Associated Reports Third Quarter Earnings of $0.07 Per Common Share
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GREEN BAY, Wis.--(BUSINESS WIRE)-- Associated Banc-Corp (NASDAQ: ASBC):
-- Net income available to common shareholders of $8.7 million for the
third quarter
-- Provision for loan losses of $95.4 million down from $155.0 million for
the second quarter of 2009
-- Total deposits of $16.4 billion at September 30, 2009 compared to $14.2
billion at September 30, 2008
-- Total noninterest expenses of $141.1 million down $28.9 million from
$170.0 million for the second quarter of 2009
-- Tangible common equity ratio of 6.64% compared to 6.09% at June 30, 2009
Associated Banc-Corp (NASDAQ: ASBC) today reported third quarter 2009 net income available to common shareholders of $8.7 million, or $0.07 per common share, after a $7.3 million dividend to preferred shareholders. This compares to a net loss to common shareholders of $24.7 million, or $0.19 per common share for the second quarter of 2009, and to net income of $37.8 million, or $0.30 per common share, for the third quarter of 2008.
Net interest income for the quarter was $179.2 million compared to $179.1 million for the second quarter of 2009 and $166.5 million for the third quarter of 2008. The company's net interest margin was 3.50% at September 30, 2009, up 10 basis points from 3.40% at June 30, 2009 and up 2 basis points from 3.48% at September 30, 2008. The quarterly improvement in net interest margin was due to a continued decline in the cost of funds and a shift in deposit balances from higher cost time deposits to lower cost transaction accounts, which was partially offset by lower levels of earning assets.
The provision for loan losses for the quarter was $95.4 million compared to $155.0 million for the second quarter of 2009 and $55.0 million for the same period one year ago. Net charge offs for the quarter were $90.0 million compared to $61.1 million for the second quarter of 2009 and $38.4 million for the third quarter of 2008. The increase in the level of net charge offs for the third quarter was significantly impacted by a $25 million charge off of a previously disclosed financial institution credit. Nonperforming loans were $885.8 million at September 30, 2009 compared to $733.4 million at June 30, 2009 and $452.2 million at March 31, 2009. Credit quality deterioration slowed during the third quarter as evidenced by the slower pace of growth in both potential problem loans and nonperforming loans. In addition, loans 30-89 days past due totaled $175.5 million, 16% lower than the prior quarter. This level for loans 30-89 days past due is the lowest the company has seen since the fourth quarter of 2007.
"The lower quarterly loan loss provision is the result of moderation in the pace of credit quality deterioration," said Associated Chairman and CEO Paul S. Beideman. "Although credit quality deterioration has slowed and past due levels have improved, we believe that loan loss provisions and charge offs will continue to be elevated as the impact of the weak economy and stress on our customers continues."
Loans were $14.8 billion at September 30, 2009, down 3.6% from $15.3 billion at June 30, 2009, primarily due to the continued decline in the company's commercial loan balances. Deposits were $16.4 billion at September 30, 2009, up 0.8% from $16.3 billion at June 30, 2009 and up 15.4% from $14.2 billion a year ago. All deposit categories experienced significant year-over-year growth, with the exception of small declines in time and savings deposits.
Mortgage loans originated for sale during the third quarter declined to $638 million compared to the record high level of $1.3 billion for the second quarter of 2009 and $218 million for the third quarter of 2008. For the third quarter of 2009, the Company experienced a net mortgage banking loss of $0.9 million, compared to net mortgage banking income of $28.3 million for the second quarter of 2009 and $3.6 million for the third quarter of 2008. Third quarter mortgage banking results included a $4.7 million valuation charge related to mortgage servicing rights compared to a $9.6 million valuation recovery in the second quarter of 2009.
Core fee-based revenue was $66.5 million for the third quarter compared to $64.9 million for the second quarter of 2009 and $71.1 million for the third quarter of 2008. The reduction in revenue between the comparable third quarter periods was primarily the result of continued lower levels of consumer fee-based activity and lower asset management revenue due to year-over-year equity market declines.
Total noninterest expense for the third quarter was $141.1 million, down $28.9 million from $170.0 million in the second quarter 2009. Expenses were driven lower in all categories. Most notably, personnel expense decreased $7.7 million, legal and professional fees decreased $2.2 million, and business development and advertising costs decreased $1.0 million. In addition, FDIC insurance expense decreased $9.6 million from the second quarter, which included a one-time special assessment of $11.3 million. Foreclosure/OREO expenses also decreased $4.9 million due to lower levels of property write-downs during the quarter. The efficiency ratio for the third quarter of 2009 was 54.14% compared to 58.65% for the second quarter of 2009 and 52.18% for the same period one year ago.
For the nine months ended September 30, 2009, net income available to common shareholders was $19.4 million, or $0.15 per common share, compared to $151.6 million, or $1.18 per common share, for the nine months ended September 30, 2008.
Associated Banc-Corp (NASDAQ: ASBC) will host a conference call for investors and analysts at 3 p.m. Central Time (CT) Thursday, October 22, 2009. The toll-free dial-in number for the live call is 877-941-4774. The number for international callers is 480-629-9760. Participants should ask the operator for the Associated Banc-Corp third quarter 2009 earnings call, or for call ID number 4170464. A replay of the call will be available starting at 6 p.m. CT on October 22, 2009 through 12:00 midnight CT on November 22, 2009 by calling 800-406-7325 (toll-free) domestically or 303-590-3030 internationally. The call ID number (replay pin number), 4170464, is required to access the replay.
Associated Banc-Corp, headquartered in Green Bay, Wis., is a diversified bank holding company with total assets of $23 billion. Associated has approximately 300 banking offices serving an estimated 160 communities in Wisconsin, Illinois, and Minnesota. The company offers a full range of traditional banking services and a variety of other financial products and services. More information about Associated Banc-Corp is available at www.associatedbank.com.
Statements made in this document that 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. Forward-looking statements are based on current management expectations and, by their nature, are subject to risks and uncertainties. These statements may be identified by the use of words such as "believe," "expect," "anticipate," "plan," "estimate," "should," "will," "intend," or similar expressions. Outcomes related to such statements are subject to numerous risk factors and uncertainties including those listed in the company's Annual Report filed on Form 10-K.
Consolidated Balance Sheets (Unaudited)
Associated
Banc-Corp
September Sept09 September Sept09
30, December 31, vs Dec08 30, vs
Sept08
(in thousands) 2009 2008 % Change 2008 % Change
Assets
Cash and due from $ 430,381 $ 533,338 (19.3 %) $ 623,132 (30.9 %)
banks
Interest-bearing
deposits in other 13,145 12,649 3.9 % 12,288 7.0 %
financial
institutions
Federal funds sold
and securities
purchased under 17,000 24,741 (31.3 %) 60,655 (72.0 %)
agreements to
resell
Investment
securities 5,651,076 5,143,414 9.9 % 3,435,625 64.5 %
available for sale,
at fair value
Federal Home Loan
Bank and Federal 181,316 206,003 (12.0 %) 181,192 0.1 %
Reserve Bank
stocks, at cost
Loans held for sale 78,740 87,084 (9.6 %) 40,912 92.5 %
Loans 14,765,597 16,283,908 (9.3 %) 16,272,487 (9.3 %)
Allowance for loan (412,530 ) (265,378 ) 55.4 % (246,189 ) 67.6 %
losses
Loans, net 14,353,067 16,018,530 (10.4 %) 16,026,298 (10.4 %)
Premises and 185,544 190,942 (2.8 %) 188,817 (1.7 %)
equipment, net
Goodwill 929,168 929,168 0.0 % 929,168 0.0 %
Other intangible 91,506 80,165 14.1 % 90,138 1.5 %
assets, net
Other assets 950,584 966,033 (1.6 %) 899,169 5.7 %
Total assets $ $ (5.4 %) $ 1.8 %
22,881,527 24,192,067 22,487,394
Liabilities and
Stockholders'
Equity
Noninterest-bearing $ $ 6.1 % $ 17.2 %
deposits 2,984,486 2,814,079 2,545,779
Interest-bearing
deposits, excluding 12,808,533 11,551,181 10.9 % 11,120,281 15.2 %
Brokered CDs
Brokered CDs 653,090 789,536 (17.3 %) 579,607 12.7 %
Total deposits 16,446,109 15,154,796 8.5 % 14,245,667 15.4 %
Short-term 1,517,594 3,703,936 (59.0 %) 4,106,015 (63.0 %)
borrowings
Long-term funding 1,761,506 1,861,647 (5.4 %) 1,561,722 12.8 %
Accrued expenses
and other 231,659 595,185 (61.1 %) 209,743 10.4 %
liabilities
Total liabilities 19,956,868 21,315,564 (6.4 %) 20,123,147 (0.8 %)
Stockholders'
Equity
Preferred equity 510,315 508,008 0.5 % - N/M
Common stock 1,284 1,281 0.2 % 1,280 0.3 %
Surplus 1,080,720 1,073,218 0.7 % 1,051,976 2.7 %
Retained earnings 1,268,507 1,293,941 (2.0 %) 1,321,323 (4.0 %)
Accumulated other
comprehensive 64,919 55 N/M (10,332 ) N/M
income (loss)
Treasury stock (1,086 ) - N/M - N/M
Total stockholders' 2,924,659 2,876,503 1.7 % 2,364,247 23.7 %
equity
Total liabilities $ $ $
and stockholders' 22,881,527 24,192,067 (5.4 %) 22,487,394 1.8 %
equity
N/M = Not
meaningful.
Consolidated Statements of Income (Unaudited)
Associated
Banc-Corp
For The Three Months For The Nine Months
Ended Ended,
September 30, Quarter September 30, Year-to-Date
(in thousands,
except per share 2009 2008 % Change 2009 2008 % Change
amounts)
Interest Income
Interest and $ $ (20.0 %) $ $ (19.7 %)
fees on loans 183,264 229,001 579,641 721,781
Interest and
dividends on
investment
securities and
deposits in
other financial
institutions:
Taxable 46,873 32,209 45.5 % 144,464 95,439 51.4 %
Tax-exempt 8,498 9,887 (14.0 %) 26,811 29,922 (10.4 %)
Interest on
federal funds
sold and
securities 16 279 (94.3 %) 130 698 (81.4 %)
purchased under
agreements to
resell
Total interest 238,651 271,376 (12.1 %) 751,046 847,840 (11.4 %)
income
Interest Expense
Interest on 37,811 61,743 (38.8 %) 129,403 206,904 (37.5 %)
deposits
Interest on
short-term 2,895 23,958 (87.9 %) 13,137 76,494 (82.8 %)
borrowings
Interest on
long-term 18,709 19,158 (2.3 %) 60,854 60,076 1.3 %
funding
Total interest 59,415 104,859 (43.3 %) 203,394 343,474 (40.8 %)
expense
Net Interest 179,236 166,517 7.6 % 547,652 504,366 8.6 %
Income
Provision for 95,410 55,011 73.4 % 355,856 137,014 159.7 %
loan losses
Net interest
income after 83,826 111,506 (24.8 %) 191,796 367,352 (47.8 %)
provision for
loan losses
Noninterest
Income
Trust service 9,057 10,020 (9.6 %) 26,103 30,172 (13.5 %)
fees
Service charges
on deposit 30,829 33,609 (8.3 %) 87,705 87,422 0.3 %
accounts
Card-based and
other nondeposit 11,586 12,517 (7.4 %) 33,618 36,243 (7.2 %)
fees
Retail 15,041 14,928 0.8 % 45,382 47,047 (3.5 %)
commissions
Mortgage (909 ) 3,571 (125.5 %) 31,655 15,911 99.0 %
banking, net
Treasury
management fees, 226 1,935 (88.3 %) 5,245 7,423 (29.3 %)
net
Bank owned life 3,789 5,235 (27.6 %) 12,722 15,093 (15.7 %)
insurance income
Asset sale gains (126 ) 573 (122.0 %) (2,520 ) (614 ) 310.4 %
(losses), net
Investment
securities gains (42 ) (13,585 ) N/M 9,169 (17,243 ) N/M
(losses), net
Other 5,858 6,520 (10.2 %) 17,148 23,122 (25.8 %)
Total
noninterest 75,309 75,323 (0.0 %) 266,227 244,576 8.9 %
income
Noninterest
Expense
Personnel 73,501 78,395 (6.2 %) 231,770 232,104 (0.1 %)
expense
Occupancy 11,949 12,037 (0.7 %) 37,171 37,327 (0.4 %)
Equipment 4,575 5,088 (10.1 %) 13,834 14,338 (3.5 %)
Data processing 7,442 7,634 (2.5 %) 23,165 23,005 0.7 %
Business
development and 3,910 5,175 (24.4 %) 13,590 15,353 (11.5 %)
advertising
Other intangible 1,386 1,568 (11.6 %) 4,157 4,705 (11.6 %)
amortization
Legal and
professional 3,349 3,538 (5.3 %) 13,176 9,255 42.4 %
fees
Foreclosure/OREO 8,688 2,427 258.0 % 27,277 6,969 291.4 %
expense
FDIC expense 8,451 791 N/M 32,316 1,594 N/M
Other 17,860 19,924 (10.4 %) 55,950 64,060 (12.7 %)
Total
noninterest 141,111 136,577 3.3 % 452,406 408,710 10.7 %
expense
Income before 18,024 50,252 (64.1 %) 5,617 203,218 (97.2 %)
income taxes
Income tax
expense 2,030 12,483 (83.7 %) (35,761 ) 51,625 (169.3 %)
(benefit)
Net income 15,994 37,769 (57.7 %) $ $ (72.7 %)
41,378 151,593
Preferred stock
dividends and 7,342 - N/M 21,994 - N/M
discount
Net income $ $ $
available to $ 8,652 37,769 (77.1 %) 19,384 151,593 (87.2 %)
common equity
Earnings Per
Common Share:
Basic $ 0.07 $ 0.30 (76.7 %) $ 0.15 $ 1.19 (87.4 %)
Diluted $ 0.07 $ 0.30 (76.7 %) $ 0.15 $ 1.18 (87.3 %)
Average Common
Shares
Outstanding:
Basic 127,863 127,553 0.2 % 127,855 127,428 0.3 %
Diluted 127,863 127,622 0.2 % 127,859 127,799 0.0 %
N/M = Not
meaningful.
Consolidated Statements of Income (Unaudited) - Quarterly Trend Associated Banc-Corp (in thousands, except per share 3Q09 2Q09 1Q09 4Q08 3Q08 amounts) Interest Income Interest and $ $ 194,352 $ 202,025 $ 230,872 $ 229,001 fees on loans 183,264 Interest and dividends on investment securities and deposits in other financial institutions: Taxable 46,873 46,688 50,903 38,032 32,209 Tax-exempt 8,498 8,819 9,494 9,811 9,887 Interest on federal funds sold and securities 16 51 63 154 279 purchased under agreements to resell Total interest 238,651 249,910 262,485 278,869 271,376 income Interest Expense Interest on 37,811 44,993 46,599 56,402 61,743 deposits Interest on short-term 2,895 5,088 5,154 10,090 23,958 borrowings Interest on long-term 18,709 20,691 21,454 20,595 19,158 funding Total interest 59,415 70,772 73,207 87,087 104,859 expense Net Interest 179,236 179,138 189,278 191,782 166,517 Income Provision for 95,410 155,022 105,424 65,044 55,011 loan losses Net interest income after 83,826 24,116 83,854 126,738 111,506 provision for loan losses Noninterest Income Trust service 9,057 8,569 8,477 8,248 10,020 fees Service charges on deposit 30,829 29,671 27,205 30,946 33,609 accounts Card-based and other nondeposit 11,586 11,858 10,174 12,297 12,517 fees Retail 15,041 14,829 15,512 15,541 14,928 commissions Total core fee-based 66,513 64,927 61,368 67,032 71,074 revenue Mortgage (909 ) 28,297 4,267 (1,227 ) 3,571 banking, net Treasury management fees, 226 2,393 2,626 (33 ) 1,935 net Bank owned life 3,789 3,161 5,772 4,711 5,235 insurance income Asset sale gains (126 ) (1,287 ) (1,107 ) (1,054 ) 573 (losses), net Investment securities gains (42 ) (1,385 ) 10,596 (35,298 ) (13,585 ) (losses), net Other 5,858 5,835 5,455 6,943 6,520 Total noninterest 75,309 101,941 88,977 41,074 75,323 income Noninterest Expense Personnel 73,501 81,171 77,098 77,374 78,395 expense Occupancy 11,949 12,341 12,881 13,134 12,037 Equipment 4,575 4,670 4,589 4,785 5,088 Data processing 7,442 8,126 7,597 7,446 7,634 Business development and 3,910 4,943 4,737 6,047 5,175 advertising Other intangible 1,386 1,385 1,386 1,564 1,568 amortization Legal and professional 3,349 5,586 4,241 5,311 3,538 fees Foreclosure/OREO 8,688 13,576 5,013 6,716 2,427 expense FDIC expense 8,451 18,090 5,775 930 791 Other 17,860 20,143 17,947 25,443 19,924 Total noninterest 141,111 170,031 141,264 148,750 136,577 expense Income (loss) before income 18,024 (43,974 ) 31,567 19,062 50,252 taxes Income tax expense 2,030 (26,633 ) (11,158 ) 2,203 12,483 (benefit) Net income 15,994 (17,341 ) 42,725 16,859 37,769 (loss) Preferred stock dividends and 7,342 7,331 7,321 3,250 - discount Net income (loss) available $ 8,652 $ (24,672 ) $ 35,404 $ 13,609 $ 37,769 to common equity Earnings (Loss) Per Common Share: Basic $ 0.07 $ (0.19 ) $ 0.28 $ 0.11 $ 0.30 Diluted $ 0.07 $ (0.19 ) $ 0.28 $ 0.11 $ 0.30 Average Common Shares Outstanding: Basic 127,863 127,861 127,839 127,717 127,553 Diluted 127,863 127,861 127,845 127,810 127,622
Selected Quarterly Information
Associated Banc-Corp
(in thousands,
except per share
and full time YTD 2009 YTD 2008 3rd Qtr 2009 2nd Qtr 2009 1st Qtr 2009 4th Qtr 2008 3rd Qtr 2008
equivalent
employee data)
Summary of
Operations
Net interest $ 547,652 $ 504,366 $ 179,236 $ 179,138 $ 189,278 $ 191,782 $ 166,517
income
Provision for 355,856 137,014 95,410 155,022 105,424 65,044 55,011
loan losses
Asset sale gains (2,520 ) (614 ) (126 ) (1,287 ) (1,107 ) (1,054 ) 573
(losses), net
Investment
securities gains 9,169 (17,243 ) (42 ) (1,385 ) 10,596 (35,298 ) (13,585 )
(losses), net
Noninterest
income
(excluding 259,578 262,433 75,477 104,613 79,488 77,426 88,335
securities &
asset gains)
Noninterest 452,406 408,710 141,111 170,031 141,264 148,750 136,577
expense
Income (loss)
before income 5,617 203,218 18,024 (43,974 ) 31,567 19,062 50,252
taxes
Income tax
expense (35,761 ) 51,625 2,030 (26,633 ) (11,158 ) 2,203 12,483
(benefit)
Net income 41,378 151,593 15,994 (17,341 ) 42,725 16,859 37,769
(loss)
Net income
(loss) available 19,384 151,593 8,652 (24,672 ) 35,404 13,609 37,769
to common equity
Taxable
equivalent 18,632 20,809 5,938 6,150 6,544 6,902 6,899
adjustment
Per Common Share
Data
Net income
(loss):
Basic $ 0.15 $ 1.19 $ 0.07 $ (0.19 ) $ 0.28 $ 0.11 $ 0.30
Diluted 0.15 1.18 0.07 (0.19 ) 0.28 0.11 0.30
Dividends 0.42 0.95 0.05 0.05 0.32 0.32 0.32
Market Value:
High $ 21.39 $ 29.23 $ 12.67 $ 19.00 $ 21.39 $ 24.21 $ 25.92
Low 9.21 14.85 9.21 12.50 10.60 15.72 14.85
Close 11.42 19.95 11.42 12.50 15.45 20.93 19.95
Book value 18.88 18.52 18.88 18.49 18.68 18.54 18.52
Tangible book 11.38 10.96 11.38 10.97 11.15 10.99 10.96
value
Performance
Ratios
(annualized)
Earning assets 4.75 % 5.90 % 4.62 % 4.70 % 4.94 % 5.57 % 5.58 %
yield
Interest-bearing 1.51 2.71 1.36 1.57 1.61 2.00 2.44
liabilities rate
Net interest 3.50 3.57 3.50 3.40 3.59 3.88 3.48
margin
Return on 0.23 0.93 0.27 (0.29 ) 0.71 0.30 0.68
average assets
Return on 1.90 8.57 2.19 (2.40 ) 5.98 2.58 6.38
average equity
Return on
average tangible 1.81 14.52 2.39 (6.88 ) 10.05 3.83 10.83
common equity
(1)
Efficiency ratio 54.78 51.89 54.14 58.65 51.31 53.87 52.18
(2)
Effective tax (636.66 ) 25.40 11.26 (60.57 ) (35.35 ) 11.56 24.84
rate (benefit)
Dividend payout 280.00 79.83 71.43 N/M 114.29 290.91 106.67
ratio (3)
Average Balances
Assets $ $ $ $ $ $ $
23,891,164 21,833,664 23,362,954 24,064,567 24,255,783 22,646,421 22,072,948
Earning assets 21,619,838 19,639,329 21,063,016 21,847,267 21,959,077 20,436,483 19,884,434
Interest-bearing 17,994,706 16,904,447 17,412,341 18,125,389 18,457,879 17,363,481 17,107,551
liabilities
Loans 15,929,440 16,011,627 15,248,895 16,122,063 16,430,347 16,285,881 16,203,717
Deposits 15,808,077 13,616,134 16,264,181 16,100,686 15,045,976 14,395,626 13,710,297
Wholesale 5,006,918 5,707,467 4,067,830 4,876,970 6,098,266 5,496,248 5,876,051
funding
Common
stockholders' 2,395,478 2,363,033 2,394,410 2,400,664 2,391,325 2,376,639 2,353,606
equity
Stockholders' 2,904,521 2,363,033 2,904,210 2,909,700 2,899,603 2,602,917 2,353,606
equity
Common
stockholders' 10.03 % 10.82 % 10.25 % 9.98 % 9.86 % 10.49 % 10.66 %
equity / assets
Stockholders' 12.16 % 10.82 % 12.43 % 12.09 % 11.95 % 11.49 % 10.66 %
equity / assets
At Period End
Assets $ $ $ $ $
22,881,527 24,013,567 24,349,725 24,192,067 22,487,394
Loans 14,765,597 15,310,107 15,917,952 16,283,908 16,272,487
Allowance for 412,530 407,167 313,228 265,378 246,189
loan losses
Goodwill 929,168 929,168 929,168 929,168 929,168
Mortgage
servicing rights 61,066 59,762 39,754 45,568 53,977
at fair value,
net
Other intangible 30,440 31,826 33,211 34,597 36,161
assets
Deposits 16,446,109 16,320,391 15,873,189 15,154,796 14,245,667
Wholesale 3,279,100 4,474,542 5,326,734 5,565,583 5,667,737
funding
Stockholders' 2,924,659 2,873,768 2,897,169 2,876,503 2,364,247
equity
Stockholders' 12.78 % 11.97 % 11.90 % 11.89 % 10.51 %
equity / assets
Tangible common
equity / 6.64 % 6.09 % 6.10 % 6.05 % 6.50 %
tangible assets
(4)
Tangible equity
/ tangible 8.96 % 8.30 % 8.27 % 8.23 % 6.50 %
assets (5)
Shares
outstanding, end 127,864 127,861 127,860 127,762 127,646
of period
Selected trend
information
Average full
time equivalent 5,004 5,116 5,143 5,109 5,141
employees
Trust assets
under $ $ $ $ $
management, at 5,200,000 5,000,000 4,800,000 5,100,000 5,600,000
market value
Mortgage loans
originated for 638,229 1,335,175 1,079,732 247,465 217,993
sale during
period
Mortgage
portfolio 7,473,000 6,904,000 6,582,000 6,606,000 6,596,000
serviced for
others
Mortgage
servicing
rights, net / 0.82 % 0.87 % 0.60 % 0.69 % 0.82 %
Portfolio
serviced for
others
N/M = Not meaningful.
Return on average tangible common equity = Net income available to common
(1) equity divided by average common equity excluding average goodwill and
other intangible assets. This is a non-GAAP financial measure.
Efficiency ratio = Noninterest expense divided by sum of taxable equivalent
(2) net interest income plus noninterest income, excluding investment
securities gains, net, and asset sales gains, net.
This is a non-GAAP financial measure.
(3) Ratio is based upon basic earnings per common share.
Tangible common equity to tangible assets = Common stockholders' equity
(4) excluding goodwill and other intangible assets divided by assets excluding
goodwill and other intangible assets.
This is a non-GAAP financial measure.
Tangible equity to tangible assets = Stockholders' equity excluding
(5) goodwill and other intangible assets divided by assets excluding goodwill
and other intangible assets.
This is a non-GAAP financial measure.
Financial Summary and Comparison
Associated Three months ended Nine months ended
Banc-Corp
September 30, September 30,
(in thousands) 2009 2008 % Change 2009 2008 % Change
Allowance for
Loan Losses
Beginning $ 407,167 $ 229,605 77.3 % $ 265,378 $ 200,570 32.3 %
balance
Provision for 95,410 55,011 73.4 % 355,856 137,014 159.7 %
loan losses
Charge offs (92,340 ) (40,344 ) 128.9 % (215,839 ) (98,076 ) 120.1 %
Recoveries 2,293 1,917 19.6 % 7,135 6,681 6.8 %
Net charge offs (90,047 ) (38,427 ) 134.3 % (208,704 ) (91,395 ) 128.4 %
Ending balance $ 412,530 $ 246,189 67.6 % $ 412,530 $ 246,189 67.6 %
Credit Quality Sep09 vs Sep09 vs
Jun09 Sep08
Sept 30, Jun 30, 2009 % Change Mar 31, 2009 Dec 31, 2008 Sept 30, % Change
2009 2008
Nonaccrual loans $ 845,320 $ 700,514 20.7 % $ 433,246 $ 326,857 $ 290,039 191.5 %
Loans 90 or more
days past due 23,174 19,785 17.1 % 16,002 13,811 14,631 58.4 %
and still
accruing
Restructured 17,256 13,089 31.8 % 2,927 - - N/M
loans
Total
nonperforming 885,750 733,388 20.8 % 452,175 340,668 304,670 190.7 %
loans
Other real
estate owned 60,010 51,633 16.2 % 54,883 48,710 46,473 29.1 %
(OREO)
Total
nonperforming $ 945,760 $ 785,021 20.5 % $ 507,058 $ 389,378 $ 351,143 169.3 %
assets
Provision for 95,410 155,022 (38.5 %) 105,424 65,044 55,011 73.4 %
loan losses
Net charge offs 90,047 61,083 47.4 % 57,574 45,855 38,427 134.3 %
Allowance for
loan losses / 2.79 % 2.66 % 1.97 % 1.63 % 1.51 %
loans
Allowance for
loan losses / 46.57 55.52 69.27 77.90 80.81
nonperforming
loans
Nonperforming
loans / total 6.00 4.79 2.84 2.09 1.87
loans
Nonperforming
assets / total 6.38 5.11 3.17 2.38 2.15
loans plus OREO
Nonperforming
assets / total 4.13 3.27 2.08 1.61 1.56
assets
Net charge offs
/ average loans 2.34 1.52 1.42 1.12 0.94
(annualized)
Year-to-date net
charge offs / 1.75 1.47 1.42 0.85 0.76
average loans
Nonperforming
loans by type:
Commercial,
financial & $ 209,843 $ 187,943 11.7 % $ 102,257 $ 104,664 $ 85,995 144.0 %
agricultural
Commercial real 213,736 165,929 28.8 % 100,838 62,423 52,875 304.2 %
estate
Real estate - 301,844 264,402 14.2 % 152,008 90,048 98,205 207.4 %
construction
Lease financing 18,814 1,929 N/M 1,707 187 83 N/M
Total commercial 744,237 620,203 20.0 % 356,810 257,322 237,158 213.8 %
Home equity 45,905 38,474 19.3 % 35,224 31,035 25,372 80.9 %
Installment 7,387 7,545 (2.1 %) 6,755 7,155 6,035 22.4 %
Total retail 53,292 46,019 15.8 % 41,979 38,190 31,407 69.7 %
Residential 88,221 67,166 31.3 % 53,386 45,156 36,105 144.3 %
mortgage
Total
nonperforming $ 885,750 $ 733,388 20.8 % $ 452,175 $ 340,668 $ 304,670 190.7 %
loans
Loans past due $ 175,492 $ 209,323 (16.2 %) $ 245,854 $ 190,112 $ 191,514 (8.4 %)
30-89 days
Potential $ $ 10.4 % $ $ 937,802 $ 765,641 105.6 %
problem loans 1,573,903 1,426,171 1,016,551
Period End Loan Sep09 vs Sep09 vs
Composition Jun09 Sep08
Sept 30, Jun 30, 2009 % Change Mar 31, 2009 Dec 31, 2008 Sept 30, % Change
2009 2008
Commercial, $ $ $ $ $
financial & 3,613,457 3,904,925 (7.5 %) 4,160,274 4,388,691 4,343,208 (16.8 %)
agricultural
Commercial real 3,902,340 3,737,749 4.4 % 3,575,301 3,566,551 3,534,791 10.4 %
estate
Real estate - 1,611,857 1,963,919 (17.9 %) 2,228,090 2,260,888 2,363,116 (31.8 %)
construction
Lease financing 102,130 110,262 (7.4 %) 116,100 122,113 125,907 (18.9 %)
Total commercial 9,229,784 9,716,855 (5.0 %) 10,079,765 10,338,243 10,367,022 (11.0 %)
Home equity 2,591,262 2,656,747 (2.5 %) 2,784,248 2,883,317 2,892,952 (10.4 %)
Installment 885,970 844,065 5.0 % 853,214 827,303 842,741 5.1 %
Total retail 3,477,232 3,500,812 (0.7 %) 3,637,462 3,710,620 3,735,693 (6.9 %)
Residential 2,058,581 2,092,440 (1.6 %) 2,200,725 2,235,045 2,169,772 (5.1 %)
mortgage
Total loans $ $ (3.6 %) $ $ $ (9.3 %)
14,765,597 15,310,107 15,917,952 16,283,908 16,272,487
Period End Sep09 vs Sep09 vs
Deposit Jun09 Sep08
Composition
Sept 30, Jun 30, 2009 % Change Mar 31, 2009 Dec 31, 2008 Sept 30, % Change
2009 2008
Demand $ $ 4.8 % $ $ $ 17.2 %
2,984,486 2,846,570 2,818,088 2,814,079 2,545,779
Savings 871,539 898,527 (3.0 %) 895,310 841,129 888,731 (1.9 %)
Interest-bearing 2,395,429 2,242,800 6.8 % 1,796,724 1,796,405 1,667,640 43.6 %
demand
Money market 5,724,418 5,410,498 5.8 % 5,410,095 4,926,088 4,608,686 24.2 %
Brokered CDs 653,090 930,582 (29.8 %) 922,491 789,536 579,607 12.7 %
Other time 3,817,147 3,991,414 (4.4 %) 4,030,481 3,987,559 3,955,224 (3.5 %)
deposits
Total deposits $ $ 0.8 % $ $ $ 15.4 %
16,446,109 16,320,391 15,873,189 15,154,796 14,245,667
Network
transaction
deposits
included above
in
interest-bearing $ $ $ $ $
demand and money 1,767,271 1,605,722 10.1 % 1,759,656 1,530,675 1,356,616 30.3 %
market
Customer repo $ 242,575 $ 269,809 (10.1 %) $ 333,706 $ 505,788 $ 657,032 (63.1 %)
sweeps (a)
(a) Included within short-term borrowings.
N/M - Not meaningful.
Net Interest Income Analysis - Taxable Equivalent Basis
Associated Nine months ended September Nine months ended September
Banc-Corp 30, 2009 30, 2008
Average Interest Average Average Interest Average
(in thousands) Balance Income / Yield / Balance Income / Yield /
Expense Rate Expense Rate
Earning assets:
Loans: (1) (2) (3)
Commercial $ $ 4.53 % $ $ 5.85 %
9,887,868 334,930 10,405,893 455,899
Residential 2,457,663 98,159 5.33 2,193,992 97,776 5.95
mortgage
Retail 3,583,909 149,098 5.56 3,411,742 170,962 6.69
Total loans 15,929,440 582,187 4.88 16,011,627 724,637 6.04
Investments and 5,690,398 187,491 4.39 3,627,702 144,012 5.29
other
Total earning 21,619,838 769,678 4.75 19,639,329 868,649 5.90
assets
Other assets, net 2,271,326 2,194,335
Total assets $ $
23,891,164 21,833,664
Interest-bearing
liabilities:
Savings deposits $ 884,098 $ 1,034 0.16 % $ 894,389 $ 3,118 0.47 %
Interest-bearing 2,002,929 3,164 0.21 1,791,808 13,131 0.98
demand deposits
Money market 5,300,646 34,516 0.87 4,010,968 61,577 2.05
deposits
Time deposits,
excluding Brokered 3,951,577 82,275 2.78 3,959,126 115,830 3.91
CDs
Total
interest-bearing 12,139,250 120,989 1.33 10,656,291 193,656 2.43
deposits, excluding
Brokered CDs
Brokered CDs 848,538 8,414 1.33 540,689 13,248 3.27
Total
interest-bearing 12,987,788 129,403 1.33 11,196,980 206,904 2.47
deposits
Wholesale funding 5,006,918 73,991 1.97 5,707,467 136,570 3.20
Total
interest-bearing 17,994,706 203,394 1.51 16,904,447 343,474 2.71
liabilities
Noninterest-bearing 2,820,289 2,419,154
demand deposits
Other liabilities 171,648 147,030
Stockholders' 2,904,521 2,363,033
equity
Total liabilities $ $
and stockholders' 23,891,164 21,833,664
equity
Net interest income $ 3.24 % $ 3.19 %
and rate spread (1) 566,284 525,175
Net interest margin 3.50 % 3.57 %
(1)
Taxable equivalent $ 18,632 $ 20,809
adjustment
Three months ended September Three months ended September
30, 2009 30, 2008
Average Interest Average Average Interest Average
Balance Income / Yield / Balance Income / Yield /
Expense Rate Expense Rate
Earning assets:
Loans: (1) (2) (3)
Commercial $ $ 4.45 % $ $ 5.40 %
9,503,565 106,506 10,393,313 141,040
Residential 2,270,025 29,928 5.26 2,151,163 31,452 5.84
mortgage
Retail 3,475,305 47,670 5.46 3,659,241 57,477 6.26
Total loans 15,248,895 184,104 4.80 16,203,717 229,969 5.65
Investments and 5,814,121 60,485 4.16 3,680,717 48,306 5.25
other
Total earning 21,063,016 244,589 4.62 19,884,434 278,275 5.58
assets
Other assets, net 2,299,938 2,188,514
Total assets $ $
23,362,954 22,072,948
Interest-bearing
liabilities:
Savings deposits $ 887,176 $ 353 0.16 % $ 911,216 $ 1,027 0.45 %
Interest-bearing 2,330,976 1,298 0.22 1,771,091 3,366 0.76
demand deposits
Money market 5,540,272 10,538 0.75 4,191,771 19,577 1.86
deposits
Time deposits,
excluding Brokered 3,847,942 23,998 2.47 3,941,384 34,860 3.52
CDs
Total
interest-bearing 12,606,366 36,187 1.14 10,815,462 58,830 2.16
deposits, excluding
Brokered CDs
Brokered CDs 738,145 1,624 0.87 416,038 2,913 2.79
Total
interest-bearing 13,344,511 37,811 1.12 11,231,500 61,743 2.19
deposits
Wholesale funding 4,067,830 21,604 2.11 5,876,051 43,116 2.92
Total
interest-bearing 17,412,341 59,415 1.36 17,107,551 104,859 2.44
liabilities
Noninterest-bearing 2,919,670 2,478,797
demand deposits
Other liabilities 126,733 132,994
Stockholders' 2,904,210 2,353,606
equity
Total liabilities $ $
and stockholders' 23,362,954 22,072,948
equity
Net interest income $ 3.26 % $ 3.14 %
and rate spread (1) 185,174 173,416
Net interest margin 3.50 % 3.48 %
(1)
Taxable equivalent $ 5,938 $ 6,899
adjustment
The yield on tax exempt loans and securities is computed on a taxable
(1) 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.
Source: Associated Banc-Corp
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