Toggle SGML Header (+)


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

Document




UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) October 18, 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 October 18, 2018, Associated Banc-Corp announced its earnings for the quarter ended September 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 October 18, 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: October 18, 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
395398180_asblogo.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 Third Quarter Earnings of $0.48 Per Common Share, or $0.49 Per Common Share Excluding $3 million in Acquisition Related Costs1 

Earnings per share up 17% from the prior year
GREEN BAY, Wis. -- October 18, 2018 -- Associated Banc-Corp (NYSE: ASB) ("Associated" or "Company") today reported net income available to common equity ("earnings") of $84 million, or $0.48 per common share for the quarter ended September 30, 2018. This compares to net income available to common equity of $63 million, or $0.41 per common share for the quarter ended September 30, 2017.
“Associated's customer deposit franchise continues to be strong. Data recently released by the FDIC shows that we grew our deposits 14% in Illinois and maintained our #3 ranking in Wisconsin with nearly 11% market share. Additionally, during the third quarter we saw robust deposit inflows from our municipal customers which allowed us to further reduce our higher cost network deposits." said President and CEO Philip B. Flynn. "We are also pleased with our year over year EPS growth. Our commercial and business lending portfolios had solid results and we continued to benefit from a benign credit environment that allowed us to further reduce our provision for credit loss."

THIRD QUARTER 2018 SUMMARY (all comparisons to the third quarter of 2017)
Average loans of $23.0 billion were up 10%, or $2.1 billion
Average deposits of $24.7 billion were up 10%, or $2.3 billion
Net interest income of $219 million increased $29 million, or 15%
Net interest margin of 2.92% improved 8 basis points from 2.84%
Provision for credit losses was negative $5 million, down from $5 million
Noninterest income of $88 million was up $2 million, or 3%
Noninterest expense of $204 million was up $27 million and included $2 million of acquisition related expenses
Income before income taxes was up 16%, or $15 million
During the quarter, the Company repurchased approximately 4 million shares, or $118 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
Third quarter 2018 average loans of $23.0 billion were up 10%, or $2.1 billion from the third quarter of 2017, and were essentially unchanged from the second quarter of 2018.
With respect to third quarter 2018 average balances by loan category:
Consumer lending increased $1.0 billion from the year ago quarter, and grew $12 million from the second quarter of 2018 to $9.6 billion.
Commercial and business lending increased $620 million from the year ago quarter and increased $242 million from the second quarter of 2018 to $7.9 billion. C&I loan growth was spread across all specialized lines of business and in the general commercial portfolio.
Commercial real estate lending increased $447 million from the third quarter of 2017, but decreased $285 million from the second quarter of 2018 to $5.4 billion.

Deposits
Third quarter 2018 average deposits of $24.7 billion were up $2.3 billion, or 10% from the year ago quarter, and were up $1.0 billion compared to the second quarter of 2018 due to seasonal inflows from municipal customers.
With respect to third quarter 2018 average balances by deposit category:
Interest-bearing demand deposits increased $995 million from the year ago quarter and increased $253 million from the second quarter of 2018 to $5.0 billion.
Money market deposits increased $929 million from the year ago quarter and increased $356 million from the second quarter of 2018 to $7.5 billion.
Time deposits increased $790 million from the year ago quarter and increased $413 million from the second quarter of 2018 to $3.0 billion.
Savings increased $356 million from the year ago quarter and increased $9 million from the second quarter of 2018 to $1.9 billion.
Noninterest-bearing demand deposits increased $319 million from the year ago quarter and increased $179 million from the second quarter of 2018 to $5.3 billion.
Network transaction deposits decreased $1.1 billion from the year ago quarter and decreased $161 million from the second quarter of 2018 to $2.0 billion.





Net Interest Income and Net Interest Margin
Third quarter 2018 net interest income of $219 million was up 15%, or $29 million, with the net interest margin increasing 8 basis points to 2.92% from the year ago quarter. Third quarter 2018 net interest income decreased 3%, or $7 million, with the net interest margin decreasing 10 basis points from the prior quarter.
The average yield on total commercial loans for the third quarter of 2018 increased 80 basis points to 4.73% from the year ago quarter, but decreased 2 basis points from the prior quarter.
The average cost of total interest-bearing deposits for the third quarter of 2018 increased 40 basis points to 1.03% from the year ago quarter and increased 20 basis points from the prior quarter.
The net free funds benefit, the benefit of holding noninterest-bearing demand deposits, increased 10 basis points in the third quarter of 2018 compared to the year ago quarter and increased 5 basis points from the prior quarter.

Noninterest Income
Third quarter 2018 total noninterest income of $88 million increased $2 million from the year ago quarter, but decreased $5 million from the prior quarter.
With respect to third quarter 2018 noninterest income line items:
Insurance commissions and fees were up $2 million from the year ago quarter, driven by the acquisitions of Diversified Insurance Solutions and Anderson Insurance, but were down $2 million from the prior quarter due to seasonal fluctuations of the employee benefits and property and casualty businesses.
Mortgage banking fees were down $3 million from the year ago quarter and down $2 million from the prior quarter due to lower sales and refinancing volumes in the underlying housing market.

Noninterest Expense
Third quarter 2018 total noninterest expense of $204 million increased 15%, or $27 million from the year ago quarter, but decreased $7 million from the prior quarter. Third quarter 2018 noninterest expense includes $2 million of Bank Mutual acquisition related costs.
With respect to third quarter 2018 noninterest expense line items:
Personnel expense increased $16 million from the year ago quarter, primarily driven by the additional cost of Bank Mutual staff. Personnel expense was essentially unchanged from the second quarter of 2018.
Technology expense increased $2 million from the year ago quarter, but decreased by $2 million from the prior quarter. The changes were 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 $5 million from the prior quarter.






Taxes
The third quarter 2018 effective tax rate was 21% compared to 31% 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.

Credit
The third quarter provision for credit losses was negative $5 million, down from $5 million in the year ago quarter and down from $4 million in the prior quarter.
With respect to third quarter 2018 credit quality:
Potential problem loans of $236 million were down $22 million from the year ago quarter and were down $5 million from the prior quarter.
Nonaccrual loans of $154 million were down $56 million from the year ago quarter and were down $50 million from the prior quarter. The decrease was primarily driven by credit upgrades and payoffs. The nonaccrual loans to total loans ratio was 0.67% in the third quarter, compared to 1.01% in the year ago quarter, and 0.89% in the prior quarter.
Net charge offs of $12 million were up $2 million from the year ago quarter and were up $4 million from the prior quarter. Net oil and gas charge offs were $9 million in the third quarter.
The allowance for loan losses of $236 million was down $40 million from the year ago quarter and was down $16 million from the prior quarter. The allowance for loan losses to total loans ratio was 1.03% in the third quarter of 2018, compared to 1.32% in the year ago quarter, and 1.10% in the prior quarter.
The allowance related to the oil and gas portfolio was $10 million at September 30, 2018 and represented 1.4% of total oil and gas loans compared to 5.2% in the year ago quarter, and 2.5% in the prior quarter.

Capital
The Company’s capital position remains strong, with a CET1 capital ratio of 10.4% at September 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 4 million shares, or $118 million, of common stock, at an average price of $27.09 per share.





THIRD 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, October 18, 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 third quarter 2018 earnings call. The third 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 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,” "target," “outlook,” or similar expressions.  Forward-looking statements are based on current management expectations and, by their nature, are subject to risks and uncertainties. Actual results may differ materially from those contained in the forward-looking statements.  Factors which may cause actual results to differ materially from those contained in such forward-looking statements include those identified in the Company’s most recent Form 10-K and subsequent SEC filings.  Such factors are incorporated herein by reference. 

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





Associated Banc-Corp
Consolidated Balance Sheets (Unaudited)
 
 
 
 
 
 
(In thousands)
Sep 30, 2018
Jun 30, 2018
Seql Qtr $ Change
Mar 31, 2018
Dec 31, 2017
Sep 30, 2017
Comp Qtr $ Change
Assets
 
 
 
 
 
 
 
Cash and due from banks
$
374,168

$
396,761

$
(22,593
)
$
328,260

$
483,666

$
354,331

$
19,837

Interest-bearing deposits in other financial institutions
147,848

71,462

76,386

94,918

199,702

109,596

38,252

Federal funds sold and securities purchased under agreements to resell
24,325

3,150

21,175

10,000

32,650

27,700

(3,375
)
Investment securities held to maturity, at amortized cost
2,661,755

2,602,247

59,508

2,443,203

2,282,853

2,233,579

428,176

Investment securities available for sale, at fair value
4,054,197

4,261,651

(207,454
)
4,485,875

4,043,446

3,801,699

252,498

Federal Home Loan Bank and Federal Reserve Bank stocks, at cost
220,825

249,040

(28,215
)
233,216

165,331

172,446

48,379

Residential loans held for sale
134,361

143,022

(8,661
)
103,953

85,544

113,064

21,297

Commercial loans held for sale
30,452


30,452

6,091


9,718

20,734

Loans
22,867,112

22,976,786

(109,674
)
22,810,491

20,784,991

20,931,460

1,935,652

Allowance for loan losses
(236,250
)
(252,601
)
16,351

(257,058
)
(265,880
)
(276,551
)
40,301

Loans, net
22,630,861

22,724,184

(93,323
)
22,553,433

20,519,111

20,654,909

1,975,952

Bank and corporate owned life insurance
661,009

659,592

1,417

657,841

591,057

589,093

71,916

Tax credit and other investments
132,355

137,051

(4,696
)
142,368

147,099

120,927

11,428

Trading assets
140,328

132,919

7,409

102,890

69,675

48,429

91,899

Premises and equipment
358,926

361,385

(2,459
)
381,327

330,963

330,065

28,861

Goodwill
1,168,922

1,166,665

2,257

1,153,156

976,239

972,006

196,916

Mortgage servicing rights, net
67,872

66,980

892

66,407

58,384

58,377

9,495

Other intangible assets, net
78,069

80,346

(2,277
)
79,714

15,580

14,080

63,989

Other assets
602,730

596,190

6,540

523,855

482,294

454,528

148,202

Total assets
$
33,489,002

$
33,652,647

$
(163,645
)
$
33,366,505

$
30,483,594

$
30,064,547

$
3,424,455

Liabilities and stockholders’ equity
 
 
 
 
 
 
 
Noninterest-bearing demand deposits
$
5,421,270

$
5,341,361

$
79,909

$
5,458,473

$
5,478,416

$
5,177,734

$
243,536

Interest-bearing deposits
19,410,342

18,474,953

935,389

18,367,129

17,307,546

17,155,717

2,254,625

Total deposits
24,831,612

23,816,314

1,015,298

23,825,602

22,785,962

22,333,451

2,498,161

Federal funds purchased and securities sold under agreements to repurchase
166,556

203,733

(37,177
)
283,954

324,815

476,550

(309,994
)
Commercial paper
43,604

52,791

(9,187
)
82,420

67,467

68,067

(24,463
)
FHLB advances
3,332,655

4,797,857

(1,465,202
)
4,515,887

3,184,168

3,170,172

162,483

Other long-term funding
795,215

497,619

297,596

497,451

497,282

497,113

298,102

Trading liabilities
138,940

131,612

7,328

100,247

67,660

46,812

92,128

Accrued expenses and other liabilities
383,381

382,476

905

348,246

318,797

268,781

114,600

Total liabilities
29,691,963

29,882,403

(190,440
)
29,653,806

27,246,151

26,860,946

2,831,017

Stockholders’ equity
 
 
 
 
 
 
 
Preferred equity
256,716

159,401

97,315

159,853

159,929

159,929

96,787

Common equity
 
 
 
 
 
 
 
Common stock
1,752

1,751

1

1,741

1,618

1,615

137

Surplus
1,834,017

1,828,965

5,052

1,823,800

1,454,188

1,442,328

391,689

Retained earnings
1,977,925

1,920,579

57,346

1,859,068

1,819,230

1,792,184

185,741

Accumulated other comprehensive income (loss)
(135,520
)
(119,888
)
(15,632
)
(107,673
)
(62,758
)
(54,288
)
(81,232
)
Treasury stock, at cost
(137,852
)
(20,564
)
(117,288
)
(24,089
)
(134,764
)
(138,167
)
315

Total common equity
3,540,322

3,610,843

(70,521
)
3,552,847

3,077,514

3,043,672

496,650

Total stockholders’ equity
3,797,038

3,770,244

26,794

3,712,699

3,237,443

3,203,601

593,437

Total liabilities and stockholders’ equity
$
33,489,002

$
33,652,647

$
(163,645
)
$
33,366,505

$
30,483,594

$
30,064,547

$
3,424,455

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
 
3Q18
 
3Q17
 
$ Change
 
% Change
 
Sep 2018
 
Sep 2017
 
$ Change
 
% Change
Interest income
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest and fees on loans
 
$
249,649

 
$
196,972

 
$
52,677

 
27
 %
 
$
716,329

 
$
554,867

 
$
161,462

 
29
 %
Interest and dividends on investment securities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Taxable
 
29,895

 
24,162

 
5,733

 
24
 %
 
90,622

 
71,295

 
19,327

 
27
 %
Tax-exempt
 
11,883

 
8,268

 
3,615

 
44
 %
 
31,883

 
24,540

 
7,343

 
30
 %
Other interest
 
4,036

 
2,492

 
1,544

 
62
 %
 
9,366

 
5,581

 
3,785

 
68
 %
Total interest income
 
295,464

 
231,894

 
63,570

 
27
 %
 
848,201

 
656,283

 
191,918

 
29
 %
Interest expense
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest on deposits
 
50,116

 
27,778

 
22,338

 
80
 %
 
121,959

 
65,882

 
56,077

 
85
 %
Interest on Federal funds purchased and securities sold under agreements to repurchase
 
504

 
768

 
(264
)
 
(34
)%
 
1,564

 
2,107

 
(543
)
 
(26
)%
Interest on other short-term funding
 
38

 
70

 
(32
)
 
(46
)%
 
150

 
239

 
(89
)
 
(37
)%
Interest on FHLB advances
 
19,318

 
8,612

 
10,706

 
124
 %
 
53,720

 
20,209

 
33,511

 
166
 %
Interest on long-term funding
 
6,095

 
4,544

 
1,551

 
34
 %
 
15,183

 
13,632

 
1,551

 
11
 %
Total interest expense
 
76,072

 
41,772

 
34,300

 
82
 %
 
192,576

 
102,068

 
90,508

 
89
 %
Net interest income
 
219,392

 
190,122

 
29,270

 
15
 %
 
655,625

 
554,215

 
101,410

 
18
 %
Provision for credit losses
 
(5,000
)
 
5,000

 
(10,000
)
 
(200
)%
 
(1,000
)
 
26,000

 
(27,000
)
 
(104
)%
Net interest income after provision for credit losses
 
224,392

 
185,122

 
39,270

 
21
 %
 
656,625

 
528,215

 
128,410

 
24
 %
Noninterest income
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Insurance commissions and fees
 
21,636

 
19,815

 
1,821

 
9
 %
 
68,279

 
62,288

 
5,991

 
10
 %
Service charges and deposit account fees
 
16,904

 
16,268

 
636

 
4
 %
 
49,714

 
48,654

 
1,060

 
2
 %
Card-based and loan fees 
 
14,090

 
12,619

 
1,471

 
12
 %
 
41,899

 
38,848

 
3,051

 
8
 %
Trust and asset management fees
 
14,140

 
12,785

 
1,355

 
11
 %
 
40,946

 
37,066

 
3,880

 
10
 %
Brokerage commissions and fees
 
7,084

 
4,392

 
2,692

 
61
 %
 
21,253

 
13,071

 
8,182

 
63
 %
Mortgage banking, net
 
4,012

 
6,585

 
(2,573
)
 
(39
)%
 
16,640

 
16,191

 
449

 
3
 %
Capital markets, net 
 
5,099

 
4,610

 
489

 
11
 %
 
15,189

 
12,535

 
2,654

 
21
 %
Bank and corporate owned life insurance
 
3,540

 
6,580

 
(3,040
)
 
(46
)%
 
10,705

 
13,094

 
(2,389
)
 
(18
)%
Asset gains (losses), net (1)
 
(1,037
)
 
(16
)
 
(1,021
)
 
N/M

 
1,353

 
(716
)
 
2,069

 
N/M

Investment securities gains (losses), net
 
30

 
3

 
27

 
N/M

 
(1,985
)
 
359

 
(2,344
)
 
N/M

Other 
 
2,802

 
2,254

 
548

 
24
 %
 
7,529

 
6,746

 
783

 
12
 %
Total noninterest income
 
88,300

 
85,895

 
2,405

 
3
 %
 
271,522

 
248,136

 
23,386

 
9
 %
Noninterest expense
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Personnel
 
124,476

 
108,098

 
16,378

 
15
 %
 
366,141

 
321,946

 
44,195

 
14
 %
Occupancy
 
14,519

 
12,294

 
2,225

 
18
 %
 
44,947

 
40,345

 
4,602

 
11
 %
Technology
 
17,563

 
15,233

 
2,330

 
15
 %
 
54,730

 
45,126

 
9,604

 
21
 %
Equipment
 
5,838

 
5,232

 
606

 
12
 %
 
17,347

 
15,951

 
1,396

 
9
 %
Business development and advertising
 
8,213

 
7,764

 
449

 
6
 %
 
21,973

 
20,751

 
1,222

 
6
 %
Legal and professional
 
5,476

 
6,248

 
(772
)
 
(12
)%
 
17,173

 
16,125

 
1,048

 
6
 %
Card issuance and loan costs
 
3,677

 
3,330

 
347

 
10
 %
 
10,154

 
8,924

 
1,230

 
14
 %
Foreclosure / OREO expense, net
 
950

 
906

 
44

 
5
 %
 
2,694

 
3,593

 
(899
)
 
(25
)%
FDIC assessment
 
7,750

 
7,800

 
(50
)
 
(1
)%
 
24,250

 
23,800

 
450

 
2
 %
Other intangible amortization
 
2,233

 
450

 
1,783

 
N/M

 
5,926

 
1,459

 
4,467

 
N/M

Acquisition related costs (2)
 
2,271

 

 
2,271

 
N/M

 
29,983

 

 
29,983

 
N/M

Other
 
11,445

 
10,072

 
1,373

 
14
 %
 
33,318

 
29,413

 
3,905

 
13
 %
Total noninterest expense
 
204,413

 
177,427

 
26,986

 
15
 %
 
628,636

 
527,434

 
101,202

 
19
 %
Income before income taxes
 
108,279

 
93,590

 
14,689

 
16
 %
 
299,510

 
248,917

 
50,593

 
20
 %
Income tax expense
 
22,349

 
28,589

 
(6,240
)
 
(22
)%
 
54,932

 
69,663

 
(14,731
)
 
(21
)%
Net income
 
85,929

 
65,001

 
20,928

 
32
 %
 
244,578

 
179,254

 
65,324

 
36
 %
Preferred stock dividends
 
2,409

 
2,339

 
70

 
3
 %
 
7,077

 
7,008

 
69

 
1
 %
Net income available to common equity
 
$
83,521

 
$
62,662

 
$
20,859

 
33
 %
 
$
237,501

 
$
172,246

 
$
65,255

 
38
 %
Earnings per common share
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic
 
$
0.49

 
$
0.41

 
$
0.08

 
20
 %
 
$
1.40

 
$
1.13

 
$
0.27

 
24
 %
Diluted
 
$
0.48

 
$
0.41

 
$
0.07

 
17
 %
 
$
1.38

 
$
1.11

 
$
0.27

 
24
 %
Average common shares outstanding
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic
 
170,516

 
150,565

 
19,951

 
13
 %
 
168,249

 
150,983

 
17,266

 
11
 %
Diluted
 
172,802

 
152,968

 
19,834

 
13
 %
 
170,876

 
153,782

 
17,094

 
11
 %
N/M = Not meaningful
Numbers may not sum due to rounding.
(1)
3Q18 includes approximately $1 million of Bank Mutual acquisition related asset losses net of asset gains; YTD Sep 2018 includes approximately $2 million of Bank Mutual acquisition related asset losses net of asset gains.
(2)
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
 
3Q18
 
2Q18
 
$ Change
 
% Change
 
1Q18
 
4Q17
 
3Q17
 
$ Change
 
% Change
Interest income
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest and fees on loans
 
$
249,649

 
$
246,646

 
$
3,003

 
1
 %
 
$
220,034

 
$
194,133

 
$
196,972

 
$
52,677

 
27
 %
Interest and dividends on investment securities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Taxable
 
29,895

 
30,623

 
(728
)
 
(2
)%
 
30,104

 
25,614

 
24,162

 
5,733

 
24
 %
Tax-exempt
 
11,883

 
10,783

 
1,100

 
10
 %
 
9,217

 
8,437

 
8,268

 
3,615

 
44
 %
Other interest
 
4,036

 
3,153

 
883

 
28
 %
 
2,177

 
2,138

 
2,492

 
1,544

 
62
 %
Total interest income
 
295,464

 
291,205

 
4,259

 
1
 %
 
261,532

 
230,322

 
231,894

 
63,570

 
27
 %
Interest expense
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest on deposits
 
50,116

 
38,431

 
11,685

 
30
 %
 
33,412

 
28,143

 
27,778

 
22,338

 
80
 %
Interest on Federal funds purchased and securities sold under agreements to repurchase
 
504

 
538

 
(34
)
 
(6
)%
 
522

 
420

 
768

 
(264
)
 
(34
)%
Interest on other short-term funding
 
38

 
51

 
(13
)
 
(25
)%
 
60

 
54

 
70

 
(32
)
 
(46
)%
Interest on FHLB advances
 
19,318

 
21,279

 
(1,961
)
 
(9
)%
 
13,123

 
10,156

 
8,612

 
10,706

 
124
 %
Interest on long-term funding
 
6,095

 
4,544

 
1,551

 
34
 %
 
4,544

 
4,544

 
4,544

 
1,551

 
34
 %
Total interest expense
 
76,072

 
64,843

 
11,229

 
17
 %
 
51,661

 
43,317

 
41,772

 
34,300

 
82
 %
Net Interest income
 
219,392

 
226,362

 
(6,970
)
 
(3
)%
 
209,871

 
187,005

 
190,122

 
29,270

 
15
 %
Provision for credit losses
 
(5,000
)
 
4,000

 
(9,000
)
 
N/M

 

 

 
5,000

 
(10,000
)
 
(200
)%
Net interest income after provision for credit losses
 
224,392

 
222,362

 
2,030

 
1
 %
 
209,871

 
187,005

 
185,122

 
39,270

 
21
 %
Noninterest income
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Insurance commissions and fees
 
21,636

 
23,996

 
(2,360
)
 
(10
)%
 
22,648

 
19,186

 
19,815

 
1,821

 
9
 %
Service charges and deposit account fees
 
16,904

 
16,390

 
514

 
3
 %
 
16,420

 
15,773

 
16,268

 
636

 
4
 %
Card-based and loan fees
 
14,090

 
14,387

 
(297
)
 
(2
)%
 
13,422

 
13,840

 
12,619

 
1,471

 
12
 %
Trust and asset management fees
 
14,140

 
13,437

 
703

 
5
 %
 
13,369

 
13,125

 
12,785

 
1,355

 
11
 %
Brokerage commissions and fees
 
7,084

 
6,896

 
188

 
3
 %
 
7,273

 
6,864

 
4,392

 
2,692

 
61
 %
Mortgage banking, net
 
4,012

 
6,258

 
(2,246
)
 
(36
)%
 
6,370

 
3,169

 
6,585

 
(2,573
)
 
(39
)%
Capital markets, net
 
5,099

 
4,783

 
316

 
7
 %
 
5,306

 
7,107

 
4,610

 
489

 
11
 %
Bank and corporate owned life insurance
 
3,540

 
3,978

 
(438
)
 
(11
)%
 
3,187

 
3,156

 
6,580

 
(3,040
)
 
(46
)%
Asset gains (losses), net (1)
 
(1,037
)
 
2,497

 
(3,534
)
 
(142
)%
 
(107
)
 
(528
)
 
(16
)
 
(1,021
)
 
N/M

Investment securities gains (losses), net
 
30

 
(2,015
)
 
2,045

 
(101
)%
 

 
75

 
3

 
27

 
N/M

Other
 
2,802

 
2,235

 
567

 
25
 %
 
2,492

 
2,777

 
2,254

 
548

 
24
 %
Total noninterest income
 
88,300

 
92,842

 
(4,542
)
 
(5
)%
 
90,380

 
84,544

 
85,895

 
2,405

 
3
 %
Noninterest expense
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Personnel
 
124,476

 
123,980

 
496

 
 %
 
117,685

 
107,031

 
108,098

 
16,378

 
15
 %
Occupancy
 
14,519

 
15,071

 
(552
)
 
(4
)%
 
15,357

 
13,497

 
12,294

 
2,225

 
18
 %
Technology
 
17,563

 
19,452

 
(1,889
)
 
(10
)%
 
17,715

 
17,878

 
15,233

 
2,330

 
15
 %
Equipment
 
5,838

 
5,953

 
(115
)
 
(2
)%
 
5,556

 
5,250

 
5,232

 
606

 
12
 %
Business development and advertising
 
8,213

 
7,067

 
1,146

 
16
 %
 
6,693

 
8,195

 
7,764

 
449

 
6
 %
Legal and professional
 
5,476

 
6,284

 
(808
)
 
(13
)%
 
5,413

 
6,384

 
6,248

 
(772
)
 
(12
)%
Card issuance and loan costs
 
3,677

 
3,173

 
504

 
16
 %
 
3,304

 
2,836

 
3,330

 
347

 
10
 %
Foreclosure / OREO expense, net
 
950

 
1,021

 
(71
)
 
(7
)%
 
723

 
1,285

 
906

 
44

 
5
 %
FDIC assessment
 
7,750

 
8,250

 
(500
)
 
(6
)%
 
8,250

 
7,500

 
7,800

 
(50
)
 
(1
)%
Other intangible amortization
 
2,233

 
2,168

 
65

 
3
 %
 
1,525

 
500

 
450

 
1,783

 
N/M

Acquisition related costs (2)
 
2,271

 
7,107

 
(4,836
)
 
(68
)%
 
20,605

 

 

 
2,271

 
N/M

Other
 
11,445

 
11,732

 
(287
)
 
(2
)%
 
10,140

 
11,343

 
10,072

 
1,373

 
14
 %
Total noninterest expense
 
204,413

 
211,258

 
(6,845
)
 
(3
)%
 
212,965

 
181,699

 
177,427

 
26,986

 
15
 %
Income before income taxes
 
108,279

 
103,947

 
4,332

 
4
 %
 
87,285

 
89,850

 
93,590

 
14,689

 
16
 %
Income tax expense
 
22,349

 
14,754

 
7,595

 
51
 %
 
17,829

 
39,840

 
28,589

 
(6,240
)
 
(22
)%
Net income
 
85,929

 
89,192

 
(3,263
)
 
(4
)%
 
69,456

 
50,010

 
65,001

 
20,928

 
32
 %
Preferred stock dividends
 
2,409

 
2,329

 
80

 
3
 %
 
2,339

 
2,339

 
2,339

 
70

 
3
 %
Net income available to common equity
 
$
83,521

 
$
86,863

 
$
(3,342
)
 
(4
)%
 
$
67,117

 
$
47,671

 
$
62,662

 
$
20,859

 
33
 %
Earnings per common share
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic
 
$
0.49

 
$
0.51

 
$
(0.02
)
 
(4
)%
 
$
0.41

 
$
0.31

 
$
0.41

 
$
0.08

 
20
 %
Diluted
 
$
0.48

 
$
0.50

 
$
(0.02
)
 
(4
)%
 
$
0.40

 
$
0.31

 
$
0.41

 
$
0.07

 
17
 %
Average common shares outstanding
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic
 
170,516

 
170,633

 
(117
)
 
 %
 
163,520

 
150,563

 
150,565

 
19,951

 
13
 %
Diluted
 
172,802

 
173,409

 
(607
)
 
 %
 
166,432

 
153,449

 
152,968

 
19,834

 
13
 %
N/M = Not meaningful
Numbers may not sum due to rounding.
(1)
3Q18 includes approximately $1 million of Bank Mutual acquisition related asset losses net of asset gains; 2Q18 includes approximately $1 million of Bank Mutual acquisition related asset losses net of asset gains.
(2)
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
Sep 2018
YTD
Sep 2017
3Q18
2Q18
1Q18
4Q17
3Q17
Per common share data
 
 
 
 
 
 
 
 
Dividends
 
$
0.45

$
0.36

$
0.15

$
0.15

$
0.15

$
0.14

$
0.12

Market value:
 
 
 
 
 
 
 
 
High
 
28.85

26.50

28.35

28.85

26.90

26.10

25.70

Low
 
23.60

21.25

26.00

24.20

23.60

24.00

21.25

Close
 
26.00

24.25

26.00

27.30

24.85

25.40

24.25

Book value
 
20.91

19.98

20.91

20.81

20.63

20.13

19.98

Tangible book value / share
 
$
13.55

$
13.51

$
13.55

$
13.62

$
13.47

$
13.65

$
13.51

Performance ratios (annualized)
 
 
 
 
 
 
 
 
Return on average assets
 
0.99
%
0.82
%
1.02
%
1.07
%
0.88
%
0.66
%
0.86
%
Effective tax rate
 
18.34
%
27.99
%
20.64
%
14.19
%
20.43
%
44.34
%
30.55
%
Dividend payout ratio (1)
 
32.14
%
31.86
%
30.61
%
29.41
%
36.59
%
45.16
%
29.27
%
Net interest margin
 
2.95
%
2.83
%
2.92
%
3.02
%
2.92
%
2.79
%
2.84
%
Selected trend information
 
 
 
 
 
 
 
 
Average full time equivalent employees (2)
 
4,712

4,308

4,707

4,792

4,637

4,303

4,324

Branch count
 
 
 
236

237

271

213

214

Assets under management, at market value (3)
 
 
 
11,206

$
10,776

$
10,540

$
10,555

$
9,243

Mortgage loans originated for sale during period
 
$
848

$
466

$
331

$
319

$
198

$
249

$
246

Mortgage loan settlements during period
 
$
827

$
552

$
345

$
294

$
188

$
268

$
188

Mortgage portfolio serviced for others
 
 
 
$
8,547

$
8,501

$
8,507

$
7,647

$
7,653

Mortgage servicing rights, net / mortgage portfolio serviced for others
 
 
 
0.79
%
0.79
%
0.78
%
0.76
%
0.76
%
Shares outstanding, end of period
 
 
 
169,293

173,526

172,182

152,846

152,316

Net shares issuable to Associated Banc-Corp warrant ("ASBWS") holders (4)
 
 
 
33

136

1,023

1,134

903

Selected quarterly ratios
 
 
 
 
 
 
 
 
Loans / deposits
 
 
 
92.09
%
96.47
%
95.74
%
91.22
%
93.72
%
Stockholders’ equity / assets
 
 
 
11.34
%
11.20
%
11.13
%
10.62
%
10.66
%
Risk-based capital (5) (6)
 
 
 
 
 
 
 
 
Total risk-weighted assets
 
 
 
$
23,907

$
24,059

$
23,535

$
21,544

$
21,657

Common equity Tier 1
 
 
 
$
2,475

$
2,528

$
2,474

$
2,172

$
2,144

Common equity Tier 1 capital ratio
 
 
 
10.35
%
10.51
%
10.51
%
10.08
%
9.90
%
Tier 1 capital ratio
 
 
 
11.42
%
11.17
%
11.19
%
10.82
%
10.64
%
Total capital ratio
 
 
 
13.56
%
13.36
%
13.45
%
13.22
%
13.04
%
Tier 1 leverage ratio
 
 
 
8.43
%
8.32
%
8.48
%
8.02
%
7.93
%
Loans
 
 
 
 
 
 
 
 
Recorded investment on loans
 
 
 
$
22,800

$
22,916

$
22,756

$
20,699

$
20,849

Net unaccreted Bank Mutual purchase discount
 
 
 
(21
)
(26
)
(34
)


Net other deferred costs
 
 
 
87

87

88

86

83

Loans
 
 
 
$
22,867

$
22,977

$
22,810

$
20,785

$
20,931

Numbers may not sum due to rounding.
(1)
Ratio is based upon basic earnings per common share.
(2)
Average full time equivalent employees without overtime.
(3)
Excludes assets held in brokerage accounts.
(4)
Based on the treasury stock method and the period-end close price. The ASBWS warrants will expire on November 21, 2018.
(5)
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.
(6)
September 30, 2018 data is estimated.



Page 4




Associated Banc-Corp
Selected Asset Quality Information
 
 
 
 
 
 
(In thousands)
 
Sep 30, 2018
Jun 30, 2018
Seql Qtr %
Change
 
Mar 31, 2018
Dec 31, 2017
Sep 30, 2017
Comp Qtr %
Change
Allowance for loan losses