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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) July 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 July 19, 2018, Associated Banc-Corp announced its earnings for the quarter ended June 30, 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 July 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: July 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
394288427_associatedbanklogoa30.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 Second Quarter Earnings of $0.50 Per Common Share, or $0.53 Per Common Share Excluding $7 million in Acquisition Related Costs1 

Earnings per share up 39% from the prior year
GREEN BAY, Wis. -- July 19, 2018 -- Associated Banc-Corp (NYSE: ASB) ("Associated" or "Company") today reported net income available to common equity ("earnings") of $87 million, or $0.50 per common share for the quarter ended June 30, 2018. This compares to net income available to common equity of $56 million, or $0.36 per common share for the quarter ended June 30, 2017.
“In June, we welcomed over 92,000 Bank Mutual customers to Associated Bank. We re-branded 22 Bank Mutual branches and expanded Associated Bank's network into 12 new communities. We look forward to demonstrating to our new customers the greater range of services that Associated offers," said President and CEO Philip B. Flynn. "We are also pleased with the strong bottom line results this quarter. We had solid growth in our commercial and business lending portfolios. We benefited from rising rates and a credit environment that remains benign, enabling us to take a very modest provision for credit loss in the quarter."

SECOND QUARTER 2018 SUMMARY (all comparisons to the second quarter of 2017)
Average loans of $23.0 billion were up 12%, or $2.5 billion
Average deposits of $23.6 billion were up 10%, or $2.1 billion
Net interest income of $226 million increased $43 million, or 23%
Net interest margin of 3.02% improved 19 basis points from 2.83%
Provision for credit losses was $4 million, down from $12 million
Noninterest income of $93 million was up $10 million, or 13%
Noninterest expense of $211 million was up $35 million and included $7 million of acquisition related costs
Income before income taxes was up 33%, or $26 million
During the quarter, the Company repurchased approximately 250,000 shares, or $7 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 10 of the attached tables for a reconciliation of GAAP financial measures to non-GAAP financial measures which exclude acquisition related costs.





Loans
Second quarter 2018 average loans of $23.0 billion were up 12%, or $2.5 billion from the second quarter of 2017, and were up $0.9 billion from the first quarter of 2018.
With respect to second quarter 2018 average balances by loan category:
Consumer lending increased $1.4 billion from the year ago quarter, and grew $237 million from the first quarter of 2018 to $9.6 billion.
Commercial real estate lending increased $742 million from the second quarter of 2017 and increased $306 million from the first quarter of 2018 to $5.7 billion.
Commercial and business lending increased $376 million from the year ago quarter and increased $383 million from the first quarter of 2018 to $7.7 billion. C&I loan growth was spread across most specialized lines of business and in the general commercial portfolio.

Deposits
Second quarter 2018 average deposits of $23.6 billion were up $2.1 billion, or 10% from the year ago quarter, and were flat compared to the first quarter of 2018.
With respect to second quarter 2018 average balances by deposit category:
Money market deposits increased $1.1 billion from the year ago quarter, but decreased $25 million from the first quarter of 2018 to $7.2 billion.
Interest-bearing demand deposits increased $911 million from the year ago quarter and increased $232 million from the first quarter of 2018 to $4.7 billion.
Time deposits increased $813 million from the year ago quarter, but decreased $150 million from the first quarter of 2018 to $2.6 billion.
Noninterest-bearing demand deposits increased $240 million from the year ago quarter and increased $47 million from the first quarter of 2018 to $5.1 billion.
Savings increased $352 million from the year ago quarter and increased $170 million from the first quarter of 2018 to $1.9 billion.
Network transaction deposits decreased $1.2 billion from the year ago quarter and decreased $278 million from the first quarter of 2018 to $2.1 billion.





Net Interest Income and Net Interest Margin
Second quarter 2018 net interest income of $226 million was up 23%, or $43 million from the year ago quarter, with net interest margin increasing 19 basis points to 3.02%. Second quarter 2018 net interest income increased 8%, or $16 million from the first quarter of 2018.
The average yield on total commercial loans for the second quarter of 2018 increased 106 basis points to 4.75% from the year ago quarter and increased 41 basis points from the prior quarter.
The average cost of total interest-bearing deposits for the second quarter of 2018 increased 32 basis points to 0.83% from the year ago quarter and increased 10 basis points from the prior quarter.
The net free funds benefit, the benefit of holding noninterest-bearing demand deposits, increased 8 basis points in the second quarter of 2018 compared to the year ago quarter and increased 4 basis points from the prior quarter.

Noninterest Income
Second quarter 2018 total noninterest income of $93 million increased $10 million from the year ago quarter and increased $2 million from the prior quarter.
With respect to second quarter 2018 noninterest income line items:
Insurance commissions and fees were up $3 million from the year ago quarter, driven by the acquisitions of Diversified Insurance Solutions and Anderson Insurance, and were up $1 million from the prior quarter on seasonal strength of the employee benefits business.
Card-based and loan fees were up $1 million from both the year ago quarter and the prior quarter.

Noninterest Expense
Second quarter 2018 total noninterest expense of $211 million increased 20%, or $35 million from the year ago quarter, but decreased $2 million from the first quarter of 2018. Second quarter 2018 noninterest expense includes $7 million of Bank Mutual acquisition related costs.
With respect to second quarter 2018 noninterest expense line items:
Personnel expense increased $17 million from the year ago quarter, and increased by $6 million from the first quarter of 2018, primarily driven by the additional cost of Bank Mutual staff.
Technology expense increased $4 million from the year ago quarter, and increased by $2 million from the prior quarter, largely driven by the additional cost of Bank Mutual operations.
Occupancy expense increased $2 million from the year ago quarter, with most of the increase coming from the additional expense of acquired Bank Mutual facilities. Occupancy expense was down slightly from the prior quarter.
Acquisition related costs decreased $13 million from the prior quarter.






Taxes
The second quarter 2018 effective tax rate was 14% compared to 26% in the year ago quarter. The decrease is primarily due to the Tax Cut and Jobs Act (TCJA) signed into law on December 22, 2017. In the second quarter, the Company received one-time tax benefits from implementing tax planning strategies to maximize the positive impact of the TCJA. Going forward, the Company expects its quarterly effective tax rate to be approximately 22% for the remainder of 2018, and approximately 20% for the full year.

Credit
The second quarter provision for credit losses was $4 million, down from $12 million in the year ago quarter, but up from zero in the prior quarter, primarily due to loan growth.
With respect to second quarter 2018 credit quality:
Potential problem loans of $242 million were down $21 million from the year ago quarter and were down $41 million from the prior quarter.
Nonaccrual loans of $204 million were down $27 million from the year ago quarter and were down $4 million from the prior quarter. The nonaccrual loans to total loans ratio was 0.89% in the second quarter, compared to 1.12% in the year ago quarter, and 0.91% in the prior quarter.
Net charge offs of $8 million were down $4 million from the year ago quarter and were down $1 million from the prior quarter. Net oil and gas charge offs were $7 million in the second quarter.
The allowance for loan losses of $253 million was down $29 million from the year ago quarter and was down $4 million from the prior quarter. The allowance for loan losses to total loans ratio was 1.10% in the second quarter of 2018, compared to 1.35% in the year ago quarter, and 1.13% in the prior quarter.
The allowance related to the oil and gas portfolio was $17 million at June 30, 2018 and represented 2.5% of total oil and gas loans compared to 5.4% in the year ago quarter, and 2.9% in the prior quarter.

Capital
The Company’s capital position remains strong, with a CET1 capital ratio of 10.5% at June 30, 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 250,000 shares, or $7 million, of common stock, at an average price of $26.52 per share.





SECOND 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, July 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 second quarter 2018 earnings call. The second 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 $34 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 230 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)
Jun 30, 2018
Mar 31, 2018
Seql Qtr $ Change
Dec 31, 2017
Sep 30, 2017
Jun 30, 2017
Comp Qtr $ Change
Assets
 
 
 
 
 
 
 
Cash and due from banks
$
396,761

$
328,260

$
68,501

$
483,666

$
354,331

$
396,677

$
84

Interest-bearing deposits in other financial institutions
71,462

94,918

(23,456
)
199,702

109,596

126,232

(54,770
)
Federal funds sold and securities purchased under agreements to resell
3,150

10,000

(6,850
)
32,650

27,700

43,000

(39,850
)
Investment securities held to maturity, at amortized cost
2,602,247

2,443,203

159,044

2,282,853

2,233,579

2,255,395

346,852

Investment securities available for sale, at fair value
4,261,651

4,485,875

(224,224
)
4,043,446

3,801,699

3,687,470

574,181

Federal Home Loan Bank and Federal Reserve Bank stocks, at cost
249,040

233,216

15,824

165,331

172,446

181,180

67,860

Residential loans held for sale
143,022

103,953

39,069

85,544

113,064

41,620

101,402

Commercial loans held for sale

6,091

(6,091
)

9,718

4,772

(4,772
)
Loans
22,976,786

22,810,491

166,295

20,784,991

20,931,460

20,783,069

2,193,717

Allowance for loan losses
(252,601
)
(257,058
)
4,457

(265,880
)
(276,551
)
(281,101
)
28,500

Loans, net
22,724,184

22,553,433

170,751

20,519,111

20,654,909

20,501,968

2,222,216

Bank and corporate owned life insurance
659,592

657,841

1,751

591,057

589,093

588,440

71,152

Tax credit and other investments
137,051

142,368

(5,317
)
147,099

120,927

95,710

41,341

Trading assets
132,919

102,890

30,029

69,675

48,429

48,576

84,343

Premises and equipment
361,385

381,327

(19,942
)
330,963

330,065

328,404

32,981

Goodwill
1,166,665

1,153,156

13,509

976,239

972,006

972,006

194,659

Mortgage servicing rights, net
66,980

66,407

573

58,384

58,377

59,395

7,585

Other intangible assets, net
80,346

79,714

632

15,580

14,080

14,530

65,816

Other assets
596,190

523,855

72,335

482,294

454,528

423,650

172,540

Total assets
$
33,652,647

$
33,366,505

$
286,142

$
30,483,594

$
30,064,547

$
29,769,025

$
3,883,622

Liabilities and stockholders’ equity
 
 
 
 
 
 
 
Noninterest-bearing demand deposits
$
5,341,361

$
5,458,473

$
(117,112
)
$
5,478,416

$
5,177,734

$
5,038,162

$
303,199

Interest-bearing deposits
18,474,953

18,367,129

107,824

17,307,546

17,155,717

16,580,018

1,894,935

Total deposits
23,816,314

23,825,602

(9,288
)
22,785,962

22,333,451

21,618,180

2,198,134

Federal funds purchased and securities sold under agreements to repurchase
203,733

283,954

(80,221
)
324,815

476,550

607,669

(403,936
)
Commercial paper
52,791

82,420

(29,629
)
67,467

68,067

97,813

(45,022
)
FHLB advances
4,797,857

4,515,887

281,970

3,184,168

3,170,172

3,462,176

1,335,681

Other long-term funding
497,619

497,451

168

497,282

497,113

496,944

675

Trading liabilities
131,612

100,247

31,365

67,660

46,812

47,143

84,469

Accrued expenses and other liabilities
382,476

348,246

34,230

318,797

268,781

247,598

134,878

Total liabilities
29,882,403

29,653,806

228,597

27,246,151

26,860,946

26,577,523

3,304,880

Stockholders’ equity
 
 
 
 
 
 
 
Preferred equity
159,401

159,853

(452
)
159,929

159,929

159,929

(528
)
Common equity
 
 
 
 
 
 
 
Common stock
1,751

1,741

10

1,618

1,615

1,630

121

Surplus
1,828,965

1,823,800

5,165

1,454,188

1,442,328

1,474,301

354,664

Retained earnings
1,920,579

1,859,068

61,511

1,819,230

1,792,184

1,747,632

172,947

Accumulated other comprehensive income (loss)
(119,888
)
(107,673
)
(12,215
)
(62,758
)
(54,288
)
(53,470
)
(66,418
)
Treasury stock, at cost
(20,564
)
(24,089
)
3,525

(134,764
)
(138,167
)
(138,520
)
117,956

Total common equity
3,610,843

3,552,847

57,996

3,077,514

3,043,672

3,031,573

579,270

Total stockholders’ equity
3,770,244

3,712,699

57,545

3,237,443

3,203,601

3,191,502

578,742

Total liabilities and stockholders’ equity
$
33,652,647

$
33,366,505

$
286,142

$
30,483,594

$
30,064,547

$
29,769,025

$
3,883,622

Numbers may not sum due to rounding.




Page 1




Associated Banc-Corp
Consolidated Statements of Income (Unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
(In thousands, except per share data)
 
 
 
Comp Qtr
 
YTD
 
YTD
 
Comp YTD
 
2Q18
 
2Q17
 
$ Change
 
% Change
 
Jun 2018
 
Jun 2017
 
$ Change
 
% Change
Interest income
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest and fees on loans
 
$
246,646

 
$
184,246

 
$
62,400

 
34
 %
 
$
466,680

 
$
357,895

 
$
108,785

 
30
 %
Interest and dividends on investment securities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Taxable
 
30,623

 
23,658

 
6,965

 
29
 %
 
60,727

 
47,133

 
13,594

 
29
 %
Tax-exempt
 
10,783

 
8,143

 
2,640

 
32
 %
 
20,000

 
16,272

 
3,728

 
23
 %
Other interest
 
3,153

 
1,553

 
1,600

 
103
 %
 
5,330

 
3,089

 
2,241

 
73
 %
Total interest income
 
291,205

 
217,600

 
73,605

 
34
 %
 
552,737

 
424,389

 
128,348

 
30
 %
Interest expense
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest on deposits
 
38,431

 
21,180

 
17,251

 
81
 %
 
71,843

 
38,104

 
33,739

 
89
 %
Interest on Federal funds purchased and securities sold under agreements to repurchase
 
538

 
824

 
(286
)
 
(35
)%
 
1,060

 
1,339

 
(279
)
 
(21
)%
Interest on other short-term funding
 
51

 
84

 
(33
)
 
(39
)%
 
111

 
169

 
(58
)
 
(34
)%
Interest on FHLB advances
 
21,279

 
7,149

 
14,130

 
198
 %
 
34,402

 
11,596

 
22,806

 
197
 %
Interest on long-term funding
 
4,544

 
4,544

 

 
 %
 
9,088

 
9,088

 

 
 %
Total interest expense
 
64,843

 
33,781

 
31,062

 
92
 %
 
116,504

 
60,296

 
56,208

 
93
 %
Net interest income
 
226,362

 
183,819

 
42,543

 
23
 %
 
436,233

 
364,093

 
72,140

 
20
 %
Provision for credit losses
 
4,000

 
12,000

 
(8,000
)
 
(67
)%
 
4,000

 
21,000

 
(17,000
)
 
(81
)%
Net interest income after provision for credit losses
 
222,362

 
171,819

 
50,543

 
29
 %
 
432,233

 
343,093

 
89,140

 
26
 %
Noninterest income
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Insurance commissions and fees
 
23,996

 
20,853

 
3,143

 
15
 %
 
46,644

 
42,473

 
4,171

 
10
 %
Service charges and deposit account fees
 
16,390

 
16,030

 
360

 
2
 %
 
32,810

 
32,386

 
424

 
1
 %
Card-based and loan fees 
 
14,387

 
13,764

 
623

 
5
 %
 
27,809

 
26,229

 
1,580

 
6
 %
Trust and asset management fees
 
13,437

 
12,346

 
1,091

 
9
 %
 
26,806

 
24,281

 
2,525

 
10
 %
Brokerage commissions and fees
 
6,896

 
4,346

 
2,550

 
59
 %
 
14,169

 
8,679

 
5,490

 
63
 %
Mortgage banking, net
 
6,258

 
5,027

 
1,231

 
24
 %
 
12,628

 
9,606

 
3,022

 
31
 %
Capital markets, net 
 
4,783

 
4,042

 
741

 
18
 %
 
10,089

 
7,925

 
2,164

 
27
 %
Bank and corporate owned life insurance
 
3,978

 
3,899

 
79

 
2
 %
 
7,165

 
6,514

 
651

 
10
 %
Asset gains (losses), net
 
2,497

 
(466
)
 
2,963

 
N/M

 
2,390

 
(700
)
 
3,090

 
N/M

Investment securities gains (losses), net
 
(2,015
)
 
356

 
(2,371
)
 
N/M

 
(2,015
)
 
356

 
(2,371
)
 
N/M

Other 
 
2,235

 
2,213

 
22

 
1
 %
 
4,727

 
4,492

 
235

 
5
 %
Total noninterest income
 
92,842

 
82,410

 
10,432

 
13
 %
 
183,222

 
162,241

 
20,981

 
13
 %
Noninterest expense
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Personnel
 
123,980

 
107,066

 
16,914

 
16
 %
 
241,665

 
213,848

 
27,817

 
13
 %
Occupancy
 
15,071

 
12,832

 
2,239

 
17
 %
 
30,428

 
28,051

 
2,377

 
8
 %
Technology
 
19,452

 
15,473

 
3,979

 
26
 %
 
37,167

 
29,893

 
7,274

 
24
 %
Equipment
 
5,953

 
5,234

 
719

 
14
 %
 
11,509

 
10,719

 
790

 
7
 %
Business development and advertising
 
7,067

 
7,152

 
(85
)
 
(1
)%
 
13,760

 
12,987

 
773

 
6
 %
Legal and professional
 
6,284

 
5,711

 
573

 
10
 %
 
11,697

 
9,877

 
1,820

 
18
 %
Card issuance and loan costs
 
3,173

 
2,974

 
199

 
7
 %
 
6,477

 
5,594

 
883

 
16
 %
Foreclosure / OREO expense, net
 
1,021

 
1,182

 
(161
)
 
(14
)%
 
1,744

 
2,687

 
(943
)
 
(35
)%
FDIC assessment
 
8,250

 
8,000

 
250

 
3
 %
 
16,500

 
16,000

 
500

 
3
 %
Other intangible amortization
 
2,168

 
496

 
1,672

 
N/M

 
3,693

 
1,009

 
2,684

 
N/M

Acquisition related costs (1)
 
7,107

 

 
7,107

 
N/M

 
27,712

 

 
27,712

 
N/M

Other
 
11,732

 
10,196

 
1,536

 
15
 %
 
21,873

 
19,342

 
2,531

 
13
 %
Total noninterest expense
 
211,258

 
176,316

 
34,942

 
20
 %
 
424,223

 
350,007

 
74,216

 
21
 %
Income before income taxes
 
103,947

 
77,913

 
26,034

 
33
 %
 
191,232

 
155,327

 
35,905

 
23
 %
Income tax expense
 
14,754

 
19,930

 
(5,176
)
 
(26
)%
 
32,583

 
41,074

 
(8,491
)
 
(21
)%
Net income
 
89,192

 
57,983

 
31,209

 
54
 %
 
158,648

 
114,253

 
44,395

 
39
 %
Preferred stock dividends
 
2,329

 
2,339

 
(10
)
 
 %
 
4,668

 
4,669

 
(1
)
 
 %
Net income available to common equity
 
$
86,863

 
$
55,644

 
$
31,219

 
56
 %
 
$
153,980

 
$
109,584

 
$
44,396

 
41
 %
Earnings per common share
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic
 
$
0.51

 
$
0.36

 
$
0.15

 
42
 %
 
$
0.92

 
$
0.72

 
$
0.20

 
28
 %
Diluted
 
$
0.50

 
$
0.36

 
$
0.14

 
39
 %
 
$
0.90

 
$
0.71

 
$
0.19

 
27
 %
Average common shares outstanding
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic
 
170,633

 
151,573

 
19,060

 
13
 %
 
167,096

 
151,196

 
15,900

 
11
 %
Diluted
 
173,409

 
154,302

 
19,107

 
12
 %
 
169,920

 
154,147

 
15,773

 
10
 %
N/M = Not meaningful
Numbers may not sum due to rounding.
(1)
Includes Bank Mutual acquisition related costs only.

Page 2




Associated Banc-Corp
Consolidated Statements of Income (Unaudited) - Quarterly Trend
(In thousands, except per share data)
 
 
 
 
 
Seql Qtr
 
 
 
 
 
 
 
Comp Qtr
 
2Q18
 
1Q18
 
$ Change
 
% Change
 
4Q17
 
3Q17
 
2Q17
 
$ Change
 
% Change
Interest income
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest and fees on loans
 
$
246,646

 
$
220,034

 
$
26,612

 
12
 %
 
$
194,133

 
$
196,972

 
$
184,246

 
$
62,400

 
34
 %
Interest and dividends on investment securities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Taxable
 
30,623

 
30,104

 
519

 
2
 %
 
25,614

 
24,162

 
23,658

 
6,965

 
29
 %
Tax-exempt
 
10,783

 
9,217

 
1,566

 
17
 %
 
8,437

 
8,268

 
8,143

 
2,640

 
32
 %
Other interest
 
3,153

 
2,177

 
976

 
45
 %
 
2,138

 
2,492

 
1,553

 
1,600

 
103
 %
Total interest income
 
291,205

 
261,532

 
29,673

 
11
 %
 
230,322

 
231,894

 
217,600

 
73,605

 
34
 %
Interest expense
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest on deposits
 
38,431

 
33,412

 
5,019

 
15
 %
 
28,143

 
27,778

 
21,180

 
17,251

 
81
 %
Interest on Federal funds purchased and securities sold under agreements to repurchase
 
538

 
522

 
16

 
3
 %
 
420

 
768

 
824

 
(286
)
 
(35
)%
Interest on other short-term funding
 
51

 
60

 
(9
)
 
(15
)%
 
54

 
70

 
84

 
(33
)
 
(39
)%
Interest on FHLB advances
 
21,279

 
13,123

 
8,156

 
62
 %
 
10,156

 
8,612

 
7,149

 
14,130

 
198
 %
Interest on long-term funding
 
4,544

 
4,544

 

 
 %
 
4,544

 
4,544

 
4,544

 

 
 %
Total interest expense
 
64,843

 
51,661

 
13,182

 
26
 %
 
43,317

 
41,772

 
33,781

 
31,062

 
92
 %
Net Interest income
 
226,362

 
209,871

 
16,491

 
8
 %
 
187,005

 
190,122

 
183,819

 
42,543

 
23
 %
Provision for credit losses
 
4,000

 

 
4,000

 
N/M

 

 
5,000

 
12,000

 
(8,000
)
 
(67
)%
Net interest income after provision for credit losses
 
222,362

 
209,871

 
12,491

 
6
 %
 
187,005

 
185,122

 
171,819

 
50,543

 
29
 %
Noninterest income
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Insurance commissions and fees
 
23,996

 
22,648

 
1,348

 
6
 %
 
19,186

 
19,815

 
20,853

 
3,143

 
15
 %
Service charges and deposit account fees
 
16,390

 
16,420

 
(30
)
 
 %
 
15,773

 
16,268

 
16,030

 
360

 
2
 %
Card-based and loan fees
 
14,387

 
13,422

 
965

 
7
 %
 
13,840

 
12,619

 
13,764

 
623

 
5
 %
Trust and asset management fees
 
13,437

 
13,369

 
68

 
1
 %
 
13,125

 
12,785

 
12,346

 
1,091

 
9
 %
Brokerage commissions and fees
 
6,896

 
7,273

 
(377
)
 
(5
)%
 
6,864

 
4,392

 
4,346

 
2,550

 
59
 %
Mortgage banking, net
 
6,258

 
6,370

 
(112
)
 
(2
)%
 
3,169

 
6,585

 
5,027

 
1,231

 
24
 %
Capital markets, net
 
4,783

 
5,306

 
(523
)
 
(10
)%
 
7,107

 
4,610

 
4,042

 
741

 
18
 %
Bank and corporate owned life insurance
 
3,978

 
3,187

 
791

 
25
 %
 
3,156

 
6,580

 
3,899

 
79

 
2
 %
Asset gains (losses), net
 
2,497

 
(107
)
 
2,604

 
N/M

 
(528
)
 
(16
)
 
(466
)
 
2,963

 
N/M

Investment securities gains (losses), net
 
(2,015
)
 

 
(2,015
)
 
N/M

 
75

 
3

 
356

 
(2,371
)
 
N/M

Other
 
2,235

 
2,492

 
(257
)
 
(10
)%
 
2,777

 
2,254

 
2,213

 
22

 
1
 %
Total noninterest income
 
92,842

 
90,380

 
2,462

 
3
 %
 
84,544

 
85,895

 
82,410

 
10,432

 
13
 %
Noninterest expense
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Personnel
 
123,980

 
117,685

 
6,295

 
5
 %
 
107,031

 
108,098

 
107,066

 
16,914

 
16
 %
Occupancy
 
15,071

 
15,357

 
(286
)
 
(2
)%
 
13,497

 
12,294

 
12,832

 
2,239

 
17
 %
Technology
 
19,452

 
17,715

 
1,737

 
10
 %
 
17,878

 
15,233

 
15,473

 
3,979

 
26
 %
Equipment
 
5,953

 
5,556

 
397

 
7
 %
 
5,250

 
5,232

 
5,234

 
719

 
14
 %
Business development and advertising
 
7,067

 
6,693

 
374

 
6
 %
 
8,195

 
7,764

 
7,152

 
(85
)
 
(1
)%
Legal and professional
 
6,284

 
5,413

 
871

 
16
 %
 
6,384

 
6,248

 
5,711

 
573

 
10
 %
Card issuance and loan costs
 
3,173

 
3,304

 
(131
)
 
(4
)%
 
2,836

 
3,330

 
2,974

 
199

 
7
 %
Foreclosure / OREO expense, net
 
1,021

 
723

 
298

 
41
 %
 
1,285

 
906

 
1,182

 
(161
)
 
(14
)%
FDIC assessment
 
8,250

 
8,250

 

 
 %
 
7,500

 
7,800

 
8,000

 
250

 
3
 %
Other intangible amortization
 
2,168

 
1,525

 
643

 
42
 %
 
500

 
450

 
496

 
1,672

 
N/M

Acquisition related costs (1)
 
7,107

 
20,605

 
(13,498
)
 
(66
)%
 

 

 

 
7,107

 
N/M

Other
 
11,732

 
10,140

 
1,592

 
16
 %
 
11,343

 
10,072

 
10,196

 
1,536

 
15
 %
Total noninterest expense
 
211,258

 
212,965

 
(1,707
)
 
(1
)%
 
181,699

 
177,427

 
176,316

 
34,942

 
20
 %
Income before income taxes
 
103,947

 
87,285

 
16,662

 
19
 %
 
89,850

 
93,590

 
77,913

 
26,034

 
33
 %
Income tax expense
 
14,754

 
17,829

 
(3,075
)
 
(17
)%
 
39,840

 
28,589

 
19,930

 
(5,176
)
 
(26
)%
Net income
 
89,192

 
69,456

 
19,736

 
28
 %
 
50,010

 
65,001

 
57,983

 
31,209

 
54
 %
Preferred stock dividends
 
2,329

 
2,339

 
(10
)
 
 %
 
2,339

 
2,339

 
2,339

 
(10
)
 
 %
Net income available to common equity
 
$
86,863

 
$
67,117

 
$
19,746

 
29
 %
 
$
47,671

 
$
62,662

 
$
55,644

 
$
31,219

 
56
 %
Earnings per common share
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic
 
$
0.51

 
$
0.41

 
$
0.10

 
24
 %
 
$
0.31

 
$
0.41

 
$
0.36

 
$
0.15

 
42
 %
Diluted
 
$
0.50

 
$
0.40

 
$
0.10

 
25
 %
 
$
0.31

 
$
0.41

 
$
0.36

 
$
0.14

 
39
 %
Average common shares outstanding
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic
 
170,633

 
163,520

 
7,113

 
4
 %
 
150,563

 
150,565

 
151,573

 
19,060

 
13
 %
Diluted
 
173,409

 
166,432

 
6,977

 
4
 %
 
153,449

 
152,968

 
154,302

 
19,107

 
12
 %
N/M = Not meaningful
Numbers may not sum due to rounding.
(1)
Includes Bank Mutual acquisition related costs only.

Page 3




Associated Banc-Corp
Selected Quarterly Information
 
 
 
 
 
 
 
 
(In millions, except share and per share, full time equivalent employee and branch count data)
 
YTD
Jun 2018
YTD
Jun 2017
2Q18
1Q18
4Q17
3Q17
2Q17
Per common share data
 
 
 
 
 
 
 
 
Dividends
 
$
0.30

$
0.24

$
0.15

$
0.15

$
0.14

$
0.12

$
0.12

Market value:
 
 
 
 
 
 
 
 
High
 
28.85

26.50

28.85

26.90

26.10

25.70

25.50

Low
 
23.60

23.25

24.20

23.60

24.00

21.25

23.25

Close
 
27.30

25.20

27.30

24.85

25.40

24.25

25.20

Book value
 
20.81

19.70

20.81

20.63

20.13

19.98

19.70

Tangible book value / share
 
$
13.62

$
13.29

$
13.62

$
13.47

$
13.65

$
13.51

$
13.29

Performance ratios (annualized)
 
 
 
 
 
 
 
 
Return on average assets
 
0.98
%
0.79
%
1.07
%
0.88
%
0.66
%
0.86
%
0.80
%
Effective tax rate
 
17.04
%
26.44
%
14.19
%
20.43
%
44.34
%
30.55
%
25.58
%
Dividend payout ratio (1)
 
32.61
%
33.33
%
29.41
%
36.59
%
45.16
%
29.27
%
33.33
%
Net interest margin
 
2.97
%
2.83
%
3.02
%
2.92
%
2.79
%
2.84
%
2.83
%
Selected trend information
 
 
 
 
 
 
 
 
Average full time equivalent employees
 
4,780

4,361

4,865

4,693

4,367

4,384

4,352

Branch count
 
 
 
237

271

213

214

214

Assets under management, at market value (2)
 
 
 
$
10,776

$
10,540

$
10,555

$
9,243

$
8,997

Mortgage loans originated for sale during period
 
$
516

$
220

$
319

$
198

$
249

$
246

$
119

Mortgage loan settlements during period
 
$
482

$
364

$
294

$
188

$
268

$
188

$
167

Mortgage portfolio serviced for others
 
 
 
$
8,501

$
8,507

$
7,647

$
7,653

$
7,768

Mortgage servicing rights, net / mortgage portfolio serviced for others
 
 
 
0.79
%
0.78
%
0.76
%
0.76
%
0.76
%
Shares outstanding, end of period
 
 
 
173,526

172,182

152,846

152,316

153,848

Net shares issuable to Associated Banc-Corp warrant ("ASBWS") holders (5)
 
 
 
136

1,023

1,134

903

1,094

Selected quarterly ratios
 
 
 
 
 
 
 
 
Loans / deposits
 
 
 
96.47
%
95.74
%
91.22
%
93.72
%
96.14
%
Stockholders’ equity / assets
 
 
 
11.20
%
11.13
%
10.62
%
10.66
%
10.72
%
Risk-based capital (3) (4)
 
 
 
 
 
 
 
 
Total risk-weighted assets
 
 
 
$
24,059

$
23,535

$
21,544

$
21,657

$
21,590

Common equity Tier 1
 
 
 
$
2,528

$
2,474

$
2,172

$
2,144

$
2,130

Common equity Tier 1 capital ratio
 
 
 
10.51
%
10.51
%
10.08
%
9.90
%
9.87
%
Tier 1 capital ratio
 
 
 
11.17
%
11.19
%
10.82
%
10.64
%
10.61
%
Total capital ratio
 
 
 
13.36
%
13.45
%
13.22
%
13.04
%
13.01
%
Tier 1 leverage ratio
 
 
 
8.32
%
8.48
%
8.02
%
7.93
%
8.09
%
Loans
 
 
 
 
 
 
 
 
Recorded investment on loans
 
 
 
$
22,916

$
22,756

$
20,699

$
20,849

$
20,708

Net unaccreted Bank Mutual purchase discount
 
 
 
(26
)
(34
)



Net other deferred costs
 
 
 
87

88

86

83

75

Loans
 
 
 
$
22,977

$
22,810

$
20,785

$
20,931

$
20,783

Numbers may not sum 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)
June 30, 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 4




Associated Banc-Corp
Selected Asset Quality Information
 
 
 
 
 
 
(In thousands)
 
Jun 30, 2018
Mar 31, 2018
Seql Qtr %
Change
 
Dec 31, 2017
Sep 30, 2017
Jun 30, 2017
Comp Qtr %
Change
Allowance for loan losses
 
 
 
 
 
 
 
 
 
Balance at beginning of period
 
$
257,058

$
265,880