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Associated Banc-Corp – ‘8-K’ for 1/23/20 – ‘EX-99.1’

On:  Thursday, 1/23/20, at 4:16pm ET   ·   For:  1/23/20   ·   Accession #:  7789-20-3   ·   File #:  1-31343

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  As Of               Filer                 Filing    For·On·As Docs:Size

 1/23/20  Associated Banc-Corp              8-K:2,9     1/23/20   14:5.6M

Current Report   —   Form 8-K   —   Sect. 13 / 15(d) – SEA’34
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 8-K         Current Report                                      HTML     36K 
 2: EX-99.1     Miscellaneous Exhibit                               HTML    758K 
 3: EX-99.2     Miscellaneous Exhibit                               HTML     27K 
11: R1          Cover Page Cover Page                               HTML     57K 
13: XML         IDEA XML File -- Filing Summary                      XML     13K 
10: XML         XBRL Instance -- asb12312019form8-kpres_htm          XML     27K 
 9: EXCEL       IDEA Workbook of Financial Reports                  XLSX      6K 
 5: EX-101.CAL  XBRL Calculations -- asb-20200122_cal                XML      7K 
 6: EX-101.DEF  XBRL Definitions -- asb-20200122_def                 XML     45K 
 7: EX-101.LAB  XBRL Labels -- asb-20200122_lab                      XML     91K 
 8: EX-101.PRE  XBRL Presentations -- asb-20200122_pre               XML     48K 
 4: EX-101.SCH  XBRL Schema -- asb-20200122                          XSD     16K 
14: JSON        XBRL Instance as JSON Data -- MetaLinks               16±    23K 
12: ZIP         XBRL Zipped Folder -- 0000007789-20-000003-xbrl      Zip     89K

‘EX-99.1’   —   Miscellaneous Exhibit

This Exhibit is an HTML Document rendered as filed.  [ Alternative Formats ]

 <!   C:   C: 
  Exhibit  


Exhibit 99.1
asblogoa09.jpg
NEWS RELEASE
Investor Contact:
Robb Timme, Senior Vice President, Director of Investor Relations     
920-491-7059
Media Contact:
Jennifer Kaminski, Vice President, Public Relations Senior Manager
920-491-7576
Associated Banc-Corp Reports Full Year 2019 Earnings of $1.91 Per Common Share,
or $1.97 Per Common Share Excluding $12 million in Acquisition and Restructuring Related Costs1 

GREEN BAY, Wis. -- January 23, 2020 -- Associated Banc-Corp (NYSE: ASB) ("Associated" or "Company") today reported net income available to common equity ("earnings") of $312 million, or $1.91 per common share for the year ended December 31, 2019. These amounts compare to net income available to common equity of $323 million, or $1.89 per common share for the year ended December 31, 2018. The Company reported earnings of $0.43 per common share for the quarter ended December 31, 2019, compared to $0.51 per common share for the quarter ended December 31, 2018.
“In 2019, we significantly repositioned the balance sheet as we faced an interest rate environment that was meaningfully different than the one we anticipated at the beginning of the year. We increased our mix of low-cost core deposits, decreased our reliance on higher-cost funding, and sold lower-yielding securities. These actions helped us defend our net interest margin," said President and CEO Philip B. Flynn. "Additionally, we focused our efforts on controlling costs and were able to reduce noninterest expense from the previous year. We are optimistic that the changes we made in 2019 will continue to benefit Associated in 2020 and beyond."
2019 SUMMARY (all comparisons to the previous year)
•
Average loans of $23.1 billion were up 2%, or $0.4 billion
•
Average deposits of $24.7 billion were up 3%, or $0.7 billion
•
Net interest income of $836 million decreased $44 million, or 5%
•
Net interest margin of 2.86% declined 11 basis points from 2.97%
•
Provision for credit losses of $16 million compared to zero
•
Noninterest income of $381 million increased 7%, or $25 million
•
Noninterest expense of $794 million was down 3%, or $28 million
•
Income before income taxes of $407 million decreased 2%, or $7 million
•
During the year, the Company repurchased over 8 million shares, or $177 million, of common stock
•
Total dividends paid per common share were $0.69, up 11%
•
Tangible book value per share of $15.28, up 10%
•
Return on average common equity Tier 1 of 12.6% decreased 0.6%

1This is a non-GAAP financial measure. Management believes these measures are meaningful because they reflect adjustments commonly made by management, investors, regulators, and analysts to evaluate the adequacy of earnings per common share, provide greater understanding of ongoing operations and enhance comparability of results with prior periods. See page 10 of the attached tables for a reconciliation of GAAP financial measures to non-GAAP financial measures which exclude acquisition and restructuring related costs.



2019 FULL YEAR and FOURTH QUARTER FINANCIAL RESULTS

Loans
Full year 2019 average loans of $23.1 billion were up 2%, or $405 million from 2018, driven by commercial and business lending. With respect to full year 2019 average balances by loan category compared to 2018:
•
Commercial and business lending increased $682 million, or 9%, to $8.4 billion, primarily due to solid growth in general commercial and power & utilities lending.
•
Consumer lending was essentially flat at $9.5 billion and included the sale of approximately $240 million of prepayment sensitive mortgages in the third quarter of 2019.
•
Commercial real estate lending decreased $283 million, or 5%, to $5.2 billion, reflecting elevated paydown activity in late 2018 and the first quarter of 2019.

Fourth quarter 2019 average loans of $22.8 billion were down $21 million from the year ago quarter and declined $469 million from the third quarter.
With respect to fourth quarter 2019 average balances by loan category:
•
Commercial and business lending increased $189 million from the year ago quarter but decreased $294 million from the third quarter to $8.2 billion. Power & utilities and mortgage warehouse drove the increase from the year ago quarter while the decrease from the third quarter was due to lower general commercial and REIT lending.
•
Consumer lending decreased $195 million from the year ago quarter and was down $213 million from the third quarter to $9.4 billion. The decreases resulted from the sale of $240 million of prepayment sensitive residential mortgages late in the third quarter of 2019.
•
Commercial real estate lending decreased $15 million from the year ago quarter to $5.2 billion. However, CRE increased $38 million from the third quarter as strong production continued to outpace paydown activity.

For 2020, the Company expects to achieve 2% to 4% average loan growth.



Investments
Full year 2019 average investment securities of $6.2 billion were reduced $718 million, or 10% from 2018.

Fourth quarter 2019 average investment securities of $5.6 billion were decreased by $1.3 billion, or 19% from the year ago quarter, and decreased by $397 million from the third quarter as the Company continued to use its investment portfolio as a source of funds during the fourth quarter, further repositioning its balance sheet for a declining rate environment.
•
Taxable securities decreased $1.5 billion from the year ago quarter and decreased $408 million from the third quarter as lower yielding, primarily mortgage backed securities were sold.
•
Tax-exempt securities increased $188 million from the year ago quarter and increased $11 million from the third quarter as the Company shifted its investment portfolio mix toward longer duration higher-yielding municipal securities.

For 2020, the Company expects the ratio of investments to total assets to remain above 17%.



Deposits
Full year 2019 average deposits of $24.7 billion increased 3%, or $664 million from 2018, driven by the Huntington branch acquisition.

With respect to full year 2019 average balances by deposit category as compared to 2018:
•
Savings increased $561 million, or 30% to $2.4 billion.
•
Interest-bearing demand deposits increased $313 million, or 7% to $5.1 billion.
•
Time deposits increased $298 million, or 11% to $3.1 billion.
•
Noninterest-bearing demand deposits decreased $18 million to $5.2 billion.
•
Network transaction deposits decreased $235 million, or 11% to $1.9 billion.
•
Money market deposits decreased $255 million, or 4% to $7.0 billion.

Fourth quarter 2019 average deposits of $24.1 billion were down $127 million, or 1% from the year ago quarter and were down $1.1 billion compared to the third quarter. The decrease from the third quarter reflects the Company's balance sheet repositioning strategy of selling lower-yielding securities and reducing certain higher-cost, non-core customer funding from interest-bearing deposits, time deposits, network transaction deposits and money market accounts.
With respect to fourth quarter 2019 average balances by deposit category:
•
Savings increased $719 million from the year ago quarter and increased $96 million from the third quarter to $2.7 billion.
•
Noninterest-bearing demand deposits increased $104 million from the year ago quarter and increased $146 million from the third quarter to $5.5 billion.
•
Interest-bearing demand deposits increased $301 million from the year ago quarter but decreased $315 million from the third quarter to $5.1 billion.
•
Time deposits decreased $314 million from the year ago quarter and decreased $361 million from the third quarter to $2.7 billion.
•
Network transaction deposits decreased $442 million from the year ago quarter and decreased $326 million from the third quarter to $1.4 billion.
•
Money market deposits decreased $495 million from the year ago quarter and decreased $339 million from the third quarter to $6.6 billion.




Net Interest Income and Net Interest Margin
Full year 2019 net interest income of $836 million was down 5%, or $44 million from 2018. Net interest margin of 2.86% was down 11 basis points from the prior year. The decreases in net interest income and margin were driven by decreases in LIBOR rates, which impact the Company's commercial loan yield, outpacing reductions in funding costs.
•
The average yield on total commercial loans decreased one basis point from the prior year to 4.72%.
•
The average cost of interest-bearing liabilities increased 27 basis points from the prior year to 1.43%.
•
The net free funds benefit, the net margin increase from noninterest-bearing deposits, increased five basis points from the prior year.

Fourth quarter 2019 net interest income of $200 million was down 11%, or $24 million, and the net interest margin decreased 19 basis points to 2.83% from the year ago quarter. Fourth quarter 2019 net interest income decreased 3%, or $6 million, but the net interest margin increased two basis points from the prior quarter. The lower net interest income from the prior quarter was driven by lower earning asset balances as the Company repositioned its balance sheet for a lower rate environment. The increase in net interest margin reflects the Company's successful efforts to reduce funding costs over the last several quarters.
•
The average yield on total earning assets for the fourth quarter of 2019 decreased 33 basis points to 3.78% from the year ago quarter and decreased 16 basis points from the prior quarter.
•
The average cost of total interest-bearing liabilities for the fourth quarter of 2019 decreased 16 basis points to 1.23% from the year ago quarter and decreased 21 basis points from the prior quarter.
•
The net free funds benefit decreased two basis points in the fourth quarter of 2019 compared to the year ago quarter and decreased three basis points from the prior quarter.

The Company expects 2020 net interest margin to be between 2.80% and 2.85%, assuming a stable interest rate environment.



Noninterest Income
Full year 2019 noninterest income of $381 million increased $25 million from the prior year.
•
Net mortgage banking income increased $12 million from the prior year, driven by higher refinance activity in 2019.
•
Gains on sales of investment securities increased $8 million from the prior year, reflecting our balance sheet deleveraging strategy

Fourth quarter 2019 total noninterest income of $93 million increased $9 million from the year ago quarter but decreased $8 million from the prior quarter.
With respect to fourth quarter 2019 noninterest income line items:
•
Net mortgage banking income was up $3 million from the year ago quarter but was down $4 million from the previous quarter. Mortgage banking income was elevated in the third quarter due to increased gain on sale of mortgages including the sale of approximately $240 million of loans from our portfolio.
•
Capital markets income was up $3 million from both the year ago quarter and the previous quarter driven by higher swap income and favorable credit valuation adjustments in the fourth quarter of 2019.
•
Asset gains were up $3 million from the year ago quarter and were essentially flat compared to the previous quarter.
•
Gains on sales of investment securities were essentially flat compared to the year ago quarter but were down $4 million from the third quarter when we sold securities as part of our deleveraging strategy.

The Company expects to earn between $375 million and $385 million of noninterest income in 2020, excluding investment securities gains and losses.



Noninterest Expense
Full year 2019 noninterest expense of $794 million decreased 3%, or $28 million from the prior year. Included in noninterest expense figures are acquisition and restructuring related costs of $12 million in 2019 and $31 million in 2018.
With respect to full year 2019 noninterest expense line items:
•
Personnel costs increased $4 million from the prior year.
•
Technology expense increased $10 million from the prior year, driven by investments in solutions to enhance operational efficiency and the customer experience.
•
FDIC assessment decreased $14 million from 2018 with the removal of the FDIC surcharge.
 
Fourth quarter 2019 total noninterest expense of $204 million increased 5%, or $10 million from the year ago quarter and increased $3 million from the prior quarter.
With respect to fourth quarter 2019 noninterest expense line items:
•
Personnel expense increased $4 million from the year ago quarter but decreased $3 million from the prior quarter.
•
Technology expense increased $5 million from the year ago quarter and increased $2 million from the prior quarter.
•
Occupancy expense increased $3 million from the year ago quarter and increased $2 million from the prior quarter.
•
The Company's FDIC assessment decreased $2 million from the year ago quarter with the removal of the FDIC surcharge and was unchanged from the prior quarter.

The Company expects its 2020 noninterest expense will be between $790 million and $795 million, including acquisition related costs in connection with the First Staunton transaction.

Taxes
Full year 2019 effective tax rate was 20% compared to 19% in 2018. The fourth quarter 2019 effective tax rate was 19% compared to 22% in the year ago quarter and 20% in the prior quarter.

The Company expects its 2020 effective tax rate will be in the range of 19%-21%.



Credit
Full year 2019 provision for credit losses was $16 million, up from zero in the prior year.

The fourth quarter 2019 provision for credit losses was zero, down from $1 million in the year ago quarter and down from $2 million in the prior quarter.
With respect to fourth quarter 2019 credit quality:
•
Potential problem loans of $157 million were down $93 million, or 37%, from the year ago quarter but up $24 million, or 18%, from the prior quarter.
•
Nonaccrual loans of $118 million were down $10 million from the year ago quarter and down $11 million from the prior quarter. The nonaccrual loans to total loans ratio was 0.52% in the fourth quarter, down from 0.56% in the year ago quarter and 0.57% in the prior quarter.
•
Net charge offs of $14 million were up $14 million from the year ago quarter but down $6 million from the prior quarter as de-risking of the oil & gas portfolio nears completion.
•
The allowance for loan losses of $201 million was down $37 million from the year ago quarter and down $13 million from the prior quarter. The allowance for loan losses to total loans ratio was 0.88% in the third quarter, down from 1.04% in the year ago quarter, and 0.94% in the prior quarter.

As a result of implementing Current Expected Credit Loss accounting standards, the Company expects to incur an after-tax charge of $70 million to $80 million which will decrease the opening equity balance as of January 1, 2020.

Capital
The Company’s capital position remains strong, with a CET1 capital ratio of 10.2% at December 31, 2019. The Company’s capital ratios continue to be in excess of the Basel III “well-capitalized” regulatory benchmarks on a fully phased in basis.

During 2019, the Company repurchased over eight million shares, or $177 million, of common stock at an average price of $21.62 per share. This included fourth quarter repurchases of over two million shares, or $48 million, of common stock at an average price of $21.22 per share.





FOURTH QUARTER 2019 EARNINGS RELEASE CONFERENCE CALL
The Company will host a conference call for investors and analysts at 4:00 p.m. Central Time (CT) today, January 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 fourth quarter 2019 earnings call. The fourth quarter 2019 financial tables with an accompanying slide presentation will be available on the Company's website just prior to the call. An audio archive of the webcast will be available on the Company's website approximately fifteen minutes after the call is over.
ABOUT ASSOCIATED BANC-CORP
Associated Banc-Corp (NYSE: ASB) has total assets of $32 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)
Dec 31, 2019
Sep 30, 2019
Seql Qtr $ Change
Jun 30, 2019
Mar 31, 2019
Dec 31, 2018
Comp Qtr $ Change
Assets
 
 
 
 
 
 
 
Cash and due from banks
$
373,380

$
523,435

$
(150,055
)
$
382,985

$
334,095

$
507,187

$
(133,807
)
Interest-bearing deposits in other financial institutions
207,624

236,010

(28,386
)
172,708

270,843

221,226

(13,602
)
Federal funds sold and securities purchased under agreements to resell
7,740

100

7,640

1,385

41,405

148,285

(140,545
)
Investment securities held to maturity, at amortized cost
2,205,083

2,200,419

4,664

2,806,064

2,846,689

2,740,511

(535,428
)
Investment securities available for sale, at fair value
3,262,586

3,436,289

(173,703
)
3,283,456

3,829,388

3,946,941

(684,355
)
Equity securities
15,090

15,096

(6
)
15,066

1,609

1,568

13,522

Federal Home Loan Bank and Federal Reserve Bank stocks, at cost
227,347

207,443

19,904

202,758

216,940

250,534

(23,187
)
Residential loans held for sale
136,280

137,655

(1,375
)
129,303

81,392

64,321

71,959

Commercial loans held for sale
15,000

11,597

3,403

11,000

15,467

14,943

57

Loans
22,821,440

22,754,710

66,730

23,249,967

23,148,359

22,940,429

(118,989
)
Allowance for loan losses
(201,371
)
(214,425
)
13,054

(233,659
)
(235,081
)
(238,023
)
36,652

Loans, net
22,620,068

22,540,285

79,783

23,016,308

22,913,278

22,702,406

(82,338
)
Bank and corporate owned life insurance
671,948

670,739

1,209

668,638

665,976

663,203

8,745

Investment in unconsolidated subsidiaries
279,969

256,220

23,749

222,812

194,670

161,181

118,788

Premises and equipment
435,284

436,268

(984
)
432,058

411,040

363,225

72,059

Goodwill
1,176,230

1,176,230

—

1,176,019

1,168,944

1,169,023

7,207

Mortgage servicing rights, net
67,306

68,168

(862
)
66,175

66,626

68,193

(887
)
Other intangible assets, net
88,301

91,089

(2,788
)
93,915

73,610

75,836

12,465

Other assets
597,242

589,420

7,822

566,216

549,356

516,538

80,704

Total assets
$
32,386,478

$
32,596,460

$
(209,982
)
$
33,246,869

$
33,681,329

$
33,615,122

$
(1,228,644
)
Liabilities and stockholders’ equity
 
 
 
 
 
 
 
Noninterest-bearing demand deposits
$
5,450,709

$
5,503,223

$
(52,514
)
$
5,354,987

$
5,334,154

$
5,698,530

$
(247,821
)
Interest-bearing deposits
18,328,355

18,919,339

(590,984
)
19,919,235

20,198,903

19,198,863

(870,508
)
Total deposits
23,779,064

24,422,562

(643,498
)
25,274,222

25,533,057

24,897,393

(1,118,329
)
Federal funds purchased and securities sold under agreements to repurchase
433,097

78,028

355,069

83,195

127,098

111,651

321,446

Commercial paper
32,016

30,416

1,600

28,787

32,019

45,423

(13,407
)
FHLB advances
3,180,967

2,877,727

303,240

2,742,941

2,944,769

3,574,371

(393,404
)
Other long-term funding
549,343

796,799

(247,456
)
796,403

796,007

795,611

(246,268
)
Accrued expenses and other liabilities
489,868

470,073

19,795

421,526

412,510

409,787

80,081

Total liabilities
28,464,355

28,675,605

(211,250
)
29,347,075

29,845,459

29,834,235

(1,369,880
)
Stockholders’ equity
 
 
 
 
 
 
 
Preferred equity
256,716

256,716

—

256,716

256,716

256,716

—

Common equity
3,665,407

3,664,139

1,269

3,643,077

3,579,153

3,524,171

141,236

Total stockholders’ equity
3,922,124

3,920,855

1,269

3,899,794

3,835,870

3,780,888

141,236

Total liabilities and stockholders’ equity
$
32,386,478

$
32,596,460

$
(209,982
)
$
33,246,869

$
33,681,329

$
33,615,122

$
(1,228,644
)
Numbers may not sum due to rounding.


Page 1



Associated Banc-Corp
Consolidated Statements of Income (Unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
($ in thousands, except per share data)
 
 
Comp Qtr
 
YTD
 
YTD
 
Comp YTD
4Q19
 
4Q18
 
$ Change
 
% Change
 
Dec 2019
 
Dec 2018
 
$ Change
 
% Change
Interest income
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest and fees on loans
$
229,883

 
$
260,661

 
$
(30,778
)
 
(12
)%
 
$
998,099

 
$
976,990

 
$
21,109

 
2
 %
Interest and dividends on investment securities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Taxable
21,056

 
29,119

 
(8,063
)
 
(28
)%
 
100,304

 
119,741

 
(19,437
)
 
(16
)%
Tax-exempt
14,615

 
12,899

 
1,716

 
13
 %
 
57,565

 
44,782

 
12,783

 
29
 %
Other interest
3,556

 
3,257

 
299

 
9
 %
 
16,643

 
12,623

 
4,020

 
32
 %
Total interest income
269,110

 
305,936

 
(36,826
)
 
(12
)%
 
1,172,610

 
1,154,137

 
18,473

 
2
 %
Interest expense
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest on deposits
45,877

 
54,159

 
(8,282
)
 
(15
)%
 
237,286

 
176,118

 
61,168

 
35
 %
Interest on federal funds purchased and securities sold under agreements to repurchase
521

 
442

 
79

 
18
 %
 
1,579

 
2,006

 
(427
)
 
(21
)%
Interest on other short-term funding
28

 
36

 
(8
)
 
(22
)%
 
149

 
186

 
(37
)
 
(20
)%
Interest on FHLB advances
16,623

 
19,948

 
(3,325
)
 
(17
)%
 
69,816

 
73,668

 
(3,852
)
 
(5
)%
Interest on long-term funding
5,918

 
7,396

 
(1,478
)
 
(20
)%
 
28,106

 
22,579

 
5,527

 
24
 %
Total interest expense
68,967

 
81,980

 
(13,013
)
 
(16
)%
 
336,936

 
274,557

 
62,379

 
23
 %
Net interest income
200,142

 
223,955

 
(23,813
)
 
(11
)%
 
835,674

 
879,580

 
(43,906
)
 
(5
)%
Provision for credit losses
—

 
1,000

 
(1,000
)
 
(100
)%
 
16,000

 
—

 
16,000

 
N/M

Net interest income after provision for credit losses
200,142

 
222,955

 
(22,813
)
 
(10
)%
 
819,674

 
879,580

 
(59,906
)
 
(7
)%
Noninterest income
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Insurance commissions and fees
19,701

 
21,232

 
(1,531
)
 
(7
)%
 
89,104

 
89,511

 
(407
)
 
—
 %
Wealth management fees(a)
21,582

 
20,364

 
1,218

 
6
 %
 
83,467

 
82,562

 
905

 
1
 %
Service charges and deposit account fees
16,032

 
16,361

 
(329
)
 
(2
)%
 
63,135

 
66,075

 
(2,940
)
 
(4
)%
Card-based fees
9,906

 
10,316

 
(410
)
 
(4
)%
 
39,755

 
39,656

 
99

 
—
 %
Other fee-based revenue
4,696

 
5,260

 
(564
)
 
(11
)%
 
18,942

 
17,818

 
1,124

 
6
 %
Capital markets, net 
7,647

 
4,931

 
2,716

 
55
 %
 
19,862

 
20,120

 
(258
)
 
(1
)%
Mortgage banking, net
6,760

 
3,271

 
3,489

 
107
 %
 
31,878

 
19,911

 
11,967

 
60
 %
Bank and corporate owned life insurance
3,364

 
3,247

 
117

 
4
 %
 
14,845

 
13,951

 
894

 
6
 %
Asset gains (losses), net(b)
398

 
(2,456
)
 
2,854

 
N/M

 
2,713

 
(1,103
)
 
3,816

 
N/M

Investment securities gains (losses), net
26

 
—

 
26

 
N/M

 
5,957

 
(1,985
)
 
7,942

 
N/M

Other 
2,822

 
1,522

 
1,300

 
85
 %
 
11,165

 
9,051

 
2,114

 
23
 %
Total noninterest income
92,934

 
84,046

 
8,888

 
11
 %
 
380,824

 
355,568

 
25,256

 
7
 %
Noninterest expense
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Personnel
120,614

 
116,535

 
4,079

 
4
 %
 
487,063

 
482,676

 
4,387

 
1
 %
Technology
22,731

 
17,944

 
4,787

 
27
 %
 
82,429

 
72,674

 
9,755

 
13
 %
Occupancy
16,933

 
14,174

 
2,759

 
19
 %
 
62,399

 
59,121

 
3,278

 
6
 %
Business development and advertising
8,316

 
8,950

 
(634
)
 
(7
)%
 
29,600

 
30,923

 
(1,323
)
 
(4
)%
Equipment
5,970

 
5,897

 
73

 
1
 %
 
23,550

 
23,243

 
307

 
1
 %
Legal and professional
5,559

 
5,888

 
(329
)
 
(6
)%
 
19,901

 
23,061

 
(3,160
)
 
(14
)%
Loan and foreclosure costs
3,262

 
1,566

 
1,696

 
108
 %
 
8,861

 
7,410

 
1,451

 
20
 %
FDIC assessment
4,000

 
5,750

 
(1,750
)
 
(30
)%
 
16,250

 
30,000

 
(13,750
)
 
(46
)%
Other intangible amortization
2,712

 
2,233

 
479

 
21
 %
 
9,948

 
8,159

 
1,789

 
22
 %
Acquisition related costs(c)
1,325

 
(981
)
 
2,306

 
N/M

 
7,320

 
29,002

 
(21,682
)
 
(75
)%
Other
12,187

 
15,207

 
(3,020
)
 
(20
)%
 
46,666

 
55,530

 
(8,864
)
 
(16
)%
Total noninterest expense
203,609

 
193,163

 
10,446

 
5
 %
 
793,988

 
821,799

 
(27,811
)
 
(3
)%
Income before income taxes
89,467

 
113,839

 
(24,372
)
 
(21
)%
 
406,509

 
413,349

 
(6,840
)
 
(2
)%
Income tax expense
17,364

 
24,854

 
(7,490
)
 
(30
)%
 
79,720

 
79,786

 
(66
)
 
—
 %
Net income
72,103

 
88,985

 
(16,882
)
 
(19
)%
 
326,790

 
333,562

 
(6,772
)
 
(2
)%
Preferred stock dividends
3,801

 
3,707

 
94

 
3
 %
 
15,202

 
10,784

 
4,418

 
41
 %
Net income available to common equity
$
68,303

 
$
85,278

 
$
(16,975
)
 
(20
)%
 
$
311,587

 
$
322,779

 
$
(11,192
)
 
(3
)%
Earnings per common share
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic
$
0.43

 
$
0.52

 
$
(0.09
)
 
(17
)%
 
$
1.93

 
$
1.92

 
$
0.01

 
1
 %
Diluted
$
0.43

 
$
0.51

 
$
(0.08
)
 
(16
)%
 
$
1.91

 
$
1.89

 
$
0.02

 
1
 %
Average common shares outstanding
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic
156,994

 
164,662

 
(7,668
)
 
(5
)%
 
160,534

 
167,345

 
(6,811
)
 
(4
)%
Diluted
158,472

 
166,394

 
(7,922
)
 
(5
)%
 
161,932

 
169,732

 
(7,800
)
 
(5
)%
N/M = Not meaningful
Numbers may not sum due to rounding.
(a) Includes trust, asset management, brokerage, and annuity fees.
(b)
YTD Dec 2019 includes less than $1 million of Huntington related asset losses; YTD Dec 2018 includes approximately $2 million of Bank Mutual acquisition related asset losses net of asset gains.
(c)
Includes Bank Mutual, Huntington branch, and First Staunton acquisition related costs only.

Page 2



Associated Banc-Corp
Consolidated Statements of Income (Unaudited) - Quarterly Trend
($ in thousands, except per share data)
 
 
 
 
Seql Qtr
 
 
 
 
 
 
 
Comp Qtr
4Q19
 
3Q19
 
$ Change
 
% Change
 
2Q19
 
1Q19
 
4Q18
 
$ Change
 
% Change
Interest income
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest and fees on loans
$
229,883

 
$
248,579

 
$
(18,696
)
 
(8
)%
 
$
260,784

 
$
258,853

 
$
260,661

 
$
(30,778
)
 
(12
)%
Interest and dividends on investment securities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Taxable
21,056

 
23,485

 
(2,429
)
 
(10
)%
 
26,710

 
29,053

 
29,119

 
(8,063
)
 
(28
)%
Tax-exempt
14,615

 
14,491

 
124

 
1
 %
 
14,643

 
13,816

 
12,899

 
1,716

 
13
 %
Other interest
3,556

 
4,865

 
(1,309
)
 
(27
)%
 
3,995

 
4,226

 
3,257

 
299

 
9
 %
Total interest income
269,110

 
291,420

 
(22,310
)
 
(8
)%
 
306,133

 
305,948

 
305,936

 
(36,826
)
 
(12
)%
Interest expense
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest on deposits
45,877

 
61,585

 
(15,708
)
 
(26
)%
 
67,050

 
62,773

 
54,159

 
(8,282
)
 
(15
)%
Interest on federal funds purchased and securities sold under agreements to repurchase
521

 
145

 
376

 
N/M

 
286

 
627

 
442

 
79

 
18
 %
Interest on other short-term funding
28

 
33

 
(5
)
 
(15
)%
 
37

 
51

 
36

 
(8
)
 
(22
)%
Interest on FHLB advances
16,623

 
15,896

 
727

 
5
 %
 
17,744

 
19,554

 
19,948

 
(3,325
)
 
(17
)%
Interest on long-term funding
5,918

 
7,396

 
(1,478
)
 
(20
)%
 
7,396

 
7,396

 
7,396

 
(1,478
)
 
(20
)%
Total interest expense
68,967

 
85,054

 
(16,087
)
 
(19
)%
 
92,513

 
90,401

 
81,980

 
(13,013
)
 
(16
)%
Net interest income
200,142

 
206,365

 
(6,223
)
 
(3
)%
 
213,619

 
215,547

 
223,955

 
(23,813
)
 
(11
)%
Provision for credit losses
—

 
2,000

 
(2,000
)
 
(100
)%
 
8,000

 
6,000

 
1,000

 
(1,000
)
 
(100
)%
Net interest income after provision for credit losses
200,142

 
204,365

 
(4,223
)
 
(2
)%
 
205,619

 
209,547

 
222,955

 
(22,813
)
 
(10
)%
Noninterest income
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Insurance commissions and fees
19,701

 
20,954

 
(1,253
)
 
(6
)%
 
22,985

 
25,464

 
21,232

 
(1,531
)
 
(7
)%
Wealth management fees(a)
21,582

 
21,015

 
567

 
3
 %
 
20,691

 
20,180

 
20,364

 
1,218

 
6
 %
Service charges and deposit account fees
16,032

 
16,561

 
(529
)
 
(3
)%
 
15,426

 
15,115

 
16,361

 
(329
)
 
(2
)%
Card-based fees
9,906

 
10,456

 
(550
)
 
(5
)%
 
10,131

 
9,261

 
10,316

 
(410
)
 
(4
)%
Other fee-based revenue
4,696

 
5,085

 
(389
)
 
(8
)%
 
5,178

 
3,983

 
5,260

 
(564
)
 
(11
)%
Capital markets, net
7,647

 
4,300

 
3,347

 
78
 %
 
4,726

 
3,189

 
4,931

 
2,716

 
55
 %
Mortgage banking, net
6,760

 
10,940

 
(4,180
)
 
(38
)%
 
9,466

 
4,712

 
3,271

 
3,489

 
107
 %
Bank and corporate owned life insurance
3,364

 
4,337

 
(973
)
 
(22
)%
 
3,352

 
3,792

 
3,247

 
117

 
4
 %
Asset gains (losses), net(b)
398

 
877

 
(479
)
 
(55
)%
 
871

 
567

 
(2,456
)
 
2,854

 
N/M

Investment securities gains (losses), net
26

 
3,788

 
(3,762
)
 
(99
)%
 
463

 
1,680

 
—

 
26

 
N/M

Other
2,822

 
2,537

 
285

 
11
 %
 
2,547

 
3,260

 
1,522

 
1,300

 
85
 %
Total noninterest income
92,934

 
100,850

 
(7,916
)
 
(8
)%
 
95,837

 
91,202

 
84,046

 
8,888

 
11
 %
Noninterest expense
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Personnel
120,614

 
123,170

 
(2,556
)
 
(2
)%
 
123,228

 
120,050

 
116,535

 
4,079

 
4
 %
Technology
22,731

 
20,572

 
2,159

 
10
 %
 
20,114

 
19,012

 
17,944

 
4,787

 
27
 %
Occupancy
16,933

 
15,164

 
1,769

 
12
 %
 
13,830

 
16,472

 
14,174

 
2,759

 
19
 %
Business development and advertising
8,316

 
7,991

 
325

 
4
 %
 
6,658

 
6,636

 
8,950

 
(634
)
 
(7
)%
Equipment
5,970

 
6,335

 
(365
)
 
(6
)%
 
5,577

 
5,668

 
5,897

 
73

 
1
 %
Legal and professional
5,559

 
5,724

 
(165
)
 
(3
)%
 
4,668

 
3,951

 
5,888

 
(329
)
 
(6
)%
Loan and foreclosure costs
3,262

 
1,638

 
1,624

 
99
 %
 
1,814

 
2,146

 
1,566

 
1,696

 
108
 %
FDIC assessment
4,000

 
4,000

 
—

 
—
 %
 
4,500

 
3,750

 
5,750

 
(1,750
)
 
(30
)%
Other intangible amortization
2,712

 
2,686

 
26

 
1
 %
 
2,324

 
2,226

 
2,233

 
479

 
21
 %
Acquisition related costs(c)
1,325

 
1,629

 
(304
)
 
(19
)%
 
3,734

 
632

 
(981
)
 
2,306

 
N/M

Other
12,187

 
12,021

 
166

 
1
 %
 
11,331

 
11,128

 
15,207

 
(3,020
)
 
(20
)%
Total noninterest expense
203,609

 
200,930

 
2,679

 
1
 %
 
197,779

 
191,671

 
193,163

 
10,446

 
5
 %
Income before income taxes
89,467

 
104,286

 
(14,819
)
 
(14
)%
 
103,678

 
109,078

 
113,839

 
(24,372
)
 
(21
)%
Income tax expense
17,364

 
20,947

 
(3,583
)
 
(17
)%
 
19,017

 
22,392

 
24,854

 
(7,490
)
 
(30
)%
Net income
72,103

 
83,339

 
(11,236
)
 
(13
)%
 
84,661

 
86,686

 
88,985

 
(16,882
)
 
(19
)%
Preferred stock dividends
3,801

 
3,801

 
—

 
—
 %
 
3,801

 
3,801

 
3,707

 
94

 
3
 %
Net income available to common equity
$
68,303

 
$
79,539

 
$
(11,236
)
 
(14
)%
 
$
80,860

 
$
82,885

 
$
85,278

 
$
(16,975
)
 
(20
)%
Earnings per common share
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic
$
0.43

 
$
0.50

 
$
(0.07
)
 
(14
)%
 
$
0.49

 
$
0.50

 
$
0.52

 
$
(0.09
)
 
(17
)%
Diluted
$
0.43

 
$
0.49

 
$
(0.06
)
 
(12
)%
 
$
0.49

 
$
0.50

 
$
0.51

 
$
(0.08
)
 
(16
)%
Average common shares outstanding
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic
156,994

 
159,126

 
(2,132
)
 
(1
)%
 
162,180

 
163,928

 
164,662

 
(7,668
)
 
(5
)%
Diluted
158,472

 
160,382

 
(1,910
)
 
(1
)%
 
163,672

 
165,433

 
166,394

 
(7,922
)
 
(5
)%
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 Bank Mutual, Huntington branch, and First Staunton acquisition related costs only.

Page 3



Associated Banc-Corp
Selected Quarterly Information
 
 
 
 
 
 
 
($ in millions except per share data; shares repurchased and outstanding in thousands)
YTD
Dec 2019
YTD
Dec 2018
4Q19
3Q19
2Q19
1Q19
4Q18
Per common share data
 
 
 
 
 
 
 
Dividends
$
0.69

$
0.62

$
0.18

$
0.17

$
0.17

$
0.17

$
0.17

Market value:
 
 
 
 
 
 
 
High
23.67

28.85

22.51

21.67

23.15

23.67

26.55

Low
18.64

18.72

18.96

18.64

19.81

19.77

18.72

Close
22.04

19.79

22.04

20.25

21.14

21.35

19.79

Book value
23.32

21.43

23.32

23.00

22.40

21.77

21.43

Tangible book value / share
15.28

13.86

15.28

15.05

14.59

14.21

13.86

Performance ratios (annualized)
 
 
 
 
 
 
 
Return on average assets
0.99
%
1.01
%
0.89
%
1.00
%
1.02
%
1.05
%
1.07
%
Effective tax rate
19.61
%
19.30
%
19.41
%
20.09
%
18.34
%
20.53
%
21.83
%
Dividend payout ratio(a)
35.75
%
32.29
%
41.86
%
34.00
%
34.69
%
34.00
%
32.69
%
Net interest margin
2.86
%
2.97
%
2.83
%
2.81
%
2.88
%
2.90
%
3.02
%
Selected trend information
 
 
 
 
 
 
 
Average full time equivalent employees(b)
4,702

4,699

4,696

4,782

4,666

4,660

4,659

Branch count
 
 
248

248

247

233

236

Assets under management, at market value(c)
 
 
$
12,104

$
11,604

$
11,475

$
11,192

$
10,291

Mortgage loans originated for sale during period
$
1,089

$
1,092

$
265

$
365

$
297

$
163

$
245

Mortgage loan settlements during period(d)
$
1,317

$
1,132

$
268

$
617

$
272

$
160

$
305

Mortgage portfolio serviced for others
 
 
$
8,485

$
8,688

$
8,504

$
8,543

$
8,601

Mortgage servicing rights, net / mortgage portfolio serviced for others
 
 
0.79
%
0.78
%
0.78
%
0.78
%
0.79
%
Shares repurchased during period
8,211

9,470

2,256

2,892

1,754

1,308

3,764

Shares outstanding, end of period
157,171

164,440

157,171

159,291

162,662

164,418

164,440

Selected quarterly ratios
 
 
 
 
 
 
 
Loans / deposits
 
 
95.97
%
93.17
%
91.99
%
90.66
%
92.14
%
Stockholders’ equity / assets
 
 
12.11
%
12.03
%
11.73
%
11.39
%
11.25
%
Risk-based capital(e)(f)
 
 
 
 
 
 
 
Total risk-weighted assets
 
 
$
24,296

$
24,313

$
24,466

$
24,121

$
23,843

Common equity Tier 1
 
 
$
2,481

$
2,482

$
2,481

$
2,485

$
2,450

Common equity Tier 1 capital ratio
 
 
10.21
%
10.21
%
10.14
%
10.30
%
10.27
%
Tier 1 capital ratio
 
 
11.26
%
11.26
%
11.19
%
11.36
%
11.35
%
Total capital ratio
 
 
13.21
%
13.26
%
13.25
%
13.48
%
13.49
%
Tier 1 leverage ratio
 
 
8.83
%
8.57
%
8.49
%
8.50
%
8.49
%
Loans
 
 
 
 
 
 
 
Recorded investment on loans
 
 
$
22,753

$
22,690

$
23,180

$
23,078

$
22,872

Net unaccreted purchase discount on performing loans(g)
 
 
(12
)
(14
)
(16
)
(16
)
(18
)
Net other deferred costs
 
 
80

79

85

86

87

Loans
 
 
$
22,821

$
22,755

$
23,250

$
23,148

$
22,940

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 resulted in an increase in 3Q19 and YTD Dec 2019 periods.
(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)
December 31, 2019 data is estimated.
(g)
Includes loans obtained from the acquisition of Bank Mutual and the Huntington branch acquisition.


Page 4



Associated Banc-Corp
Selected Asset Quality Information
 
 
 
 
 
 
($ in thousands)
 
Dec 31, 2019
Sep 30, 2019
Seql Qtr %
Change
 
Jun 30, 2019
Mar 31, 2019
Dec 31, 2018
Comp Qtr %
Change
Allowance for loan losses
 
 
 
 
 
 
 
 
 
Balance at beginning of period
 
$
214,425

$
233,659

(8
)%
 
$
235,081

$
238,023

$
236,250

(9
)%
Provision for loan losses
 
1,000

1,000

—
 %
 
12,000

4,500

2,000

(50
)%
Charge offs
 
(16,752
)
(26,313
)
(36
)%
 
(15,761
)
(15,486
)
(6,151
)
172
 %
Recoveries
 
2,699

6,079

(56
)%
 
2,339

8,044

5,923

(54
)%
Net charge offs
 
(14,054
)
(20,234
)
(31
)%
 
(13,421
)
(7,442
)
(228
)
N/M

Balance at end of period
 
$
201,371

$
214,425

(6
)%
 
$
233,659

$
235,081

$
238,023

(15
)%
Allowance for unfunded commitments
 
 
 
 
 
 
 
 
 
Balance at beginning of period
 
$
22,907

$
21,907

5
 %
 
$
25,836

$
24,336

$
25,336

(10
)%
Provision for unfunded commitments
 
(1,000
)
1,000

N/M

 
(4,000
)
1,500

(1,000
)
—
 %
Amount recorded at acquisition
 
—

—

N/M

 
70

—

—

N/M

Balance at end of period
 
$
21,907

$
22,907

(4
)%
 
$
21,907

$
25,836

$
24,336

(10
)%
Allowance for credit losses
 
$
223,278

$
237,331

(6
)%
 
$
255,566

$
260,917

$
262,359

(15
)%
Provision for credit losses
 
$
—

$
2,000

(100
)%
 
$
8,000

$
6,000

$
1,000

(100
)%
($ in thousands)
 
Dec 31, 2019
Sep 30, 2019
Seql Qtr % Change
 
Jun 30, 2019
Mar 31, 2019
Dec 31, 2018
Comp Qtr %
Change
Net (charge offs) recoveries
 
 
 
 
 
 
 
 
 
Commercial and industrial
 
$
(11,917
)
$
(19,918
)
(40
)%
 
$
(12,177
)
$
(7,428
)
$
2,974

N/M

Commercial real estate—owner occupied
 
—

1,483

(100
)%
 
(104
)
1,193

282

(100
)%
Commercial and business lending
 
(11,917
)
(18,435
)
(35
)%
 
(12,281
)
(6,235
)
3,256

N/M

Commercial real estate—investor
 
—

(3
)
(100
)%
 
3

31

(2,107
)
(100
)%
Real estate construction
 
72

20

N/M

 
151

—

106

(32
)%
Commercial real estate lending
 
72

17

N/M

 
153

31

(2,001
)
N/M

Total commercial
 
(11,845
)
(18,418
)
(36
)%
 
(12,127
)
(6,203
)
1,255

N/M

Residential mortgage
 
(1,415
)
(393
)
N/M

 
(365
)
(457
)
(94
)
N/M

Home equity
 
480

(275
)
N/M

 
239

309

(270
)
N/M

Other consumer
 
(1,274
)
(1,148
)
11
 %
 
(1,169
)
(1,090
)
(1,118
)
14
 %
Total consumer
 
(2,208
)
(1,816
)
22
 %
 
(1,294
)
(1,239
)
(1,482
)
49
 %
Total net (charge offs) recoveries
 
$
(14,054
)
$
(20,234
)
(31
)%
 
$
(13,421
)
$
(7,442
)
$
(228
)
N/M

 
 
 
 
 
 
 
 
 
 
(In basis points)
 
Dec 31, 2019
Sep 30, 2019
 
 
Jun 30, 2019
Mar 31, 2019
Dec 31, 2018
 
Net charge offs to average loans (annualized)
 
 
 
 
 
 
 
 
 
Commercial and industrial
 
(65
)
(104
)
 
 
(64
)
(40
)
16

 
Commercial real estate—owner occupied
 
—

63

 
 
(4
)
53

13

 
Commercial and business lending
 
(58
)
(86
)
 
 
(57
)
(30
)
16

 
Commercial real estate—investor
 
—

—

 
 
—

—

(22
)
 
Real estate construction
 
2

1

 
 
5

—

3

 
Commercial real estate lending
 
1

—

 
 
1

—

(15
)
 
Total commercial
 
(35
)
(53
)
 
 
(35
)
(19
)
4

 
Residential mortgage
 
(7
)
(2
)
 
 
(2
)
(2
)
—

 
Home equity
 
22

(12
)
 
 
11

14

(12
)
 
Other consumer
 
(145
)
(129
)
 
 
(132
)
(123
)
(121
)
 
Total consumer
 
(9
)
(8
)
 
 
(5
)
(5
)
(6
)
 
Total net charge offs
 
(24
)
(35
)
 
 
(23
)
(13
)
—

 
 
 
 
 
 
 
 
 
 
 
($ in thousands)
 
Dec 31, 2019
Sep 30, 2019
Seql Qtr %
Change
 
Jun 30, 2019
Mar 31, 2019
Dec 31, 2018
Comp Qtr %
Change
Credit Quality
 
 
 
 
 
 
 
 
 
Nonaccrual loans
 
$
118,380

$
128,939

(8
)%
 
$
166,707

$
155,556

$
127,901

(7
)%
Other real estate owned (OREO)
 
21,101

19,625

8
 %
 
18,355

12,286

11,984

76
 %
Other nonperforming assets
 
6,004

6,004

—
 %
 
—

—

—

N/M

Total nonperforming assets
 
$
145,485

$
154,568

(6
)%
 
$
185,062

$
167,843

$
139,885

4
 %
 
 
 
 
 
 
 
 
 
 
Loans 90 or more days past due and still accruing
 
$
2,259

$
1,986

14
 %
 
$
2,088

$
2,218

$
2,165

4
 %
Allowance for loan losses to loans
 
0.88
%
0.94
%
 
 
1.00
%
1.02
%
1.04
%
 
Net unaccreted purchase discount to net purchased loans
 
1.21
%
1.33
%
 
 
1.35
%
1.41
%
1.44
%
 
Allowance for loan losses to nonaccrual loans
 
170.10
%
166.30
%
 
 
140.16
%
151.12
%
186.10
%
 
Nonaccrual loans to total loans
 
0.52
%
0.57
%
 
 
0.72
%
0.67
%
0.56
%
 
Nonperforming assets to total loans plus OREO
 
0.64
%
0.68
%
 
 
0.80
%
0.72
%
0.61
%
 
Nonperforming assets to total assets
 
0.45
%
0.47
%
 
 
0.56
%
0.50
%
0.42
%
 
Year-to-date net charge offs to average loans (annualized)
 
0.24
%
0.24
%
 
 
0.18
%
0.13
%
0.13
%
 


Page 5



Associated Banc-Corp
Selected Asset Quality Information (continued)
(In thousands)
 
Dec 31, 2019
Sep 30, 2019
Seql Qtr %
Change

Jun 30, 2019
Mar 31, 2019
Dec 31, 2018
Comp Qtr %
Change
Nonaccrual loans
 
 
 
 
 
 
 
 
 
Commercial and industrial
 
$
46,312

$
56,536

(18
)%
 
$
84,151

$
73,379

$
41,021

13
 %
Commercial real estate—owner occupied
 
67

68

(1
)%
 
571

890

3,957

(98
)%
Commercial and business lending
 
46,380

56,604

(18
)%
 
84,722

74,269

44,978

3
 %
Commercial real estate—investor
 
4,409

4,800

(8
)%
 
1,485

776

1,952

126
 %
Real estate construction
 
493

542

(9
)%
 
427

739

979

(50
)%
Commercial real estate lending
 
4,902

5,342

(8
)%
 
1,912

1,516

2,931

67
 %
Total commercial
 
51,282

61,946

(17
)%
 
86,634

75,784

47,909

7
 %
Residential mortgage
 
57,844

57,056

1
 %
 
68,166

67,323

67,574

(14
)%
Home equity
 
9,104

9,828

(7
)%
 
11,835

12,300

12,339

(26
)%
Other consumer
 
152

109

39
 %
 
72

149

79

92
 %
Total consumer
 
67,099

66,993

—
 %
 
80,073

79,772

79,992

(16
)%
Total nonaccrual loans
 
$
118,380

$
128,939

(8
)%
 
$
166,707

$
155,556

$
127,901

(7
)%
 
 
 
 
 
 
 
 
 
 
 
 
Dec 31, 2019
Sep 30, 2019
Seql Qtr %
Change
 
Jun 30, 2019
Mar 31, 2019
Dec 31, 2018
Comp Qtr %
Change
Restructured loans (accruing)
 
 
 
 
 
 
 
 
 
Commercial and industrial
 
$
16,678

$
15,398

8
 %
 
$
16,850

$
15,443

$
25,478

(35
)%
Commercial real estate—owner occupied
 
1,676

1,912

(12
)%
 
1,970

2,026

2,080

(19
)%
Commercial and business lending
 
18,353

17,311

6
 %
 
18,820

17,469

27,558

(33
)%
Commercial real estate—investor
 
293

304

(4
)%
 
315

1,700

799

(63
)%
Real estate construction
 
298

227

31
 %
 
232

311

311

(4
)%
Commercial real estate lending
 
591

531

11
 %
 
547

2,011

1,110

(47
)%
Total commercial
 
18,944

17,842

6
 %
 
19,367

19,480

28,668

(34
)%
Residential mortgage
 
3,955

3,228

23
 %
 
17,645

18,226

16,036

(75
)%
Home equity
 
1,896

2,017

(6
)%
 
7,247

7,688

7,385

(74
)%
Other consumer
 
1,246

1,243

—
 %
 
1,222

1,154

1,174

6
 %
Total consumer
 
7,097

6,487

9
 %
 
26,114

27,068

24,595

(71
)%
Total restructured loans (accruing)
 
$
26,041

$
24,329

7
 %
 
$
45,481

$
46,548

$
53,263

(51
)%
Nonaccrual restructured loans (included in nonaccrual loans)
 
$
22,494

$
16,293

38
 %
 
$
24,332

$
24,172

$
26,292

(14
)%
 
 
Dec 31, 2019
Sep 30, 2019
Seql Qtr %
Change
 
Jun 30, 2019
Mar 31, 2019
Dec 31, 2018
Comp Qtr %
Change
Accruing Loans 30-89 Days Past Due
 
 
 
 
 
 
 
 
 
Commercial and industrial
 
$
821

$
426

93
 %
 
$
4,909

$
3,295

$
525

56
 %
Commercial real estate—owner occupied
 
1,369

2,646

(48
)%
 
2,018

6,066

2,699

(49
)%
Commercial and business lending
 
2,190

3,073

(29
)%
 
6,926

9,361

3,224

(32
)%
Commercial real estate—investor
 
1,812

636

185
 %
 
1,382

1,090

3,767

(52
)%
Real estate construction
 
97

595

(84
)%
 
151

6,773

330

(71
)%
Commercial real estate lending
 
1,909

1,232

55
 %
 
1,532

7,863

4,097

(53
)%
Total commercial
 
4,099

4,304

(5
)%
 
8,459

17,224

7,321

(44
)%
Residential mortgage
 
9,274

8,063

15
 %
 
9,756

13,274

9,706

(4
)%
Home equity
 
5,647

4,798

18
 %
 
5,827

6,363

6,049

(7
)%
Other consumer
 
2,083

2,203

(5
)%
 
1,838

2,364

2,269

(8
)%
Total consumer
 
17,005

15,063

13
 %
 
17,422

22,001

18,024

(6
)%
Total accruing loans 30-89 days past due
 
$
21,104

$
19,367

9
 %
 
$
25,881

$
39,225

$
25,345

(17
)%
 
 
 
 
 
 
 
 
 
 
 
 
Dec 31, 2019
Sep 30, 2019
Seql Qtr %
Change
 
Jun 30, 2019
Mar 31, 2019
Dec 31, 2018
Comp Qtr %
Change
Potential Problem Loans
 
 
 
 
 
 
 
 
 
Commercial and industrial
 
$
106,308

$
59,427

79
 %
 
$
58,658

$
111,772

$
116,578

(9
)%
Commercial real estate—owner occupied
 
19,889

22,624

(12
)%
 
24,237

48,929

55,964

(64
)%
Commercial and business lending
 
126,197

82,051

54
 %
 
82,895

160,701

172,542

(27
)%
Commercial real estate—investor
 
29,449

49,353

(40
)%
 
77,766

70,613

67,481

(56
)%
Real estate construction
 
—

544

(100
)%
 
3,166

4,600

3,834

(100
)%
Commercial real estate lending
 
29,449

49,897

(41
)%
 
80,932

75,213

71,315

(59
)%
Total commercial
 
155,646

131,948

18
 %
 
163,828

235,914

243,856

(36
)%
Residential mortgage
 
1,451

1,242

17
 %
 
1,983

5,351

5,975

(76
)%
Home equity
 
—

—

N/M

 
32

91

103

(100
)%
Total consumer
 
1,451

1,242

17
 %
 
2,014

5,443

6,078

(76
)%
Total potential problem loans
 
$
157,097

$
133,189

18
 %
 
$
165,842

$
241,357

$
249,935

(37
)%
N/M = Not meaningful
Numbers may not sum due to rounding.

Page 6



Associated Banc-Corp
Net Interest Income Analysis - Fully Tax-Equivalent Basis - Sequential and Comparable Quarter
 
 
 
 
 
Three Months Ended
 
December 31, 2019
 
September 30, 2019
 
December 31, 2018
($ in thousands)
Average
Balance
Interest
Income /Expense
Average
Yield /Rate
 
Average
Balance
Interest
Income /Expense
Average
Yield /Rate
 
Average
Balance
Interest
Income /Expense
Average
Yield /Rate
Assets
 
 
 
 
 
 
 
 
 
 
 
Earning assets
 
 
 
 
 
 
 
 
 
 
 
Loans (a) (b) (c)
 
 
 
 
 
 
 
 
 
 
 
Commercial and business lending
$
8,208,076

$
85,418

4.13
%
 
$
8,502,268

$
96,327

4.49
%
 
$
8,019,254

$
96,539

4.78
%
Commercial real estate lending
5,195,025

59,490

4.55
%
 
5,157,031

64,058

4.92
%
 
5,209,743

72,364

5.51
%
Total commercial
13,403,101

144,908

4.29
%
 
13,659,299

160,386

4.66
%
 
13,228,997

168,903

5.07
%
Residential mortgage
8,167,795

66,805

3.27
%
 
8,337,230

68,656

3.29
%
 
8,314,421

73,158

3.52
%
Retail
1,212,438

18,422

6.06
%
 
1,255,540

20,066

6.38
%
 
1,261,307

18,982

6.00
%
Total loans
22,783,334

230,135

4.02
%
 
23,252,068

249,108

4.26
%
 
22,804,725

261,043

4.55
%
Investment securities
 
 
 
 
 
 
 
 
 
 
 
Taxable
3,624,465

21,056

2.32
%
 
4,032,027

23,485

2.33
%
 
5,087,746

29,119

2.29
%
Tax-exempt(a)
1,929,374

18,269

3.79
%
 
1,918,661

18,114

3.78
%
 
1,740,964

16,253

3.73
%
Other short-term investments
445,869

3,556

3.17
%
 
619,334

4,865

3.12
%
 
383,286

3,257

3.38
%
Investments and other
5,999,708

42,881

2.86
%
 
6,570,022

46,464

2.83
%
 
7,211,997

48,629

2.70
%
Total earning assets
28,783,042

$
273,015

3.78
%
 
29,822,090

$
295,572

3.94
%
 
30,016,722

$
309,672

4.11
%
Other assets, net(d)
3,399,141

 
 
 
3,331,910

 
 
 
3,006,436

 
 
Total assets
$
32,182,183

 
 
 
$
33,154,000

 
 
 
$
33,023,158

 
 
Liabilities and stockholders' equity
 
 
 
 
 
 
 
 
 
 
 
Interest-bearing liabilities
 
 
 
 
 
 
 
 
 
 
 
Interest-bearing deposits
 
 
 
 
 
 
 
 
 
 
 
Savings
$
2,714,191

$
2,086

0.30
%
 
$
2,618,188

$
2,164

0.33
%
 
$
1,995,160

$
696

0.14
%
Interest-bearing demand
5,138,116

11,458

0.88
%
 
5,452,674

16,055

1.17
%
 
4,837,223

14,006

1.15
%
Money market
6,594,681

13,959

0.84
%
 
6,933,230

18,839

1.08
%
 
7,089,449

16,532

0.93
%
Network transaction deposits
1,438,908

6,295

1.74
%
 
1,764,961

10,147

2.28
%
 
1,880,595

10,943

2.31
%
Time deposits
2,746,978

12,080

1.74
%
 
3,107,670

14,381

1.84
%
 
3,060,896

11,982

1.55
%
Total interest-bearing deposits
18,632,874

45,877

0.98
%
 
19,876,723

61,585

1.23
%
 
18,863,323

54,159

1.14
%
Federal funds purchased and securities sold under agreements to repurchase
176,999

521

1.17
%
 
81,285

145

0.71
%
 
134,748

442

1.30
%
Commercial paper
27,708

28

0.40
%
 
28,721

33

0.45
%
 
41,528

36

0.35
%
FHLB advances
2,909,462

16,623

2.27
%
 
2,716,946

15,896

2.32
%
 
3,654,905

19,948

2.17
%
Long-term funding
585,024

5,918

4.05
%
 
796,561

7,396

3.71
%
 
795,379

7,396

3.72
%
Total short and long-term funding
3,699,192

23,090

2.48
%
 
3,623,513

23,469

2.58
%
 
4,626,560

27,822

2.39
%
Total interest-bearing liabilities
22,332,066

$
68,967

1.23
%
 
23,500,235

$
85,054

1.44
%
 
23,489,883

$
81,980

1.39
%
Noninterest-bearing demand deposits
5,470,496

 
 
 
5,324,481

 
 
 
5,366,711

 
 
Other liabilities(d)
465,081

 
 
 
425,810

 
 
 
419,805

 
 
Stockholders’ equity
3,914,539

 
 
 
3,903,474

 
 
 
3,746,760

 
 
Total liabilities and stockholders’ equity
$
32,182,183

 
 
 
$
33,154,000

 
 
 
$
33,023,158

 
 
Interest rate spread
 
 
2.55
%
 
 
 
2.50
%
 
 
 
2.72
%
Net free funds
 
 
0.28
%
 
 
 
0.31
%
 
 
 
0.30
%
Fully tax-equivalent net interest income and net interest margin ("NIM")
 
$
204,048

2.83
%
 
 
$
210,517

2.81
%
 
 
$
227,692

3.02
%
Fully tax-equivalent adjustment
 
3,906

 
 
 
4,152

 
 
 
3,736

 
Net interest income
 
$
200,142

 
 
 
$
206,365

 
 
 
$
223,955

 
Numbers may not sum due to rounding.
(a)
The yield on tax-exempt loans and securities is computed on a fully tax-equivalent basis using a tax rate of 21% and is net of the effects of certain disallowed interest deductions.
(b)
Nonaccrual loans and loans held for sale have been included in the average balances.
(c)
Interest income includes amortization of net deferred loan origination costs and net accreted purchase loan discount.
(d) During the third quarter of 2019, the Corporation made a change in accounting policy to offset derivative assets and liabilities and cash collateral with the same counterparty where it has a legally enforceable master netting agreement in place. Adoption of this change was voluntary and has been adopted retrospectively with all prior periods presented herein restated.

Page 7



Associated Banc-Corp
Net Interest Income Analysis - Fully Tax-Equivalent Basis - Year Over Year
 
 
Year Ended December 31,
 
 
2019
 
2018
($ in thousands)
 
Average
Balance
 
Interest
Income /Expense
 
Average
Yield / Rate
 
Average
Balance
 
Interest
Income /Expense
 
Average
Yield / Rate
Assets
 
 
 
 
 
 
 
 
 
 
 
 
Earning assets
 
 
 
 
 
 
 
 
 
 
 
 
Loans (a) (b) (c)
 
 
 
 
 
 
 
 
 
 
 
 
Commercial and business lending
 
$
8,426,774

 
$
385,072

 
4.57
%
 
$
7,744,640

 
$
349,266

 
4.51
%
Commercial real estate lending
 
5,150,464

 
255,582

 
4.96
%
 
5,433,361

 
273,937

 
5.04
%
Total commercial
 
13,577,238

 
640,655

 
4.72
%
 
13,178,001

 
623,203

 
4.73
%
Residential mortgage 
 
8,311,914

 
282,134

 
3.39
%
 
8,289,432

 
281,814

 
3.40
%
Retail
 
1,233,646

 
76,939

 
6.24
%
 
1,250,863

 
73,605

 
5.88
%
Total loans
 
23,122,797

 
999,727

 
4.32
%
 
22,718,297

 
978,622

 
4.31
%
Investment securities
 
 
 
 
 
 
 
 
 
 
 
 
Taxable
 
4,284,991

 
100,304

 
2.34
%
 
5,366,825

 
119,741

 
2.23
%
Tax-exempt (a)
 
1,909,474

 
71,956

 
3.77
%
 
1,546,096

 
56,426

 
3.65
%
Other short-term investments
 
503,566

 
16,643

 
3.30
%
 
418,576

 
12,623

 
3.02
%
Investments and other
 
6,698,032

 
188,903

 
2.82
%
 
7,331,497

 
188,790

 
2.58
%
Total earning assets
 
29,820,829

 
$
1,188,630

 
3.99
%
 
30,049,793

 
$
1,167,412

 
3.88
%
Other assets, net(d)
 
3,225,775

 
 
 
 
 
2,958,066

 
 
 
 
Total assets
 
$
33,046,604

 
 
 
 
 
$
33,007,859

 
 
 
 
Liabilities and stockholders' equity
 
 
 
 
 
 
 
 
 
 
 
 
Interest-bearing liabilities
 
 
 
 
 
 
 
 
 
 
 
 
Interest-bearing deposits
 
 
 
 
 
 
 
 
 
 
 
 
Savings
 
$
2,439,872

 
$
7,086

 
0.29
%
 
$
1,878,960

 
$
1,435

 
0.08
%
Interest-bearing demand
 
5,080,857

 
56,742

 
1.12
%
 
4,767,873

 
44,911

 
0.94
%
Money market
 
7,005,265

 
74,467

 
1.06
%
 
7,260,692

 
54,573

 
0.75
%
Network transaction deposits
 
1,860,951

 
42,523

 
2.29
%
 
2,095,715

 
39,251

 
1.87
%
Time deposits
 
3,129,142

 
56,468

 
1.80
%
 
2,831,229

 
35,948

 
1.27
%
Total interest-bearing deposits
 
19,516,088

 
237,286

 
1.22
%
 
18,834,469

 
176,118

 
0.94
%
Federal funds purchased and securities sold under agreements to repurchase
 
137,679

 
1,579

 
1.15
%
 
224,967

 
2,006

 
0.89
%
Commercial paper
 
32,123

 
149

 
0.46
%
 
56,076

 
186

 
0.33
%
FHLB advances
 
3,106,279

 
69,816

 
2.25
%
 
3,971,797

 
73,668

 
1.85
%
Long-term funding
 
742,946

 
28,106

 
3.78
%
 
612,513

 
22,579

 
3.69
%
Total short and long-term funding
 
4,019,027

 
99,651

 
2.48
%
 
4,865,353

 
98,439

 
2.02
%
Total interest-bearing liabilities
 
23,535,115

 
$
336,936

 
1.43
%
 
23,699,823

 
$
274,557

 
1.16
%
Noninterest-bearing demand deposits
 
5,219,520

 
 
 
 
 
5,237,580

 
 
 
 
Other liabilities(d)
 
420,100

 
 
 
 
 
378,024

 
 
 
 
Stockholders’ equity
 
3,871,869

 
 
 
 
 
3,692,433

 
 
 
 
Total liabilities and stockholders’ equity
 
$
33,046,604

 
 
 
 
 
$
33,007,859

 
 
 
 
Interest rate spread
 
 
 
 
 
2.56
%
 
 
 
 
 
2.72
%
Net free funds
 
 
 
 
 
0.30
%
 
 
 
 
 
0.25
%
Fully tax-equivalent net interest income and net interest margin ("NIM")
 
 
 
$
851,693

 
2.86
%
 
 
 
$
892,855

 
2.97
%
Fully tax-equivalent adjustment
 
 
 
16,020

 
 
 
 
 
13,275

 
 
Net interest income
 
 
 
$
835,674

 
 
 
 
 
$
879,580

 
 
Numbers may not sum due to rounding.
(a)
The yield on tax-exempt loans and securities is computed on a fully tax-equivalent basis using a tax rate of 21% and is net of the effects of certain disallowed interest deductions.
(b)
Nonaccrual loans and loans held for sale have been included in the average balances.
(c)
Interest income includes amortization of net deferred loan origination costs and net accreted purchase loan discount.
(d) During the third quarter of 2019, the Corporation made a change in accounting policy to offset derivative assets and liabilities and cash collateral with the same counterparty where it has a legally enforceable master netting agreement in place. Adoption of this change was voluntary and has been adopted retrospectively with all prior periods presented herein restated.



Page 8



Associated Banc-Corp
Loan and Deposit Composition
 
 
 
 
 
 
 
 
 
 
 
 
 
 
($ in thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Period end loan composition
 
Dec 31, 2019
 
Sep 30, 2019
 
Seql Qtr % Change
 
Jun 30, 2019
 
Mar 31, 2019
 
Dec 31, 2018
 
Comp Qtr % Change
Commercial and industrial
 
$
7,354,594

 
$
7,495,623

 
(2
)%
 
$
7,579,384

 
$
7,587,597

 
$
7,398,044

 
(1
)%
Commercial real estate—owner occupied
 
911,265

 
915,524

 
—
 %
 
942,811

 
932,393

 
920,443

 
(1
)%
Commercial and business lending
 
8,265,858

 
8,411,147

 
(2
)%
 
8,522,194

 
8,519,990

 
8,318,487

 
(1
)%
Commercial real estate—investor
 
3,794,517

 
3,803,277

 
—
 %
 
3,779,201

 
3,809,253

 
3,751,554

 
1
 %
Real estate construction
 
1,420,900

 
1,356,508

 
5
 %
 
1,394,815

 
1,273,782

 
1,335,031

 
6
 %
Commercial real estate lending
 
5,215,417

 
5,159,784

 
1
 %
 
5,174,016

 
5,083,035

 
5,086,585

 
3
 %
Total commercial
 
13,481,275

 
13,570,932

 
(1
)%
 
13,696,210

 
13,603,025

 
13,405,072

 
1
 %
Residential mortgage
 
8,136,980

 
7,954,801

 
2
 %
 
8,277,479

 
8,323,846

 
8,277,712

 
(2
)%
Home equity
 
852,025

 
879,642

 
(3
)%
 
916,213

 
868,886

 
894,473

 
(5
)%
Other consumer
 
351,159

 
349,335

 
1
 %
 
360,065

 
352,602

 
363,171

 
(3
)%
Total consumer
 
9,340,164

 
9,183,778

 
2
 %
 
9,553,757

 
9,545,333

 
9,535,357

 
(2
)%
Total loans
 
$
22,821,440

 
$
22,754,710

 
—
 %
 
$
23,249,967

 
$
23,148,359

 
$
22,940,429

 
(1
)%
Purchased credit-impaired loans
 
$
1,552

 
$
1,710

 
(9
)%
 
$
2,145

 
$
4,907

 
$
4,852

 
(68
)%
Period end deposit and customer funding composition
 
Dec 31, 2019
 
Sep 30, 2019
 
Seql Qtr % Change
 
Jun 30, 2019
 
Mar 31, 2019
 
Dec 31, 2018
 
Comp Qtr % Change
Noninterest-bearing demand
 
$
5,450,709

 
$
5,503,223

 
(1
)%
 
$
5,354,987

 
$
5,334,154

 
$
5,698,530

 
(4
)%
Savings
 
2,735,036

 
2,643,950

 
3
 %
 
2,591,173

 
2,215,857

 
2,012,841

 
36
 %
Interest-bearing demand
 
5,329,717

 
5,434,955

 
(2
)%
 
6,269,035

 
5,226,362

 
5,336,952

 
—
 %
Money market
 
7,640,798

 
7,930,676

 
(4
)%
 
7,691,775

 
9,005,018

 
9,033,669

 
(15
)%
Brokered CDs
 
5,964

 
16,266

 
(63
)%
 
77,543

 
387,459

 
192,234

 
(97
)%
Other time
 
2,616,839

 
2,893,493

 
(10
)%
 
3,289,709

 
3,364,206

 
2,623,167

 
—
 %
Total deposits
 
23,779,064

 
24,422,562

 
(3
)%
 
25,274,222

 
25,533,057

 
24,897,393

 
(4
)%
Customer funding(a)
 
103,113

 
108,369

 
(5
)%
 
104,973

 
146,027

 
137,364

 
(25
)%
Total deposits and customer funding
 
$
23,882,177

 
$
24,530,932

 
(3
)%
 
$
25,379,195

 
$
25,679,083

 
$
25,034,757

 
(5
)%
Network transaction deposits(b)
 
$
1,336,286

 
$
1,527,910

 
(13
)%
 
$
1,805,141

 
$
2,204,204

 
$
2,276,296

 
(41
)%
Net deposits and customer funding (Total deposits and customer funding, excluding Brokered CDs and network transaction deposits)
 
$
22,539,927

 
$
22,986,756

 
(2
)%
 
$
23,496,510

 
$
23,087,421

 
$
22,566,227

 
—
 %
Quarter average loan composition
 
Dec 31, 2019
 
Sep 30, 2019
 
Seql Qtr % Change
 
Jun 30, 2019
 
Mar 31, 2019
 
Dec 31, 2018
 
Comp Qtr % Change
Commercial and industrial
 
$
7,291,592

 
$
7,574,448

 
(4
)%
 
$
7,688,462

 
$
7,459,318

 
$
7,166,092

 
2
 %
Commercial real estate—owner occupied
 
916,484

 
927,820

 
(1
)%
 
933,146

 
916,845

 
853,162

 
7
 %
Commercial and business lending
 
8,208,076

 
8,502,268

 
(3
)%
 
8,621,609

 
8,376,163

 
8,019,254

 
2
 %
Commercial real estate—investor
 
3,806,168

 
3,768,377

 
1
 %
 
3,806,828

 
3,777,520

 
3,788,398

 
—
 %
Real estate construction
 
1,388,857

 
1,388,653

 
—
 %
 
1,324,126

 
1,340,406

 
1,421,344

 
(2
)%
Commercial real estate lending
 
5,195,025

 
5,157,031

 
1
 %
 
5,130,954

 
5,117,926

 
5,209,743

 
—
 %
Total commercial
 
13,403,101

 
13,659,299

 
(2
)%
 
13,752,563

 
13,494,089

 
13,228,997

 
1
 %
Residential mortgage
 
8,167,795

 
8,337,230

 
(2
)%
 
8,378,082

 
8,366,452

 
8,314,421

 
(2
)%
Home equity
 
864,144

 
901,291

 
(4
)%
 
869,248

 
883,735

 
895,412

 
(3
)%
Other consumer
 
348,295

 
354,249

 
(2
)%
 
354,478

 
359,238

 
365,895

 
(5
)%
Total consumer
 
9,380,233

 
9,592,770

 
(2
)%
 
9,601,809

 
9,609,426

 
9,575,728

 
(2
)%
Total loans(c)
 
$
22,783,334

 
$
23,252,068

 
(2
)%
 
$
23,354,371

 
$
23,103,514

 
$
22,804,725

 
—
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarter average deposit composition
 
Dec 31, 2019
 
Sep 30, 2019
 
Seql Qtr % Change
 
Jun 30, 2019
 
Mar 31, 2019
 
Dec 31, 2018
 
Comp Qtr % Change
Noninterest-bearing demand
 
$
5,470,496

 
$
5,324,481

 
3
 %
 
$
5,089,928

 
$
4,982,553

 
$
5,366,711

 
2
 %
Savings
 
2,714,191

 
2,618,188

 
4
 %
 
2,319,556

 
2,098,834

 
1,995,160

 
36
 %
Interest-bearing demand
 
5,138,116

 
5,452,674

 
(6
)%
 
4,984,511

 
4,739,662

 
4,837,223

 
6
 %
Money market
 
6,594,681

 
6,933,230

 
(5
)%
 
7,118,594

 
7,388,174

 
7,089,449

 
(7
)%
Network transaction deposits
 
1,438,908

 
1,764,961

 
(18
)%
 
2,024,604

 
2,225,027

 
1,880,595

 
(23
)%
Time deposits
 
2,746,978

 
3,107,670

 
(12
)%
 
3,544,317

 
3,121,960

 
3,060,896

 
(10
)%
Total deposits
 
$
24,103,371

 
$
25,201,203

 
(4
)%
 
$
25,081,509

 
$
24,556,209

 
$
24,230,034

 
(1
)%
N/M = Not meaningful
Numbers may not sum due to rounding.
(a)
Includes repurchase agreements and commercial paper.
(b)
Included above in interest-bearing demand and money market.
(c)
Nonaccrual loans and loans held for sale have been included in the average balances.


Page 9



Associated Banc-Corp
Non-GAAP Financial Measures Reconciliation
 
 
 
 
 
 
 
 
 
 
($ in millions, except per share data)
 
 
 
YTD
Dec 2019
YTD
Dec 2018
4Q19
3Q19
2Q19
1Q19
4Q18
Tangible common equity reconciliation(a)
 
 
 
 
 
 
 
 
 
 
Common equity
 
 
 
 
 
$
3,665

$
3,664

$
3,643

$
3,579

$
3,524

Goodwill and other intangible assets, net
 
 
 
 
 
(1,265
)
(1,267)
(1,270
)
(1,243
)
(1,245
)
Tangible common equity
 
 
 
 
 
$
2,401

$
2,397

$
2,373

$
2,337

$
2,279

Tangible assets reconciliation(a)
 
 
 
 
 
 
 
 
 
 
Total assets
 
 
 
 
 
$
32,386

$
32,596

$
33,247

$
33,681

$
33,615

Goodwill and other intangible assets, net
 
 
 
 
 
(1,265
)
(1,267
)
(1,270
)
(1,243
)
(1,245
)
Tangible assets
 
 
 
 
 
$
31,122

$
31,329

$
31,977

$
32,439

$
32,370

Average tangible common equity and average common equity tier 1 reconciliation(a)
 
 
 
 
 
 
 
 
 
Common equity
 
 
 
$
3,615

$
3,505

$
3,658

$
3,647

$
3,596

$
3,558

$
3,490

Goodwill and other intangible assets, net
 
 
 
(1,257
)
(1,209
)
(1,266
)
(1,269
)
(1,247
)
(1,244
)
(1,246
)
Tangible common equity
 
 
 
2,358

2,296

2,392

2,378

2,349

2,314

2,244

Accumulated other comprehensive loss (income)
 
 
 
69

117

37

42

82

116

137

Deferred tax assets (liabilities), net
 
 
 
47

42

48

49

46

45

46

Average common equity Tier 1
 
 
 
$
2,474

$
2,455

$
2,476

$
2,469

$
2,477

$
2,475

$
2,427

Selected Trend Information(b)
 
 
 
 
 
 
 
 
 
 
Insurance commissions and fees
 
 
 
$
89

$
90

$
20

$
21

$
23

$
25

$
21

Wealth management fees(c)
 
 
 
83

83

22

21

21

20

20

Service charges and deposit account fees
 
 
 
63

66

16

17

15

15

16

Card-based fees
 
 
 
40

40

10

10

10

9

10

Other fee-based revenue
 
 
 
19

18

5

5

5

4

5

Fee-based revenue
 
 
 
294

296

72

74

74

74

74

Other
 
 
 
86

60

21

27

21

17

11

Total noninterest income
 
 
 
$
381

$
356

$
93

$
101

$
96

$
91

$
84

Selected equity and performance ratios(a)(d)
 
 
 
 
 
 
 
 
 
 
Tangible common equity / tangible assets
 
 
 
 
 
7.71
 %
7.65
 %
7.42
 %
7.20
 %
7.04
 %
Return on average equity
 
 
 
8.44
 %
9.03
 %
7.31
 %
8.47
 %
8.81
 %
9.21
 %
9.42
 %
Return on average tangible common equity
 
 
 
13.21
 %
14.06
 %
11.33
 %
13.27
 %
13.81
 %
14.52
 %
15.08
 %
Return on average common equity Tier 1
 
 
 
12.59
 %
13.15
 %
10.94
 %
12.78
 %
13.09
 %
13.58
 %
13.94
 %
Efficiency ratio reconciliation(e)
 
 
 
 
 
 
 
 
 
 
Federal Reserve efficiency ratio
 
 
 
65.38
 %
66.23
 %
69.14
 %
66.55
 %
62.71
 %
63.32
 %
62.39
 %
Fully tax-equivalent adjustment
 
 
 
(0.85
)%
(0.71
)%
(0.91
)%
(0.90
)%
(0.84
)%
(0.77
)%
(0.75
)%
Other intangible amortization
 
 
 
(0.82
)%
(0.66
)%
(0.93
)%
(0.89
)%
(0.75
)%
(0.73
)%
(0.72
)%
Fully tax-equivalent efficiency ratio
 
 
 
63.72
 %
64.87
 %
67.32
 %
64.78
 %
61.13
 %
61.83
 %
60.93
 %
Acquisition related costs adjustment
 
 
 
(0.60
)%
(2.42
)%
(0.45
)%
(0.53
)%
(1.21
)%
(0.20
)%
0.31
 %
Fully tax-equivalent efficiency ratio, excluding acquisition related costs (adjusted efficiency ratio)
 
 
63.12
 %
62.45
 %
66.87
 %
64.25
 %
59.91
 %
61.63
 %
61.24
 %
Acquisition and Restructuring Related Costs
YTD 2019
YTD 2019 per share data(g)
4Q 2019
4Q 2019 per share data(g)
3Q 2019
3Q 2019 per share data(g)
2Q 2019
2Q 2019 per share data(g)
1Q 2019
1Q 2019 per share data(g)
GAAP earnings
$
312

$
1.91

$
68

$
0.43

$
80

$
0.49

$
81

$
0.49

$
83

$
0.50

Acquisition Related Costs
 
 
 
 
 
 
 
 
 
 
Change of control and severance
1

 
—



—



1



—



Merger advisors and consultants
1

 
—



—



—



—



Facilities and other
3

 
—



1



2



—



Contract terminations and conversion costs
3

 
1



—



1



—



Total acquisition related costs
$
7

 
$
1



$
2



$
4



$
1



Restructuring Related Costs
 
 
 
 
 
 
 
 
 
 
Severance
$
5

 
$
4

 
$
—

 
$
1

 
$
—

 
Total acquisition and restructuring related costs
$
12

 
$
5

 
$
2

 
$
5

 
$
1

 
Less additional tax expense
$
3

 
$
1



$
—



$
1



$
—



Earnings, excluding acquisition and restructuring related costs(f)
$
321

$
1.97

$
72

$
0.45

$
81

$
0.50

$
85

$
0.51

$
84

$
0.50

Numbers may not sum due to rounding.
(a)
The ratio tangible common equity to tangible assets excludes goodwill and other intangible assets, net. This financial measure has been included as it is considered to be a critical metric with which to analyze and evaluate financial condition and capital strength.
(b)
These financial measures have been included as they provide meaningful supplemental information to assess trends in the Corporation’s results of operations.
(c)
Includes trust, asset management, brokerage, and annuity fees.
(d)
These 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.
(e)
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 fully tax-equivalent net interest income plus noninterest income, excluding investment securities gains / losses, net. The adjusted efficiency ratio is noninterest expense (which includes the provision for unfunded commitments), excluding other intangible amortization and acquisition related costs, divided by the sum of fully tax-equivalent net interest income plus noninterest income, excluding investment securities gains / losses, net and acquisition related costs. Management believes the adjusted efficiency ratio, which adjusts net interest income for the tax-favored status of certain loans and investment securities and acquisition related costs, to be a meaningful measure as it enhances the comparability of net interest income arising from taxable and tax-exempt sources and excludes acquisition related costs.
(f)
This 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 and provide greater understanding of ongoing operations and enhanced comparability of results with prior periods.
(g)
Diluted earnings and per share data presented after-tax.

Page 10

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