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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) January 24, 2019
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 January 24, 2019, Associated Banc-Corp announced its earnings for the quarter ended December 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 January 24, 2019, 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: January 24, 2019
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
396475938_asblogoa01.jpg
NEWS RELEASE
Investor Contact:
Robb Timme, Senior Vice President, Director of Investor Relations     
920-491-7059
Media Contact:
Jennifer Kaminski, Vice President, Public Relations Senior Manager
920-491-7576

Associated Banc-Corp Reports Full Year 2018 Earnings of $1.89 Per Common Share,

Earnings per share up 33% from the prior year
GREEN BAY, Wis. -- January 24, 2019 -- Associated Banc-Corp (NYSE: ASB) ("Associated" or "Company") today reported net income available to common equity ("earnings") of $323 million, or $1.89 per common share for the year ended December 31, 2018. Earnings per common share ("EPS") for the year ended December 31, 2018 included $31 million of acquisition related costs. These amounts compare to net income available to common equity of $220 million, or $1.42 per common share for the year ended December 31, 2017. The Company reported earnings of $0.51 per common share for the quarter ended December 31, 2018, compared to $0.31 per common share for the quarter ended December 31, 2017.
“2018 was a year of significant accomplishments for Associated. We completed the Bank Mutual acquisition and ended the year with record levels of checking deposits. We announced the acquisition of the Wisconsin branch operations of The Huntington National Bank, which will further enhance our core franchise, and we look forward to welcoming Huntington's customers to Associated in the second quarter," said President and CEO Philip B. Flynn. "We are pleased with our 2018 results, which were driven by loan growth and higher fee revenues related to our acquisitions. We benefited from efficiency gains and a benign credit environment. For 2019, we expect modest loan growth, higher fee revenues, and continued efficiency gains to drive increasing returns on capital for our shareholders."
2018 HIGHLIGHTS (all comparisons to the previous year)
Average loans of $22.7 billion were up 10%, or $2.1 billion
Average deposits of $24.1 billion were up 10%, or $2.1 billion
Net interest income of $880 million increased $138 million, or 19%
Net interest margin of 2.97% improved 15 basis points from 2.82%
Provision for credit losses was zero, down from $26 million
Noninterest income of $356 million increased 7%, or $23 million
Noninterest expense of $822 million, including $29 million of acquisition related costs, was up 16%, or $113 million
Income before income taxes was up 22%, or $75 million
During the year, the Company repurchased over 9 million shares, or $240 million, of common stock
Total dividends paid per common share were $0.62, up 24%
Return on average common equity Tier 1 increased to 13.2% from 10.4%






2018 FULL YEAR AND FOURTH QUARTER FINANCIAL RESULTS

Loans
Full year 2018 average loans of $22.7 billion were up 10%, or $2.1 billion from 2017, primarily driven by the Bank Mutual acquisition. With respect to full year 2018 average balances by loan category as compared to 2017:
Consumer lending increased $1.2 billion, or 14%, to $9.5 billion.
Commercial and business lending increased $490 million, or 7%, to $7.7 billion.
Commercial real estate lending increased $481 million, or 10%, to $5.4 billion.

Fourth quarter 2018 average loans of $22.8 billion were up $1.9 billion, or 9%, from the year ago quarter but were down $169 million from the third quarter as loan growth in commercial and business lending was outpaced by run off in the commercial real estate portfolio.

With respect to fourth quarter 2018 average balances by loan category:
Commercial and business lending increased $841 million from the year ago quarter and increased $81 million from the third quarter to $8.0 billion. General commercial lending and oil & gas specialized lending drove the increase from the year ago quarter.
Consumer lending increased $764 million from the year ago quarter but was down $39 million from the third quarter to $9.6 billion as seasonality and higher interest rates tempered mortgage activity.
Commercial real estate lending increased $336 million from the year ago quarter but decreased $211 million from the third quarter to $5.2 billion.

For 2019, the Company expects to achieve 3% to 6% average loan growth.




Deposits
Full year 2018 average deposits of $24.1 billion increased 10%, or $2.1 billion from 2017, driven primarily by the addition of Bank Mutual customers and increased focus on and pricing of time deposit offerings.

With respect to full year 2018 average balances by deposit category as compared to 2017:
Money market deposits increased $939 million, or 15% to $7.3 billion.
Time deposits increased $852 million, or 43% to $2.8 billion.
Interest-bearing demand deposits increased $815 million, or 21% to $4.8 billion.
Savings increased $352 million, or 23% to $1.9 billion.
Noninterest-bearing demand deposits increased $241 million, or 5% to $5.2 billion.
Network transaction deposits decreased $1.0 billion, or 33% to $2.1 billion.

Fourth quarter 2018 average deposits of $24.2 billion were up $2.0 billion, or 9% from the year ago quarter, but were down $466 million compared to the third quarter of 2018 due to seasonal outflows from municipal customers. Fourth quarter period end deposits were $24.9 billion, up $66 million from the end of the third quarter.

With respect to fourth quarter 2018 average balances by deposit category:
Time deposits increased $706 million from the year ago quarter and increased $83 million from the third quarter of 2018 to $3.1 billion.
Interest-bearing demand deposits increased $669 million from the year ago quarter, but decreased $151 million from the third quarter of 2018 to $4.8 billion.
Money market deposits increased $569 million from the year ago quarter, but decreased $457 million from the third quarter of 2018 to $7.1 billion.
Savings increased $441 million from the year ago quarter and increased $93 million from the third quarter of 2018 to $2.0 billion.
Noninterest-bearing demand deposits increased $233 million from the year ago quarter and increased $56 million from the third quarter of 2018 to $5.4 billion.
Network transaction deposits decreased $637 million from the year ago quarter and decreased $89 million from the third quarter of 2018 to $1.9 billion.

The loan to deposit ratio was 92% at year end. The Company expects to continue maintain its loan to deposit ratio between 90% and 100% in 2019, with some seasonality.




Net Interest Income and Net Interest Margin
Full year 2018 net interest income of $880 million was up 19%, or $138 million from 2017. Net interest margin of 2.97% was up 15 basis points from the prior year.
The average yield on total commercial loans increased 97 basis points to 4.73% from the prior year.
The average cost of interest-bearing deposits increased 38 basis points to 0.94% from the prior year.
The net free funds benefit, the benefit of holding noninterest-bearing demand deposits, increased 10 basis points from the prior year.

Fourth quarter 2018 net interest income of $224 million was up 20%, or $37 million, with the net interest margin increasing 23 basis points to 3.02% from the year ago quarter. Fourth quarter 2018 net interest income increased 2%, or $5 million, with the net interest margin increasing 10 basis points from the prior quarter.
The average yield on total commercial loans for the fourth quarter of 2018 increased 118 basis points to 5.07% from the year ago quarter and increased 34 basis points from the prior quarter.
The average cost of total interest-bearing deposits for the fourth quarter of 2018 increased 49 basis points to 1.14% from the year ago quarter and increased 11 basis points from the prior quarter.
The net free funds benefit increased 12 basis points in the fourth quarter of 2018 compared to the year ago quarter and increased 3 basis points from the prior quarter.

The Company expects a stable to improving full-year net interest margin, given continued upward Fed Funds rate activity.




Noninterest Income
Full year 2018 total noninterest income of $356 million increased $23 million reflecting the contributions of acquisitions made in the fourth quarter of 2017 and in 2018.
Brokerage and advisory revenues increased $8 million from the prior year, driven by the Whitnell acquisition and the generally strong equity markets through the first three quarters of 2018.
Insurance commissions increased $8 million from the prior year, driven by the Diversified Insurance Solutions and Anderson Insurance acquisitions.
Card-based and loan fees were up $5 million from the prior year.

Fourth quarter 2018 total noninterest income of $84 million was essentially unchanged from the year ago quarter, but decreased $4 million from the prior quarter.
With respect to fourth quarter 2018 noninterest income line items:
Card-based and loan fees increased $2 million from the year ago quarter and increased $1 million from the prior quarter.
Insurance revenues were up $2 million from the year ago quarter, driven by acquisitions noted above, and were flat compared to the previous quarter.
Capital markets were down $2 million from a very strong fourth quarter of 2017, and were essentially unchanged from the previous quarter.
Asset losses were $2 million greater versus the year ago quarter and were $1 million greater than the prior quarter due to Bank Mutual related items.

The Company expects to earn between $360 million and $375 million of noninterest income in 2019.





Noninterest Expense
Full year 2018 noninterest expense of $822 million increased 16%, or $113 million from the prior year and included $29 million of acquisition related costs.
Personnel costs increased $54 million from the prior year, principally related to operating Bank Mutual as a stand-alone entity from February through conversion in June. Bank Mutual operations were wound down through the third quarter. This also reflected certain severance and other contractual personnel costs.
Technology expense increased $10 million from the prior year, driven by investments made in solutions to enhance operational efficiency and the customer experience.

Fourth quarter 2018 total noninterest expense of $193 million increased 6%, or $11 million from the year ago quarter, but decreased $11 million from the prior quarter. Fourth quarter 2018 noninterest expense included a $1 million recovery of Bank Mutual acquisition related costs.
With respect to fourth quarter 2018 noninterest expense line items:
Personnel expense increased $10 million from the year ago quarter, primarily driven by additional colleagues brought on through acquisitions. Personnel expense decreased $8 million from the third quarter of 2018.
Occupancy expense increased $1 million from the year ago quarter, with most of the increase coming from the additional expense of acquired Bank Mutual facilities. Occupancy expense was essentially unchanged from the prior quarter.
Acquisition related costs decreased $3 million from the prior quarter.

The Company expects its 2019 noninterest expense will be approximately $800 million.

Taxes
Full year 2018 effective tax rate was 19% compared to 32% in 2017. The decrease is primarily due to the Tax Cut and Jobs Act signed into law on December 22, 2017.
The fourth quarter 2018 effective tax rate was 22% compared to 21% in the prior quarter.
For 2019, the Company expects its effective tax rate to be in the range of 21%-23%.





Credit
Full year 2018 provision for credit losses was zero, down from $26 million in the prior year.

The fourth quarter 2018 provision for credit losses was $1 million, up from zero in the year ago quarter and up from negative $5 million in the prior quarter. With respect to fourth quarter 2018 credit quality:
Nonperforming assets of $140 million were down $89 million from the year ago quarter and were down $46 million from the prior quarter.
Nonaccrual loans of $128 million were down $81 million from the year ago quarter and were down $26 million from the prior quarter. The decrease from the prior quarter was primarily driven by payoffs. The nonaccrual loans to total loans ratio was 0.56% in the fourth quarter, compared to 1.00% in the year ago quarter, and 0.67% in the prior quarter.
Net charge offs were essentially zero, down $10 million from the year ago quarter and down $12 million from the prior quarter.
The allowance for loan losses of $238 million was down $28 million from the year ago quarter and was up $2 million from the prior quarter. The allowance for loan losses to total loans ratio was 1.04% in the fourth quarter of 2018, compared to 1.28% in the year ago quarter, and 1.03% in the prior quarter.

The Company expects its 2019 provision for credit losses to adjust with changes to risk grade, other indications of credit quality, and loan volume.

Capital
The Company’s capital position remains strong, with a CET1 capital ratio of 10.3% at December 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 2018, the Company repurchased over 9 million shares, or $240 million, of common stock at an average price of $25.29 per share. This included fourth quarter repurchases of approximately 4 million shares, or $89 million, of common stock at an average price of $23.55 per share.





FOURTH 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, January 24, 2019. Interested parties can access the live webcast of the call through the Investor Relations section of the Company's website, http://investor.associatedbank.com. Parties may also dial into the call at 877-407-8037 (domestic) or 201-689-8037 (international) and request the Associated Banc-Corp fourth quarter 2018 earnings call. The fourth 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,” "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)
Dec 31, 2018
Sep 30, 2018
Seql Qtr $ Change
Jun 30, 2018
Mar 31, 2018
Dec 31, 2017
Comp Qtr $ Change
Assets
 
 
 
 
 
 
 
Cash and due from banks
$
507,187

$
374,168

$
133,019

$
396,761

$
328,260

$
483,666

$
23,521

Interest-bearing deposits in other financial institutions
221,226

147,848

73,378

71,462

94,918

199,702

21,524

Federal funds sold and securities purchased under agreements to resell
148,285

24,325

123,960

3,150

10,000

32,650

115,635

Investment securities held to maturity, at amortized cost
2,740,511

2,661,755

78,756

2,602,247

2,443,203

2,282,853

457,658

Investment securities available for sale, at fair value
3,948,510

4,054,197

(105,687
)
4,261,651

4,485,875

4,043,446

(94,936
)
Federal Home Loan Bank and Federal Reserve Bank stocks, at cost
250,534

220,825

29,709

249,040

233,216

165,331

85,203

Residential loans held for sale
64,321

134,361

(70,040
)
143,022

103,953

85,544

(21,223
)
Commercial loans held for sale
14,943

30,452

(15,509
)

6,091


14,943

Loans
22,940,429

22,867,112

73,317

22,976,786

22,810,491

20,784,991

2,155,438

Allowance for loan losses
(238,023
)
(236,250
)
(1,773
)
(252,601
)
(257,058
)
(265,880
)
27,857

Loans, net
22,702,406

22,630,861

71,545

22,724,184

22,553,433

20,519,111

2,183,295

Bank and corporate owned life insurance
663,203

661,009

2,194

659,592

657,841

591,057

72,146

Investment in unconsolidated subsidiaries
161,181

156,878

4,303

161,676

166,124

170,473

(9,292
)
Trading assets
88,943

140,328

(51,385
)
132,919

102,890

69,675

19,268

Premises and equipment
363,225

358,926

4,299

361,385

381,327

330,963

32,262

Goodwill
1,169,023

1,168,922

101

1,166,665

1,153,156

976,239

192,784

Mortgage servicing rights, net
68,193

67,872

321

66,980

66,407

58,384

9,809

Other intangible assets, net
75,836

78,069

(2,233
)
80,346

79,714

15,580

60,256

Other assets
460,331

578,206

(117,875
)
571,566

500,099

458,920

1,410

Total assets
$
33,647,859

$
33,489,002

$
158,857

$
33,652,647

$
33,366,505

$
30,483,594

$
3,164,265

Liabilities and stockholders’ equity
 
 
 
 
 
 
 
Noninterest-bearing demand deposits
$
5,698,530

$
5,421,270

$
277,260

$
5,341,361

$
5,458,473

$
5,478,416

$
220,114

Interest-bearing deposits
19,198,863

19,410,342

(211,479
)
18,474,953

18,367,129

17,307,546

1,891,317

Total deposits
24,897,393

24,831,612

65,781

23,816,314

23,825,602

22,785,962

2,111,431

Federal funds purchased and securities sold under agreements to repurchase
111,651

166,556

(54,905
)
203,733

283,954

324,815

(213,164
)
Commercial paper
45,423

43,604

1,819

52,791

82,420

67,467

(22,044
)
FHLB advances
3,574,371

3,332,655

241,716

4,797,857

4,515,887

3,184,168

390,203

Other long-term funding
795,611

795,215

396

497,619

497,451

497,282

298,329

Trading liabilities
87,668

138,940

(51,272
)
131,612

100,247

67,660

20,008

Accrued expenses and other liabilities
354,855

383,381

(28,526
)
382,476

348,246

318,797

36,058

Total liabilities
29,866,971

29,691,963

175,008

29,882,403

29,653,806

27,246,151

2,620,820

Stockholders’ equity(1)
 
 
 
 
 
 
 
Preferred equity
256,716

256,716


159,401

159,853

159,929

96,787

Common equity
 
 
 
 
 
 
 
Common stock
1,752

1,752


1,751

1,741

1,618

134

Surplus
1,828,081

1,824,544

3,537

1,820,053

1,813,987

1,454,188

373,893

Retained earnings
2,065,948

2,013,024

52,924

1,955,406

1,895,280

1,819,230

246,718

Accumulated other comprehensive income (loss)
(124,972
)
(135,520
)
10,548

(119,888
)
(107,673
)
(62,758
)
(62,214
)
Treasury stock, at cost
(246,638
)
(163,478
)
(83,160
)
(46,479
)
(50,488
)
(134,764
)
(111,874
)
Total common equity
3,524,171

3,540,322

(16,151
)
3,610,843

3,552,847

3,077,514

446,657

Total stockholders’ equity
3,780,888

3,797,038

(16,151
)
3,770,244

3,712,699

3,237,443

543,445

Total liabilities and stockholders’ equity
$
33,647,859

$
33,489,002

$
158,857

$
33,652,647

$
33,366,505

$
30,483,594

$
3,164,265

Numbers may not sum due to rounding.
(1) During 2018, unvested options, restricted stock awards, and restricted stock units were reclassified within stockholders' equity. This reclassification resulted in a net reduction in period end common shares outstanding, but had no impact on basic or diluted average common shares outstanding. There was no impact to earnings, expenses, or total stockholders' equity.




Page 1




Associated Banc-Corp
Consolidated Statements of Income (Unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
(In thousands, except per share data)
 
 
 
Comp Qtr
 
YTD
 
YTD
 
Comp YTD
 
4Q18
 
4Q17
 
$ Change
 
% Change
 
Dec 2018
 
Dec 2017
 
$ Change
 
% Change
Interest income
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest and fees on loans
 
$
260,661

 
$
194,133

 
$
66,528

 
34
 %
 
$
976,990

 
$
749,000

 
$
227,990

 
30
 %
Interest and dividends on investment securities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Taxable
 
29,119

 
25,614

 
3,505

 
14
 %
 
119,741

 
96,909

 
22,832

 
24
 %
Tax-exempt
 
12,899

 
8,437

 
4,462

 
53
 %
 
44,782

 
32,977

 
11,805

 
36
 %
Other interest
 
3,257

 
2,138

 
1,119

 
52
 %
 
12,623

 
7,719

 
4,904

 
64
 %
Total interest income
 
305,936

 
230,322

 
75,614

 
33
 %
 
1,154,137

 
886,605

 
267,532

 
30
 %
Interest expense
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest on deposits
 
54,159

 
28,143

 
26,016

 
92
 %
 
176,118

 
94,025

 
82,093

 
87
 %
Interest on Federal funds purchased and securities sold under agreements to repurchase
 
442

 
420

 
22

 
5
 %
 
2,006

 
2,527

 
(521
)
 
(21
)%
Interest on other short-term funding
 
36

 
54

 
(18
)
 
(33
)%
 
186

 
293

 
(107
)
 
(37
)%
Interest on FHLB advances
 
19,948

 
10,156

 
9,792

 
96
 %
 
73,668

 
30,364

 
43,304

 
143
 %
Interest on long-term funding
 
7,396

 
4,544

 
2,852

 
63
 %
 
22,579

 
18,176

 
4,403

 
24
 %
Total interest expense
 
81,980

 
43,317

 
38,663

 
89
 %
 
274,557

 
145,385

 
129,172

 
89
 %
Net interest income
 
223,955

 
187,005

 
36,950

 
20
 %
 
879,580

 
741,220

 
138,360

 
19
 %
Provision for credit losses
 
1,000

 

 
1,000

 
N/M

 

 
26,000

 
(26,000
)
 
(100
)%
Net interest income after provision for credit losses
 
222,955

 
187,005

 
35,950

 
19
 %
 
879,580

 
715,220

 
164,360

 
23
 %
Noninterest income
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Insurance commissions and fees
 
21,232

 
19,186

 
2,046

 
11
 %
 
89,511

 
81,474

 
8,037

 
10
 %
Service charges and deposit account fees
 
16,361

 
15,773

 
588

 
4
 %
 
66,075

 
64,427

 
1,648

 
3
 %
Card-based and loan fees 
 
15,575

 
13,840

 
1,735

 
13
 %
 
57,474

 
52,688

 
4,786

 
9
 %
Trust and asset management fees
 
13,371

 
13,125

 
246

 
2
 %
 
54,316

 
50,191

 
4,125

 
8
 %
Brokerage and advisory fees
 
6,993

 
6,864

 
129

 
2
 %
 
28,246

 
19,935

 
8,311

 
42
 %
Capital markets, net 
 
4,931

 
7,107

 
(2,176
)
 
(31
)%
 
20,120

 
19,642

 
478

 
2
 %
Mortgage banking, net
 
3,271

 
3,169

 
102

 
3
 %
 
19,911

 
19,360

 
551

 
3
 %
Bank and corporate owned life insurance
 
3,247

 
3,156

 
91

 
3
 %
 
13,951

 
16,250

 
(2,299
)
 
(14
)%
Asset gains (losses), net (1)
 
(2,456
)
 
(528
)
 
(1,928
)
 
N/M

 
(1,103
)
 
(1,244
)
 
141

 
(11
)%
Investment securities gains (losses), net
 

 
75

 
(75
)
 
(100
)%
 
(1,985
)
 
434

 
(2,419
)
 
N/M

Other 
 
1,522

 
2,777

 
(1,255
)
 
(45
)%
 
9,051

 
9,523

 
(472
)
 
(5
)%
Total noninterest income
 
84,046

 
84,544

 
(498
)
 
(1
)%
 
355,568

 
332,680

 
22,888

 
7
 %
Noninterest expense
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Personnel
 
116,535

 
107,031

 
9,504

 
9
 %
 
482,676

 
428,976

 
53,700

 
13
 %
Technology
 
17,944

 
17,878

 
66

 
 %
 
72,674

 
63,004

 
9,670

 
15
 %
Occupancy
 
14,174

 
13,497

 
677

 
5
 %
 
59,121

 
53,842

 
5,279

 
10
 %
Business development and advertising
 
8,950

 
8,195

 
755

 
9
 %
 
30,923

 
28,946

 
1,977

 
7
 %
Equipment
 
5,897

 
5,250

 
647

 
12
 %
 
23,243

 
21,201

 
2,042

 
10
 %
Legal and professional
 
5,888

 
6,384

 
(496
)
 
(8
)%
 
23,061

 
22,509

 
552

 
2
 %
Card issuance and loan costs
 
2,232

 
2,836

 
(604
)
 
(21
)%
 
12,386

 
11,760

 
626

 
5
 %
Foreclosure / OREO expense, net
 
909

 
1,285

 
(376
)
 
(29
)%
 
3,603

 
4,878

 
(1,275
)
 
(26
)%
FDIC assessment
 
5,750

 
7,500

 
(1,750
)
 
(23
)%
 
30,000

 
31,300

 
(1,300
)
 
(4
)%
Other intangible amortization
 
2,233

 
500

 
1,733

 
N/M

 
8,159

 
1,959

 
6,200

 
N/M

Acquisition related costs (2)
 
(981
)
 

 
(981
)
 
N/M

 
29,002

 

 
29,002

 
N/M

Other
 
13,632

 
11,343

 
2,289

 
20
 %
 
46,951

 
40,758

 
6,193

 
15
 %
Total noninterest expense
 
193,163

 
181,699

 
11,464

 
6
 %
 
821,799

 
709,133

 
112,666

 
16
 %
Income before income taxes
 
113,839

 
89,850

 
23,989

 
27
 %
 
413,349

 
338,767

 
74,582

 
22
 %
Income tax expense
 
24,854

 
39,840

 
(14,986
)
 
(38
)%
 
79,786

 
109,503

 
(29,717
)
 
(27
)%
Net income
 
88,985

 
50,010

 
38,975

 
78
 %
 
333,562

 
229,264

 
104,298

 
45
 %
Preferred stock dividends
 
3,707

 
2,339

 
1,368

 
58
 %
 
10,784

 
9,347

 
1,437

 
15
 %
Net income available to common equity
 
$
85,278

 
$
47,671

 
$
37,607

 
79
 %
 
$
322,779

 
$
219,917

 
$
102,862

 
47
 %
Earnings per common share
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic
 
$
0.52

 
$
0.31

 
$
0.21

 
68
 %
 
$
1.92

 
$
1.45

 
$
0.47

 
32
 %
Diluted
 
$
0.51

 
$
0.31

 
$
0.20

 
65
 %
 
$
1.89

 
$
1.42

 
$
0.47

 
33
 %
Average common shares outstanding
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic
 
164,662

 
150,563

 
14,099

 
9
 %
 
167,345

 
150,877

 
16,468

 
11
 %
Diluted
 
166,394

 
153,449

 
12,945

 
8
 %
 
169,732

 
153,647

 
16,085

 
10
 %
N/M = Not meaningful
Numbers may not sum due to rounding.
(1)
YTD Dec 2018 includes approximately $2 million of Bank Mutual acquisition related asset losses net of asset gains.
(2)
Includes Bank Mutual and Huntington 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
 
4Q18
 
3Q18
 
$ Change
 
% Change
 
2Q18
 
1Q18
 
4Q17
 
$ Change
 
% Change
Interest income
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest and fees on loans
 
$
260,661

 
$
249,649

 
$
11,012

 
4
 %
 
$
246,646

 
$
220,034

 
$
194,133

 
$
66,528

 
34
 %
Interest and dividends on investment securities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Taxable
 
29,119

 
29,895

 
(776
)
 
(3
)%
 
30,623

 
30,104

 
25,614

 
3,505

 
14
 %
Tax-exempt
 
12,899

 
11,883

 
1,016

 
9
 %
 
10,783

 
9,217

 
8,437

 
4,462

 
53
 %
Other interest
 
3,257

 
4,036

 
(779
)
 
(19
)%
 
3,153

 
2,177

 
2,138

 
1,119

 
52
 %
Total interest income
 
305,936

 
295,464

 
10,472

 
4
 %
 
291,205

 
261,532

 
230,322

 
75,614

 
33
 %
Interest expense
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest on deposits
 
54,159

 
50,116

 
4,043

 
8
 %
 
38,431

 
33,412

 
28,143

 
26,016

 
92
 %
Interest on Federal funds purchased and securities sold under agreements to repurchase
 
442

 
504

 
(62
)
 
(12
)%
 
538

 
522

 
420

 
22

 
5
 %
Interest on other short-term funding
 
36

 
38

 
(2
)
 
(5
)%
 
51

 
60

 
54

 
(18
)
 
(33
)%
Interest on FHLB advances
 
19,948

 
19,318

 
630

 
3
 %
 
21,279

 
13,123

 
10,156

 
9,792

 
96
 %
Interest on long-term funding
 
7,396

 
6,095

 
1,301

 
21
 %
 
4,544

 
4,544

 
4,544

 
2,852

 
63
 %
Total interest expense
 
81,980

 
76,072

 
5,908

 
8
 %
 
64,843

 
51,661

 
43,317

 
38,663

 
89
 %
Net Interest income
 
223,955

 
219,392

 
4,563

 
2
 %
 
226,362

 
209,871

 
187,005

 
36,950

 
20
 %
Provision for credit losses
 
1,000

 
(5,000
)
 
6,000

 
(120
)%
 
4,000

 

 

 
1,000

 
N/M

Net interest income after provision for credit losses
 
222,955

 
224,392

 
(1,437
)
 
(1
)%
 
222,362

 
209,871

 
187,005

 
35,950

 
19
 %
Noninterest income
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Insurance commissions and fees
 
21,232

 
21,636

 
(404
)
 
(2
)%
 
23,996

 
22,648

 
19,186

 
2,046

 
11
 %
Service charges and deposit account fees
 
16,361

 
16,904

 
(543
)
 
(3
)%
 
16,390

 
16,420

 
15,773

 
588

 
4
 %
Card-based and loan fees
 
15,575

 
14,090

 
1,485

 
11
 %
 
14,387

 
13,422

 
13,840

 
1,735

 
13
 %
Trust and asset management fees
 
13,371

 
14,140

 
(769
)
 
(5
)%
 
13,437

 
13,369

 
13,125

 
246

 
2
 %
Brokerage and advisory fees
 
6,993

 
7,084

 
(91
)
 
(1
)%
 
6,896

 
7,273

 
6,864

 
129

 
2
 %
Capital markets, net
 
4,931

 
5,099

 
(168
)
 
(3
)%
 
4,783

 
5,306

 
7,107

 
(2,176
)
 
(31
)%
Mortgage banking, net
 
3,271

 
4,012

 
(741
)
 
(18
)%
 
6,258

 
6,370

 
3,169

 
102

 
3
 %
Bank and corporate owned life insurance
 
3,247

 
3,540

 
(293
)
 
(8
)%
 
3,978

 
3,187

 
3,156

 
91

 
3
 %
Asset gains (losses), net (1)
 
(2,456
)
 
(1,037
)
 
(1,419
)
 
137
 %
 
2,497

 
(107
)
 
(528
)
 
(1,928
)
 
N/M

Investment securities gains (losses), net
 

 
30

 
(30
)
 
(100
)%
 
(2,015
)
 

 
75

 
(75
)
 
(100
)%
Other
 
1,522

 
2,802

 
(1,280
)
 
(46
)%
 
2,235

 
2,492

 
2,777

 
(1,255
)
 
(45
)%
Total noninterest income
 
84,046

 
88,300

 
(4,254
)
 
(5
)%
 
92,842

 
90,380

 
84,544

 
(498
)
 
(1
)%
Noninterest expense
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Personnel
 
116,535

 
124,476

 
(7,941
)
 
(6
)%
 
123,980

 
117,685

 
107,031

 
9,504

 
9
 %
Technology
 
17,944

 
17,563

 
381

 
2
 %
 
19,452

 
17,715

 
17,878

 
66

 
 %
Occupancy
 
14,174

 
14,519

 
(345
)
 
(2
)%
 
15,071

 
15,357

 
13,497

 
677

 
5
 %
Business development and advertising
 
8,950

 
8,213

 
737

 
9
 %
 
7,067

 
6,693

 
8,195

 
755

 
9
 %
Equipment
 
5,897

 
5,838

 
59

 
1
 %
 
5,953

 
5,556

 
5,250

 
647

 
12
 %
Legal and professional
 
5,888

 
5,476

 
412

 
8
 %
 
6,284

 
5,413

 
6,384

 
(496
)
 
(8
)%
Card issuance and loan costs
 
2,232

 
3,677

 
(1,445
)
 
(39
)%
 
3,173

 
3,304

 
2,836

 
(604
)
 
(21
)%
Foreclosure / OREO expense, net
 
909

 
950

 
(41
)
 
(4
)%
 
1,021

 
723

 
1,285

 
(376
)
 
(29
)%
FDIC assessment
 
5,750

 
7,750

 
(2,000
)
 
(26
)%
 
8,250

 
8,250

 
7,500

 
(1,750
)
 
(23
)%
Other intangible amortization
 
2,233

 
2,233

 

 
 %
 
2,168

 
1,525

 
500

 
1,733

 
N/M

Acquisition related costs (2)
 
(981
)
 
2,271

 
(3,252
)
 
(143
)%
 
7,107

 
20,605

 

 
(981
)
 
N/M

Other
 
13,632

 
11,445

 
2,187

 
19
 %
 
11,732

 
10,140

 
11,343

 
2,289

 
20
 %
Total noninterest expense
 
193,163

 
204,413

 
(11,250
)
 
(6
)%
 
211,258

 
212,965

 
181,699

 
11,464

 
6
 %
Income before income taxes
 
113,839

 
108,279

 
5,560

 
5
 %
 
103,947

 
87,285

 
89,850

 
23,989

 
27
 %
Income tax expense
 
24,854

 
22,349

 
2,505

 
11
 %
 
14,754

 
17,829

 
39,840

 
(14,986
)
 
(38
)%
Net income
 
88,985

 
85,929

 
3,056

 
4
 %
 
89,192

 
69,456

 
50,010

 
38,975

 
78
 %
Preferred stock dividends
 
3,707

 
2,409

 
1,298

 
54
 %
 
2,329

 
2,339

 
2,339

 
1,368

 
58
 %
Net income available to common equity
 
$
85,278

 
$
83,521

 
$
1,757

 
2
 %
 
$
86,863

 
$
67,117

 
$
47,671

 
$
37,607

 
79
 %
Earnings per common share
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic
 
$
0.52

 
$
0.49

 
$
0.03

 
6
 %
 
$
0.51

 
$
0.41

 
$
0.31

 
$
0.21

 
68
 %
Diluted
 
$
0.51

 
$
0.48

 
$
0.03

 
6
 %
 
$
0.50

 
$
0.40

 
$
0.31

 
$
0.20

 
65
 %
Average common shares outstanding
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic
 
164,662

 
170,516

 
(5,854
)
 
(3
)%
 
170,633

 
163,520

 
150,563

 
14,099

 
9
 %
Diluted
 
166,394

 
172,802

 
(6,408
)
 
(4
)%
 
173,409

 
166,432

 
153,449

 
12,945

 
8
 %
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 and Huntington 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
Dec 2018
YTD
Dec 2017
4Q18
3Q18
2Q18
1Q18
4Q17
Per common share data
 
 
 
 
 
 
 
 
Dividends
 
$
0.62

$
0.50

$
0.17

$
0.15

$
0.15

$
0.15

$
0.14

Market value:
 
 
 
 
 
 
 
 
High
 
28.85

26.50

26.55

28.35

28.85

26.90

26.10

Low
 
18.72

21.25

18.72

26.00

24.20

23.60

24.00

Close
 
19.79

25.40

19.79

26.00

27.30

24.85

25.40

Book value
 
21.43

20.13

21.43

21.06

20.95

20.78

20.13

Tangible book value / share
 
13.86

13.65

13.86

13.64

13.71

13.57

13.65

Performance ratios (annualized)
 
 
 
 
 
 
 
 
Return on average assets
 
1.01
%
0.78
%
1.07
%
1.02
%
1.07
%
0.88
%
0.66
%
Effective tax rate
 
19.30
%
32.32
%
21.83
%
20.64
%
14.19
%
20.43
%
44.34
%
Dividend payout ratio (1)
 
32.29
%
34.48
%
32.69
%
30.61
%
29.41
%
36.59
%
45.16
%
Net interest margin
 
2.97
%
2.82
%
3.02
%
2.92
%
3.02
%
2.92
%
2.79
%
Selected trend information
 
 
 
 
 
 
 
 
Average full time equivalent employees (2)
 
4,699

4,307

4,659

4,707

4,792

4,637

4,303

Branch count
 
 
 
236

236

237

271

213

Assets under management, at market value (3)
 
 
 
$
10,291

$
11,206

$
10,776

$
10,540

$
10,555

Mortgage loans originated for sale during period
 
$
1,092

$
715

$
245

$
331

$
319

$
198

$
249

Mortgage loan settlements during period
 
$
1,132

$
820

$
305

$
345

$
294

$
188

$
268

Mortgage portfolio serviced for others
 
 
 
$
8,601

$
8,547

$
8,501

$
8,507

$
7,647

Mortgage servicing rights, net / mortgage portfolio serviced for others
 
 
 
0.79
%
0.79
%
0.79
%
0.78
%
0.76
%
Shares outstanding, end of period (6)
 
 
 
164,440

168,138

172,358

170,995

152,846

Selected quarterly ratios
 
 
 
 
 
 
 
 
Loans / deposits
 
 
 
92.14
%
92.09
%
96.47
%
95.74
%
91.22
%
Stockholders’ equity / assets
 
 
 
11.24
%
11.34
%
11.20
%
11.13
%
10.62
%
Risk-based capital (4) (5)
 
 
 
 
 
 
 
 
Total risk-weighted assets
 
 
 
$
23,875

$
23,907

$
24,059

$
23,535

$
21,544

Common equity Tier 1
 
 
 
$
2,450

$
2,475

$
2,528

$
2,474

$
2,172

Common equity Tier 1 capital ratio
 
 
 
10.26
%
10.35
%
10.51
%
10.51
%
10.08
%
Tier 1 capital ratio
 
 
 
11.33
%
11.42
%
11.17
%
11.19
%
10.82
%
Total capital ratio
 
 
 
13.47
%
13.56
%
13.36
%
13.45
%
13.22
%
Tier 1 leverage ratio
 
 
 
8.48
%
8.43
%
8.32
%
8.48
%
8.02
%
Loans
 
 
 
 
 
 
 
 
Recorded investment on loans
 
 
 
$
22,872

$
22,800

$
22,916

$
22,756

$
20,699

Net unaccreted Bank Mutual purchase discount