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

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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) April 19, 2018
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))
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 April 19, 2018, Associated Banc-Corp announced its earnings for the quarter ended March 31, 2018. 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 April 19, 2018, 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: April 19, 2018
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
 
 
    99.2


(Back To Top)

Section 2: EX-99.1 (EXHIBIT 99.1)

Exhibit


Exhibit 99.1
393096642_associatedbanklogoa29.jpg
NEWS RELEASE
Investor Contact:
Robb Timme, Vice President, Investor Relations     
920-491-7059
Media Contact:
Jennifer Kaminski, Vice President, Public Relations Senior Manager
920-491-7576

Associated Banc-Corp Reports First Quarter Earnings of $0.40 per common share, or $0.50 per common share excluding $21 million in acquisition related costs1 

Earnings per share up 14% from the prior year
GREEN BAY, Wis. -- April 19, 2018 -- Associated Banc-Corp (NYSE: ASB) ("Associated" or "Company") today reported net income available to common equity ("earnings") of $67 million, or $0.40 per common share for the quarter ended March 31, 2018. This compares to net income available to common equity of $54 million, or $0.35 per common share for the quarter ended March 31, 2017.
“The Bank Mutual acquisition was integral to Associated's results in the quarter. With the merger closing on February 1, we added $1.9 billion of loans and $1.8 billion of deposits to our franchise. The integration is going well and we look forward to introducing Bank Mutual customers to Associated's products and services over the next few months," said President and CEO Philip B. Flynn. “In the first quarter, credit dynamics continued to be favorable and fee income increased. Our conversations with customers have been upbeat, and our growth outlook is optimistic."

FIRST QUARTER 2018 SUMMARY (all comparisons to the first quarter of 2017)
Average loans of $22.1 billion were up 10%, or $2.0 billion
Average deposits of $23.7 billion were up 10%, or $2.2 billion
Net interest income of $210 million increased $30 million, or 16%
Net interest margin of 2.92% improved 8 basis points from 2.84%
Provision for credit losses was zero, down from $9 million
Noninterest income of $90 million was up $11 million, or 13%
Noninterest expense of $213 million was up $39 million and included $21 million of acquisition related costs
Income before income taxes was up 13%, or $10 million
During the quarter, the Company repurchased approximately 1.1 million shares, or $26 million, of common stock
Total dividends paid per common share were $0.15, up 25%

1This is a non-GAAP financial measure. Management believes these measures are meaningful because they reflect adjustments commonly made by management, investors, regulators, and analysts to evaluate the adequacy of earnings per common share, provide greater understanding of ongoing operations and enhance comparability of results with prior periods. See page 8 of the attached tables for a reconciliation of GAAP financial measures to non-GAAP financial measures which exclude acquisition related costs.





Loans
First quarter 2018 average loans of $22.1 billion were up 10%, or $2.0 billion from the first quarter of 2017 and were up $1.2 billion from the fourth quarter of 2017. The Bank Mutual acquisition added $1.9 billion of loans.
With respect to first quarter 2018 average balances by loan category:
Consumer lending increased $1.5 billion from the year ago quarter, driven by the Company's on balance sheet mortgage retention strategy, and grew $554 million from the fourth quarter of 2017 to $9.4 billion.
Commercial real estate lending increased $399 million from the first quarter of 2017 and increased $526 million from the fourth quarter of 2017 to $5.4 billion.
Commercial and business lending increased $114 million from the year ago quarter and increased $135 million from the fourth quarter of 2017 to $7.3 billion. Mortgage Warehouse loan balances decreased approximately $50 million year over year and were down approximately $100 million from the prior quarter due to seasonal factors and higher mortgage interest rates.

Deposits
First quarter 2018 average deposits of $23.7 billion were up $2.2 billion, or 10% from the year ago quarter and were up $1.4 billion, or 6% from the fourth quarter of 2017. The Bank Mutual acquisition supplied $1.8 billion of deposits.
With respect to first quarter 2018 average balances by deposit category:
Noninterest-bearing demand deposits increased $119 million from the year ago quarter, but decreased $49 million from the fourth quarter of 2017 to $5.1 billion.
Savings and time deposits increased $1.4 billion from the year ago quarter and increased $528 million from the fourth quarter of 2017 to $4.4 billion.
Interest-bearing demand deposits increased $461 million from the year ago quarter and increased $249 million from the fourth quarter of 2017 to $4.7 billion.
Money market deposits increased $247 million from the year ago quarter and increased $672 million from the fourth quarter of 2017 to $9.4 billion.




Net Interest Income and Net Interest Margin
First quarter 2018 net interest income of $210 million was up 16%, or $30 million from the year ago quarter, with net interest margin increasing 8 basis points to 2.92%. First quarter 2018 net interest income increased 12%, or $23 million from the fourth quarter of 2017.
The average yield on total commercial loans for the first quarter of 2018 increased 82 basis points to 4.34% from the year ago quarter and increased 45 basis points from the prior quarter.
The average cost of total interest-bearing deposits for the first quarter of 2018 increased 31 basis points to 0.73% from the year ago quarter and increased 8 basis points from the prior quarter.
The net free funds benefit, the benefit of holding noninterest-bearing demand deposits, increased 6 basis points in the first quarter of 2018 compared to the year ago quarter and remained unchanged from the prior quarter.
Net loan and deposit growth for the first quarter of 2018, including the Bank Mutual acquisition, contributed an additional $10 million of net interest income compared to fourth quarter 2017.
Accreted income from the acquired Bank Mutual loan portfolio contributed $6 million to net interest income for the first quarter of 2018. Approximately $2 million of the accreted income was from prepayments and other adjustments.
Net changes in the securities portfolio for the first quarter of 2018 added $3 million to net interest income. LIBOR - Fed Funds and other net changes to earning assets and liabilities contributed $4 million to net interest income.

Noninterest Income
First quarter 2018 total noninterest income of $90 million increased $11 million from the year ago quarter and increased $6 million from the prior quarter.
With respect to first quarter 2018 noninterest income line items:
Brokerage and asset management fees were up $3 million from the year ago quarter, primarily driven by the acquisition of Whitnell & Co., and were up slightly from the prior quarter.
Capital market fees increased $1 million from the year ago quarter, but decreased $2 million from a very strong fourth quarter of 2017.
Mortgage banking income increased $2 million from the year ago quarter and increased $3 million from the prior quarter as the Company completed its mortgage retention initiative and returned to selling newly originated mortgage loans.

Noninterest Expense
First quarter 2018 total noninterest expense of $213 million increased 23%, or $39 million from the year ago quarter and increased $31 million from the fourth quarter of 2017. First quarter 2018 noninterest expense includes $21 million of Bank Mutual acquisition related costs.





With respect to first quarter 2018 noninterest expense line items:
Personnel expense increased by $11 million from both the year ago quarter and the fourth quarter of 2017, primarily driven by the additional cost of Bank Mutual staff.
Technology expense increased $3 million from the year ago quarter, but was unchanged from the prior quarter.
Occupancy expense was essentially unchanged from the year ago quarter, but increased $2 million from the prior quarter, with most of the increase coming from the additional expense of acquired Bank Mutual facilities.

Taxes
The first quarter 2018 effective tax rate was 20% compared to 27% in the year ago quarter. The decrease is primarily due to the Tax Cut and Jobs Act signed into law on December 22, 2017. The Company continues to expect its 2018 effective tax rate to be in the range of 20%-22%.

Credit
The first quarter provision for credit losses was zero, down from $9 million from the year ago quarter and unchanged from the prior quarter.
With respect to first quarter 2018 credit quality:
Potential problem loans of $282 million, including $42 million of loans from the Bank Mutual acquisition, were down $57 million from the year ago quarter, but were up $105 million from the prior quarter.
Nonaccrual loans of $209 million, including $15 million of purchased credit-impaired loans from the Bank Mutual acquisition, were down $51 million from the year ago quarter and were unchanged from the prior quarter. The nonaccrual loans to total loans ratio was 0.91% in the first quarter, compared to 1.29% in the year ago quarter, and 1.00% in the prior quarter.
Net charge offs of $9 million were up $4 million from the year ago quarter, but were down $1 million from the prior quarter. Oil and gas charge offs were $4 million in the first quarter.
The allowance for loan losses of $257 million was down $26 million from the year ago quarter and was down $9 million from the prior quarter. The allowance for loan losses to total loans ratio was 1.13% in the first quarter of 2018, compared to 1.40% in the year ago quarter, and 1.28% in the prior quarter.
The allowance related to the oil and gas portfolio was $19 million at March 31, 2018 and represented 2.9% of total oil and gas loans compared to 6.7% in the year ago quarter, and 4.5% in the prior quarter.

Capital
The Company’s capital position remains strong, with a CET1 capital ratio of 10.5% at March 31, 2018. The Company’s capital ratios continue to be in excess of the Basel III “well-capitalized” regulatory benchmarks on a fully phased in basis.
During the quarter, the Company repurchased approximately 1.1 million shares, or $26 million, of common stock, at an average price of $23.90 per share.





FIRST QUARTER 2018 EARNINGS RELEASE CONFERENCE CALL
The Company will host a conference call for investors and analysts at 4:00 p.m. Central Time (CT) today, April 19, 2018. Interested parties can access the live webcast of the call through the Investor Relations section of the Company's website, http://investor.associatedbank.com. Parties may also dial into the call at 877-407-8037 (domestic) or 201-689-8037 (international) and request the Associated Banc-Corp first quarter 2018 earnings call. The first quarter 2018 financial tables with an accompanying slide presentation will be available on the Company's website just prior to the call. An audio archive of the webcast will be available on the Company's website approximately fifteen minutes after the call is over.
ABOUT ASSOCIATED BANC-CORP
Associated Banc-Corp (NYSE: ASB) has total assets of $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 270 banking locations serving more than 110 communities throughout Wisconsin, Illinois and Minnesota, and commercial financial services in Indiana, Michigan, Missouri, Ohio and Texas. Associated Bank, N.A. is an Equal Housing Lender, Equal Opportunity Lender and Member FDIC. More information about Associated Banc-Corp is available at www.associatedbank.com.
FORWARD-LOOKING STATEMENTS
Statements made in this document which are not purely historical are forward-looking statements, as defined in the Private Securities Litigation Reform Act of 1995. This includes any statements regarding management’s plans, objectives, or goals for future operations, products or services, and forecasts of its revenues, earnings, or other measures of performance.  Such forward-looking statements may be identified by the use of words such as “believe,” “expect,” “anticipate,” “plan,” “estimate,” “should,” “will,” “intend,” “outlook,” or similar expressions.  Forward-looking statements are based on current management expectations and, by their nature, are subject to risks and uncertainties. Actual results may differ materially from those contained in the forward-looking statements.  Factors which may cause actual results to differ materially from those contained in such forward-looking statements include those identified in the Company’s most recent Form 10-K and subsequent SEC filings.  Such factors are incorporated herein by reference. 

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





Associated Banc-Corp
Consolidated Balance Sheets (Unaudited)
 
 
 
 
 
 
(In thousands)
Mar 31, 2018
Dec 31, 2017
Seql Qtr $ Change
Sep 30, 2017
Jun 30, 2017
Mar 31, 2017
Comp Qtr $ Change
Assets
 
 
 
 
 
 
 
Cash and due from banks
$
328,260

$
483,666

$
(155,406
)
$
354,331

$
396,677

$
332,601

$
(4,341
)
Interest-bearing deposits in other financial institutions
94,918

199,702

(104,784
)
109,596

126,232

337,167

(242,249
)
Federal funds sold and securities purchased under agreements to resell
10,000

32,650

(22,650
)
27,700

43,000

19,700

(9,700
)
Investment securities held to maturity, at amortized cost
2,443,203

2,282,853

160,350

2,233,579

2,255,395

1,554,843

888,360

Investment securities available for sale, at fair value
4,485,875

4,043,446

442,429

3,801,699

3,687,470

4,300,490

185,385

Federal Home Loan Bank and Federal Reserve Bank stocks, at cost
233,216

165,331

67,885

172,446

181,180

139,273

93,943

Residential loans held for sale
103,953

85,544

18,409

113,064

41,620

34,051

69,902

Commercial loans held for sale
6,091


6,091

9,718

4,772

2,901

3,190

Loans
22,810,491

20,784,991

2,025,500

20,931,460

20,783,069

20,147,683

2,662,808

Allowance for loan losses
(257,058
)
(265,880
)
8,822

(276,551
)
(281,101
)
(282,672
)
25,614

Loans, net
22,553,433

20,519,111

2,034,322

20,654,909

20,501,968

19,865,011

2,688,422

Bank and corporate owned life insurance
657,841

591,057

66,784

589,093

588,440

587,600

70,241

Tax credit and other investments
142,368

147,099

(4,731
)
120,927

95,710

92,675

49,693

Trading assets
102,890

69,675

33,215

48,429

48,576

49,306

53,584

Premises and equipment
381,327

330,963

50,364

330,065

328,404

332,884

48,443

Goodwill
1,153,156

976,239

176,917

972,006

972,006

972,006

181,150

Mortgage servicing rights, net
66,407

58,384

8,023

58,377

59,395

60,702

5,705

Other intangible assets, net
79,714

15,580

64,134

14,080

14,530

15,026

64,688

Other assets
523,855

482,294

41,561

454,528

423,650

413,621

110,234

Total assets
$
33,366,505

$
30,483,594

$
2,882,911

$
30,064,547

$
29,769,025

$
29,109,857

$
4,256,648

Liabilities and stockholders’ equity
 
 
 
 
 
 
 
Noninterest-bearing demand deposits
$
5,458,473

$
5,478,416

$
(19,943
)
$
5,177,734

$
5,038,162

$
5,338,212

$
120,261

Interest-bearing deposits
18,367,129

17,307,546

1,059,583

17,155,717

16,580,018

16,489,823

1,877,306

Total deposits
23,825,602

22,785,962

1,039,640

22,333,451

21,618,180

21,828,035

1,997,567

Federal funds purchased and securities sold under agreements to repurchase
283,954

324,815

(40,861
)
476,550

607,669

650,188

(366,234
)
Other short-term funding
1,862,420

351,467

1,510,953

588,067

794,813

430,679

1,431,741

Long-term funding
3,233,338

3,397,450

(164,112
)
3,147,285

3,262,120

2,761,955

471,383

Trading liabilities
100,247

67,660

32,587

46,812

47,143

47,561

52,686

Accrued expenses and other liabilities
348,246

318,797

29,449

268,781

247,598

246,645

101,601

Total liabilities
29,653,806

27,246,151

2,407,655

26,860,946

26,577,523

25,965,063

3,688,743

Stockholders’ equity
 
 
 
 
 
 
 
Preferred equity
159,853

159,929

(76
)
159,929

159,929

159,929

(76
)
Common equity
 
 
 
 
 
 
 
Common stock
1,741

1,618

123

1,615

1,630

1,630

111

Surplus
1,823,800

1,454,188

369,612

1,442,328

1,474,301

1,469,744

354,056

Retained earnings
1,859,068

1,819,230

39,838

1,792,184

1,747,632

1,709,514

149,554

Accumulated other comprehensive income (loss)
(107,673
)
(62,758
)
(44,915
)
(54,288
)
(53,470
)
(56,344
)
(51,329
)
Treasury stock, at cost
(24,089
)
(134,764
)
110,675

(138,167
)
(138,520
)
(139,679
)
115,590

Total common equity
3,552,847

3,077,514

475,333

3,043,672

3,031,573

2,984,865

567,982

Total stockholders’ equity
3,712,699

3,237,443

475,256

3,203,601

3,191,502

3,144,794

567,905

Total liabilities and stockholders’ equity
$
33,366,505

$
30,483,594

$
2,882,911

$
30,064,547

$
29,769,025

$
29,109,857

$
4,256,648

Numbers may not add due to rounding.




Page 1




Associated Banc-Corp
Consolidated Statements of Income (Unaudited) - Quarterly Trend
(In thousands, except per share data)
 
 
 
 
 
Seql Qtr
 
 
 
 
 
 
 
Comp Qtr
 
1Q18
 
4Q17
 
$ Change
 
% Change
 
3Q17
 
2Q17
 
1Q17
 
$ Change
 
% Change
Interest income
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest and fees on loans
 
$
220,034

 
$
194,133

 
$
25,901

 
13
 %
 
$
196,972

 
$
184,246

 
$
173,649

 
$
46,385

 
27
 %
Interest and dividends on investment securities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Taxable
 
30,104

 
25,614

 
4,490

 
18
 %
 
24,162

 
23,658

 
23,475

 
6,629

 
28
 %
Tax-exempt
 
9,217

 
8,437

 
780

 
9
 %
 
8,268

 
8,143

 
8,129

 
1,088

 
13
 %
Other interest
 
2,177

 
2,138

 
39

 
2
 %
 
2,492

 
1,553

 
1,536

 
641

 
42
 %
Total interest income
 
261,532

 
230,322

 
31,210

 
14
 %
 
231,894

 
217,600

 
206,789

 
54,743

 
26
 %
Interest expense
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest on deposits
 
33,412

 
28,143

 
5,269

 
19
 %
 
27,778

 
21,180

 
16,924

 
16,488

 
97
 %
Interest on Federal funds purchased and securities sold under agreements to repurchase
 
522

 
420

 
102

 
24
 %
 
768

 
824

 
515

 
7

 
1
 %
Interest on other short-term funding
 
3,005

 
1,731

 
1,274

 
74
 %
 
1,039

 
1,827

 
1,080

 
1,925

 
178
 %
Interest on long-term funding
 
14,722

 
13,023

 
1,699

 
13
 %
 
12,187

 
9,950

 
7,996

 
6,726

 
84
 %
Total interest expense
 
51,661

 
43,317

 
8,344

 
19
 %
 
41,772

 
33,781

 
26,515

 
25,146

 
95
 %
Net Interest income
 
209,871

 
187,005

 
22,866

 
12
 %
 
190,122

 
183,819

 
180,274

 
29,597

 
16
 %
Provision for credit losses
 

 

 

 

 
5,000

 
12,000

 
9,000

 
(9,000
)
 
N/M

Net interest income after provision for credit losses
 
209,871

 
187,005

 
22,866

 
12
 %
 
185,122

 
171,819

 
171,274

 
38,597

 
23
 %
Noninterest income
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Insurance commissions and fees
 
22,648

 
19,186

 
3,462

 
18
 %
 
19,815

 
20,853

 
21,620

 
1,028

 
5
 %
Service charges and deposit account fees
 
16,420

 
15,773

 
647

 
4
 %
 
16,268

 
16,030

 
16,356

 
64

 
 %
Card-based and loan fees
 
13,422

 
13,840

 
(418
)
 
(3
)%
 
12,619

 
13,764

 
12,465

 
957

 
8
 %
Trust and asset management fees
 
13,369

 
13,125

 
244

 
2
 %
 
12,785

 
12,346

 
11,935

 
1,434

 
12
 %
Brokerage commissions and fees
 
7,273

 
6,864

 
409

 
6
 %
 
4,392

 
4,346

 
4,333

 
2,940

 
68
 %
Mortgage banking, net
 
6,370

 
3,169

 
3,201

 
101
 %
 
6,585

 
5,027

 
4,579

 
1,791

 
39
 %
Capital markets, net
 
5,306

 
7,107

 
(1,801
)
 
(25
)%
 
4,610

 
4,042

 
3,883

 
1,423

 
37
 %
Bank and corporate owned life insurance
 
3,187

 
3,156

 
31

 
1
 %
 
6,580

 
3,899

 
2,615

 
572

 
22
 %
Asset gains (losses), net
 
(107
)
 
(528
)
 
421

 
(80
)%
 
(16
)
 
(466
)
 
(234
)
 
127

 
(54
)%
Investment securities gains (losses), net
 

 
75

 
(75
)
 
N/M

 
3

 
356

 

 

 
N/M

Other
 
2,492

 
2,777

 
(285
)
 
(10
)%
 
2,254

 
2,213

 
2,279

 
213

 
9
 %
Total noninterest income
 
90,380

 
84,544

 
5,836

 
7
 %
 
85,895

 
82,410

 
79,831

 
10,549

 
13
 %
Noninterest expense
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Personnel (1)
 
117,685

 
107,031

 
10,654

 
10
 %
 
108,098

 
107,066

 
106,782

 
10,903

 
10
 %
Occupancy
 
15,357

 
13,497

 
1,860

 
14
 %
 
12,294

 
12,832

 
15,219

 
138

 
1
 %
Technology
 
17,715

 
17,878

 
(163
)
 
(1
)%
 
15,233

 
15,473

 
14,420

 
3,295

 
23
 %
Equipment
 
5,556

 
5,250

 
306

 
6
 %
 
5,232

 
5,234

 
5,485

 
71

 
1
 %
Business development and advertising
 
6,693

 
8,195

 
(1,502
)
 
(18
)%
 
7,764

 
7,152

 
5,835

 
858

 
15
 %
Legal and professional
 
5,413

 
6,384

 
(971
)
 
(15
)%
 
6,248

 
5,711

 
4,166

 
1,247

 
30
 %
Card issuance and loan costs
 
3,304

 
2,836

 
468

 
17
 %
 
3,330

 
2,974

 
2,620

 
684

 
26
 %
Foreclosure / OREO expense, net
 
723

 
1,285

 
(562
)
 
(44
)%
 
906

 
1,182

 
1,505

 
(782
)
 
(52
)%
FDIC assessment
 
8,250

 
7,500

 
750

 
10
 %
 
7,800

 
8,000

 
8,000

 
250

 
3
 %
Other intangible amortization
 
1,525

 
500

 
1,025

 
205
 %
 
450

 
496

 
513

 
1,012

 
197
 %
Acquisition related costs (2)
 
20,605

 

 
20,605

 
N/M

 

 

 

 
20,605

 
N/M

Other (1)
 
10,140

 
11,343

 
(1,203
)
 
(11
)%
 
10,072

 
10,196

 
9,146

 
994

 
11
 %
Total noninterest expense
 
212,965

 
181,699

 
31,266

 
17
 %
 
177,427

 
176,316

 
173,691

 
39,274

 
23
 %
Income before income taxes
 
87,285

 
89,850

 
(2,565
)
 
(3
)%
 
93,590

 
77,913

 
77,414

 
9,871

 
13
 %
Income tax expense
 
17,829

 
39,840

 
(22,011
)
 
(55
)%
 
28,589

 
19,930

 
21,144

 
(3,315
)
 
(16
)%
Net income
 
69,456

 
50,010

 
19,446

 
39
 %
 
65,001

 
57,983

 
56,270

 
13,186

 
23
 %
Preferred stock dividends
 
2,339

 
2,339

 

 
 %
 
2,339

 
2,339

 
2,330

 
9

 
 %
Net income available to common equity
 
$
67,117

 
$
47,671

 
$
19,446

 
41
 %
 
$
62,662

 
$
55,644

 
$
53,940

 
$
13,177

 
24
 %
Earnings per common share
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic
 
$
0.41

 
$
0.31

 
$
0.10

 
32
 %
 
$
0.41

 
$
0.36

 
$
0.36

 
$
0.05

 
14
 %
Diluted
 
$
0.40

 
$
0.31

 
$
0.09

 
29
 %
 
$
0.41

 
$
0.36

 
$
0.35

 
$
0.05

 
14
 %
Average common shares outstanding
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic
 
163,520

 
150,563

 
12,957

 
9
 %
 
150,565

 
151,573

 
150,815

 
12,705

 
8
 %
Diluted
 
166,432

 
153,449

 
12,983

 
8
 %
 
152,968

 
154,302

 
153,869

 
12,563

 
8
 %
N/M = Not meaningful
Numbers may not add due to rounding.
(1) During the first quarter of 2018, the Corporation adopted a new accounting standard related to the presentation of net periodic pension cost and net periodic postretirement benefit cost which required the disaggregation of the service cost component from the other components of net benefit cost and net periodic postretirement benefit cost. Under this new accounting standard, the other components of net benefit cost and net periodic postretirement benefit cost were reclassified from personnel expense to other noninterest expense. All prior periods have been restated to reflect this change in presentation.
(2)
Includes Bank Mutual acquisition related costs only.

Page 2




Associated Banc-Corp
Selected Quarterly Information
 
 
 
 
 
 
(In millions, except share and per share, full time equivalent employee and branch count data)
 
1Q18
4Q17
3Q17
2Q17
1Q17
Per common share data
 
 
 
 
 
 
Dividends
 
$
0.15

$
0.14

$
0.12

$
0.12

$
0.12

Market value:
 
 
 
 
 
 
High
 
26.90

26.10

25.70

25.50

26.50

Low
 
23.60

24.00

21.25

23.25

23.40

Close
 
24.85

25.40

24.25

25.20

24.40

Book value
 
20.63

20.13

19.98

19.70

19.42

Tangible book value / share
 
$
13.47

$
13.65

$
13.51

$
13.29

$
13.00

Performance ratios (annualized)
 
 
 
 
 
 
Return on average assets
 
0.88
%
0.66
%
0.86
%
0.80
%
0.79
%
Effective tax rate
 
20.43
%
44.34
%
30.55
%
25.58
%
27.31
%
Dividend payout ratio (1)
 
36.59
%
45.16
%
29.27
%
33.33
%
33.33
%
Net interest margin
 
2.92
%
2.79
%
2.84
%
2.83
%
2.84
%
Selected trend information
 
 
 
 
 
 
Average full time equivalent employees
 
4,693

4,367

4,384

4,352

4,370

Branch count
 
271

213

214

214

215

Assets under management, at market value (2)
 
$
10,540

$
10,555

$
9,243

$
8,997

$
8,716

Mortgage loans originated for sale during period
 
$
198

$
249

$
246

$
119

$
101

Mortgage loan settlements during period
 
$
188

$
268

$
188

$
167

$
197

Mortgage portfolio serviced for others
 
$
8,507

$
7,647

$
7,653

$
7,768

$
7,909

Mortgage servicing rights, net / mortgage portfolio serviced for others
 
0.78
%
0.76
%
0.76
%
0.76
%
0.77
%
Shares outstanding, end of period
 
172,182

152,846

152,316

153,848

153,734

Net shares issuable to Associated Banc-Corp warrant ("ASBWS") holders (5)
 
1,023

1,134

903

1,094

933

Selected quarterly ratios
 
 
 
 
 
 
Loans / deposits
 
95.74
%
91.22
%
93.72
%
96.14
%
92.30
%
Stockholders’ equity / assets
 
11.13
%
10.62
%
10.66
%
10.72
%
10.80
%
Risk-based capital (3) (4)
 
 
 
 
 
 
Total risk-weighted assets
 
$
23,550

$
21,544

$
21,657

$
21,590

$
21,129

Common equity Tier 1
 
$
2,474

$
2,172

$
2,144

$
2,130

$
2,085

Common equity Tier 1 capital ratio
 
10.50
%
10.08
%
9.90
%
9.87
%
9.87
%
Tier 1 capital ratio
 
11.18
%
10.82
%
10.64
%
10.61
%
10.62
%
Total capital ratio
 
13.44
%
13.22
%
13.04
%
13.01
%
13.05
%
Tier 1 leverage ratio
 
8.48
%
8.02
%
7.93
%
8.09
%
8.05
%
Loans
 
 
 
 
 
 
Recorded investment on loans
 
$
22,756

$
20,699

$
20,849

$
20,708

$
20,086

Net unaccreted Bank Mutual purchase discount
 
(34
)




Net other deferred costs
 
88

86

83

75

62

Loans
 
$
22,810

$
20,785

$
20,931

$
20,783

$
20,148

Numbers may not add due to rounding.
(1)
Ratio is based upon basic earnings per common share.
(2)
Excludes assets held in brokerage accounts.
(3)
The Federal Reserve establishes regulatory capital requirements, including well-capitalized standards for the Corporation. The regulatory capital requirements effective for the Corporation follow Basel III, subject to certain transition provisions.
(4)
March 31, 2018 data is estimated.
(5)
Based on the treasury stock method and the period-end close price. The ASBWS warrants will expire on November 21, 2018.


Page 3




Associated Banc-Corp
Selected Asset Quality Information
 
 
 
 
 
 
(In thousands)
 
Mar 31, 2018
Dec 31, 2017
Seql Qtr %
Change
 
Sep 30, 2017
Jun 30, 2017
Mar 31, 2017
Comp Qtr %
Change
Allowance for loan losses
 
 
 
 
 
 
 
 
 
Balance at beginning of period
 
$
265,880

$
276,551

(4
)%
 
$
281,101

$
282,672

$
278,335

(4
)%
Provision for loan losses
 
500


N/M

 
6,000

11,000

10,000

(95
)%
Charge offs
 
(12,155
)
(14,289
)
(15
)%
 
(14,727
)
(15,376
)
(11,854
)
3
 %
Recoveries
 
2,832

3,618

(22
)%
 
4,177

2,805

6,191

(54
)%
Net charge offs
 
(9,323
)
(10,671
)
(13
)%
 
(10,550
)
(12,571
)
(5,663
)
65
 %
Balance at end of period
 
$
257,058

$
265,880

(3
)%
 
$
276,551

$
281,101

$
282,672

(9
)%
Allowance for unfunded commitments
 
 
 
 
 
 
 
 
 
Balance at beginning of period
 
$
24,400

$
24,400

 %
 
$
25,400

$
24,400

$
25,400

(4
)%
Provision for unfunded commitments
 
(500
)

N/M

 
(1,000
)
1,000

(1,000
)
(50
)%
Amount recorded at acquisition
 
2,436


N/M

 



N/M

Balance at end of period
 
$
26,336

$
24,400

8
 %
 
$
24,400

$
25,400

$
24,400

8
 %
Allowance for credit losses
 
$
283,394

$
290,280

(2
)%
 
$
300,951

$
306,501

$
307,072

(8
)%
Provision for credit losses
 
$

$

N/M

 
$
5,000

$
12,000

$
9,000

(100
)%
 
 
Mar 31, 2018
Dec 31, 2017
Seql Qtr %
Change
 
Sep 30, 2017
Jun 30, 2017
Mar 31, 2017
Comp Qtr %
Change
Net charge offs
 
 
 
 
 
 
 
 
 
Commercial and industrial
 
$
(6,599
)
$
(8,212
)
(20
)%
 
$
(9,442
)
$
(11,046
)
$
(4,368
)
51
 %
Commercial real estate—owner occupied
 
(1,025
)
(246
)
N/M

 
13

43

19

N/M

Commercial and business lending
 
(7,624
)
(8,458
)
(10
)%
 
(9,429
)
(11,003
)
(4,349
)
75
 %
Commercial real estate—investor
 
8

(164
)
(105
)%
 
55

(126
)
(514
)
(102
)%
Real estate construction
 
189

(365
)
(152
)%
 
(150
)
(26
)
11

N/M

Commercial real estate lending
 
197

(529
)
(137
)%
 
(95
)
(152
)
(503
)
(139
)%
Total commercial
 
(7,427
)
(8,987
)
(17
)%
 
(9,524
)
(11,155
)
(4,852
)
53
 %
Residential mortgage
 
(131
)
(966
)
(86
)%
 
(26
)
(564
)
(128
)
2
 %
Home equity
 
(677
)
330

N/M

 
(87
)
54

173

N/M

Other consumer
 
(1,088
)
(1,048
)
4
 %
 
(913
)
(906
)
(856
)
27
 %
Total consumer
 
(1,896
)
(1,684
)
13
 %
 
(1,026
)
(1,416
)
(811
)
134
 %
Total net charge offs
 
$
(9,323
)
$
(10,671
)
(13
)%
 
$
(10,550
)
$
(12,571
)
$
(5,663
)
65
 %
 
 
 
 
 
 
 
 
 
 
(In basis points)
 
Mar 31, 2018
Dec 31, 2017
 
 
Sep 30, 2017
Jun 30, 2017
Mar 31, 2017
 
Net charge offs to average loans (annualized)
 
 
 
 
 
 
 
 
 
Commercial and industrial
 
(41
)
(51
)
 
 
(58
)
(69
)
(28
)
 
Commercial real estate—owner occupied
 
(48
)
(12
)
 
 
1

2

1

 
Commercial and business lending
 
(42
)
(47
)
 
 
(51
)
(60
)
(24
)
 
Commercial real estate—investor
 
N/M

(2
)
 
 
1

(2
)
(6
)
 
Real estate construction
 
5

(10
)
 
 
(4
)
(1
)
N/M

 
Commercial real estate lending
 
1

(4
)
 
 
(1
)
(1
)
(4
)
 
Total commercial
 
(24
)
(30
)
 
 
(31
)
(36
)
(16
)
 
Residential mortgage
 
(1
)
(5
)
 
 
N/M

(3
)
(1
)
 
Home equity
 
(28
)
15

 
 
(4
)
2

8

 
Other consumer
 
(115
)
(109
)
 
 
(97
)
(98
)
(90
)
 
Total consumer
 
(8
)
(8
)
 
 
(5
)
(7
)
(4
)
 
Total net charge offs
 
(17
)
(20
)
 
 
(20
)
(25
)
(11
)
 
 
 
 
 
 
 
 
 
 
 
(In thousands)
 
Mar 31, 2018
Dec 31, 2017
Seql Qtr %
Change
 
Sep 30, 2017
Jun 30, 2017
Mar 31, 2017
Comp Qtr %
Change
Credit Quality
 
 
 
 
 
 
 
 
 
Nonaccrual loans
 
$
208,553

$
208,546

 %
 
$
210,517

$
231,888

$
259,991

(20
)%
Other real estate owned (OREO)
 
16,919

12,608

34
 %
 
8,483

7,782

7,540

124
 %
Other nonperforming assets
 
7,117

7,418

(4
)%
 
7,418

7,418

7,418

(4
)%
Total nonperforming assets
 
$
232,589

$
228,572

2
 %
 
$
226,418

$
247,088

$
274,949

(15
)%
 
 
 
 
 
 
 
 
 
 
Loans 90 or more days past due and still accruing
 
$
3,393

$
1,867

82
 %
 
$
1,611

$
1,535

$
1,720

97
 %
Allowance for loan losses to loans
 
1.13
%
1.28
%
 
 
1.32
%
1.35
%
1.40
%
 
Net unaccreted purchase discount to purchased loans
 
1.80
%
%
 
 
%
%
%
 
Allowance for loan losses to nonaccrual loans
 
123.26
%
127.49
%
 
 
131.37
%
121.22
%
108.72
%
 
Nonaccrual loans to total loans
 
0.91
%
1.00
%
 
 
1.01
%
1.12
%
1.29
%
 
Nonperforming assets to total loans plus OREO
 
1.02
%
1.10
%
 
 
1.08
%
1.19
%
1.36
%
 
Nonperforming assets to total assets
 
0.70
%
0.75
%
 
 
0.75
%
0.83
%
0.94
%
 
Year-to-date net charge offs to average loans (annualized)
 
0.17
%
0.19
%
 
 
0.19
%
0.18
%
0.11
%
 

Page 4




Associated Banc-Corp
Selected Asset Quality Information (continued)
(In thousands)
 
Mar 31, 2018
Dec 31, 2017
Seql Qtr %
Change

Sep 30, 2017
Jun 30, 2017
Mar 31, 2017
Comp Qtr %
Change
Nonaccrual loans
 
 
 
 
 
 
 
 
 
Commercial and industrial
 
$
102,667

$
112,786

(9
)%
 
$
122,284

$
141,475

$
164,891

(38
)%
Commercial real estate—owner occupied
 
20,636

22,740

(9
)%
 
15,598

15,800

17,925

15
 %
Commercial and business lending
 
123,303

135,526

(9
)%
 
137,882

157,275

182,816

(33
)%
Commercial real estate—investor
 
15,574

4,729

N/M

 
3,543

7,206

8,273

88
 %
Real estate construction
 
1,219

974

25
 %
 
1,540

1,717

1,247

(2
)%
Commercial real estate lending
 
16,793

5,703

194
 %
 
5,083

8,923

9,520

76
 %
Total commercial
 
140,096

141,229

(1
)%
 
142,965

166,198

192,336

(27
)%
Residential mortgage
 
55,100

53,632

3
 %
 
54,654

51,975

54,183

2
 %
Home equity
 
13,218

13,514

(2
)%
 
12,639

13,482

13,212

 %
Other consumer
 
139

171

(19
)%
 
259

233

260

(47
)%
Total consumer
 
68,456

67,317

2
 %
 
67,552

65,690

67,655

1
 %
Total nonaccrual loans
 
$
208,553

$
208,546

 %
 
$
210,517

$
231,888

$
259,991

(20
)%
 
 
 
 
 
 
 
 
 
 
 
 
Mar 31, 2018
Dec 31, 2017
Seql Qtr %
Change
 
Sep 30, 2017
Jun 30, 2017
Mar 31, 2017
Comp Qtr %
Change
Restructured loans (accruing)
 
 
 
 
 
 
 
 
 
Commercial and industrial
 
$
29,580

$
30,047

(2
)%
 
$
32,572

$
31,540

$
30,852

(4
)%
Commercial real estate—owner occupied
 
3,892

3,989

(2
)%
 
4,077

4,145

5,532

(30
)%
Commercial and business lending
 
33,472

34,036

(2
)%
 
36,649

35,685

36,384

(8
)%
Commercial real estate—investor
 
13,683

14,389

(5
)%
 
14,294

14,628

14,563

(6
)%
Real estate construction
 
305

310

(2
)%
 
316

321

327

(7
)%
Commercial real estate lending
 
13,988

14,699

(5
)%
 
14,610

14,949

14,890

(6
)%
Total commercial
 
47,460

48,735

(3
)%
 
51,259

50,634

51,274

(7
)%
Residential mortgage
 
19,902

17,068

17
 %
 
16,859

17,624

18,535

7
 %
Home equity
 
8,098

7,705

5
 %
 
7,987

7,985

8,209

(1
)%
Other consumer
 
1,041

1,110

(6
)%
 
1,073

1,082

1,041

 %
Total consumer
 
29,041

25,883

12
 %
 
25,919

26,691

27,785

5
 %
Total restructured loans (accruing)
 
$
76,501

$
74,618

3
 %
 
$
77,178

$
77,325

$
79,059

(3
)%
Restructured loans included in nonaccrual loans (not included with restructured loans (accruing))
 
$
23,827

$
23,486

1
 %
 
$
33,520

$
51,715

$
78,902

(70
)%
 
 
Mar 31, 2018
Dec 31, 2017
Seql Qtr %
Change
 
Sep 30, 2017
Jun 30, 2017
Mar 31, 2017
Comp Qtr %
Change
Accruing Loans 30-89 Days Past Due
 
 
 
 
 
 
 
 
 
Commercial and industrial
 
$
880

$
271

N/M

 
$
1,378

$
1,255

$
1,675

(47
)%
Commercial real estate—owner occupied
 
511

48

N/M

 
1,522

1,284

970

(47
)%
Commercial and business lending
 
1,391

319

N/M

 
2,900

2,539

2,645

(47
)%
Commercial real estate—investor
 
240

374

(36
)%
 
1,109