %
Asset gains (losses), net
 
767

 
(1,034
)
 
1,801

 
(174
)%
 
(343
)
 
524

 
(391
)
 
1,158

 
N/M

Investment securities gains (losses), net
 
3,115

 
(13
)
 
3,128

 
N/M

 
3,116

 
3,098

 
4,095

 
(980
)
 
(24
)%
Other (2)
 
2,379

 
2,180

 
199

 
9
 %
 
1,789

 
2,171

 
2,392

 
(13
)
 
(1
)%
Total noninterest income
 
92,289

 
95,234

 
(2,945
)
 
(3
)%
 
82,168

 
83,192

 
82,997

 
9,292

 
11
 %
Noninterest Expense
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Personnel expense
 
107,491

 
103,819

 
3,672

 
4
 %
 
102,129

 
101,398

 
100,469

 
7,022

 
7
 %
Occupancy
 
13,690

 
15,362

 
(1,672
)
 
(11
)%
 
13,215

 
13,802

 
14,718

 
(1,028
)
 
(7
)%
Equipment
 
5,328

 
5,319

 
9

 
 %
 
5,396

 
5,446

 
5,695

 
(367
)
 
(6
)%
Technology
 
14,413

 
14,173

 
240

 
2
 %
 
14,450

 
14,264

 
13,953

 
460

 
3
 %
Business development and advertising
 
6,298

 
5,251

 
1,047

 
20
 %
 
6,591

 
8,211

 
7,652

 
(1,354
)
 
(18
)%
Other intangible amortization
 
525

 
525

 

 
 %
 
539

 
504

 
520

 
5

 
1
 %
Loan expense
 
3,443

 
3,535

 
(92
)
 
(3
)%
 
3,442

 
3,221

 
4,120

 
(677
)
 
(16
)%
Legal and professional fees
 
5,184

 
4,804

 
380

 
8
 %
 
4,856

 
5,025

 
3,963

 
1,221

 
31
 %
Foreclosure / OREO expense, net
 
677

 
960

 
(283
)
 
(29
)%
 
1,330

 
1,877

 
2,371

 
(1,694
)
 
(71
)%
FDIC expense
 
9,250

 
9,000

 
250

 
3
 %
 
8,750

 
7,750

 
7,500

 
1,750

 
23
 %
Other
 
12,616

 
12,566

 
50

 
 %
 
13,662

 
12,473

 
15,032

 
(2,416
)
 
(16
)%
Total noninterest expense
 
178,915

 
175,314

 
3,601

 
2
 %
 
174,360

 
173,971

 
175,993

 
2,922

 
2
 %
Income before income taxes
 
78,409

 
77,454

 
955

 
1
 %
 
70,525

 
61,208

 
58,472

 
19,937

 
34
 %
Income tax expense
 
23,576

 
23,638

 
(62
)
 
 %
 
21,434

 
18,674

 
15,681

 
7,895

 
50
 %
Net income
 
54,833

 
53,816

 
1,017

 
2
 %
 
49,091

 
42,534

 
42,791

 
12,042

 
28
 %
Preferred stock dividends
 
2,348

 
2,188

 
160

 
7
 %
 
2,169

 
2,198

 
2,198

 
150

 
7
 %
Net income available to common equity
 
$
52,485

 
$
51,628

 
$
857

 
2
 %
 
$
46,922

 
$
40,336

 
$
40,593

 
$
11,892

 
29
 %
Earnings Per Common Share:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic
 
$
0.35

 
$
0.34

 
$
0.01

 
3
 %
 
$
0.31

 
$
0.27

 
$
0.27

 
$
0.08

 
30
 %
Diluted
 
$
0.34

 
$
0.34

 
$

 
 %
 
$
0.31

 
$
0.27

 
$
0.27

 
$
0.07

 
26
 %
Average Common Shares Outstanding:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic
 
149,253

 
148,708

 
545

 
 %
 
148,511

 
148,601

 
148,834

 
419

 
 %
Diluted
 
151,563

 
149,973

 
1,590

 
1
 %
 
149,530

 
149,454

 
150,163

 
1,400

 
1
 %
N/M - Not meaningful
(1) During the fourth quarter of 2016, the consolidated statements of income were modified from prior periods' presentation to conform with the current period presentation, which reflects loan syndications as a component of Capital Market fees, net. In prior periods' presentation, loan syndications were reported as a component of Card-based and other nondeposit fees. All prior periods have been restated to reflect this change in presentation.
(2) During the fourth quarter of 2016, the consolidated statements of income were modified from prior periods' presentation to conform with the current period presentation, which reflects bond underwriting as a component of Capital Market fees, net. In prior periods' presentation, bond underwriting was reported as a component of Other. All prior periods have been restated to reflect this change in presentation.

Page 3




Associated Banc-Corp
Selected Quarterly Information
 
 
 
 
 
 
 
 
($ in millions, except share and per share, full time equivalent employee data and branch count)
 
YTD
Dec 2016
YTD
Dec 2015
4Q16
3Q16
2Q16
1Q16
4Q15
Per Common Share Data
 
 
 
 
 
 
 
 
Dividends
 
$
0.45

$
0.41

$
0.12

$
0.11

$
0.11

$
0.11

$
0.11

Market value:
 
 
 
 
 
 
 
 
High
 
25.15

20.84

25.15

19.91

18.84

18.79

20.61

Low
 
15.48

16.62

19.05

16.49

15.84

15.48

17.98

Close
 
24.70

18.75

24.70

19.59

17.15

17.94

18.75

Book value
 
19.27

18.62

19.27

19.42

19.27

18.96

18.62

Tangible book value / share
 
$
12.78

$
12.10

$
12.78

$
12.89

$
12.72

$
12.41

$
12.10

Performance Ratios (annualized)
 
 
 
 
 
 
 
 
Return on average assets
 
0.70
%
0.70
%
0.75
%
0.74
%
0.69
%
0.62
%
0.62
%
Effective tax rate
 
30.36
%
30.20
%
30.07
%
30.52
%
30.39
%
30.51
%
26.82
%
Dividend payout ratio(1)
 
35.43
%
34.17
%
34.29
%
32.35
%
35.48
%
40.74
%
40.74
%
Selected Trend Information
 
 
 
 
 
 
 
 
Average full time equivalent employees
 
4,426

4,421

4,439

4,477

4,415

4,374

4,378

Branch count
 
 
 
217

217

215

215

215

Trust assets under management, at market value
 
 
 
$
8,302

$
8,179

$
7,944

$
7,844

$
7,729

Mortgage loans originated for sale during period
 
$
1,282

$
1,228

$
298

$
466

$
324

$
194

$
317

Mortgage loan settlements during period
 
$
1,543

$
1,241

$
396

$
655

$
270

$
222

$
299

Mortgage portfolio serviced for others
 
 
 
$
7,975

$
8,011

$
7,776

$
7,877

$
7,915

Mortgage servicing rights, net / mortgage portfolio serviced for others
 
 
 
0.77
%
0.73
%
0.74
%
0.75
%
0.77
%
Shares outstanding, end of period
 
 
 
152,121

151,243

151,036

150,994

151,239

Selected Quarterly Ratios
 
 
 
 
 
 
 
 
Loans / deposits
 
 
 
91.53
%
91.25
%
97.65
%
92.95
%
89.08
%
Stockholders’ equity / assets
 
 
 
10.61
%
10.62
%
10.43
%
10.58
%
10.60
%
Risk-based Capital (2) (3)
 
 
 
 
 
 
 
 
Total risk-weighted assets
 
 
 
$
21,350

$
21,265

$
21,168

$
20,454

$
19,930

Common equity Tier 1
 
 
 
$
2,033

$
1,984

$
1,941

$
1,903

$
1,898

Common equity Tier 1 capital ratio
 
 
 
9.52
%
9.33
%
9.17
%
9.30
%
9.52
%
Tier 1 capital ratio
 
 
 
10.27
%
10.08
%
9.73
%
9.88
%
10.12
%
Total capital ratio
 
 
 
12.68
%
12.49
%
12.16
%
12.35
%
12.62
%
Tier 1 leverage ratio
 
 
 
7.83
%
7.64
%
7.43
%
7.55
%
7.60
%

(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)
December 31, 2016 data is estimated.


Page 4




Associated Banc-Corp
Selected Asset Quality Information
 
 
 
 
 
 
(in thousands)
 
Dec 31, 2016
Sep 30, 2016
Seql Qtr % Change
 
Jun 30, 2016
Mar 31, 2016
Dec 31, 2015
Comp Qtr % Change
Allowance for Loan Losses
 
 
 
 
 
 
 
 
 
Balance at beginning of period
 
$
269,540

$
267,780

1
 %
 
$
277,370

$
274,264

$
262,536

3
 %
Provision for loan losses
 
18,000

20,000

(10
)%
 
11,000

20,000

19,500

(8
)%
Charge offs
 
(11,609
)
(28,964
)
(60
)%
 
(24,621
)
(21,245
)
(12,741
)
(9
)%
Recoveries
 
2,404

10,724

(78
)%
 
4,031

4,351

4,969

(52
)%
Net charge offs
 
(9,205
)
(18,240
)
(50
)%
 
(20,590
)
(16,894
)
(7,772
)
18
 %
Balance at end of period
 
$
278,335

$
269,540

3
 %
 
$
267,780

$
277,370

$
274,264

1
 %
Allowance for Unfunded Commitments
 
 
 
 
 
 
 
 
 
Balance at beginning of period
 
$
28,400

$
27,400

4
 %
 
$
24,400

$
24,400

$
23,900

19
 %
Provision for unfunded commitments
 
(3,000
)
1,000

N/M

 
3,000


500

N/M

Balance at end of period
 
$
25,400

$
28,400

(11
)%
 
$
27,400

$
24,400

$
24,400

4
 %
Allowance for credit losses
 
$
303,735

$
297,940

2
 %
 
$
295,180

$
301,770

$
298,664

2
 %
Provision for credit losses
 
$
15,000

$
21,000

(29
)%
 
$
14,000

$
20,000

$