GREEN BAY, Wis., Jan. 21, 2016 /PRNewswire/ -- Associated Banc-Corp (NYSE: ASB) today reported net income available to common shareholders of $181 million, or $1.19 per common share, for the year ended December 31, 2015. This compares to net income available to common shareholders of $186 million, or $1.16 per common share, for the year ended December 31, 2014.
For the quarter ended December 31, 2015, the Company reported earnings of $0.27 per common share. This compares to $0.31 per common share for the quarter ended December 31, 2014.
"In 2015, we reached record levels of loans and deposits. We are particularly pleased by our year over year deposit growth in a competitive environment and transforming industry. In addition, our successful insurance business acquisition drove year over year fee income growth of 13%. We achieved these results with essentially flat expenses, when you adjust for the acquisition," said President and CEO Philip B. Flynn. "Over the past five years, we have rebuilt and diversified our loan portfolio. We grew several specialized commercial lending businesses, including an oil and gas business focused entirely on reserve secured lending. Despite the recent energy price volatility, we remain committed to the energy business and we will continue to proactively manage the risk of our portfolio throughout this current cycle. As we enter 2016, we remain focused on enhancing our customer solutions and driving shareholder value."
2015 HIGHLIGHTS
-- Average loans grew $1.4 billion, or 8% from a year ago to $18.3 billion -- Commercial lending accounted for 55% of average loan growth -- Average deposits grew $2.3 billion, or 13% from a year ago to $19.9 billion -- Net interest income of $676 million decreased $5 million, or 1% from last year -- Net interest margin of 2.84% declined from 3.08% in 2014 -- Noninterest expenses of $697 million increased $18 million, or 3% from last year -- Substantially all the increase was attributable to the insurance business acquisition -- During the year, the Company repurchased $93 million, or approximately 5 million shares, of common stock at an average cost of $18.73 per share -- Return on average common equity Tier 1 was 9.9% and return on average tangible common equity was 10.0% -- Total dividends per common share of $0.41 were up 11% from last year -- Capital ratios remain strong with a common equity tier 1 ratio of 9.5% at year end
FOURTH QUARTER AND 2015 FINANCIAL RESULTS
Loans
Full year 2015 average loans of $18.3 billion were up $1.4 billion, or 8% from 2014. Total commercial lending average balances grew $772 million, or 7% from the prior year. Commercial and business lending average balances grew $540 million, or 8% from 2014. Commercial real estate lending average balances grew $232 million, or 6% from 2014. Residential lending average balances increased $675 million, or 14% from the prior year.
Fourth quarter 2015 average loans of $18.5 billion increased $90 million, or 0.5% from the third quarter and increased $1.2 billion, or 7% from the year ago quarter. Total commercial lending average balances decreased $84 million, or 1% from the prior quarter and increased $479 million, or 4% from the year ago quarter. Commercial and business lending average balances declined $198 million, or 3% from the third quarter and was attributed to lower general commercial and mortgage warehouse activity. Commercial and business lending average balances were up $171 million, or 3% from the year ago quarter. Commercial real estate lending average balances grew $113 million, or 3% from the third quarter and are up $307 million, or 8% from the year ago quarter. Residential lending average balances grew $187 million, or 3% from the prior quarter and grew $754 million, or 15% from the year ago quarter.
For the period ended December 31, 2015, total loans of $18.7 billion were up $190 million, or 1% from September 30, 2015, and were up $1.1 billion, or 6% from December 31, 2014. Total commercial lending was up $103 million, or 1% from the prior quarter end, and was up $474 million, or 4% from the prior year end. Total consumer loans were up $87 million or 1% from the prior quarter end and were up $646 million, or 10% from the prior year end.
For the period ended December 31, 2015, the Company's oil and gas exposure was $1 billion of commitments with $752 million of outstandings, representing approximately 4% of the loan portfolio. The loans are all reserve secured. The portfolio was comprised of approximately 50 credits made primarily to small and mid-sized companies.
Deposits
Full year 2015 average deposits of $19.9 billion were up $2.3 billion, or 13% from 2014. Noninterest-bearing demand deposits and interest-bearing demand deposits average balances were up $329 million and $217 million, respectively, from the prior year. Money market average balances were up $1.6 billion, or 21% from 2014. Savings and time deposits average balances had modest growth in 2015.
Fourth quarter 2015 average deposits of $20.6 billion were up $322 million, or 2% compared to the third quarter and increased $2.1 billion, or 11% from the year ago quarter. Noninterest-bearing demand deposits average balances increased $394 million, or 9% from the third quarter and were up $601 million, or 14% from the year ago quarter. Interest-bearing demand deposits average balances decreased $49 million, or 2% from the third quarter, and were modestly up from the year ago quarter. Money market average balances were slightly down compared to the third quarter, and up $1.3 billion, or 16% from the year ago quarter. Average savings balances were flat from the prior quarter and up $94 million, or 7% from the year ago quarter. Average time deposits were down $20 million, or 1% from the third quarter and up $55 million, or 4% from the year ago quarter.
For the period ended December 31, 2015, total deposits of $21.0 billion were up $449 million, or 2% from September 30, 2015, and were up $2.2 billion, or 12% from December 31, 2014. Noninterest-bearing demand deposit balances were up $905 million, or 19% from the prior quarter end and up $1.1 billion, or 23% from the prior year end. Money market balances decreased $414 million, or 4% from the prior quarter end and up $778 million, or 9% from December 31, 2014. Interest-bearing demand deposits were up $29 million, or 1% from the prior quarter end and up $318 million, or 10% from the prior year end. Savings accounts were down $12 million, or 1% from prior quarter end and up $99 million, or 8% from the prior year end.
Net Interest Income and Net Interest Margin
Net interest income of $676 million for 2015 was down $5 million, or 1% from 2014. Fourth quarter net interest income of $171 million increased $1 million, or 1% from the prior quarter and was down $3 million, or 2% compared to the year ago quarter.
Net interest margin of 2.84% for 2015 reflected 24 basis points of compression from 2014. Fourth quarter net interest margin of 2.82% was flat to the prior quarter and 22 basis points lower than the year ago quarter. The majority of the year over year decline was attributed to commercial loan yield compression. In addition, funding costs increased 6 basis points from the year ago quarter, primarily related to the carrying cost of the Company's $500 million of senior and subordinated debt issued in November 2014.
Fourth quarter total earning assets yield of 3.14% was up 1 basis point from the prior quarter. Asset yield compression was offset by $2 million in interest recoveries and deferred fees in the fourth quarter. The net interest margin impact of this activity was approximately 3 basis points for the quarter.
Total interest-bearing funding costs of 0.41% in the fourth quarter were up 1 basis point from the prior quarter.
Noninterest Income
Noninterest income of $328 million for 2015 was up $38 million, or 13% compared to 2014. Insurance commissions were up $31 million, or 70% from the prior year due to the insurance business acquisition in the first quarter of 2015. Mortgage banking income increased $11 million from the prior year due to higher volumes and margins.
Fourth quarter noninterest income was $82 million, up $2 million, or 2% from the third quarter and up $12 million, or 18% from the year ago quarter. Mortgage banking income increased $2 million from the third quarter, primarily driven by higher volumes and positive interest rate marks. Insurance commissions were modestly up from the third quarter, and up $7 million from the year ago quarter. Capital market fees increased $1 million from the prior quarter due to increased customer derivatives activity. Fourth quarter net investment securities gains of $4 million were primarily related to the continued restructuring of the Company's investment portfolio from Fannie Mae and Freddie Mac mortgage backed securities into Ginnie Mae securities.
Noninterest Expense
Total noninterest expense of $697 million in 2015 was up $18 million, or 3% compared to 2014, and was substantially attributable to increased personnel expense related to the insurance business acquisition. Technology expense increased $5 million, or 9% from the prior year. Year over year increases in occupancy and FDIC expense were offset by decreases in several categories including foreclosure/OREO and equipment expense.
Total noninterest expense was $175 million in the fourth quarter, up $3 million, or 2% from both the third quarter and the year ago quarter. Personnel expense decreased $1 million in the fourth quarter due to reduced incentive compensation and lower staffing levels; partially offset by increased health and benefits costs. Business development and advertising increased $2 million from the third quarter driven by the Company's fall marketing campaign. FDIC expense increased $2 million in the fourth quarter related to an increase in FDIC risk premiums. Occupancy was higher in the fourth quarter due to a $2 million expense related to the consolidation of 10 branches during the quarter. Technology, equipment, and legal fees had declines in the fourth quarter.
Taxes
2015 income taxes of $81 million were down $4 million from 2014. The effective tax rate for 2015 was 30% compared to 31% last year.
Credit
Net charge offs of $8 million for the fourth quarter were flat to the third quarter, and up $3 million from the year ago quarter. Potential problem loans increased to $302 million from $264 million in the third quarter, and increased from $190 million in the year ago quarter, primarily attributed to migration within the oil and gas portfolio.
The fourth quarter provision for credit losses was $20 million, up $12 million from the prior quarter, due primarily to an increase in reserves related to energy exposure, driven by the low and volatile price of oil and gas and the resulting downward migration in the portfolio. The allowance for loan losses related to the Company's energy portfolio was $42 million as of December 31, 2015, up from $29 million at the prior quarter end, and up from $17 million at the prior year end. The additional reserves increased the Company's energy reserve as a percent of its energy loans to 5.6% at year end, compared to 3.8% at the prior quarter end, and 2.3% at the prior year end.
Nonaccrual loans of $178 million were up $31 million in the fourth quarter, and were modestly higher than a year ago quarter, primarily attributable to the downgrade of two commercial loans. The nonaccrual loans to total loans ratio increased to 0.95% in the fourth quarter, up from 0.80% in the prior quarter, and down from 1.01% in the year ago quarter.
The Company's allowance for loan losses was $274 million, up $12 million from the third quarter, and up $8 million from the year ago quarter. The allowance for loan losses to total loans ratio increased to 1.47% in the fourth quarter, from 1.42% in the third quarter.
Capital
The Company's capital position remains strong, with a common equity Tier 1 ratio of 9.5% at December 31, 2015. The Company's capital ratios continue to be in excess of the Basel III "well-capitalized" regulatory benchmarks on a fully phased in basis.
FOURTH QUARTER 2015 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 21, 2016. Interested parties can listen to the call live on the internet through the investor relations section of the company's website, http://investor.associatedbank.com or by dialing 877-407-8037. The slide presentation for the call will be available on the company's website just prior to the call. The number for international callers is 201-689-8037. Participants should ask the operator for the Associated Banc-Corp fourth quarter 2015 earnings call.
An audio archive of the webcast will be available on the company's website at http://investor.associatedbank.com approximately fifteen minutes after the call is over.
ABOUT ASSOCIATED BANC-CORP
Associated Banc-Corp (NYSE: ASB) has total assets of over $27 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 over 200 banking locations serving more than 100 communities throughout Wisconsin, Illinois and Minnesota, and commercial financial services in Indiana, Michigan, Missouri, Ohio and Texas. Associated Bank, N.A. is an Equal Housing Lender, Equal Opportunity Lender and Member FDIC. More information about Associated Banc-Corp is available at www.associatedbank.com.
FORWARD LOOKING STATEMENTS
Statements made in this document which are not purely historical are forward-looking statements, as defined in the Private Securities Litigation Reform Act of 1995. This includes any statements regarding management's plans, objectives, or goals for future operations, products or services, and forecasts of its revenues, earnings, or other measures of performance. Such forward-looking statements may be identified by the use of words such as "believe", "expect", "anticipate", "plan", "estimate", "should", "will", "intend", "outlook", or similar expressions. Forward-looking statements are based on current management expectations and, by their nature, are subject to risks and uncertainties. Actual results may differ materially from those contained in the forward-looking statements. Factors which may cause actual results to differ materially from those contained in such forward-looking statements include those identified in the Company's most recent Form 10-K and subsequent SEC filings. Such factors are incorporated herein by reference.
NON-GAAP FINANCIAL MEASURES
This press release contains references to measures which are not defined in generally accepted accounting principles ("GAAP"), including "efficiency ratio" and "common equity Tier 1." Information concerning these non-GAAP financial measures can be found in the attached tables.
Investor Contact:
Teresa Gutierrez, Senior Vice President, Director of Investor Relations
920-491-7059
Media Contact:
Cliff Bowers, Senior Vice President, Director of Public Relations
920-491-7542
Associated Banc-Corp Consolidated Balance Sheets (Unaudited) (in thousands) Dec 31, 2015 Sep 30, 2015 Seql Qtr $ Change Jun 30, 2015 Mar 31, 2015 Dec 31, 2014 Comp Qtr $ Change ------------- ------------ ------------ ----------------- ------------ ------------ ------------ ----------------- Assets Cash and due from banks $374,921 $303,701 $71,220 $375,369 $355,541 $444,113 $(69,192) Interest-bearing deposits in other financial institutions 79,764 70,023 9,741 101,573 488,426 571,924 (492,160) Federal funds sold and securities purchased under agreements to resell 19,000 36,490 (17,490) 39,850 3,380 16,030 2,970 Securities held to maturity, at amortized cost 1,168,230 604,799 563,431 532,382 438,047 404,455 763,775 Securities available for sale, at fair value 4,967,414 5,403,656 (436,242) 5,407,998 5,358,310 5,396,812 (429,398) Federal Home Loan Bank and Federal Reserve Bank stocks, at cost 147,240 160,871 (13,631) 160,765 189,222 189,107 (41,867) Loans held for sale 124,915 105,144 19,771 151,146 159,963 154,935 (30,020) Loans 18,714,343 18,524,773 189,570 18,303,252 17,979,032 17,593,846 1,120,497 Allowance for loan losses (274,264) (262,536) (11,728) (261,538) (265,268) (266,302) (7,962) -------- -------- ------- -------- -------- -------- ------ Loans, net 18,440,079 18,262,237 177,842 18,041,714 17,713,764 17,327,544 1,112,535 Premises and equipment, net 267,606 271,119 (3,513) 274,338 274,591 274,688 (7,082) Goodwill 968,844 968,844 - 968,844 968,774 929,168 39,676 Mortgage servicing rights 61,341 61,402 (61) 61,192 59,733 60,145 1,196 Other intangible assets 16,458 16,978 (520) 17,863 18,251 7,437 9,021 Trading assets 32,192 43,752 (11,560) 35,386 42,336 35,163 (2,971) Other assets 1,047,017 1,158,227 (111,210) 1,016,725 998,402 1,010,253 36,764 --------- --------- -------- --------- ------- --------- ------ Total assets $27,715,021 $27,467,243 $247,778 $27,185,145 $27,068,740 $26,821,774 $893,247 =========== =========== ======== =========== =========== =========== ======== Liabilities and Stockholders' Equity Noninterest-bearing demand deposits $5,562,466 $4,657,261 $905,205 $4,332,171 $4,570,872 $4,505,272 $1,057,194 Interest-bearing deposits 15,445,199 15,901,134 (455,935) 14,937,392 15,280,720 14,258,232 1,186,967 ---------- ---------- -------- ---------- ---------- ---------- --------- Total deposits 21,007,665 20,558,395 449,270 19,269,563 19,851,592 18,763,504 2,244,161 Federal funds purchased and securities sold under agreements to repurchase 431,438 702,569 (271,131) 689,699 587,272 493,991 (62,553) Other short-term funding 402,978 319,766 83,212 905,837 75,265 574,297 (171,319) Long-term funding 2,679,350 2,679,542 (192) 3,179,734 3,429,925 3,930,117 (1,250,767) Trading liabilities 33,430 45,817 (12,387) 37,169 44,730 37,329 (3,899) Accrued expenses and other liabilities 222,914 207,357 15,557 198,752 197,818 222,285 629 ------- ------- ------ ------- ------- ------- --- Total liabilities 24,777,775 24,513,446 264,329 24,280,754 24,186,602 24,021,523 756,252 Stockholders' Equity Preferred equity 121,379 121,379 - 122,015 59,727 59,727 61,652 Common stock 1,642 1,642 - 1,642 1,674 1,665 (23) Surplus 1,458,522 1,455,034 3,488 1,450,200 1,505,170 1,484,933 (26,411) Retained earnings 1,593,239 1,570,199 23,040 1,538,684 1,509,967 1,497,818 95,421 Accumulated other comprehensive income (loss) (32,616) 15,376 (47,992) 2,594 24,800 (4,850) (27,766) Treasury stock (204,920) (209,833) 4,913 (210,744) (219,200) (239,042) 34,122 -------- -------- ----- -------- -------- -------- ------ Total stockholders' equity 2,937,246 2,953,797 (16,551) 2,904,391 2,882,138 2,800,251 136,995 --------- --------- ------- --------- --------- --------- ------- Total liabilities and stockholders' equity $27,715,021 $27,467,243 $247,778 $27,185,145 $27,068,740 $26,821,774 $893,247 =========== =========== ======== =========== =========== =========== ========
Associated Banc-Corp Consolidated Statements of Income (Unaudited) Comp Qtr Comp YTD (in thousands, except per share amounts) 4Q15 4Q14 $ Change % Change YTD YTD $ Change % Change Dec 2015 Dec 2014 --- -------- -------- Interest Income Interest and fees on loans $155,602 $156,536 $(934) (0.6)% $615,627 $598,582 $17,045 2.8% Interest and dividends on investment securities: Taxable 26,395 25,061 1,334 5.3% 100,292 102,464 (2,172) (2.1)% Tax-exempt 7,783 7,580 203 2.7% 31,152 29,064 2,088 7.2% Other interest 1,639 1,821 (182) (10.0)% 6,591 6,635 (44) (0.7)% ----- ----- ---- ----- ----- --- Total interest income 191,419 190,998 421 0.2% 753,662 736,745 16,917 2.3% Interest Expense Interest on deposits 8,844 7,319 1,525 20.8% 33,125 26,294 6,831 26.0% Interest on Federal funds purchased and securities sold under agreements to repurchase 229 218 11 5.0% 943 1,219 (276) (22.6)% Interest on other short-term funding 186 156 30 19.2% 465 785 (320) (40.8)% Interest on long-term funding 10,692 8,644 2,048 23.7% 42,851 27,480 15,371 55.9% ------ ----- ----- ------ ------ ------ Total interest expense 19,951 16,337 3,614 22.1% 77,384 55,778 21,606 38.7% ------ ------ ----- ------ ------ ------ Net Interest Income 171,468 174,661 (3,193) (1.8)% 676,278 680,967 (4,689) (0.7)% Provision for credit losses 20,000 5,000 15,000 300.0% 37,500 16,000 21,500 134.4% ------ ----- ------ ------ ------ ------ Net interest income after provision for credit losses 151,468 169,661 (18,193) (10.7)% 638,778 664,967 (26,189) (3.9)% Noninterest Income Trust service fees 11,965 12,457 (492) (3.9)% 48,840 48,403 437 0.9% Service charges on deposit accounts 16,577 17,006 (429) (2.5)% 65,471 68,779 (3,308) (4.8)% Card-based and other nondeposit fees 12,694 12,019 675 5.6% 51,325 49,512 1,813 3.7% Insurance commissions 17,997 10,593 7,404 69.9% 75,363 44,421 30,942 69.7% Brokerage and annuity commissions 3,694 3,496 198 5.7% 15,378 16,089 (711) (4.4)% ----- ----- --- ------ ------ ---- Total core fee-based revenue 62,927 55,571 7,356 13.2% 256,377 227,204 29,173 12.8% Mortgage banking, net 8,271 2,928 5,343 182.5% 32,263 21,320 10,943 51.3% Capital market fees, net 3,423 2,613 810 31.0% 10,752 9,973 779 7.8% Bank owned life insurance income 2,092 2,739 (647) (23.6)% 9,796 13,576 (3,780) (27.8)% Asset gains (losses), net (1,492) 3,727 (5,219) (140.0)% 1,592 10,288 (8,696) (84.5)% Investment securities gains, net 4,095 25 4,070 N/M 8,133 494 7,639 N/M Other 2,580 2,040 540 26.5% 9,496 7,464 2,032 27.2% ----- ----- --- ----- ----- ----- Total noninterest income 81,896 69,643 12,253 17.6% 328,409 290,319 38,090 13.1% Noninterest Expense Personnel expense 100,469 97,258 3,211 3.3% 404,741 390,399 14,342 3.7% Occupancy 14,718 14,589 129 0.9% 60,896 57,677 3,219 5.6% Equipment 5,695 6,148 (453) (7.4)% 23,209 24,784 (1,575) (6.4)% Technology 13,953 14,581 (628) (4.3)% 60,613 55,472 5,141 9.3% Business development and advertising 7,652 8,538 (886) (10.4)% 25,772 26,144 (372) (1.4)% Other intangible amortization 520 775 (255) (32.9)% 3,094 3,747 (653) (17.4)% Loan expense 4,120 3,646 474 13.0% 14,102 13,866 236 1.7% Legal and professional fees 3,963 4,257 (294) (6.9)% 17,052 17,485 (433) (2.5)% Foreclosure / OREO expense 1,270 1,168 102 8.7% 4,494 6,722 (2,228) (33.1)% FDIC expense 7,500 6,956 544 7.8% 26,000 23,761 2,239 9.4% Other 15,032 13,889 1,143 8.2% 57,426 59,184 (1,758) (3.0)% ------ ------ ----- ------ ------ ------ Total noninterest expense 174,892 171,805 3,087 1.8% 697,399 679,241 18,158 2.7% ------- ------- ----- ------- ------- ------ Income before income taxes 58,472 67,499 (9,027) (13.4)% 269,788 276,045 (6,257) (2.3)% Income tax expense 15,681 18,761 (3,080) (16.4)% 81,487 85,536 (4,049) (4.7)% ------ ------ ------ ------ ------ ------ Net income 42,791 48,738 (5,947) (12.2)% 188,301 190,509 (2,208) (1.2)% Preferred stock dividends 2,198 1,225 973 79.4% 7,155 5,002 2,153 43.0% ----- ----- ----- ----- Net income available to common equity $40,593 $47,513 $(6,920) (14.6)% $181,146 $185,507 $(4,361) (2.4)% ======= ======= ======= ======== ======== ======= Earnings Per Common Share: Basic $0.27 $0.31 $(0.04) (12.9)% $1.20 $1.17 $0.03 2.6% Diluted $0.27 $0.31 $(0.04) (12.9)% $1.19 $1.16 $0.03 2.6% Average Common Shares Outstanding: Basic 148,834 151,931 (3,097) (2.0)% 149,350 157,286 (7,936) (5.0)% Diluted 150,163 153,083 (2,920) (1.9)% 150,603 158,254 (7,651) (4.8)% N/M = Not meaningful
Associated Banc-Corp Consolidated Statements of Income (Unaudited)-Quarterly Trend Seql Qtr Comp Qtr (in thousands, except per share amounts) 4Q15 3Q15 $ Change % Change 2Q15 1Q15 4Q14 $ Change % Change ------------------------------- ---- ---- -------- -------- ---- ---- ---- -------- -------- Interest Income Interest and fees on loans $155,602 $155,663 $(61) - % $152,417 $151,945 $156,536 $(934) (0.6)% Interest and dividends on investment securities: Taxable 26,395 24,937 1,458 5.8% 23,868 25,092 25,061 1,334 5.3% Tax-exempt 7,783 7,917 (134) (1.7)% 7,565 7,887 7,580 203 2.7% Other interest 1,639 1,489 150 10.1% 1,771 1,692 1,821 (182) (10.0)% ----- ----- --- ----- ----- ----- ---- Total interest income 191,419 190,006 1,413 0.7% 185,621 186,616 190,998 421 0.2% Interest Expense Interest on deposits 8,844 8,521 323 3.8% 8,141 7,619 7,319 1,525 20.8% Interest on Federal funds purchased and securities sold under agreements to repurchase 229 248 (19) (7.7)% 235 231 218 11 5.0% Interest on other short-term funding 186 83 103 124.1% 115 81 156 30 19.2% Interest on long-term funding 10,692 10,645 47 0.4% 10,642 10,872 8,644 2,048 23.7% ------ ------ --- ------ ------ ----- ----- Total interest expense 19,951 19,497 454 2.3% 19,133 18,803 16,337 3,614 22.1% ------ ------ --- ------ ------ ------ ----- Net Interest Income 171,468 170,509 959 0.6% 166,488 167,813 174,661 (3,193) (1.8)% Provision for credit losses 20,000 8,000 12,000 150.0% 5,000 4,500 5,000 15,000 300.0% ------ ----- ------ ----- ----- ----- ------ Net interest income after provision for credit losses 151,468 162,509 (11,041) (6.8)% 161,488 163,313 169,661 (18,193) (10.7)% Noninterest Income Trust service fees 11,965 12,273 (308) (2.5)% 12,515 12,087 12,457 (492) (3.9)% Service charges on deposit accounts 16,577 17,385 (808) (4.6)% 15,703 15,806 17,006 (429) (2.5)% Card-based and other nondeposit fees 12,694 12,618 76 0.6% 13,597 12,416 12,019 675 5.6% Insurance commissions 17,997 17,561 436 2.5% 20,077 19,728 10,593 7,404 69.9% Brokerage and annuity commissions 3,694 3,809 (115) (3.0)% 4,192 3,683 3,496 198 5.7% ----- ----- ---- ----- ----- ----- --- Total core fee-based revenue 62,927 63,646 (719) (1.1)% 66,084 63,720 55,571 7,356 13.2% Mortgage banking, net 8,271 6,643 1,628 24.5% 9,941 7,408 2,928 5,343 182.5% Capital market fees, net 3,423 2,170 1,253 57.7% 2,692 2,467 2,613 810 31.0% Bank owned life insurance income 2,092 2,448 (356) (14.5)% 2,381 2,875 2,739 (647) (23.6)% Asset gains (losses), net (1,492) 95 (1,587) N/M 1,893 1,096 3,727 (5,219) (140.0)% Investment securities gains, net 4,095 2,796 1,299 46.5% 1,242 - 25 4,070 N/M Other 2,580 2,118 462 21.8% 2,288 2,510 2,040 540 26.5% ----- ----- --- ----- ----- ----- --- Total noninterest income 81,896 79,916 1,980 2.5% 86,521 80,076 69,643 12,253 17.6% Noninterest Expense Personnel expense 100,469 101,134 (665) (0.7)% 102,986 100,152 97,258 3,211 3.3% Occupancy 14,718 14,187 531 3.7% 14,308 17,683 14,589 129 0.9% Equipment 5,695 6,003 (308) (5.1)% 5,739 5,772 6,148 (453) (7.4)% Technology 13,953 14,748 (795) (5.4)% 16,354 15,558 14,581 (628) (4.3)% Business development and advertising 7,652 5,964 1,688 28.3% 6,829 5,327 8,538 (886) (10.4)% Other intangible amortization 520 885 (365) (41.2)% 888 801 775 (255) (32.9)% Loan expense 4,120 3,305 815 24.7% 3,681 2,996 3,646 474 13.0% Legal and professional fees 3,963 4,207 (244) (5.8)% 4,344 4,538 4,257 (294) (6.9)% Foreclosure / OREO expense 1,270 496 774 156.0% 1,303 1,425 1,168 102 8.7% FDIC expense 7,500 6,000 1,500 25.0% 6,000 6,500 6,956 544 7.8% Other 15,032 14,507 525 3.6% 14,384 13,503 13,889 1,143 8.2% ------ ------ --- ------ ------ ------ ----- Total noninterest expense 174,892 171,436 3,456 2.0% 176,816 174,255 171,805 3,087 1.8% ------- ------- ----- ------- ------- ------- ----- Income before income taxes 58,472 70,989 (12,517) (17.6)% 71,193 69,134 67,499 (9,027) (13.4)% Income tax expense 15,681 21,551 (5,870) (27.2)% 21,793 22,462 18,761 (3,080) (16.4)% ------ ------ ------ ------ ------ ------ ------ Net income 42,791 49,438 (6,647) (13.4)% 49,400 46,672 48,738 (5,947) (12.2)% Preferred stock dividends 2,198 2,184 14 0.6% 1,545 1,228 1,225 973 79.4% ----- ----- --- ----- ----- ----- --- Net income available to common equity $40,593 $47,254 $(6,661) (14.1)% $47,855 $45,444 $47,513 $(6,920) (14.6)% ======= ======= ======= ======= ======= ======= ======= Earnings Per Common Share: Basic $0.27 $0.31 $(0.04) (12.9)% $0.32 $0.30 $0.31 $(0.04) (12.9)% Diluted $0.27 $0.31 $(0.04) (12.9)% $0.31 $0.30 $0.31 $(0.04) (12.9)% Average Common Shares Outstanding: Basic 148,834 148,614 220 0.1% 149,903 150,070 151,931 (3,097) (2.0)% Diluted 150,163 149,799 364 0.2% 151,108 151,164 153,083 (2,920) (1.9)% N/M = Not meaningful
Associated Banc-Corp Selected Quarterly Information ($ in millions, except per share, full time YTD 2015 YTD 2014 4Q15 3Q15 2Q15 1Q15 4Q14 equivalent employee data and branch count) Per Common Share Data Dividends $0.41 $0.37 $0.11 $0.10 $0.10 $0.10 $0.10 Market value: High 20.84 19.37 20.61 20.55 20.84 19.07 19.37 Low 16.62 15.58 17.98 17.17 18.50 16.62 16.75 Close 18.75 18.63 18.75 17.97 20.27 18.60 18.63 Book value 18.62 18.32 18.62 18.77 18.44 18.38 18.32 Tangible book value / share $12.10 $12.06 $12.10 $12.23 $11.90 $11.95 $12.06 ------ ------ ------ ------ ------ ------ ------ Performance Ratios (annualized) Return on average assets 0.70% 0.76% 0.62% 0.72% 0.74% 0.71% 0.75% Effective tax rate 30.20% 30.99% 26.82% 30.36% 30.61% 32.49% 27.79% Dividend payout ratio (1) 34.17% 31.62% 40.74% 32.26% 31.25% 33.33% 32.26% ----- ----- ----- ----- ----- ----- ----- Selected Trend Information Average full time equivalent employees 4,421 4,406 4,378 4,421 4,465 4,422 4,320 Branch count 215 225 228 227 226 Trust assets under management, at market value $7,729 $7,626 $8,068 $8,138 $7,993 Mortgage loans originated for sale during period $317 $292 $351 $268 $292 Mortgage portfolio serviced for others $7,915 $7,907 $7,898 $7,920 $7,999 Mortgage servicing rights, net / portfolio serviced for others 0.77% 0.78% 0.77% 0.75% 0.75% ---- ---- ---- ---- ---- Selected Quarterly Ratios Loans / deposits 89.08% 90.11% 94.99% 90.57% 93.77% Stockholders' equity / assets 10.60% 10.75% 10.68% 10.65% 10.44% Shares outstanding, end of period 151,239 150,928 150,862 153,567 149,560
(1) Ratio is based upon basic earnings per common share.
Associated Banc-Corp Selected Asset Quality Information (in thousands) Dec 31, 2015 Sep 30, 2015 Seql Qtr % Jun 30, 2015 Mar 31, 2015 Dec 31, 2014 Comp Qtr % Change Change ------------ ------------ ----------- ------------ ------------ ------------ ----------- Allowance for Loan Losses Beginning balance $262,536 $261,538 0.4% $265,268 $266,302 $266,262 (1.4)% Provision for loan losses 19,500 9,000 116.7% 5,000 4,500 4,500 333.3% Charge offs (12,741) (11,732) 8.6% (14,537) (13,270) (8,778) 45.1% Recoveries 4,969 3,730 33.2% 5,807 7,736 4,318 15.1% ----- ----- ----- ----- ----- Net charge offs (7,772) (8,002) (2.9)% (8,730) (5,534) (4,460) 74.3% ------ ------ ------ ------ ------ Ending balance $274,264 $262,536 4.5% $261,538 $265,268 $266,302 3.0% ======== ======== ======== ======== ======== Allowance for Unfunded Commitments Beginning balance $23,900 $24,900 (4.0)% $24,900 $24,900 $24,400 (2.0)% Provision for unfunded commitments 500 (1,000) (150.0)% - - 500 - % --- ------ --- --- --- Ending balance $24,400 $23,900 2.1% $24,900 $24,900 $24,900 (2.0)% ======= ======= ======= ======= ======= Allowance for credit losses $298,664 $286,436 4.3% $286,438 $290,168 $291,202 2.6% -------- -------- -------- -------- -------- Net Charge Offs Dec 31, 2015 Sep 30, 2015 Seql Qtr % Jun 30, 2015 Mar 31, 2015 Dec 31, 2014 Comp Qtr % Change Change ------------ ------------ ----------- ------------ ------------ ------------ ----------- Commercial and industrial $4,612 $4,709 (2.1)% $3,921 $4,650 $1,323 248.6% Commercial real estate-owner occupied 291 (504) (157.7)% 1,198 739 134 117.2% Lease financing (26) - N/M - - 9 (388.9)% --- --- --- --- --- Commercial and business lending 4,877 4,205 16.0% 5,119 5,389 1,466 232.7% Commercial real estate-investor 665 496 34.1% 1,856 (2,529) (132) N/M Real estate construction (140) 38 (468.4)% (673) (743) (116) 20.7% ---- --- ---- ---- ---- Commercial real estate lending 525 534 (1.7)% 1,183 (3,272) (248) (311.7)% --- --- ----- ------ ---- Total commercial 5,402 4,739 14.0% 6,302 2,117 1,218 343.5% Home equity revolving lines of credit 294 533 (44.8)% 246 1,220 1,094 (73.1)% Home equity loans junior liens 623 358 74.0% 118 423 457 36.3% --- --- --- --- --- Home equity 917 891 2.9% 364 1,643 1,551 (40.9)% Installment and credit cards 739 810 (8.8)% 786 769 990 (25.4)% Residential mortgage 714 1,562 (54.3)% 1,278 1,005 701 1.9% --- ----- ----- ----- --- Total consumer 2,370 3,263 (27.4)% 2,428 3,417 3,242 (26.9)% Total net charge offs $7,772 $8,002 (2.9)% $8,730 $5,534 $4,460 74.3% ====== ====== ====== ====== ====== Net Charge Offs to Average Loans (in basis points) * Dec 31, 2015 Sep 30, 2015 Jun 30, 2015 Mar 31, 2015 Dec 31, 2014 ------------ ------------ ------------ ------------ ------------ Commercial and industrial 31 31 26 32 9 Commercial real estate-owner occupied 12 (21) 48 30 5 Lease financing (24) - - - 7 --- --- --- --- --- Commercial and business lending 28 24 29 31 9 Commercial real estate-investor 8 6 24 (33) (2) Real estate construction (5) 1 (26) (30) (5) --- --- --- --- --- Commercial real estate lending 5 5 11 (32) (2) --- --- --- --- --- Total commercial 19 17 22 8 4 Home equity revolving lines of credit 13 24 11 56 49 Home equity loans junior liens 195 104 32 108 107 --- --- --- --- --- Home equity 36 35 14 64 58 Installment and credit cards 69 75 73 70 86 Residential mortgage 5 11 9 8 5 --- --- --- --- --- Total consumer 13 18 14 21 19 --- --- --- --- --- Total net charge offs 17 17 19 13 10 === === === === === Credit Quality Dec 31, 2015 Sep 30, 2015 Seql Qtr % Jun 30, 2015 Mar 31, 2015 Dec 31, 2014 Comp Qtr % Change Change ------------ ------------ ----------- ------------ ------------ ------------ ----------- Nonaccrual loans $178,258 $147,454 20.9% $160,361 $174,346 $177,413 0.5% Other real estate owned (OREO) 14,569 13,740 6.0% 13,557 14,926 16,732 (12.9)% ------ ------ ------ ------ ------ Total nonperforming assets $192,827 $161,194 19.6% $173,918 $189,272 $194,145 (0.7)% ======== ======== ======== ======== ======== Loans 90 or more days past due and still accruing $1,648 $1,484 11.1% $1,662 $1,715 $1,623 1.5% Allowance for loan losses / loans 1.47% 1.42% 1.43% 1.48% 1.51% Allowance for loan losses / nonaccrual loans 153.86 178.05 163.09 152.15 150.10 Nonaccrual loans / total loans 0.95 0.80 0.88 0.97 1.01 Nonperforming assets /total loans plus OREO 1.03 0.87 0.95 1.05 1.10 Nonperforming assets /total assets 0.70 0.59 0.64 0.70 0.72 Net charge offs /average loans * 0.17 0.17 0.19 0.13 0.10 Year-to-date net charge offs / average loans * 0.16 0.16 0.16 0.13 0.09 * Annualized N/M = Not meaningful
Associated Banc-Corp Selected Asset Quality Information (continued) (in thousands) Dec 31, 2015 Sep 30, 2015 Seql Qtr % Jun 30, 2015 Mar 31, 2015 Dec 31, 2014 Comp Qtr % Change Change ------------ ------------ ----------- ------------ ------------ ------------ ----------- Nonaccrual loans by type: Commercial and industrial $91,941 $58,421 57.4% $64,738 $61,620 $49,663 85.1% Commercial real estate-owner occupied 8,049 13,368 (39.8)% 18,821 21,861 25,825 (68.8)% Lease financing 1,634 1,763 (7.3)% 1,656 1,720 1,801 (9.3)% ----- ----- ----- ----- ----- Commercial and business lending 101,624 73,552 38.2% 85,215 85,201 77,289 31.5% Commercial real estate-investor 8,643 6,921 24.9% 6,090 13,742 22,685 (61.9)% Real estate construction 940 997 (5.7)% 2,906 5,423 5,399 (82.6)% --- --- ----- ----- ----- Commercial real estate lending 9,583 7,918 21.0% 8,996 19,165 28,084 (65.9)% ----- ----- ----- ------ ------ Total commercial 111,207 81,470 36.5% 94,211 104,366 105,373 5.5% Home equity revolving lines of credit 9,917 8,060 23.0% 8,420 9,171 9,853 0.6% Home equity loans junior liens 5,327 5,581 (4.6)% 5,356 6,145 6,598 (19.3)% ----- ----- ----- ----- ----- Home equity 15,244 13,641 11.8% 13,776 15,316 16,451 (7.3)% Installment and credit cards 325 386 (15.8)% 454 515 613 (47.0)% Residential mortgage 51,482 51,957 (0.9)% 51,920 54,149 54,976 (6.4)% ------ ------ ------ ------ ------ Total consumer 67,051 65,984 1.6% 66,150 69,980 72,040 (6.9)% Total nonaccrual loans $178,258 $147,454 20.9% $160,361 $174,346 $177,413 0.5% ======== ======== ======== ======== ======== Restructured loans (accruing) Dec 31, 2015 Sep 30, 2015 Seql Qtr % Jun 30, 2015 Mar 31, 2015 Dec 31, 2014 Comp Qtr % Change Change ------------ ------------ ----------- ------------ ------------ ------------ ----------- Commercial and industrial $29,293 $28,598 2.4% $32,063 $26,466 $33,892 (13.6)% Commercial real estate-owner occupied 7,877 7,343 7.3% 5,433 9,780 10,454 (24.7)% ----- ----- ----- ----- ------ Commercial and business lending 37,170 35,941 3.4% 37,496 36,246 44,346 (16.2)% Commercial real estate-investor 21,915 18,580 17.9% 22,009 22,775 23,127 (5.2)% Real estate construction 510 485 5.2% 714 717 727 (29.8)% --- --- --- --- --- Commercial real estate lending 22,425 19,065 17.6% 22,723 23,492 23,854 (6.0)% ------ ------ ------ ------ ------ Total commercial 59,595 55,006 8.3% 60,219 59,738 68,200 (12.6)% Home equity revolving lines of credit 1,332 1,121 18.8% 1,222 1,251 1,508 (11.7)% Home equity loans junior liens 5,737 5,824 (1.5)% 6,610 6,642 6,701 (14.4)% ----- ----- ----- ----- ----- Home equity 7,069 6,945 1.8% 7,832 7,893 8,209 (13.9)% Installment and credit cards 829 804 3.1% 796 891 974 (14.9)% Residential mortgage 19,870 20,054 (0.9)% 21,373 20,295 20,833 (4.6)% ------ ------ ------ ------ ------ Total consumer 27,768 27,803 (0.1)% 30,001 29,079 30,016 (7.5)% ------ ------ ------ ------ ------ Total restructured loans (accruing) $87,363 $82,809 5.5% $90,220 $88,817 $98,216 (11.1)% ======= ======= ======= ======= ======= Restructured loans in nonaccrual loans (not included above) $37,684 $36,583 3.0% $43,699 $53,553 $57,656 (34.6)% ------- ------- ------- ------- ------- Loans Past Due 30-89 Days Dec 31, 2015 Sep 30, 2015 Seql Qtr % Jun 30, 2015 Mar 31, 2015 Dec 31, 2014 Comp Qtr % Change Change ------------ ------------ ----------- ------------ ------------ ------------ ----------- Commercial and industrial $1,011 $2,921 (65.4)% $6,357 $1,717 $14,747 (93.1)% Commercial real estate-owner occupied 7,142 2,018 253.9% 1,090 1,849 10,628 (32.8)% Lease financing - 375 (100.0)% - - - N/M --- --- --- --- --- Commercial and business lending 8,153 5,314 53.4% 7,447 3,566 25,375 (67.9)% Commercial real estate-investor 291 1,218 (76.1)% 19,843 2,215 1,208 (75.9)% Real estate construction 296 373 (20.6)% 312 317 984 (69.9)% --- --- --- --- --- Commercial real estate lending 587 1,591 (63.1)% 20,155 2,532 2,192 (73.2)% --- ----- ------ ----- ----- Total commercial 8,740 6,905 26.6% 27,602 6,098 27,567 (68.3)% Home equity revolving lines of credit 5,559 6,142 (9.5)% 5,157 7,150 6,725 (17.3)% Home equity loans junior liens 2,360 2,423 (2.6)% 1,894 1,905 2,058 14.7% ----- ----- ----- ----- ----- Home equity 7,919 8,565 (7.5)% 7,051 9,055 8,783 (9.8)% Installment and credit cards 1,870 1,723 8.5% 1,655 1,818 1,932 (3.2)% Residential mortgage 4,930 4,811 2.5% 6,602 4,356 4,846 1.7% ----- ----- ----- ----- ----- Total consumer 14,719 15,099 (2.5)% 15,308 15,229 15,561 (5.4)% Total loans past due 30-89 days $23,459 $22,004 6.6% $42,910 $21,327 $43,128 (45.6)% ======= ======= ======= ======= ======= Potential Problem Loans Dec 31, 2015 Sep 30, 2015 Seql Qtr % Jun 30, 2015 Mar 31, 2015 Dec 31, 2014 Comp Qtr % Change Change ------------ ------------ ----------- ------------ ------------ ------------ ----------- Commercial and industrial $230,680 $191,941 20.2% $125,643 $138,403 $108,522 112.6% Commercial real estate-owner occupied 35,706 41,466 (13.9)% 41,997 43,114 48,695 (26.7)% Lease financing 2,450 233 N/M 1,385 2,009 2,709 (9.6)% ----- --- ----- ----- ----- Commercial and business lending 268,836 233,640 15.1% 169,025 183,526 159,926 68.1% Commercial real estate-investor 25,944 23,633 9.8% 23,543 26,026 24,043 7.9% Real estate construction 3,919 2,354 66.5% 1,327 1,487 1,776 120.7% ----- ----- ----- ----- ----- Commercial real estate lending 29,863 25,987 14.9% 24,870 27,513 25,819 15.7% ------ ------ ------ ------ ------ Total commercial 298,699 259,627 15.0% 193,895 211,039 185,745 60.8% Home equity revolving lines of credit 48 141 (66.0)% 202 247 204 (76.5)% Home equity loans junior liens 174 86 102.3% 230 711 676 (74.3)% --- --- --- --- --- Home equity 222 227 (2.2)% 432 958 880 (74.8)% Installment and credit cards - - N/M - - 2 (100.0)% Residential mortgage 2,796 3,966 (29.5)% 5,341 6,621 3,781 (26.1)% ----- ----- ----- ----- ----- Total consumer 3,018 4,193 (28.0)% 5,773 7,579 4,663 (35.3)% Total potential problem loans $301,717 $263,820 14.4% $199,668 $218,618 $190,408 58.5% ======== ======== ======== ======== ======== N/M = Not meaningful
Associated Banc-Corp Net Interest Income Analysis-Taxable Equivalent Basis - Sequential Quarter Three months ended December 31, 2015 Three months ended September 30, 2015 ------------------------------------ ------------------------------------- (in thousands) Average Interest Average Average Interest Average Balance Income /Expense Yield /Rate Balance Income /Expense Yield /Rate ------- --------------- ----------- ------- --------------- ----------- Earning assets: Loans: (1) (2) (3) Commercial and business lending $6,892,162 $55,451 3.19% $7,089,664 $55,944 3.13% Commercial real estate lending 4,373,460 37,587 3.41% 4,260,329 36,694 3.42% --------- ------ --------- ------ Total commercial 11,265,622 93,038 3.28% 11,349,993 92,638 3.24% Residential mortgage 5,845,557 47,305 3.24% 5,658,253 47,004 3.32% Retail 1,431,509 16,673 4.65% 1,444,503 16,913 4.67% --------- ------ --------- ------ Total loans 18,542,688 157,016 3.37% 18,452,749 156,555 3.38% Investment securities Taxable 5,205,033 26,395 2.03% 4,968,609 24,937 2.01% Tax-exempt (1) 1,016,329 11,909 4.69% 997,489 12,112 4.86% Other short-term investments 259,053 1,639 2.53% 415,496 1,489 1.43% ------- ----- ------- ----- Investments and other 6,480,415 39,943 2.47% 6,381,594 38,538 2.42% --------- --------- Total earning assets 25,023,103 $196,959 3.14% 24,834,343 $195,093 3.13% Other assets, net 2,437,653 2,445,733 Total assets $27,460,756 $27,280,076 =========== =========== Liabilities and stockholder's equity Interest-bearing liabilities: Interest-bearing deposits: Savings deposits $1,358,141 $249 0.07% $1,357,677 $254 0.07% Interest-bearing demand deposits 3,150,628 1,217 0.15% 3,199,391 962 0.12% Money market deposits 9,534,551 4,351 0.18% 9,538,030 4,350 0.18% Time deposits 1,604,864 3,027 0.75% 1,624,661 2,955 0.72% --------- ----- --------- ----- Total interest-bearing deposits 15,648,184 8,844 0.22% 15,719,759 8,521 0.22% Federal funds purchased and securities sold under agreements to repurchase 605,026 229 0.15% 649,891 248 0.15% Other short-term funding 368,752 186 0.20% 154,811 83 0.21% ------- --- ------- --- Total short-term funding 973,778 415 0.17% 804,702 331 0.16% Long-term funding 2,679,472 10,692 1.60% 3,024,774 10,645 1.41% --------- ------ --------- ------ Total short and long-term funding 3,653,250 11,107 1.22% 3,829,476 10,976 1.15% --------- ------ --------- ------ Total interest-bearing liabilities 19,301,434 $19,951 0.41% 19,549,235 $19,497 0.40% Noninterest-bearing demand deposits 4,967,719 4,573,840 Other liabilities 250,957 237,725 Stockholders' equity 2,940,646 2,919,276 Total liabilities and stockholders' equity $27,460,756 $27,280,076 =========== =========== Interest rate spread 2.73% 2.73% Net free funds 0.09% 0.09% ---- ---- Net interest income, tax-equivalent, and net interest margin $177,008 2.82% $175,596 2.82% ======== ==== ======== ==== Fully tax-equivalent adjustment 5,540 5,087 ----- ----- Net interest income $171,468 $170,509 ======== ======== Net Interest Income Analysis-Taxable Equivalent Basis - Comparable Quarter Three months ended December 31, 2015 Three months ended December 31, 2014 ------------------------------------ ------------------------------------ (in thousands) Average Interest Average Average Interest Average Balance Income /Expense Yield /Rate Balance Income /Expense Yield /Rate ------- --------------- ----------- ------- --------------- ----------- Earning assets: Loans: (1) (2) (3) Commercial and business lending $6,892,162 $55,451 3.19% $6,720,893 $59,197 3.50% Commercial real estate lending 4,373,460 37,587 3.41% 4,066,143 37,122 3.62% --------- ------ --------- ------ Total commercial 11,265,622 93,038 3.28% 10,787,036 96,319 3.54% Residential mortgage 5,845,557 47,305 3.24% 5,091,794 43,370 3.40% Retail 1,431,509 16,673 4.65% 1,508,425 17,800 4.70% --------- ------ --------- ------ Total loans 18,542,688 157,016 3.37% 17,387,255 157,489 3.60% Investment securities Taxable 5,205,033 26,395 2.03% 4,780,268 25,061 2.10% Tax-exempt (1) 1,016,329 11,909 4.69% 917,330 11,597 5.06% Other short-term investments 259,053 1,639 2.53% 407,644 1,821 1.78% ------- ----- ------- ----- Investments and other 6,480,415 39,943 2.47% 6,105,242 38,479 2.52% --------- --------- Total earning assets 25,023,103 $196,959 3.14% 23,492,497 $195,968 3.32% Other assets, net 2,437,653 2,388,268 --------- --------- Total assets $27,460,756 $25,880,765 =========== =========== Liabilities and stockholder's equity Interest-bearing liabilities: Interest-bearing deposits: Savings deposits $1,358,141 $249 0.07% $1,264,195 $253 0.08% Interest-bearing demand deposits 3,150,628 1,217 0.15% 3,142,537 1,220 0.15% Money market deposits 9,534,551 4,351 0.18% 8,209,091 3,547 0.17% Time deposits 1,604,864 3,027 0.75% 1,549,565 2,299 0.59% --------- ----- --------- ----- Total interest-bearing deposits 15,648,184 8,844 0.22% 14,165,388 7,319 0.20% Federal funds purchased and securities sold under agreements to repurchase 605,026 229 0.15% 600,969 218 0.14% Other short-term funding 368,752 186 0.20% 464,866 156 0.13% ------- --- ------- --- Total short-term funding 973,778 415 0.17% 1,065,835 374 0.14% Long-term funding 2,679,472 10,692 1.60% 3,221,574 8,644 1.07% --------- ------ --------- ----- Total short and long-term funding 3,653,250 11,107 1.22% 4,287,409 9,018 0.84% --------- ------ --------- ----- Total interest-bearing liabilities 19,301,434 $19,951 0.41% 18,452,797 $16,337 0.35% Noninterest-bearing demand deposits 4,967,719 4,367,031 Other liabilities 250,957 228,600 Stockholders' equity 2,940,646 2,832,337 Total liabilities and stockholders' equity $27,460,756 $25,880,765 =========== =========== Interest rate spread 2.73% 2.97% Net free funds 0.09% 0.07% ---- ---- Net interest income, tax-equivalent, and net interest margin $177,008 2.82% $179,631 3.04% ======== ==== ======== ==== Fully tax-equivalent adjustment 5,540 4,970 ----- ----- Net interest income $171,468 $174,661 ======== ========
Associated Banc-Corp Net Interest Income Analysis-Taxable Equivalent Basis - Year Over Year Year ended December 31, 2015 Year ended December 31, 2014 ---------------------------- ---------------------------- (in thousands) Average Interest Average Average Interest Average Balance Income /Expense Yield /Rate Balance Income /Expense Yield /Rate ------- --------------- ----------- ------- --------------- ----------- Earning assets: Loans: (1) (2) (3) Commercial and business lending $7,035,449 $223,639 3.18% $6,495,338 $219,386 3.38% Commercial real estate lending 4,222,218 146,372 3.47% 3,990,675 146,802 3.68% --------- ------- --------- ------- Total commercial 11,257,667 370,011 3.29% 10,486,013 366,188 3.49% Residential mortgage 5,538,690 182,228 3.29% 4,864,054 168,830 3.47% Retail 1,455,907 67,524 4.64% 1,488,927 67,382 4.53% --------- ------ --------- ------ Total loans 18,252,264 619,763 3.40% 16,838,994 602,400 3.58% Investment securities Taxable 4,936,065 100,292 2.03% 4,726,511 102,464 2.17% Tax-exempt (1) 976,784 47,663 4.88% 867,721 44,467 5.12% Other short-term investments 405,974 6,591 1.62% 326,902 6,635 2.03% ------- ----- ------- ----- Investments and other 6,318,823 154,546 2.45% 5,921,134 153,566 2.59% --------- --------- Total earning assets 24,571,087 $774,309 3.15% 22,760,128 $755,966 3.32% Other assets, net 2,451,923 2,351,469 --------- Total assets $27,023,010 $25,111,597 =========== =========== Liabilities and stockholder's equity Interest-bearing liabilities: Interest-bearing deposits: Savings deposits $1,336,755 $1,000 0.07% $1,249,452 $968 0.08% Interest-bearing demand deposits 3,201,085 4,266 0.13% 2,983,747 4,124 0.14% Money market deposits 9,210,179 16,574 0.18% 7,614,042 12,452 0.16% Time deposits 1,613,547 11,285 0.70% 1,587,641 8,750 0.55% --------- ------ --------- ----- Total interest-bearing deposits 15,361,566 33,125 0.22% 13,434,882 26,294 0.20% Federal funds purchased and securities sold under agreements to repurchase 625,736 943 0.15% 795,257 1,219 0.15% Other short-term funding 220,321 465 0.21% 573,460 785 0.14% ------- --- ------- --- Total short-term funding 846,057 1,408 0.17% 1,368,717 2,004 0.15% Long-term funding 3,127,018 42,851 1.37% 3,022,787 27,480 0.91% --------- ------ --------- ------ Total short and long-term funding 3,973,075 44,259 1.11% 4,391,504 29,484 0.67% --------- ------ --------- ------ Total interest-bearing liabilities 19,334,641 $77,384 0.40% 17,826,386 $55,778 0.31% Noninterest-bearing demand deposits 4,541,521 4,212,202 Other liabilities 251,690 201,077 Stockholders' equity 2,895,158 2,871,932 Total liabilities and stockholders' equity $27,023,010 $25,111,597 =========== =========== Interest rate spread 2.75% 3.01% Net free funds 0.09% 0.07% ---- ---- Net interest income, tax- equivalent, and net interest margin $696,925 2.84% $700,188 3.08% ======== ==== ======== ==== Fully tax-equivalent adjustment 20,647 19,221 ------ ------ Net interest income $676,278 $680,967 ======== ========
(1) The yield on tax exempt loans and securities is computed on a fully tax-equivalent basis using a tax rate of 35% for all periods presented and is net of the effects of certain disallowed interest deductions. (2) Nonaccrual loans and loans held for sale have been included in the average balances. (3) Interest income includes net loan fees.
Associated Banc-Corp Financial Summary and Comparison (in thousands) Period End Loan Composition Dec 31, 2015 Sep 30, 2015 Seql Qtr % Jun 30, 2015 Mar 31, 2015 Dec 31, 2014 Comp Qtr % Change Change ------------ ------------ ----------- ------------ ------------ ------------ ----------- Commercial and industrial $6,147,440 $6,085,473 1.0% $6,208,192 $6,140,420 $5,905,902 4.1% Commercial real estate-owner occupied 918,212 966,689 (5.0)% 978,183 1,003,885 1,007,937 (8.9)% Lease financing 43,243 42,607 1.5% 46,900 49,496 51,529 (16.1)% ------ ------ ------ ------ Commercial and business lending 7,108,895 7,094,769 0.2% 7,233,275 7,193,801 6,965,368 2.1% Commercial real estate-investor 3,234,266 3,183,352 1.6% 3,126,440 3,086,980 3,056,485 5.8% Real estate construction 1,162,145 1,124,280 3.4% 1,092,308 1,019,571 1,008,956 15.2% --------- --------- --------- --------- Commercial real estate lending 4,396,411 4,307,632 2.1% 4,218,748 4,106,551 4,065,441 8.1% --------- --------- --------- --------- Total commercial 11,505,306 11,402,401 0.9% 11,452,023 11,300,352 11,030,809 4.3% Home equity revolving lines of credit 883,759 883,573 - % 880,628 879,827 887,779 (0.5)% Home equity loans junior liens 122,043 130,892 (6.8)% 141,344 154,120 164,148 (25.7)% ------- ------- ------- ------- Home equity 1,005,802 1,014,465 (0.9)% 1,021,972 1,033,947 1,051,927 (4.4)% Installment and credit cards 419,968 425,729 (1.4)% 430,823 436,492 454,219 (7.5)% Residential mortgage 5,783,267 5,682,178 1.8% 5,398,434 5,208,241 5,056,891 14.4% --------- --------- --------- --------- --------- Total consumer 7,209,037 7,122,372 1.2% 6,851,229 6,678,680 6,563,037 9.8% --------- --------- --------- --------- Total loans $18,714,343 $18,524,773 1.0% $18,303,252 $17,979,032 $17,593,846 6.4% =========== =========== =========== =========== =========== Period End Deposit and Customer Funding Composition Dec 31, 2015 Sep 30, 2015 Seql Qtr % Jun 30, 2015 Mar 31, 2015 Dec 31, 2014 Comp Qtr % Change Change ------------ ------------ ----------- ------------ ------------ ------------ ----------- Noninterest-bearing demand $5,562,466 $4,657,261 19.4% $4,332,171 $4,570,872 $4,505,272 23.5% Savings 1,334,420 1,346,407 (0.9)% 1,359,478 1,337,643 1,235,277 8.0% Interest-bearing demand 3,445,000 3,416,429 0.8% 3,576,311 3,525,870 3,126,854 10.2% Money market 9,102,977 9,516,503 (4.3)% 8,374,186 8,781,206 8,324,646 9.3% Brokered CDs 42,443 42,689 (0.6)% 39,760 40,699 42,556 (0.3)% Other time 1,520,359 1,579,106 (3.7)% 1,587,657 1,595,302 1,528,899 (0.6)% --------- --------- --------- --------- --------- Total deposits 21,007,665 20,558,395 2.2% 19,269,563 19,851,592 18,763,504 12.0% Customer repo sweeps 383,568 524,630 (26.9)% 433,044 528,572 384,221 (0.2)% Total deposits and customer funding $21,391,233 $21,083,025 1.5% $19,702,607 $20,380,164 $19,147,725 11.7% =========== =========== =========== =========== =========== Network transaction deposits included above in interest-bearing demand & money market $3,174,911 $3,207,867 (1.0)% $2,920,939 $2,900,325 $2,852,943 11.3% Brokered CDs 42,443 42,689 (0.6)% 39,760 40,699 42,556 (0.3)% ------ ------ ------ ------ ------ Total network and brokered funding 3,217,354 3,250,556 (1.0)% 2,960,699 2,941,024 2,895,499 11.1% Net customer deposits and funding (1) $18,173,879 $17,832,469 1.9% $16,741,908 $17,439,140 $16,252,226 11.8% =========== =========== =========== =========== =========== Quarter Average Loan Composition Dec 31, 2015 Sep 30, 2015 Seql Qtr % Jun 30, 2015 Mar 31, 2015 Dec 31, 2014 Comp Qtr % Change Change ------------ ------------ ----------- ------------ ------------ ------------ ----------- Commercial and industrial $5,905,034 $6,074,168 (2.8)% $6,122,864 $5,944,152 $5,665,396 4.2% Commercial real estate-owner occupied 944,223 970,112 (2.7)% 995,981 998,293 1,003,179 (5.9)% Lease financing 42,905 45,384 (5.5)% 48,470 50,724 52,318 (18.0)% ------ ------ ------ ------ ------ Commercial and business lending 6,892,162 7,089,664 (2.8)% 7,167,315 6,993,169 6,720,893 2.5% Commercial real estate-investor 3,266,008 3,134,454 4.2% 3,110,637 3,106,965 3,062,427 6.6% Real estate construction 1,107,452 1,125,875 (1.6)% 1,038,318 995,768 1,003,716 10.3% --------- --------- --------- ------- --------- Commercial real estate lending 4,373,460 4,260,329 2.7% 4,148,955 4,102,733 4,066,143 7.6% --------- --------- --------- --------- --------- Total commercial 11,265,622 11,349,993 (0.7)% 11,316,270 11,095,902 10,787,036 4.4% Home equity revolving lines of credit 882,599 880,660 0.2% 881,036 882,869 883,580 (0.1)% Home equity loans junior liens 126,658 136,254 (7.0)% 147,391 159,378 169,845 (25.4)% ------- ------- ------- ------- ------- Home equity 1,009,257 1,016,914 (0.8)% 1,028,427 1,042,247 1,053,425 (4.2)% Installment and credit cards 422,252 427,589 (1.2)% 432,415 445,268 455,000 (7.2)% Residential mortgage 5,845,557 5,658,253 3.3% 5,411,193 5,231,698 5,091,794 14.8% --------- --------- --------- --------- --------- Total consumer 7,277,066 7,102,756 2.5% 6,872,035 6,719,213 6,600,219 10.3% Total loans $18,542,688 $18,452,749 0.5% $18,188,305 $17,815,115 $17,387,255 6.6% =========== =========== =========== =========== =========== Quarter Average Deposit Composition Dec 31, 2015 Sep 30, 2015 Seql Qtr % Jun 30, 2015 Mar 31, 2015 Dec 31, 2014 Comp Qtr % Change Change ------------ ------------ ----------- ------------ ------------ ------------ ----------- Noninterest-bearing demand $4,967,719 $4,573,840 8.6% $4,290,567 $4,326,557 $4,367,031 13.8% Savings 1,358,141 1,357,677 - % 1,352,616 1,277,469 1,264,195 7.4% Interest-bearing demand 3,150,628 3,199,391 (1.5)% 3,251,196 3,203,727 3,142,537 0.3% Money market 9,534,551 9,538,030 - % 9,101,589 8,653,260 8,209,091 16.1% Time deposits 1,604,864 1,624,661 (1.2)% 1,630,242 1,594,183 1,549,565 3.6% Total deposits $20,615,903 $20,293,599 1.6% $19,626,210 $19,055,196 $18,532,419 11.2% =========== =========== =========== =========== ===========
(1) Total deposits and customer funding excluding total network and brokered funding.
Associated Banc-Corp Non-GAAP Financial Measures Reconciliation ($ in millions) YTD 2015 YTD 2014 4Q15 3Q15 2Q15 1Q15 4Q14 -------- -------- ---- ---- ---- ---- ---- Common Equity Tier 1 Reconciliation (1) Common equity $2,816 $2,832 $2,782 $2,823 $2,740 Goodwill and other intangible assets (985) (986) (987) (987) (937) ---- ---- ---- ---- ---- Tangible common equity 1,831 1,846 1,795 1,836 1,803 Accumulated other comprehensive income 33 (15) (2) (25) 5 Deferred tax assets / deferred tax liabilities, net 34 34 32 27 - Common equity Tier 1 $1,898 $1,865 $1,825 $1,838 $1,808 ====== ====== ====== ====== ====== Average Common Equity Tier 1 Reconciliation (1) Common equity $2,819 $2,798 $2,794 $2,785 $2,772 Goodwill and other intangible assets (985) (986) (987) (971) (937) ---- ---- ---- ---- ---- Tangible common equity 1,834 1,812 1,807 1,814 1,835 Accumulated other comprehensive income 4 (7) (16) (18) (14) Deferred tax assets / deferred tax liabilities, net 34 32 29 8 - Average common equity Tier 1 $1,872 $1,837 $1,820 $1,804 $1,821 ====== ====== ====== ====== ====== Risk-based Capital (1) (2) Risk-weighted assets $19,933 $19,866 $19,629 $19,565 $18,568 Common equity Tier 1 / risk-weighted assets 9.52% 9.39% 9.30% 9.39% 9.74% Tier 1 leverage ratio 7.60% 7.53% 7.53% 7.39% 7.48% Tier 1 risk-based capital ratio 10.12% 9.98% 9.89% 9.70% 10.06% Total risk-based capital ratio 12.62% 12.49% 12.41% 12.21% 12.66% ----- ----- ----- ----- ----- Selected Equity and Performance Ratios (1) (3) Tangible common equity / tangible assets 6.85% 6.97% 6.85% 7.04% 6.97% Tangible equity /tangible assets 7.30% 7.43% 7.32% 7.27% 7.20% Return on average tangible common equity 9.97% 9.91% 8.78% 10.35% 10.62% 10.16% 10.27% Return on average common equity Tier 1 9.88% 9.92% 8.60% 10.20% 10.55% 10.22% 10.35% ---- ---- ---- ----- ----- ----- ----- Efficiency Ratio Reconciliation (4) Federal Reserve efficiency ratio 69.93% 70.28% 70.36% 68.83% 70.23% 70.30% 70.54% Taxable equivalent adjustment (1.42)% (1.36)% (1.53)% (1.39)% (1.34)% (1.42)% (1.41)% Other intangible amortization (0.30)% (0.39)% (0.20)% (0.35)% (0.35)% (0.32)% (0.31)% ------ Fully tax-equivalent efficiency ratio 68.21% 68.53% 68.63% 67.09% 68.54% 68.56% 68.82% ===== ===== ===== ===== ===== ===== =====
(1) The Federal Reserve establishes regulatory capital requirements, including well-capitalized standards for the Corporation. Prior to 2015, the regulatory capital requirements effective for the Corporation followed the Capital Accord of the Basel Committee on Banking Supervision ("Basel I"). Beginning January 1, 2015, the regulatory capital requirements effective for the Corporation follow Basel III, subject to certain transition provisions. These regulatory capital measurements are used by management, regulators, investors, and analysts to assess, monitor and compare the quality and composition of our capital with the capital of other financial services companies. (2) December 31, 2015 data is estimated. (3) The ratios tangible common equity to tangible assets and tangible equity to tangible assets exclude goodwill and other intangible assets, which is a non-GAAP financial measure. These financial measures have been included as they are considered to be critical metrics with which to analyze and evaluate financial condition and capital strength. (4) The efficiency ratio as defined by the Federal Reserve guidance is noninterest expense (which includes the provision for unfunded commitments) divided by the sum of net interest income plus noninterest income, excluding investment securities gains / losses, net. The fully tax- equivalent efficiency ratio is noninterest expense (which includes the provision for unfunded commitments), excluding other intangible amortization, divided by the sum of taxable equivalent net interest income plus noninterest income, excluding investment securities gains /losses, net. Management believes the fully tax- equivalent efficiency ratio, which adjusts net interest income for the tax-favored status of certain loans and investment securities, to be the preferred industry measurement as it enhances the comparability of net interest income arising from taxable and tax-exempt sources.
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SOURCE Associated Banc-Corp