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

Document
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM
8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934


Date of Report (Date of earliest event reported)
April 23, 2020

                                                                            Associated Banc-Corp                                                                      
(Exact name of registrant as specified in its chapter)

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
New York Stock Exchange
Depositary Shrs, each representing 1/40th intrst in a shr of 6.125% Non-Cum. Perp Pref Stock, Srs C
ASB PrC
New York Stock Exchange
Depositary Shrs, each representing 1/40th intrst in a shr of 5.375% Non-Cum. Perp Pref Stock, Srs D
ASB PrD
New York Stock Exchange
Depositary Shrs, each representing 1/40th intrst in a shr of 5.875% Non-Cum. Perp Pref Stock, Srs E
ASB PrE
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 April 23, 2020, Associated Banc-Corp announced its earnings for the quarter ended March 31, 2020. A copy of the registrant’s press release containing this information and the slide presentation discussed on the conference call for investors and analysts on April 23, 2020, are being furnished as Exhibit 99.1 and Exhibit 99.2, respectively, to this Report on Form 8-K and are incorporated herein by reference.
 
The information furnished pursuant to this Item 2.02, including Exhibit 99.1 and Exhibit 99.2, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities under that Section and shall not be deemed to be incorporated by reference into any filing of the registrant under the Securities Act of 1933 or the Exchange Act.

 
Item 9.01 Financial Statements and Exhibits.
 
(d)  Exhibits.
 
 The following exhibits are furnished as part of this Report on Form 8-K:
 








SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
Associated Banc-Corp
 
(Registrant)
 
 
 
 
Date: April 23, 2020
By: /s/ Christopher J. Del Moral-Niles
 
Christopher J. Del Moral-Niles
 
Chief Financial Officer
  
 
 


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Section 2: EX-99.1 (EXHIBIT 99.1)

Exhibit


Exhibit 99.1
403713781_asblogoa10.jpg
NEWS RELEASE
Investor Contact:
Brian Mathena, 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 First Quarter 2020 Earnings of $0.27 Per Common Share,
or $0.28 Per Common Share Excluding $2 million in Acquisition Related Costs1 

GREEN BAY, Wis. -- April 23, 2020 -- Associated Banc-Corp (NYSE: ASB) ("Associated" or "Company") today reported net income available to common equity ("earnings") of $42 million, or $0.27 per common share for the quarter ended March 31, 2020. Excluding acquisition related costs, the Company reported earnings of $43 million, or $0.28 per common share. These amounts compare to net income available to common equity of $83 million, or $0.50 per common share for the quarter ended March 31, 2019.
“The past two months have been one of the most extraordinary periods in this country’s history. The coronavirus pandemic has presented many challenges, both personal and economic, and we at Associated Bank are committed to helping our customers and communities through this difficult time," said President and CEO Philip B. Flynn. "We have taken action to help our colleagues and customers stay safe and we have contributed to relief efforts in our communities. Associated Bank has strong capital and liquidity and we will continue to help our customers through our COVID-19 Relief Program, which includes suspension of certain fees and loan payment deferrals, and through participation in federal initiatives like the Paycheck Protection Program. Standing together with our customers and communities, we will make it through this turbulent period, and we will be part of the economic recovery that will surely follow."
FIRST QUARTER 2020 SUMMARY (all comparisons to the first quarter of 2019)
Average loans of $23.3 billion were up 1%, or $0.2 billion; period end loans were $24.4 billion
Average deposits of $24.3 billion were down 1%, or $0.3 billion; period end deposits were $25.7 billion
Net interest income of $203 million decreased $13 million, or 6%
Net interest margin of 2.84% declined 6 basis points from 2.90%
Provision for credit losses was $53 million compared to $6 million
Noninterest income of $98 million increased 8%, or $7 million
Noninterest expense of $192 million, up $1 million
Pre-tax pre-provision income of $109 million decreased 5%, or $6 million1
Tangible book value per share was $14.64, up 3%

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




Loans
First quarter 2020 average loans of $23.3 billion were up 1%, or $205 million from the same period last year, and were up 2%, or $525 million from fourth quarter 2019. The increase from the fourth quarter was driven in part by the First Staunton acquisition which closed in February and by customers drawing on lines of credit in March in response to the pandemic. With respect to first quarter average balances by loan category:
Commercial real estate lending increased $212 million from the same period last year and $135 million from the fourth quarter 2019 to $5.3 billion. The change was largely due to increased construction loans and funded term debt.
Commercial and business lending was essentially flat compared to the same period last year and increased $172 million from the fourth quarter 2019 to $8.4 billion. The increase from the fourth quarter was driven by power & utilities and general commercial lending.
Consumer lending was $9.6 billion, down $10 million from the first quarter 2019 and up $219 million from the fourth quarter 2019.

First quarter 2020 period-end loans of $24.4 billion were up 5%, or $1.2 billion from the same period last year, and were up 7%, or $1.5 billion from fourth quarter 2019. Similar to the changes in average balances, the period-end increases were driven by the First Staunton acquisition and pandemic response. With respect to first quarter period-end balances by loan category:
Commercial and business lending increased $939 million from the same period last year, and $1.2 billion from the fourth quarter 2019 to $9.5 billion.
Commercial real estate lending increased $500 million from the same period last year, and $367 million from the fourth quarter 2019 to $5.6 billion. The change was largely due to increased construction loans and funded term debt.
Consumer lending was $9.3 billion, down $221 million from first quarter 2019 and down $16 million from the fourth quarter 2019.

On April 3, the Company began accepting loan applications under the Small Business Administration's Paycheck Protection Program. This initiative was created through the Coronavirus Aid, Relief, and Economic Security Act and is intended to support small business with loans to cover payroll and other employee expenses for companies impacted by the pandemic. As of April 21, the Company had funded over 3,600 loans for nearly $900 million under this program.




Deposits
First quarter 2020 average deposits of $24.3 billion were down $264 million, or 1% from the same period last year and were up $189 million compared to the fourth quarter. The decrease from the first quarter of 2019 reflects the Company's balance sheet repositioning strategy of selling lower-yielding securities and reducing certain higher-cost, non-core customer funding from time deposits, network transaction deposits and money market accounts in 2019. The increase from the fourth quarter was driven by the First Staunton acquisition and by customers building cash in March in response to the pandemic.
With respect to first quarter 2020 average balances by deposit category:
Savings increased $770 million from the same period last year and increased $155 million from the fourth quarter to $2.9 billion.
Interest-bearing demand deposits increased $568 million from the same period last year and increased $169 million from the fourth quarter to $5.3 billion.
Noninterest-bearing demand deposits increased $524 million from the same period last year and increased $36 million from the fourth quarter to $5.5 billion.
Time deposits decreased $486 million from the same period last year and decreased $111 million from the fourth quarter to $2.6 billion.
Network transaction deposits decreased $791 million from the same period last year and decreased $5 million from the fourth quarter to $1.4 billion.
Money market deposits decreased $850 million from the same period last year and decreased $56 million from the fourth quarter to $6.5 billion.

First quarter 2020 period-end deposits of $25.7 billion were up $129 million, or 1% from the same period last year and were up $1.9 billion compared to the fourth quarter. Core funding made up 58% of deposit balances as of March 31, 2020.
With respect to first quarter 2020 period-end balances by deposit category:
Savings increased $817 million from the same period last year and increased $298 million from the fourth quarter to $3.0 billion.
Noninterest-bearing demand deposits increased $773 million from the same period last year and increased $657 million from the fourth quarter to $6.1 billion.
Interest-bearing demand deposits increased $944 million from the same period last year and increased $840 million from the fourth quarter to $6.2 billion.
Time deposits decreased $1.1 billion from the same period last year and increased $11 million from the fourth quarter to $2.6 billion.
Money market deposits decreased $1.3 billion from the same period last year and increased $77 million from the fourth quarter to $7.7 billion.
Network transaction deposits (included in money market and interest-bearing deposits) decreased $472 million from the same period last year and increased $396 million from the fourth quarter to $1.7 billion.





Net Interest Income and Net Interest Margin
First quarter 2020 net interest income of $203 million was down 6%, or $13 million, and the net interest margin decreased 6 basis points to 2.84% from the same period last year. First quarter 2020 net interest income increased 1%, or $3 million, and the net interest margin increased 1 basis point from the fourth quarter of 2019. The increases in net interest income and net interest margin from the fourth quarter are due to reductions in the Company's deposit pricing and elevated LIBOR - Fed Funds spread in the first quarter.
The average yield on total earning assets for the first quarter of 2020 decreased 44 basis points from the same period last year to 3.67% and decreased 11 basis points from the prior quarter.
The average cost of total interest-bearing liabilities for the first quarter of 2020 decreased 45 basis points from the same period last year to 1.06% and decreased 17 basis points from the prior quarter.
The net free funds benefit decreased seven basis points in the first quarter of 2020 compared to the same period last year and decreased five basis points from the prior quarter.

Noninterest Income
First quarter of 2020 total noninterest income of $98 million increased $7 million from the same period last year and increased $5 million from the prior quarter.
With respect to first quarter 2020 noninterest income line items:
Net mortgage banking income was $6 million for the first quarter. Gross mortgage banking income was $15 million, partially offset by $9 million of mortgage servicing rights impairment.
Capital markets income was up $5 million from same period last year driven by interest rate swap fees, and was flat with the previous quarter.
Gains on sales of investment securities were up $4 million compared to the same period last year and up $6 million from the fourth quarter.

Noninterest Expense
First quarter 2020 total noninterest expense of $192 million increased $1 million compared to the same period last year and decreased $11 million from the prior quarter.
With respect to first quarter 2020 noninterest expense line items:
Personnel expense decreased $6 million from both the same period last year and from the prior quarter.    
Technology expense increased $2 million from the same period last year but decreased $2 million from the prior quarter.
Occupancy expense was essentially flat from the same period last year and increased $1 million from the prior quarter.
The Company's FDIC assessment increased $2 million from both the same period last year and from the prior quarter.




Taxes
The first quarter 2020 effective tax rate was 18% compared to 21% in the same period last year and 19% in the prior quarter.

Credit
The first quarter 2020 provision for loan losses was $53 million, up from $6 million in the same period last year and up from zero in the prior quarter. As a result of implementing the Current Expected Credit Loss accounting standard, the Company incurred an after-tax charge of $98 million which decreased the opening equity balance as of January 1, 2020.
With respect to first quarter 2020 credit quality:
Potential problem loans of $234 million were down $7 million, or 3%, from the same period last year but up $73 million, or 45%, from the prior quarter.
Nonaccrual loans of $137 million were down $19 million from the same period last year and up $18 million from the prior quarter. The nonaccrual loans to total loans ratio was 0.56% in the first quarter, down from 0.67% in the same period last year and up from 0.52% in the prior quarter.
Net charge offs of $17 million were up $10 million from the same period last year and up $3 million from the prior quarter.
The allowance for credit losses on loans (ACLL) of $394 million was up $133 million compared to the same period last year and up $171 million from the prior quarter. The adoption of CECL resulted in an increase of $131 million to ACLL. The ACLL to total loans ratio was 1.62% in the first quarter, up from 1.13% in the same period last year, and 0.98% in the prior quarter.

Capital
The Company’s capital position remains strong, with a CET1 capital ratio of 9.4% at March 31, 2020. 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 first ten weeks of 2020, the Company repurchased over four million shares, or $71 million, of common stock at an average price of $16.71 per share. On March 13th, 2020, the Company suspended its share repurchases in order to have additional capital available to support its customers and for additional security given anticipated continued economic volatility.






FIRST QUARTER 2020 EARNINGS RELEASE CONFERENCE CALL
The Company will host a conference call for investors and analysts at 4:00 p.m. Central Time (CT) today, April 23, 2020. Interested parties can access the live webcast of the call through the Investor Relations section of the Company's website, http://investor.associatedbank.com. Parties may also dial into the call at 877-407-8037 (domestic) or 201-689-8037 (international) and request the Associated Banc-Corp first quarter 2020 earnings call. The first quarter 2020 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 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)
Mar 31, 2020
Dec 31, 2019
Seql Qtr $ Change
Sep 30, 2019
Jun 30, 2019
Mar 31, 2019
Comp Qtr $ Change
Assets
 
 
 
 
 
 
 
Cash and due from banks
$
480,337

$
373,380

$
106,957

$
523,435

$
382,985

$
334,095

$
146,242

Interest-bearing deposits in other financial institutions
176,440

207,624

(31,184
)
236,010

172,708

270,843

(94,403
)
Federal funds sold and securities purchased under agreements to resell
22,455

7,740

14,715

100

1,385

41,405

(18,950
)
Investment securities held to maturity, net, at amortized cost(a)
2,149,373

2,205,083

(55,710
)
2,200,419

2,806,064

2,846,689

(697,316
)
Investment securities available for sale, at fair value
2,928,787

3,262,586

(333,799
)
3,436,289

3,283,456

3,829,388

(900,601
)
Equity securities
15,063

15,090

(27
)
15,096

15,066

1,609

13,454

Federal Home Loan Bank and Federal Reserve Bank stocks, at cost
222,922

227,347

(4,425
)
207,443

202,758

216,940

5,982

Residential loans held for sale
366,330

136,280

230,050

137,655

129,303

81,392

284,938

Commercial loans held for sale

15,000

(15,000
)
11,597

11,000

15,467

(15,467
)
Loans
24,365,633

22,821,440

1,544,193

22,754,710

23,249,967

23,148,359

1,217,274

Allowance for loan losses(b)
(337,793
)
(201,371
)
(136,422
)
(214,425
)
(233,659
)
(235,081
)
(102,712
)
Loans, net
24,027,841

22,620,068

1,407,773

22,540,285

23,016,308

22,913,278

1,114,563

Bank and corporate owned life insurance
674,026

671,948

2,078

670,739

668,638

665,976

8,050

Tax credit and other investments
315,909

279,969

35,940

256,220

222,812

194,670

121,239

Premises and equipment, net
438,469

435,284

3,185

436,268

432,058

411,040

27,429

Goodwill
1,191,388

1,176,230

15,158

1,176,230

1,176,019

1,168,944

22,444

Mortgage servicing rights, net
58,289

67,306

(9,017
)
68,168

66,175

66,626

(8,337
)
Other intangible assets, net
92,723

88,301

4,422

91,089

93,915

73,610

19,113

Interest receivable
92,377

91,196

1,181

96,315

110,528

110,859

(18,482
)
Other assets
655,328

506,046

149,282

493,105

455,688

438,498

216,830

Total assets
$
33,908,056

$
32,386,478

$
1,521,578

$
32,596,460

$
33,246,869

$
33,681,329

$
226,727

Liabilities and stockholders’ equity
 
 
 
 
 
 
 
Noninterest-bearing demand deposits
$
6,107,386

$
5,450,709

$
656,677

$
5,503,223

$
5,354,987

$
5,334,154

$
773,232

Interest-bearing deposits
19,554,194

18,328,355

1,225,839

18,919,339

19,919,235

20,198,903

(644,709
)
Total deposits
25,661,580

23,779,064

1,882,516

24,422,562

25,274,222

25,533,057

128,523

Federal funds purchased and securities sold under agreements to repurchase
133,007

433,097

(300,090
)
78,028

83,195

127,098

5,909

Commercial paper
33,647

32,016

1,631

30,416

28,787

32,019

1,628

FHLB advances
3,214,194

3,180,967

33,227

2,877,727

2,742,941

2,944,769

269,425

Other long-term funding
549,644

549,343

301

796,799

796,403

796,007

(246,363
)
Accrued expenses and other liabilities(b)
525,512

489,868

35,644

470,073

421,526

412,510

113,002

Total liabilities
30,117,584

28,464,355

1,653,229

28,675,605

29,347,075

29,845,459

272,125

Stockholders’ equity
 
 
 
 
 
 
 
Preferred equity
256,716

256,716


256,716

256,716

256,716


Common equity(b)
3,533,755

3,665,407

(131,652
)
3,664,139

3,643,077

3,579,153

(45,398
)
Total stockholders’ equity
3,790,471

3,922,124

(131,652
)
3,920,855

3,899,794

3,835,870

(45,398
)
Total liabilities and stockholders’ equity
$
33,908,056

$
32,386,478

$
1,521,578

$
32,596,460

$
33,246,869

$
33,681,329

$
226,727

Numbers may not sum due to rounding.
(a) At March 31, 2020, the investment securities held to maturity are reported net of the related allowance for credit losses. Prior periods were unadjusted due to the modified retrospective application of ASU 2016-13.
(b) At January 1, 2020, the adoption of ASU 2016-13 resulted in an increase to the allowance for loan losses of $112 million and an increase to the allowance for unfunded commitments, included in accrued expenses and other liabilities, of $19 million for a total increase to the allowance for credit losses on loans of $131 million. A corresponding after tax decrease to common equity of $98 million was recorded along with a deferred tax asset of $33 million resulting in a net decrease to accrued expenses and other liabilities of $14 million. Prior periods were unadjusted due to the modified retrospective application of ASU 2016-13.

Page 1




Associated Banc-Corp
Consolidated Statements of Income (Unaudited) - Quarterly Trend
($ in thousands, except per share data)
 
 
 
 
Seql Qtr
 
 
 
 
 
 
 
Comp Qtr
1Q20
 
4Q19
 
$ Change
 
% Change
 
3Q19
 
2Q19
 
1Q19
 
$ Change
 
% Change
Interest income
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest and fees on loans
$
224,786

 
$
229,883

 
$
(5,097
)
 
(2
)%
 
$
248,579

 
$
260,784

 
$
258,853

 
$
(34,067
)
 
(13
)%
Interest and dividends on investment securities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Taxable
20,272

 
21,056

 
(784
)
 
(4
)%
 
23,485

 
26,710

 
29,053

 
(8,781
)
 
(30
)%
Tax-exempt
14,882

 
14,615

 
267

 
2
 %
 
14,491

 
14,643

 
13,816

 
1,066

 
8
 %
Other interest
3,304

 
3,556

 
(252
)
 
(7
)%
 
4,865

 
3,995

 
4,226

 
(922
)
 
(22
)%
Total interest income
263,244

 
269,110

 
(5,866
)
 
(2
)%
 
291,420

 
306,133

 
305,948

 
(42,704
)
 
(14
)%
Interest expense
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest on deposits
36,666

 
45,877

 
(9,211
)
 
(20
)%
 
61,585

 
67,050

 
62,773

 
(26,107
)
 
(42
)%
Interest on federal funds purchased and securities sold under agreements to repurchase
368

 
521

 
(153
)
 
(29
)%
 
145

 
286

 
627

 
(259
)
 
(41
)%
Interest on other short-term funding
39

 
28

 
11

 
39
 %
 
33

 
37

 
51

 
(12
)
 
(24
)%
Interest on FHLB advances
17,626

 
16,623

 
1,003

 
6
 %
 
15,896

 
17,744

 
19,554

 
(1,928
)
 
(10
)%
Interest on long-term funding
5,604

 
5,918

 
(314
)
 
(5
)%
 
7,396

 
7,396

 
7,396

 
(1,792
)
 
(24
)%
Total interest expense
60,303

 
68,967

 
(8,664
)
 
(13
)%
 
85,054

 
92,513

 
90,401

 
(30,098
)
 
(33
)%
Net interest income
202,942

 
200,142

 
2,800

 
1
 %
 
206,365

 
213,619

 
215,547

 
(12,605
)
 
(6
)%
Provision for credit losses
53,001

 

 
53,001

 
N/M

 
2,000

 
8,000

 
6,000

 
47,001

 
N/M

Net interest income after provision for credit losses
149,941

 
200,142

 
(50,201
)
 
(25
)%
 
204,365

 
205,619

 
209,547

 
(59,606
)
 
(28
)%
Noninterest income
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Insurance commissions and fees
22,608

 
19,701

 
2,907

 
15
 %
 
20,954

 
22,985

 
25,464

 
(2,856
)
 
(11
)%
Wealth management fees(a)
20,816

 
21,582

 
(766
)
 
(4
)%
 
21,015

 
20,691

 
20,180

 
636

 
3
 %
Service charges and deposit account fees
15,222

 
16,032

 
(810
)
 
(5
)%
 
16,561

 
15,426

 
15,115

 
107

 
1
 %
Card-based fees
9,597

 
9,906

 
(309
)
 
(3
)%
 
10,456

 
10,131

 
9,261

 
336

 
4
 %
Other fee-based revenue
4,497

 
4,696

 
(199
)
 
(4
)%
 
5,085

 
5,178

 
3,983

 
514

 
13
 %
Capital markets, net
7,935

 
7,647

 
288

 
4
 %
 
4,300

 
4,726

 
3,189

 
4,746

 
149
 %
Mortgage banking, net
6,143

 
6,760

 
(617
)
 
(9
)%
 
10,940

 
9,466

 
4,712

 
1,431

 
30
 %
Bank and corporate owned life insurance
3,094

 
3,364

 
(270
)
 
(8
)%
 
4,337

 
3,352

 
3,792

 
(698
)
 
(18
)%
Asset gains (losses), net(b)
(77
)
 
398

 
(475
)
 
N/M

 
877

 
871

 
567

 
(644
)
 
N/M

Investment securities gains (losses), net
6,118

 
26

 
6,092

 
N/M

 
3,788

 
463

 
1,680

 
4,438

 
N/M

Other
2,352

 
2,822

 
(470
)
 
(17
)%
 
2,537

 
2,547

 
3,260

 
(908
)
 
(28
)%
Total noninterest income
98,306

 
92,934

 
5,372

 
6
 %
 
100,850

 
95,837

 
91,202

 
7,104

 
8
 %
Noninterest expense
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Personnel
114,200

 
120,614

 
(6,414
)
 
(5
)%
 
123,170

 
123,228

 
120,050

 
(5,850
)
 
(5
)%
Technology
20,799

 
22,731

 
(1,932
)
 
(8
)%
 
20,572

 
20,114

 
19,012

 
1,787

 
9
 %
Occupancy
16,069

 
16,933

 
(864
)
 
(5
)%
 
15,164

 
13,830

 
16,472

 
(403
)
 
(2
)%
Business development and advertising
5,826

 
8,316

 
(2,490
)
 
(30
)%
 
7,991

 
6,658

 
6,636

 
(810
)
 
(12
)%
Equipment
5,439

 
5,970

 
(531
)
 
(9
)%
 
6,335

 
5,577

 
5,668

 
(229
)
 
(4
)%
Legal and professional
5,160

 
5,559

 
(399
)
 
(7
)%
 
5,724

 
4,668

 
3,951

 
1,209

 
31
 %
Loan and foreclosure costs
3,120

 
3,262

 
(142
)
 
(4
)%
 
1,638

 
1,814

 
2,146

 
974

 
45
 %
FDIC assessment
5,500

 
4,000

 
1,500

 
38
 %
 
4,000

 
4,500

 
3,750

 
1,750

 
47
 %
Other intangible amortization
2,814

 
2,712

 
102

 
4
 %
 
2,686

 
2,324

 
2,226

 
588

 
26
 %
Acquisition related costs(c)
1,721

 
1,325

 
396

 
30
 %
 
1,629

 
3,734

 
632

 
1,089

 
172
 %
Other
11,543

 
12,187

 
(644
)
 
(5
)%
 
12,021

 
11,331

 
11,128

 
415

 
4
 %
Total noninterest expense
192,191

 
203,609

 
(11,418
)
 
(6
)%
 
200,930

 
197,779

 
191,671

 
520

 
 %
Income before income taxes
56,056

 
89,467

 
(33,411
)
 
(37
)%
 
104,286

 
103,678

 
109,078

 
(53,022
)
 
(49
)%
Income tax expense
10,219

 
17,364

 
(7,145
)
 
(41
)%
 
20,947

 
19,017

 
22,392

 
(12,173
)
 
(54
)%
Net income
45,838

 
72,103

 
(26,266
)
 
(36
)%
 
83,339

 
84,661

 
86,686

 
(40,848
)
 
(47
)%
Preferred stock dividends
3,801

 
3,801

 

 
 %
 
3,801

 
3,801

 
3,801

 

 
 %
Net income available to common equity
$
42,037

 
$
68,303

 
$
(26,266
)
 
(38
)%
 
$
79,539

 
$
80,860

 
$
82,885

 
$
(40,848
)
 
(49
)%
Earnings per common share
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic
$
0.27

 
$
0.43

 
$
(0.16
)
 
(37
)%
 
$
0.50

 
$
0.49

 
$
0.50

 
$
(0.23
)
 
(46
)%
Diluted
$
0.27

 
$
0.43

 
$
(0.16
)
 
(37
)%
 
$
0.49

 
$
0.49

 
$
0.50

 
$
(0.23
)
 
(46
)%
Average common shares outstanding
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic
154,701

 
156,994

 
(2,293
)
 
(1
)%
 
159,126

 
162,180

 
163,928

 
(9,227
)
 
(6
)%
Diluted
155,619

 
158,472

 
(2,853
)
 
(2
)%
 
160,382

 
163,672

 
165,433

 
(9,814
)
 
(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.
(c) Includes Huntington branch and First Staunton acquisition related costs only.

Page 2




Associated Banc-Corp
Selected Quarterly Information
 
 
 
 
 
($ in millions except per share data; shares repurchased and outstanding in thousands)
1Q20
4Q19
3Q19
2Q19
1Q19
Per common share data
 
 
 
 
 
Dividends
$
0.18

$
0.18

$
0.17

$
0.17

$
0.17

Market value:
 
 
 
 
 
High
21.94

22.51

21.67

23.15

23.67

Low
10.85

18.96

18.64

19.81

19.77

Close
12.79

22.04

20.25

21.14

21.35

Book value
22.99

23.32

23.00

22.40

21.77

Tangible book value / share
14.64

15.28

15.05

14.59

14.21

Performance ratios (annualized)
 
 
 
 
 
Return on average assets
0.57
%
0.89
%
1.00
%
1.02
%
1.05
%
Effective tax rate
18.23
%
19.41
%
20.09
%
18.34
%
20.53
%
Dividend payout ratio(a)
66.67
%
41.86
%
34.00
%
34.69
%
34.00
%
Net interest margin
2.84
%
2.83
%
2.81
%
2.88
%
2.90
%
Selected trend information
 
 
 
 
 
Average full time equivalent employees(b)
4,631

4,696

4,782

4,666

4,660

Branch count
249

248

248

247

233

Assets under management, at market value(c)
$
10,454

$
12,104

$
11,604

$
11,475

$
11,192

Mortgage loans originated for sale during period
$
312

$
267

$
365

$
297

$
163

Mortgage loan settlements during period(d)
$
297

$
268

$
617

$
272

$
160

Mortgage portfolio loans transferred to held for sale during period
$
200

$

$
243

$

$

Mortgage portfolio serviced for others
$
8,545

$
8,485

$
8,688

$
8,504

$
8,543

Mortgage servicing rights, net / mortgage portfolio serviced for others
0.68
%
0.79
%
0.78
%
0.78
%
0.78
%
Shares repurchased during period
4,264

2,256

2,892

1,754

1,308

Shares outstanding, end of period
153,690

157,171

159,291

162,662

164,418

Selected quarterly ratios
 
 
 
 
 
Loans / deposits
94.95
%
95.97
%
93.17
%
91.99
%
90.66
%
Stockholders’ equity / assets
11.18
%
12.11
%
12.03
%
11.73
%
11.39
%
Risk-based capital(e)(f)
 
 
 
 
 
Total risk-weighted assets
$
25,866

$
24,296

$
24,313

$
24,466

$
24,121

Common equity Tier 1
$
2,421

$
2,481

$
2,482

$
2,481

$
2,485

Common equity Tier 1 capital ratio
9.36
%
10.21
%
10.21
%
10.14
%
10.30
%
Tier 1 capital ratio
10.35
%
11.26
%
11.26
%
11.19
%
11.36
%
Total capital ratio
12.56
%
13.21
%
13.26
%
13.25
%
13.48
%
Tier 1 leverage ratio
8.50
%
8.83
%
8.57
%
8.49
%
8.50
%
Mortgage banking, net
 
 
 
 
 
Mortgage servicing fees, net(g)
$
2,062

$
2,104

$
2,473

$
2,787

$
2,777

Gains (losses) and fair value adjustments on loans held for sale
$
9,756

$
4,542

$
4,043

$
6,704

$
2,056

Fair value adjustment on portfolio loans transferred to held for sale
$
3,423

$

$
4,456

$

$

Mortgage servicing rights (impairment) recovery
(9,098
)
114

(31
)
(24
)
(121
)
Mortgage banking, net
$
6,143

$
6,760

$
10,940

$
9,466

$
4,712

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)
During the third quarter of 2019, the Corporation sold approximately $240 million of portfolio mortgages that were transferred during the period, resulting in increased settlements.
(e)
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.
(f)
March 31, 2020 data is estimated.
(g)
Includes mortgage origination and servicing fees, net of mortgage servicing rights amortization.


Page 3




Associated Banc-Corp
Selected Asset Quality Information
 
 
 
 
 
 
($ in thousands)
 
Mar 31, 2020
Dec 31, 2019
Seql Qtr %
Change
 
Sep 30, 2019
Jun 30, 2019
Mar 31, 2019
Comp Qtr %
Change
Allowance for loan losses
 
 
 
 
 
 
 
 
 
Balance at beginning of period
 
$
201,371

$
214,425

(6
)%
 
$
233,659

$
235,081

$
238,023

(15
)%
Cumulative effect of ASU 2016-13 adoption (CECL)
 
112,457

N/A

 
 
N/A

N/A

N/A

 
January 1, 2020
 
313,828

N/A

 
 
N/A

N/A

N/A

 
Provision for loan losses
 
37,500

1,000

N/M

 
1,000

12,000

4,500

N/M

Allowance for PCD loans for bank acquisition
 
3,504

N/A

 
 
N/A

N/A

N/A

 
Charge offs
 
(19,308
)
(16,752
)
15
 %
 
(26,313
)
(15,761
)
(15,486
)
25
 %
Recoveries
 
2,268

2,699

(16
)%
 
6,079

2,339

8,044

(72
)%
Net charge offs
 
(17,040
)
(14,054
)
21
 %
 
(20,234
)
(13,421
)
(7,442
)
129
 %
Balance at end of period
 
$
337,793

$
201,371

68
 %
 
$
214,425

$
233,659

$
235,081

44
 %
Allowance for unfunded commitments
 
 
 
 
 
 
 
 
 
Balance at beginning of period
 
$
21,907

$
22,907

(4
)%
 
$
21,907

$
25,836

$
24,336

(10
)%
Cumulative effect of ASU 2016-13 adoption (CECL)
 
18,690

N/A

 
 
N/A

N/A

N/A

 
January 1, 2020
 
40,597

N/A

 
 
N/A

N/A

N/A

 
Provision for unfunded commitments
 
15,500

(1,000
)
N/M

 
1,000

(4,000
)
1,500

N/M

Amount recorded at acquisition
 
179


N/M

 

70


N/M

Balance at end of period
 
$
56,276

$
21,907

157
 %
 
$
22,907

$
21,907

$
25,836

118
 %
Allowance for credit losses on loans (ACLL)(a)
 
$
394,069

$
223,278

76
 %
 
$
237,331

$
255,566

$
260,917

51
 %
Provision for credit losses on loans(b)
 
$
53,000

$

N/M

 
$
2,000

$
8,000

$
6,000

N/M

($ in thousands)
 
Mar 31, 2020
Dec 31, 2019
 
 
Sep 30, 2019
Jun 30, 2019
Mar 31, 2019
 
Net (charge offs) recoveries
 
 
 
 
 
 
 
 
 
Commercial and industrial
 
$
(15,049
)
$
(11,917
)
26
 %
 
$
(19,918
)
$
(12,177
)
$
(7,428
)
103
 %
Commercial real estate—owner occupied
 


N/M

 
1,483

(104
)
1,193

(100
)%
Commercial and business lending
 
(15,048
)
(11,917
)
26
 %
 
(18,435
)
(12,281
)
(6,235
)
141
 %
Commercial real estate—investor
 


N/M

 
(3
)
3

31

(100
)%
Real estate construction
 
11

72

(85
)%
 
20

151


N/M

Commercial real estate lending
 
11

72

(85
)%
 
17

153

31

(65
)%
Total commercial
 
(15,037
)
(11,845
)
27
 %
 
(18,418
)
(12,127
)
(6,203
)
142
 %
Residential mortgage
 
(912
)
(1,415
)
(36
)%
 
(393
)
(365
)
(457
)
100
 %
Home equity
 
71

480

(85
)%
 
(275
)
239

309

(77
)%
Other consumer
 
(1,162
)
(1,274
)
(9
)%
 
(1,148
)
(1,169
)
(1,090
)
7
 %
Total consumer
 
(2,003
)
(2,208
)
(9
)%
 
(1,816
)
(1,294
)
(1,239
)
62
 %
Total net (charge offs) recoveries
 
$
(17,040
)
$
(14,054
)
21
 %
 
$
(20,234
)
$
(13,421
)
$
(7,442
)
129
 %
 
 
 
 
 
 
 
 
 
 
(In basis points)
 
Mar 31, 2020
Dec 31, 2019
 
 
Sep 30, 2019
Jun 30, 2019
Mar 31, 2019
 
Net charge offs to average loans (annualized)
 
 
 
 
 
 
 
 
 
Commercial and industrial
 
(81
)
(65
)
 
 
(104
)
(64
)
(40
)
 
Commercial real estate—owner occupied
 


 
 
63

(4
)
53

 
Commercial and business lending
 
(72
)
(58
)
 
 
(86
)
(57
)
(30
)
 
Real estate construction
 

2

 
 
1

5


 
Commercial real estate lending
 

1

 
 

1


 
Total commercial
 
(44
)
(35
)
 
 
(53
)
(35
)
(19
)
 
Residential mortgage
 
(4
)
(7
)
 
 
(2
)
(2
)
(2
)
 
Home equity
 
3

22

 
 
(12
)
11

14

 
Other consumer
 
(134
)
(145
)
 
 
(129
)
(132
)
(123
)
 
Total consumer
 
(8
)
(9
)
 
 
(8
)
(5
)
(5
)
 
Total net charge offs
 
(29
)
(24
)
 
 
(35
)
(23
)
(13
)
 
 
 
 
 
 
 
 
 
 
 
($ in thousands)
 
Mar 31, 2020
Dec 31, 2019
 
 
Sep 30, 2019
Jun 30, 2019
Mar 31, 2019
 
Credit Quality
 
 
 
 
 
 
 
 
 
Nonaccrual loans
 
$
136,717

$
118,380

15
 %
 
$
128,939

$
166,707

$
155,556

(12
)%
Other real estate owned (OREO)
 
22,530

21,101

7
 %
 
19,625

18,355

12,286

83
 %
Other nonperforming assets
 
6,004

6,004

 %
 
6,004



N/M

Total nonperforming assets
 
$
165,251

$
145,485

14
 %
 
$
154,568

$
185,062

$
167,843

(2
)%
 
 
 
 
 
 
 
 
 
 
Loans 90 or more days past due and still accruing
 
$
2,255

$
2,259

 %
 
$
1,986

$
2,088

$
2,218

2
 %
Allowance for loan losses to loans
 
N/A

0.88
%
 
 
0.94
%
1.00
%
1.02
%
 
Allowance for credit losses to loans
 
1.62
%
0.98
%
 
 
1.04
%
1.10
%
1.13
%
 
Allowance for loan losses to nonaccrual loans
 
N/A

170.10
%
 
 
166.30
%
140.16
%
151.12
%
 
Allowance for credit losses to nonaccrual loans
 
288.24
%
188.61
%
 
 
184.07
%
153.30
%
167.73
%
 
Nonaccrual loans to total loans
 
0.56
%
0.52
%
 
 
0.57
%
0.72
%
0.67
%
 
Nonperforming assets to total loans plus OREO
 
0.68
%
0.64
%
 
 
0.68
%
0.80
%
0.72
%
 
Nonperforming assets to total assets
 
0.49
%
0.45
%
 
 
0.47
%
0.56
%
0.50
%
 
Year-to-date net charge offs to average loans (annualized)
 
0.29
%
0.24
%
 
 
0.24
%
0.18
%
0.13
%
 
(a)
Excludes approximately $61,000 of allowance for held to maturity investment securities
(b)
Excludes less than $1,000 of provision for held to maturity investment securities

Page 4




Associated Banc-Corp
Selected Asset Quality Information (continued)
(In thousands)
 
Mar 31, 2020
Dec 31, 2019
Seql Qtr %
Change

Sep 30, 2019
Jun 30, 2019
Mar 31, 2019
Comp Qtr %
Change
Nonaccrual loans
 
 
 
 
 
 
 
 
 
Commercial and industrial
 
$
58,854

$
46,312

27
 %
 
$
56,536

$
84,151

$
73,379

(20
)%
Commercial real estate—owner occupied
 
1,838

67

N/M

 
68

571

890

107
 %
Commercial and business lending
 
60,692

46,380

31
 %
 
56,604

84,722

74,269

(18
)%
Commercial real estate—investor
 
1,091

4,409

(75
)%
 
4,800

1,485

776

41
 %
Real estate construction
 
486

493

(1
)%
 
542

427

739

(34
)%
Commercial real estate lending
 
1,577

4,902

(68
)%
 
5,342

1,912

1,516

4
 %
Total commercial
 
62,269

51,282

21
 %
 
61,946

86,634

75,784

(18
)%
Residential mortgage
 
64,855

57,844

12
 %
 
57,056

68,166

67,323

(4
)%
Home equity
 
9,378

9,104

3
 %
 
9,828

11,835

12,300

(24
)%
Other consumer
 
215

152

41
 %
 
109

72

149

44
 %
Total consumer
 
74,448

67,099

11
 %
 
66,993

80,073

79,772

(7
)%
Total nonaccrual loans
 
$
136,717

$
118,380

15
 %
 
$
128,939

$
166,707

$
155,556

(12
)%
 
 
 
 
 
 
 
 
 
 
 
 
Mar 31, 2020
Dec 31, 2019
Seql Qtr %
Change
 
Sep 30, 2019
Jun 30, 2019
Mar 31, 2019
Comp Qtr %
Change
Restructured loans (accruing)(a)
 
 
 
 
 
 
 
 
 
Commercial and industrial
 
$
16,056

$
16,678

(4
)%
 
$
15,398

$
16,850

$
15,443

4
 %
Commercial real estate—owner occupied
 
2,091

1,676

25
 %
 
1,912

1,970

2,026

3
 %
Commercial and business lending
 
18,146

18,353

(1
)%
 
17,311

18,820

17,469

4
 %
Commercial real estate—investor
 
281

293

(4
)%
 
304

315

1,700

(83
)%
Real estate construction
 
339

298

14
 %
 
227

232

311

9
 %
Commercial real estate lending
 
620

591

5
 %
 
531

547

2,011

(69
)%
Total commercial
 
18,767

18,944

(1
)%
 
17,842

19,367

19,480

(4
)%
Residential mortgage
 
4,654

3,955

18
 %
 
3,228

17,645

18,226

(74
)%
Home equity
 
1,719

1,896

(9
)%
 
2,017

7,247

7,688

(78
)%
Other consumer
 
1,245

1,246

 %
 
1,243

1,222

1,154

8
 %
Total consumer
 
7,618

7,097

7
 %
 
6,487

26,114

27,068

(72
)%
Total restructured loans (accruing)
 
$
26,384

$
26,041

1
 %
 
$
24,329

$
45,481

$
46,548

(43
)%
Nonaccrual restructured loans (included in nonaccrual loans)
 
$
24,204

$
22,494

8
 %
 
$
16,293

$
24,332

$
24,172

 %
 
 
Mar 31, 2020
Dec 31, 2019
Seql Qtr %
Change