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

Document




UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) July 25, 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))

Securities Registered Pursuant to Section 12(b) of the act:
Title of each class
Trading symbol
Name of each exchange on which registered
Common stock, par value $0.01 per share
ASB
The New York Stock Exchange
Depositary Shares, each representing a 1/40th interest in a
share of 6.125% Non-Cumulative Perpetual Preferred Stock, Series C
ASB PrC
The New York Stock Exchange
Depositary Shares, each representing a 1/40th interest in a
share of 5.375% Non-Cumulative Perpetual Preferred Stock, Series D
ASB PrD
The New York Stock Exchange
Depositary Shares, each representing a 1/40th interest in a
share of 5.875% Non-Cumulative Perpetual Preferred Stock, Series E
ASB PrE
The New York Stock Exchange

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 25, 2019, Associated Banc-Corp announced its earnings for the quarter ended June 30, 2019. 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 25, 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: July 25, 2019
By:
 /s/ Christopher J. Del Moral-Niles
 
 
Christopher J. Del Moral-Niles
 
 
Chief Financial Officer


(Back To Top)

Section 2: EX-99.1 (EXHIBIT 99.1)

Exhibit


Exhibit 99.1
398895068_asblogoa04.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 Second Quarter 2019 Earnings of $0.49 Per Common Share,
or $0.51 Per Common Share Excluding $4 million in Acquisition Related Costs1,
Year-to-Date Earnings Per Share up 10% from Prior Year

GREEN BAY, Wis. -- July 25, 2019 -- Associated Banc-Corp (NYSE: ASB) ("Associated" or "Company") today reported net income available to common equity ("earnings") of $81 million, or $0.49 per common share for the quarter ended June 30, 2019. These amounts compare to net income available to common equity of $87 million, or $0.50 per common share for the quarter ended June 30, 2018. Year to date earnings were $0.99 per share compared to $0.90 per share in the same period last year.
“Our commercial and business lending remained strong in the second quarter and, as anticipated, our commercial real estate portfolio has returned to growth. Our results were also aided by improved fee income, driven by mortgage banking and capital markets fees," said President and CEO Philip B. Flynn. "We completed the Huntington Bank branch acquisition in June and expect these deposits, along with our efforts to reposition other funding sources, will result in stable to improving net interest margin for the balance of the year."
SECOND QUARTER 2019 SUMMARY (all comparisons to the second quarter of 2018)
Average loans of $23.4 billion were up 2%, or $349 million
Average deposits of $25.1 billion were up 6%, or $1.4 billion
Net interest income of $214 million decreased $13 million, or 6%
Net interest margin of 2.87% declined 15 basis points from 3.02%
Provision for credit losses of $8 million increased $4 million
Noninterest income of $96 million increased 3%, or $3 million
Noninterest expense of $198 million was down 6%, or $13 million
Income before income taxes was essentially unchanged
During the quarter, the Company repurchased nearly 2 million shares, or $40 million, of common stock
Total dividends paid per common share were $0.17, up 13%
Return on average common equity Tier 1 decreased to 13.1% from 14.0%


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 2019 average loans of $23.4 billion were up $349 million, or 2%, from the year ago quarter, and were up $251 million from the first quarter driven by increased commercial and business lending.
With respect to second quarter 2019 average balances by loan category:
Commercial and business lending increased $925 million from the year ago quarter and increased $245 million from the first quarter to $8.6 billion. General commercial lending and power & utilities specialized lending drove the increase from the year ago quarter.
Consumer lending decreased $1 million from the year ago quarter and decreased $8 million from the first quarter to $9.6 billion.
Commercial real estate lending decreased $575 million from the year ago quarter to $5.1 billion. However, CRE increased $13 million from the first quarter as strong production outpaced paydown activity.

Investments
Second quarter 2019 average investment securities of $6.5 billion were managed lower by $549 million, or 8% from the year ago quarter, and were down $356 million compared to the first quarter as the company used its investment portfolio as a source of funds during the quarter and sought to reposition its investments for a stable to declining rate environment.
Taxable securities decreased $995 million from the year ago quarter and decreased $455 million from the first quarter as lower yielding, primarily mortgage backed securities were sold. Losses realized on the sales were mitigated by gains on equity securities.
Tax-exempt securities increased $446 million from the year ago quarter and increased $98 million from the first quarter.




Deposits
Second quarter 2019 average deposits of $25.1 billion were up $1.4 billion, or 6% from the year ago quarter and were up $525 million compared to the first quarter. During the quarter, the Company reduced its higher-cost deposits in anticipation of the approximately $730 million in lower-cost deposits received in the Huntington transaction in late June.
With respect to second quarter 2019 average balances by deposit category:
Time deposits increased $979 million from the year ago quarter and increased $422 million from the first quarter to $3.5 billion.
Savings increased $427 million from the year ago quarter and increased $221 million from the first quarter to $2.3 billion.
Interest-bearing demand deposits increased $249 million from the year ago quarter and increased $245 million from the first quarter to $5.0 billion.
Noninterest-bearing demand deposits decreased $42 million from the year ago quarter, but increased $107 million from the first quarter to $5.1 billion.
Money market deposits decreased $72 million from the year ago quarter and decreased $270 million from the first quarter to $7.1 billion.
Network transaction deposits decreased $106 million from the year ago quarter and decreased $200 million from the first quarter to $2.0 billion.

Net Interest Income and Net Interest Margin
Second quarter 2019 net interest income of $214 million was down 6%, or $13 million, while the net interest margin decreased 15 basis points to 2.87% from the year ago quarter, primarily due to lower prepayments and accretion related to the Bank Mutual acquisition. Second quarter 2019 net interest income decreased 1%, or $2 million, and the net interest margin decreased 3 basis points from the prior quarter, driven by compression in LIBOR rates.
The average yield on total commercial loans for the second quarter of 2019 increased 19 basis points to 4.94% from the year ago quarter, but decreased 4 basis points from the prior quarter.
The average cost of total interest-bearing deposits for the second quarter of 2019 increased 52 basis points to 1.35% from the year ago quarter and increased 5 basis points from the prior quarter.
The net free funds benefit, which is the net margin increase from noninterest-bearing deposits, increased 9 basis points in the second quarter of 2019 compared to the year ago quarter and increased 1 basis point from the prior quarter.




Noninterest Income
Second quarter 2019 total noninterest income of $96 million increased $3 million from the year ago quarter and increased $5 million from the prior quarter.
With respect to second quarter 2019 noninterest income line items:
Mortgage banking revenues were up $3 million from the year ago quarter and were up $5 million from the previous quarter.
Capital markets fees were essentially unchanged from the year ago quarter but were up $2 million from the previous quarter.
Insurance commissions and fees were down $1 million from the year ago quarter and were down $2 million from the previous quarter as timing of contingency fees enhanced results in the first quarter of 2019.

Noninterest Expense
Second quarter 2019 total noninterest expense of $198 million decreased 6%, or $13 million from the year ago quarter, but increased $6 million from the prior quarter. The year ago quarter included $7 million of Bank Mutual acquisition related costs while the current quarter and prior quarter included $4 million and $1 million of Huntington branch acquisition related costs, respectively.
With respect to second quarter 2019 noninterest expense line items:
Personnel expense decreased $1 million from the year ago quarter, and increased $3 million from the prior quarter due primarily to severance costs and increased commissions expense.
Occupancy expense decreased $1 million from the year ago quarter, and decreased $3 million from the prior quarter due primarily to lower snow removal expense.
Technology expense increased $1 million from the year ago quarter and the prior quarter as the company continued to make investments to enhance its online and mobile product offerings.
The Company's FDIC assessment decreased $4 million from the year ago quarter with the removal of the FDIC surcharge but increased $1 million from the prior quarter due to loan growth.

Taxes
The second quarter 2019 effective tax rate was 18% compared to 14% in the year ago quarter and 21% in the prior quarter. The lower effective tax rates in the current quarter and in the year ago quarter were due to one-time tax benefits; in the current quarter the Company contributed appreciated stock to its charitable trust and in the second quarters of 2018 and 2019 the Company received tax benefits from implementing tax planning strategies to maximize the positive impact of the Tax Cut and Jobs Act. Going forward, the company expects its tax rate to be approximately 21% for full-year 2019.




Credit
The second quarter 2019 provision for credit losses was $8 million, up from $4 million in the year ago quarter and up from $6 million in the prior quarter. With respect to second quarter 2019 credit quality:
Potential problem loans of $166 million were down $76 million from both the year ago quarter and the prior quarter.
Nonaccrual loans of $167 million were down $38 million from the year ago quarter, but were up $11 million from the prior quarter. The nonaccrual loans to total loans ratio was 0.72% in the second quarter, compared to 0.89% in the year ago quarter and 0.67% in the prior quarter.
Other real estate owned (OREO) of $18 million was down $9 million from the year ago quarter, which was elevated due to pending Bank Mutual branch dispositions. OREO was up $6 million from the prior quarter due to the pending disposition of recently consolidated branches related to the Huntington branch acquisition.
Net charge offs of $13 million were up $5 million from the year ago quarter and up $6 million from the prior quarter.
The allowance for loan losses of $234 million was down $19 million from the year ago quarter and was down $1 million from the prior quarter. The allowance for loan losses to total loans ratio was 1.00% in the second quarter of 2019, compared to 1.10% in the year ago quarter, and 1.02% in the prior quarter.

Capital
The Company’s capital position remains strong, with a CET1 capital ratio of 10.1% at June 30, 2019. 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 nearly 2 million shares, or $40 million, of common stock at an average price of $22.57 per share.





SECOND QUARTER 2019 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 25, 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 second quarter 2019 earnings call. The second quarter 2019 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 240 banking locations serving more than 120 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)
Jun 30, 2019
Mar 31, 2019
Seql Qtr $ Change
Dec 31, 2018
Sep 30, 2018
Jun 30, 2018
Comp Qtr $ Change
Assets
 
 
 
 
 
 
 
Cash and due from banks
$
382,985

$
334,095

$
48,890

$
507,187

$
374,168

$
396,761

$
(13,776
)
Interest-bearing deposits in other financial institutions
172,708

270,843

(98,135
)
221,226

147,848

71,462

101,246

Federal funds sold and securities purchased under agreements to resell
1,385

41,405

(40,020
)
148,285

24,325

3,150

(1,765
)
Investment securities held to maturity, at amortized cost
2,806,064

2,846,689

(40,625
)
2,740,511

2,661,755

2,602,247

203,817

Investment securities available for sale, at fair value
3,283,456

3,829,388

(545,932
)
3,946,941

4,052,624

4,260,037

(976,581
)
Equity securities
15,066

1,609

13,457

1,568

1,573

1,613

13,453

Federal Home Loan Bank and Federal Reserve Bank stocks, at cost
202,758

216,940

(14,182
)
250,534

220,825

249,040

(46,282
)
Residential loans held for sale
129,303

81,392

47,911

64,321

134,361

143,022

(13,719
)
Commercial loans held for sale
11,000

15,467

(4,467
)
14,943

30,452


11,000

Loans
23,249,967

23,148,359

101,608

22,940,429

22,867,112

22,976,786

273,181

Allowance for loan losses
(233,659
)
(235,081
)
1,422

(238,023
)
(236,250
)
(252,601
)
18,942

Loans, net
23,016,308

22,913,278

103,030

22,702,406

22,630,861

22,724,184

292,124

Bank and corporate owned life insurance
668,638

665,976

2,662

663,203

661,009

659,592

9,046

Investment in unconsolidated subsidiaries
222,812

194,670

28,142

161,181

156,878

161,676

61,136

Premises and equipment (a)
432,058

411,040

21,018

363,225

358,926

361,385

70,673

Goodwill
1,176,019

1,168,944

7,075

1,169,023

1,168,922

1,166,665

9,354

Mortgage servicing rights, net
66,175

66,626

(451
)
68,193

67,872

66,980

(805
)
Other intangible assets, net
93,915

73,610

20,305

75,836

78,069

80,346

13,569

Other assets (a)
591,976

568,894

23,082

549,274

718,534

704,484

(112,508
)
Total assets
$
33,272,628

$
33,700,866

$
(428,238
)
$
33,647,859

$
33,489,002

$
33,652,647

$
(380,019
)
Liabilities and stockholders’ equity
 
 
 
 
 
 
 
Noninterest-bearing demand deposits
$
5,354,987

$
5,334,154

$
20,833

$
5,698,530

$
5,421,270

$
5,341,361

$
13,626

Interest-bearing deposits
19,919,235

20,198,903

(279,668
)
19,198,863

19,410,342

18,474,953

1,444,282

Total deposits
25,274,222

25,533,057

(258,835
)
24,897,393

24,831,612

23,816,314

1,457,908

Federal funds purchased and securities sold under agreements to repurchase
83,195

127,098

(43,903
)
111,651

166,556

203,733

(120,538
)
Commercial paper
28,787

32,019

(3,232
)
45,423

43,604

52,791

(24,004
)
FHLB advances
2,742,941

2,944,769

(201,828
)
3,574,371

3,332,655

4,797,857

(2,054,916
)
Other long-term funding
796,403

796,007

396

795,611

795,215

497,619

298,784

Accrued expenses and other liabilities
447,286

432,047

15,239

442,522

522,321

514,087

(66,801
)
Total liabilities
29,372,835

29,864,996

(492,161
)
29,866,971

29,691,963

29,882,403

(509,568
)
Stockholders’ equity
 
 
 
 
 
 
 
Preferred equity
256,716

256,716


256,716

256,716

159,401

97,315

Common equity
 
 
 
 
 
 
 
Common stock
1,752

1,752


1,752

1,752

1,751

1

Surplus
1,695,715

1,689,792

5,923

1,712,615

1,709,078

1,704,587

(8,872
)
Retained earnings
2,288,909

2,235,824

53,085

2,181,414

2,128,490

2,070,872

218,037

Accumulated other comprehensive income (loss)
(59,063
)
(103,375
)
44,312

(124,972
)
(135,520
)
(119,888
)
60,825

Treasury stock, at cost
(284,235
)
(244,840
)
(39,395
)
(246,638
)
(163,478
)
(46,479
)
(237,756
)
Total common equity
3,643,077

3,579,153

63,924

3,524,171

3,540,322

3,610,843

32,234

Total stockholders’ equity
3,899,794

3,835,870

63,924

3,780,888

3,797,038

3,770,244

129,550

Total liabilities and stockholders’ equity
$
33,272,628

$
33,700,866

$
(428,238
)
$
33,647,859

$
33,489,002

$
33,652,647

$
(380,019
)
Numbers may not sum due to rounding.
(a) During the second quarter of 2019, the Corporation reclassified operating leases from Other Assets to Premises and Equipment. March 31, 2019 balances were restated for comparability.




Page 1




Associated Banc-Corp
Consolidated Statements of Income (Unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
($ in thousands, except per share data)
 
 
Comp Qtr
 
YTD
 
YTD
 
Comp YTD
2Q19
 
2Q18
 
$ Change
 
% Change
 
Jun 2019
 
Jun 2018
 
$ Change
 
% Change
Interest income
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest and fees on loans
$
260,784

 
$
246,646

 
$
14,138

 
6
 %
 
$
519,637

 
$
466,680

 
$
52,957

 
11
 %
Interest and dividends on investment securities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Taxable
26,710

 
30,623

 
(3,913
)
 
(13
)%
 
55,764

 
60,727

 
(4,963
)
 
(8
)%
Tax-exempt
14,643

 
10,783

 
3,860

 
36
 %
 
28,459

 
20,000

 
8,459

 
42
 %
Other interest
3,995

 
3,153

 
842

 
27
 %
 
8,221

 
5,330

 
2,891

 
54
 %
Total interest income
306,133

 
291,205

 
14,928

 
5
 %
 
612,081

 
552,737

 
59,344

 
11
 %
Interest expense
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest on deposits
67,050

 
38,431

 
28,619

 
74
 %
 
129,823

 
71,843

 
57,980

 
81
 %
Interest on federal funds purchased and securities sold under agreements to repurchase
286

 
538

 
(252
)
 
(47
)%
 
913

 
1,060

 
(147
)
 
(14
)%
Interest on other short-term funding
37

 
51

 
(14
)
 
(27
)%
 
88

 
111

 
(23
)
 
(21
)%
Interest on FHLB advances
17,744

 
21,279

 
(3,535
)
 
(17
)%
 
37,298

 
34,402

 
2,896

 
8
 %
Interest on long-term funding
7,396

 
4,544

 
2,852

 
63
 %
 
14,792

 
9,088

 
5,704

 
63
 %
Total interest expense
92,513

 
64,843

 
27,670

 
43
 %
 
182,914

 
116,504

 
66,410

 
57
 %
Net interest income
213,619

 
226,362

 
(12,743
)
 
(6
)%
 
429,167

 
436,233

 
(7,066
)
 
(2
)%
Provision for credit losses
8,000

 
4,000

 
4,000

 
100
 %
 
14,000

 
4,000

 
10,000

 
N/M

Net interest income after provision for credit losses
205,619

 
222,362

 
(16,743
)
 
(8
)%
 
415,167

 
432,233

 
(17,066
)
 
(4
)%
Noninterest income
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Insurance commissions and fees
22,985

 
23,996

 
(1,011
)
 
(4
)%
 
48,449

 
46,644

 
1,805

 
4
 %
Wealth management fees (a)
20,691

 
20,333

 
358

 
2
 %
 
40,870

 
40,975

 
(105
)
 
 %
Service charges and deposit account fees
15,426

 
16,390

 
(964
)
 
(6
)%
 
30,542

 
32,810

 
(2,268
)
 
(7
)%
Card-based fees
10,131

 
10,115

 
16

 
 %
 
19,392

 
19,557

 
(165
)
 
(1
)%
Other fee-based revenue
5,178

 
4,272

 
906

 
21
 %
 
9,161

 
8,252

 
909

 
11
 %
Capital markets, net 
4,726

 
4,783

 
(57
)
 
(1
)%
 
7,916

 
10,089

 
(2,173
)
 
(22
)%
Mortgage banking, net
9,466

 
6,258

 
3,208

 
51
 %
 
14,178

 
12,628

 
1,550

 
12
 %
Bank and corporate owned life insurance
3,352

 
3,978

 
(626
)
 
(16
)%
 
7,144

 
7,165

 
(21
)
 
 %
Asset gains (losses), net (b)
871

 
2,497

 
(1,626
)
 
(65
)%
 
1,438

 
2,390

 
(952
)
 
(40
)%
Investment securities gains (losses), net
463

 
(2,015
)
 
2,478

 
N/M

 
2,143

 
(2,015
)
 
4,158

 
N/M

Other 
2,547

 
2,235

 
312

 
14
 %
 
5,807

 
4,727

 
1,080

 
23
 %
Total noninterest income
95,837

 
92,842

 
2,995

 
3
 %
 
187,040

 
183,222

 
3,818

 
2
 %
Noninterest expense
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Personnel
123,228

 
123,980

 
(752
)
 
(1
)%
 
243,279

 
241,665

 
1,614

 
1
 %
Technology
20,114

 
19,452

 
662

 
3
 %
 
39,126

 
37,167

 
1,959

 
5
 %
Occupancy
13,830

 
15,071

 
(1,241
)
 
(8
)%
 
30,302

 
30,428

 
(126
)
 
 %
Business development and advertising
6,658

 
7,067

 
(409
)
 
(6
)%
 
13,293

 
13,760

 
(467
)
 
(3
)%
Equipment
5,577

 
5,953

 
(376
)
 
(6
)%
 
11,245

 
11,509

 
(264
)
 
(2
)%
Legal and professional
4,668

 
6,284

 
(1,616
)
 
(26
)%
 
8,619

 
11,697

 
(3,078
)
 
(26
)%
Card issuance costs
1,290

 
2,412

 
(1,122
)
 
(47
)%
 
2,266

 
4,744

 
(2,478
)
 
(52
)%
Loan costs
952

 
761

 
191

 
25
 %
 
2,316

 
1,733

 
583

 
34
 %
Foreclosure / OREO expense, net
924

 
1,021

 
(97
)
 
(10
)%
 
1,491

 
1,744

 
(253
)
 
(15
)%
FDIC assessment
4,500

 
8,250

 
(3,750
)
 
(45
)%
 
8,250

 
16,500

 
(8,250
)
 
(50
)%
Other intangible amortization
2,324

 
2,168

 
156

 
7
 %
 
4,551

 
3,693

 
858

 
23
 %
Acquisition related costs (c)
3,734

 
7,107

 
(3,373
)
 
(47
)%
 
4,366

 
27,712

 
(23,346
)
 
(84
)%
Other
9,979

 
11,732

 
(1,753
)
 
(15
)%
 
20,346

 
21,873

 
(1,527
)
 
(7
)%
Total noninterest expense
197,779

 
211,258

 
(13,479
)
 
(6
)%
 
389,450

 
424,223

 
(34,773
)
 
(8
)%
Income before income taxes
103,678

 
103,947

 
(269
)
 
 %
 
212,756

 
191,232

 
21,524

 
11
 %
Income tax expense
19,017

 
14,754

 
4,263

 
29
 %
 
41,409

 
32,583

 
8,826

 
27
 %
Net income
84,661

 
89,192

 
(4,531
)
 
(5
)%
 
171,347

 
158,648

 
12,699

 
8
 %
Preferred stock dividends
3,801

 
2,329

 
1,472

 
63
 %
 
7,601

 
4,668

 
2,933

 
63
 %
Net income available to common equity
$
80,860

 
$
86,863

 
$
(6,003
)
 
(7
)%
 
$
163,746

 
$
153,980

 
$
9,766

 
6
 %
Earnings per common share
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic
$
0.49

 
$
0.51

 
$
(0.02
)
 
(4
)%
 
$
1.00

 
$
0.92

 
$
0.08

 
9
 %
Diluted
$
0.49

 
$
0.50

 
$
(0.01
)
 
(2
)%
 
$
0.99

 
$
0.90

 
$
0.09

 
10
 %
Average common shares outstanding
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic
162,180

 
170,633

 
(8,453
)
 
(5
)%
 
163,049

 
167,096

 
(4,047
)
 
(2
)%
Diluted
163,672

 
173,409

 
(9,737
)
 
(6
)%
 
164,518

 
169,920

 
(5,402
)
 
(3
)%
N/M = Not meaningful
Numbers may not sum due to rounding.
(a) Includes trust, asset management, brokerage, and annuity fees.
(b)
2Q19 and YTD 2019 include less than $1 million of Huntington related asset losses; 2Q18 and YTD June 2018 include approximately $1 million of Bank Mutual acquisition related asset losses net of asset gains.
(c)
Includes Bank Mutual and Huntington branch 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
2Q19
 
1Q19
 
$ Change
 
% Change
 
4Q18
 
3Q18
 
2Q18
 
$ Change
 
% Change
Interest income
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest and fees on loans
$
260,784

 
$
258,853

 
$
1,931

 
1
 %
 
$
260,661

 
$
249,649

 
$
246,646

 
$
14,138

 
6
 %
Interest and dividends on investment securities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Taxable
26,710

 
29,053

 
(2,343
)
 
(8
)%
 
29,119

 
29,895

 
30,623

 
(3,913
)
 
(13
)%
Tax-exempt
14,643

 
13,816

 
827

 
6
 %
 
12,899

 
11,883

 
10,783

 
3,860

 
36
 %
Other interest
3,995

 
4,226

 
(231
)
 
(5
)%
 
3,257

 
4,036

 
3,153

 
842

 
27
 %
Total interest income
306,133

 
305,948

 
185

 
 %
 
305,936

 
295,464

 
291,205

 
14,928

 
5
 %
Interest expense
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest on deposits
67,050

 
62,773

 
4,277

 
7
 %
 
54,159

 
50,116

 
38,431

 
28,619

 
74
 %
Interest on federal funds purchased and securities sold under agreements to repurchase
286

 
627

 
(341
)
 
(54
)%
 
442

 
504

 
538

 
(252
)
 
(47
)%
Interest on other short-term funding
37

 
51

 
(14
)
 
(27
)%
 
36

 
38

 
51

 
(14
)
 
(27
)%
Interest on FHLB advances
17,744

 
19,554

 
(1,810
)
 
(9
)%
 
19,948

 
19,318

 
21,279

 
(3,535
)
 
(17
)%
Interest on long-term funding
7,396

 
7,396

 

 
 %
 
7,396

 
6,095

 
4,544

 
2,852

 
63
 %
Total interest expense
92,513

 
90,401

 
2,112

 
2
 %
 
81,980

 
76,072

 
64,843

 
27,670

 
43
 %
Net interest income
213,619

 
215,547

 
(1,928
)
 
(1
)%
 
223,955

 
219,392

 
226,362

 
(12,743
)
 
(6
)%
Provision for credit losses
8,000

 
6,000

 
2,000

 
33
 %
 
1,000

 
(5,000
)
 
4,000

 
4,000

 
100
 %
Net interest income after provision for credit losses
205,619

 
209,547

 
(3,928
)
 
(2
)%
 
222,955

 
224,392

 
222,362

 
(16,743
)
 
(8
)%
Noninterest income
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Insurance commissions and fees
22,985

 
25,464

 
(2,479
)
 
(10
)%
 
21,232

 
21,636

 
23,996

 
(1,011
)
 
(4
)%
Wealth management fees (a)
20,691

 
20,180

 
511

 
3
 %
 
20,364

 
21,224

 
20,333

 
358

 
2
 %
Service charges and deposit account fees
15,426

 
15,115

 
311

 
2
 %
 
16,361

 
16,904

 
16,390

 
(964
)
 
(6
)%
Card-based fees
10,131

 
9,261

 
870

 
9
 %
 
10,316

 
9,783

 
10,115

 
16

 
 %
Other fee-based revenue
5,178

 
3,983

 
1,195

 
30
 %
 
5,260

 
4,307

 
4,272

 
906

 
21
 %
Capital markets, net
4,726

 
3,189

 
1,537

 
48
 %
 
4,931

 
5,099

 
4,783

 
(57
)
 
(1
)%
Mortgage banking, net
9,466

 
4,712

 
4,754

 
101
 %
 
3,271

 
4,012

 
6,258

 
3,208

 
51
 %
Bank and corporate owned life insurance
3,352

 
3,792

 
(440
)
 
(12
)%
 
3,247

 
3,540

 
3,978

 
(626
)
 
(16
)%
Asset gains (losses), net (b)
871

 
567

 
304

 
54
 %
 
(2,456
)
 
(1,037
)
 
2,497

 
(1,626
)
 
(65
)%
Investment securities gains (losses), net
463

 
1,680

 
(1,217
)
 
(72
)%
 

 
30

 
(2,015
)
 
2,478

 
N/M

Other
2,547

 
3,260

 
(713
)
 
(22
)%
 
1,522

 
2,802

 
2,235

 
312

 
14
 %
Total noninterest income
95,837

 
91,202

 
4,635

 
5
 %
 
84,046

 
88,300

 
92,842

 
2,995

 
3
 %
Noninterest expense
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Personnel
123,228

 
120,050

 
3,178

 
3
 %
 
116,535

 
124,476

 
123,980

 
(752
)
 
(1
)%
Technology
20,114

 
19,012

 
1,102

 
6
 %
 
17,944

 
17,563

 
19,452

 
662

 
3
 %
Occupancy
13,830

 
16,472

 
(2,642
)
 
(16
)%
 
14,174

 
14,519

 
15,071

 
(1,241
)
 
(8
)%
Business development and advertising
6,658

 
6,636

 
22

 
 %
 
8,950

 
8,213

 
7,067

 
(409
)
 
(6
)%
Equipment
5,577

 
5,668

 
(91
)
 
(2
)%
 
5,897

 
5,838

 
5,953

 
(376
)
 
(6
)%
Legal and professional
4,668

 
3,951

 
717

 
18
 %
 
5,888

 
5,476

 
6,284

 
(1,616
)
 
(26
)%
Card issuance costs
1,290

 
977

 
313

 
32
 %
 
1,442

 
2,247

 
2,412

 
(1,122
)
 
(47
)%
Loan costs
952

 
1,364

 
(412
)
 
(30
)%
 
790

 
1,430

 
761

 
191

 
25
 %
Foreclosure / OREO expense, net
924

 
567

 
357

 
63
 %
 
909

 
950

 
1,021

 
(97
)
 
(10
)%
FDIC assessment
4,500

 
3,750

 
750

 
20
 %
 
5,750

 
7,750

 
8,250

 
(3,750
)
 
(45
)%
Other intangible amortization
2,324

 
2,226

 
98

 
4
 %
 
2,233

 
2,233

 
2,168

 
156

 
7
 %
Acquisition related costs (c)
3,734

 
632

 
3,102

 
N/M

 
(981
)
 
2,271

 
7,107

 
(3,373
)
 
(47
)%
Other
9,979

 
10,366

 
(387
)
 
(4
)%
 
13,632

 
11,445

 
11,732

 
(1,753
)
 
(15
)%
Total noninterest expense
197,779

 
191,671

 
6,108

 
3
 %
 
193,163

 
204,413

 
211,258

 
(13,479
)
 
(6
)%
Income before income taxes
103,678

 
109,078

 
(5,400
)
 
(5
)%
 
113,839

 
108,279

 
103,947

 
(269
)
 
 %
Income tax expense
19,017

 
22,392

 
(3,375
)
 
(15
)%
 
24,854

 
22,349

 
14,754

 
4,263

 
29
 %
Net income
84,661

 
86,686

 
(2,025
)
 
(2
)%
 
88,985

 
85,929

 
89,192

 
(4,531
)
 
(5
)%
Preferred stock dividends
3,801

 
3,801

 

 
 %
 
3,707

 
2,409

 
2,329

 
1,472

 
63
 %
Net income available to common equity
$
80,860

 
$
82,885

 
$
(2,025
)
 
(2
)%
 
$
85,278

 
$
83,521

 
$
86,863

 
$
(6,003
)
 
(7
)%
Earnings per common share
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic
$
0.49

 
$
0.50

 
$
(0.01
)
 
(2
)%
 
$
0.52

 
$
0.49

 
$
0.51

 
$
(0.02
)
 
(4
)%
Diluted
$
0.49

 
$
0.50

 
$
(0.01
)
 
(2
)%
 
$
0.51

 
$
0.48

 
$
0.50

 
$
(0.01
)
 
(2
)%
Average common shares outstanding
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic
162,180

 
163,928

 
(1,748
)
 
(1
)%
 
164,662

 
170,516

 
170,633

 
(8,453
)
 
(5
)%
Diluted
163,672

 
165,433

 
(1,761
)
 
(1
)%
 
166,394

 
172,802

 
173,409

 
(9,737
)
 
(6
)%
N/M = Not meaningful
Numbers may not sum due to rounding.
(a) Includes trust, asset management, brokerage, and annuity fees.
(b)
2Q19 includes less than $1 million of Huntington related asset losses; 3Q18 and 2Q18 include approximately $1 million of Bank Mutual acquisition related asset losses net of asset gains.
(c)
Includes Bank Mutual and Huntington branch acquisition related costs only.

Page 3




Associated Banc-Corp
Selected Quarterly Information
 
 
 
 
 
 
 
($ in millions except per share data; shares repurchased and outstanding in thousands)
YTD
Jun 2019
YTD
Jun 2018
2Q19
1Q19
4Q18
3Q18
2Q18
Per common share data
 
 
 
 
 
 
 
Dividends
$
0.34

$
0.30

$
0.17

$
0.17

$
0.17

$
0.15

$
0.15

Market value:
 
 
 
 
 
 
 
High
23.67

28.85

23.15

23.67

26.55

28.35

28.85

Low
19.77

23.60

19.81

19.77

18.72

26.00

24.20

Close
21.14

27.30

21.14

21.35

19.79

26.00

27.30

Book value
22.40

20.95

22.40

21.77

21.43

21.06

20.95

Tangible book value / share
14.59

13.71

14.59

14.21

13.86

13.64

13.71

Performance ratios (annualized)
 
 
 
 
 
 
 
Return on average assets
1.03
%
0.98
%
1.01
%
1.05
%
1.07
%
1.02
%
1.07
%
Effective tax rate
19.46
%
17.04
%
18.34
%
20.53
%
21.83
%
20.64
%
14.19
%
Dividend payout ratio (a)
34.00
%
32.61
%
34.69
%
34.00
%
32.69
%
30.61
%
29.41
%
Net interest margin
2.89
%
2.97
%
2.87
%
2.90
%
3.02
%
2.92
%
3.02
%
Selected trend information
 
 
 
 
 
 
 
Average full time equivalent employees (b)
4,663

4,715

4,666

4,660

4,659

4,707

4,792

Branch count
 
 
247

233

236

236

237

Assets under management, at market value (c)
 
 
$
11,475

$
11,192

$
10,291

$
11,206

$
10,776

Mortgage loans originated for sale during period
$
459

$
516

$
297

$
163

$
245

$
331

$
319

Mortgage loan settlements during period
$
432

$
482

$
272

$
160

$
305

$
345

$
294

Mortgage portfolio serviced for others
 
 
$
8,504

$
8,543

$
8,601

$
8,547

$
8,501

Mortgage servicing rights, net / mortgage portfolio serviced for others
 
 
0.78
%
0.78
%
0.79
%
0.79
%
0.79
%
Shares repurchased during period
3,063

1,357

1,754

1,308

3,764

4,349

249

Shares outstanding, end of period
162,662

172,358

162,662

164,418

164,440

168,138

172,358

Selected quarterly ratios
 
 
 
 
 
 
 
Loans / deposits
 
 
91.99
%
90.66
%
92.14
%
92.09
%
96.47
%
Stockholders’ equity / assets
 
 
11.72
%
11.38
%
11.24
%
11.34
%
11.20
%
Risk-based capital (d) (e)
 
 
 
 
 
 
 
Total risk-weighted assets
 
 
$
24,490

$
24,140

$
23,875

$
23,907

$
24,059

Common equity Tier 1
 
 
$
2,481

$
2,485

$
2,450

$
2,475

$
2,528

Common equity Tier 1 capital ratio
 
 
10.13
%
10.29
%
10.26
%
10.35
%
10.51
%
Tier 1 capital ratio
 
 
11.18
%
11.36
%
11.33
%
11.42
%
11.17
%
Total capital ratio
 
 
13.24
%
13.46
%
13.47
%
13.56
%
13.36
%
Tier 1 leverage ratio
 
 
8.49
%
8.49
%
8.48
%
8.43
%
8.32
%
Loans
 
 
 
 
 
 
 
Recorded investment on loans
 
 
$
23,180

$
23,078

$
22,872

$
22,800

$
22,916

Net unaccreted purchase discount on performing loans (f)
 
 
(16
)
(16
)
(18
)
(21
)
(26
)
Net other deferred costs
 
 
85

86

87

87

87

Loans
 
 
$
23,250

$
23,148

$
22,940

$
22,867

$
22,977

Numbers may not sum due to rounding.
(a)
Ratio is based upon basic earnings per common share.
(b)
Average full time equivalent employees without overtime.
(c)
Excludes assets held in brokerage accounts.
(d)
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.
(e)
June 30, 2019 data is estimated.
(f)
Includes loans obtained from the acquisition of Bank Mutual and the Huntington branch acquisition.


Page 4




Associated Banc-Corp
Selected Asset Quality Information
 
 
 
 
 
 
($ in thousands)
 
Jun 30, 2019
Mar 31, 2019
Seql Qtr %
Change
 
Dec 31, 2018
Sep 30, 2018
Jun 30, 2018
Comp Qtr %
Change
Allowance for loan losses
 
 
 
 
 
 
 
 
 
Balance at beginning of period
 
$
235,081

$
238,023

(1
)%
 
$
236,250

$
252,601

$
257,058

(9
)%
Provision for loan losses
 
12,000

4,500

167
 %
 
2,000

(4,000
)
4,000

N/M

Charge offs
 
(15,761
)
(15,486
)
2
 %
 
(6,151
)
(17,304
)
(14,926
)
6
 %
Recoveries
 
2,339

8,044

(71
)%
 
5,923

4,953

6,470

(64
)%
Net charge offs
 
(13,421
)
(7,442
)
80
 %
 
(228
)
(12,351
)