The Globe and Mail

Go to the Globe and Mail homepage

Jump to main navigationJump to main content

Globe Investor

News Sources

Take control of your investments with the latest investing news and analysis

Press release from PR Newswire

Associated Reports Fourth Quarter Earnings of $0.26 per share

Thursday, January 17, 2013

Associated Reports Fourth Quarter Earnings of $0.26 per share16:59 EST Thursday, January 17, 2013Full year net income to common shareholders up 51% from a year agoGREEN BAY, Wis., Jan. 17, 2013 /PRNewswire/ -- Associated Banc-Corp (NASDAQ: ASBC) today reported net income to common shareholders of $45 million, or $0.26 per common share, for the quarter ended December 31, 2012. This compares to net income to common shareholders of $40 million, or $0.23 per common share, for the quarter ended December 31, 2011.For the year ended December 31, 2012, the Company reported net income to common shareholders of $174 million, or $1.00 per common share.  This compares to net income to common shareholders of $115 million, or $0.66 per common share for the year ended December 31, 2011."This year's strong performance was the result of the commitment of our colleagues to serving the needs of customers across the footprint," said President and CEO Philip B. Flynn.  "We are proud to have restored Associated to its position as a strong Upper Midwestern franchise and we are pleased to have been able to deliver value for our shareholders over the course of 2012.  We continue to be encouraged by the momentum throughout the company and we look forward to the opportunity to continue to grow Associated."HIGHLIGHTS   Full year 2012 net income to common shareholders of $174 million, up 51% from a year ago Fourth quarter net income to common shareholders of $45 million Return on Tier 1 common equity for full year 2012 of 9.5%, compared to 6.7% for full year 2011 Loan balances have grown by $1.4 billion, or 10%, from a year ago to $15.4 billion Loans increased by $445 million, or 3%, during the fourth quarter Total commercial loan balances grew by $426 million, or 5% from the third quarter and accounted for the majority of the quarter's net loan growth Average deposits for the fourth quarter increased by $1.8 billion, or 12% from a year ago to $16.7 billion Average deposits increased by $1.0 billion, or 7%, from the third quarter Credit quality continued to improve with net charge offs, nonaccrual loans, and potential problem loans all declining from the prior year Quarterly dividend increased to $0.08 per common share in the fourth quarter, up from $0.05 per common share During the fourth quarter, the Company repurchased $30 million, or approximately 2 million shares, of common stock at an average cost of $12.70 Capital ratios remain very strong with a Tier 1 common equity ratio of 11.58%FOURTH QUARTER 2012 FINANCIAL RESULTS Loans At December 31, 2012, the Company's loan portfolio was $15.4 billion, up $445 million, or 3%, from $15.0 billion at September 30, 2012.  For full year 2012, loans increased by $1.4 billion, or 10%, from $14.0 billion a year ago.  Commercial and business lending balances increased by $262 million, or 5% from the prior quarter.  Commercial real estate lending balances grew by $164 million, or 5% on a linked-quarter basis.  The residential mortgage portfolio grew by $172 million, or 5%, during the quarter while the retail portfolio, which includes home equity and installment loan balances, experienced net run-off of $153 million during the quarter. Deposits Average deposits of $16.7 billion were up $1.0 billion, or 7%, from the third quarter.  On a full year basis, average deposits increased by $1.2 billion, or 8%, from a year ago.  Total deposits of $16.9 billion at the end of the fourth quarter were up $489 million, or 3%, compared to third quarter levels.  Period-end noninterest-bearing account balances grew by $439 million, or 10%, from the third quarter, and have increased by $831 million, or 21%, from a year ago.  The increase in fourth quarter noninterest-bearing deposit balances was partially the result of customers' seasonal year-end account activity.  Interest-bearing demand balances increased by $324 million, or 15%, from the third quarter, and have increased by $257 million, or 11%, from a year ago.  During the quarter, the Company continued to reduce its reliance on higher cost funding sources, including term repurchase agreements, which were down $334 million, and brokered and other CD balances, which were down $103 million from the prior quarter. Net Interest Income and Net Interest MarginFourth quarter net interest income of $161 million increased by $6 million, or 4%, compared to the prior quarter and was up 6% compared to the year-ago quarter.  Net interest income for the fourth quarter included $2 million of interest related to a tax refund.  For the full year, net interest income of $626 million increased by $13 million, or 2% from the prior year.The net interest margin for the fourth quarter was 3.32%, which included a 3 basis point benefit related to interest received on the tax refund.  On a full year basis, the net interest margin was 3.30% compared to 3.26% for full year 2011.  Fourth quarter net interest margin benefited from an 11 basis point decline in the cost of deposits and interest-bearing liabilities, partially offset by a 4 basis point decline in loan yields, contributing to a net increase in overall net interest margin of 6 basis points compared to the prior quarter.  Noninterest Income and ExpenseNoninterest income for the quarter was $78 million, down $3 million, or 4%, from the third quarter.  Noninterest income for the full year was $313 million, up 15% from full year 2011.The decline in fourth quarter fee income was primarily attributable to the establishment of a $3 million repurchase reserve against previously sold mortgage loans that reduced net mortgage banking income during the quarter.Total noninterest expense for the quarter ended December 31, 2012 was $176 million, up $7 million, or 4%, from the third quarter.  For the full year, noninterest expense increased by 5% to $682 million.  Personnel and occupancy expenses increased by $6 million during the fourth quarter which included $4 million of severance cost and lease breakage expense related to the Company's recently announced efficiency initiatives.  CreditThe Company reported another quarter of improving credit quality with nonaccrual loans down 9%, to $253 million compared to the third quarter, and down 29% from a year ago.  Nonaccrual loans to total loans now stand at 1.64% and have improved for the 11th consecutive quarter.  Nonperforming assets declined 8% from the prior quarter to $288 million, and have declined 28% from a year ago.  Net charge offs of $21 million for the fourth quarter were up $3 million from the third quarter, and were $2 million lower than a year ago.  For the full year, net charge offs declined by 44% to $84 million.Fourth quarter provision for loan losses was $3 million.  The Company's allowance for loan losses was $297 million, representing an allowance equal to 1.93% of loans and representing a coverage ratio of over 117% of nonaccrual loans at December 31, 2012.TaxesIncome tax expense was lower by $7 million compared to the third quarter, due to a net $5 million income tax benefit recorded during the period, primarily related to the reversal of certain prior years' tax reserves.Capital RatiosThe Company's capital position remains very strong, with a Tier 1 common equity ratio of 11.58% at December 31, 2012.  The Company's capital ratios continue to be well in excess of both current and proposed "well-capitalized" regulatory benchmarks.FOURTH QUARTER 2012 EARNINGS RELEASE CONFERENCE CALLThe Company will host a conference call for investors and analysts at 4:00 p.m. Central Time (CT) today, January 17, 2013.  Interested parties can listen to the call live on the Internet through the investor relations section of the Company's website, http://investor.associatedbank.com/ or by dialing 888-317-6016. The slide presentation for the call will be available on the Company's website just prior to the call. The number for international callers is 412-317-6016. Participants should ask the operator for the Associated Banc-Corp fourth quarter 2012 earnings call.An audio archive of the webcast will be available on the Company's website.  A telephone replay will be available two hours after the completion of the call through 8:00 a.m. CT on February 18, 2013, by dialing 877-344-7529 and entering the conference ID number 10022452. The replay number for international callers is 412-317-0088. ABOUT ASSOCIATED BANC-CORPAssociated Banc-Corp (NASDAQ: ASBC) has total assets of $24 billion and is one of the top 50, publicly traded, U.S. bank holding companies.  Headquartered in Green Bay, Wis., Associated is a leading Midwest banking franchise, offering a full range of financial products and services through more than 250 banking locations serving more than 150 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 STATEMENTSStatements made in this document which are not purely historical are forward-looking statements, as defined in the Private Securities Litigation Reform Act of 1995. This includes any statements regarding management's plans, objectives, or goals for future operations, products or services, and forecasts of its revenues, earnings, or other measures of performance.  Such forward-looking statements may be identified by the use of words such as "believe", "expect", "anticipate", "plan", "estimate", "should", "will", "intend", "outlook", or similar expressions.  Forward-looking statements are based on current management expectations and, by their nature, are subject to risks and uncertainties. Actual results may differ materially from those contained in the forward-looking statements.  Factors which may cause actual results to differ materially from those contained in such forward-looking statements include those identified in the Company's most recent Form 10-K and subsequent SEC filings.  Such factors are incorporated herein by reference. Investor Contact:Tim Sedabres, VP of Finance, Investor Relations 920-491-7059  Media Contact:Autumn Latimore, Senior Vice President, Public Relations Director414-278-1860 Consolidated Balance Sheets (Unaudited)Associated Banc-CorpDecember 31,September 30,Seql QtrJune 30,March 31,December 31,Comp Qtr(in thousands)20122012$ Change201220122011$ ChangeAssetsCash and due from banks$        563,304$         419,529$    143,775$        414,760$        360,728$        454,958$     108,346Interest-bearing deposits in other financial institutions147,434531,303(383,869)180,050344,148154,562(7,128)Federal funds sold and securities purchased under agreements to resell27,1352,46024,6753,8007,1007,07520,060Securities held to maturity, at amortized cost39,87721,85218,025---39,877Securities available for sale, at fair value4,926,7584,496,198430,5604,521,4364,669,1004,937,483(10,725)Federal Home Loan Bank and Federal    Reserve Bank stocks, at cost166,774166,100674176,041177,808191,188(24,414)Loans held for sale261,410157,093104,317157,481196,570249,19512,215Loans15,411,02214,966,214444,80814,698,90214,253,72514,031,0711,379,951Allowance for loan losses(297,409)(315,150)17,741(332,658)(356,298)(378,151)80,742    Loans, net15,113,61314,651,064462,54914,366,24413,897,42713,652,9201,460,693Premises and equipment, net253,958238,75615,202225,245225,164223,73630,222Goodwill929,168929,168-929,168929,168929,168-Other intangible assets, net61,17661,294(118)64,81268,37467,574(6,398)Trading assets70,71176,159(5,448)73,48469,08173,253(2,542)Other assets970,472987,378(16,906)968,579969,002983,105(12,633)    Total assets$   23,531,79022,738,354$    793,436$   22,081,100$   21,913,670$   21,924,217$  1,607,573Liabilities and Stockholders' EquityNoninterest-bearing demand deposits$     4,759,5564,320,437$    439,119$     3,874,429$     3,989,156$     3,928,792$     830,764Interest-bearing deposits12,180,30912,130,15550,15411,232,44211,664,22011,161,8631,018,446    Total deposits16,939,86516,450,592489,27315,106,87115,653,37615,090,6551,849,210Federal funds purchased and securities sold under agreements to repurchase750,4551,138,027(387,572)1,253,2701,236,2191,514,485(764,030)Other short-term funding1,576,484615,258961,2261,400,000700,0001,000,000576,484Long-term funding1,015,3461,305,422(290,076)1,150,7291,176,7361,177,071(161,725)Trading liabilities76,34382,861(6,518)80,10775,13080,046(3,703)Accrued expenses and other liabilities236,898195,74241,156180,502171,336196,16640,732    Total liabilities20,595,39119,787,902807,48919,171,47919,012,79719,058,4231,536,968Stockholders' Equity  Preferred equity63,27263,272-63,27263,27263,272-  Common stock1,7501,750-1,7501,7501,7464  Surplus1,602,1361,599,0703,0661,594,9951,590,3361,586,40115,735  Retained earnings1,281,8111,250,18931,6221,213,7351,181,2471,148,773133,038  Accumulated other comprehensive income 48,60367,303(18,700)66,57965,27865,602(16,999)  Treasury stock(61,173)(31,132)(30,041)(30,710)(1,010)-(61,173)    Total stockholders' equity2,936,3992,950,452(14,053)2,909,6212,900,8732,865,79470,605    Total liabilities and stockholders' equity$   23,531,79022,738,354$    793,436$   22,081,100$   21,913,670$   21,924,217$  1,607,573 Consolidated Statements of Income (Unaudited)Associated Banc-CorpFor The Three Months EndedFor The Year Ended,December 31,QuarterDecember 31,Year-to-Date(in thousands, except per share amounts)20122011$ Change% Change20122011$ Change% ChangeInterest IncomeInterest and fees on loans$       150,107$     149,832$         2750.2%$        595,965$      582,739$        13,2262.3%Interest and dividends on investment securities:  Taxable20,36822,855(2,487)(10.9%)86,945123,371(36,426)(29.5%)  Tax-exempt7,1197,344(225)(3.1%)28,65529,937(1,282)(4.3%)Other interest 2,8761,2511,625129.9%6,7195,5751,14420.5%    Total interest income180,470181,282(812)(0.4%)718,284741,622(23,338)(3.1%)Interest ExpenseInterest on deposits 9,09114,954(5,863)(39.2%)41,43165,748(24,317)(37.0%)Interest on Federal funds purchased and securities sold under agreements to repurchase5581,278(720)(56.3%)2,6876,196(3,509)(56.6%)Interest on other short-term funding226879(653)(74.3%)3,2946,215(2,921)(47.0%)Interest on long-term funding9,14012,346(3,206)(26.0%)44,88050,632(5,752)(11.4%)    Total interest expense19,01529,457(10,442)(35.4%)92,292128,791(36,499)(28.3%)Net Interest Income161,455151,8259,6306.3%625,992612,83113,1612.1%Provision for loan losses3,0001,0002,000200.0%3,00052,000(49,000)(94.2%)Net interest income after provision for loan losses158,455150,8257,6305.1%622,992560,83162,16111.1%Noninterest IncomeTrust service fees10,4299,5119189.7%40,73739,1451,5924.1%Service charges on deposit accounts16,81717,783(966)(5.4%)68,91775,908(6,991)(9.2%)Card-based and other nondeposit fees12,69011,2691,42112.6%47,86257,905(10,043)(17.3%)Insurance commissions10,86211,216(354)(3.2%)47,01445,5541,4603.2%Brokerage and annuity commissions3,6783,665130.4%15,64317,230(1,587)(9.2%)  Total core fee-based revenue54,47653,4441,0321.9%220,173235,742(15,569)(6.6%)Mortgage banking, net13,5309,6773,85339.8%63,50012,72350,777399.1%Capital market fees, net4,2433,9502937.4%14,2418,7115,53063.5%Bank owned life insurance income3,2063,820(614)(16.1%)13,95214,896(944)(6.3%)Asset losses, net(209)(1,799)1,590(88.4%)(12,096)(12,199)103(0.8%)Investment securities gains (losses), net152(310)462(149.0%)4,261(1,112)5,373483.2%Other2,5072,750(243)(8.8%)9,25914,358(5,099)(35.5%)    Total noninterest income77,90571,5326,3738.9%313,290273,11940,17114.7%Noninterest ExpensePersonnel expense98,07390,3067,7678.6%381,404360,14421,2605.9%Occupancy 17,27313,7963,47725.2%60,79455,9394,8558.7%Equipment 6,4445,2861,15821.9%23,56619,8733,69318.6%Data processing11,7069,0802,62628.9%43,54832,47511,07334.1%Business development and advertising5,3956,904(1,509)(21.9%)21,30323,038(1,735)(7.5%)Other intangible amortization1,0491,179(130)(11.0%)4,1954,714(519)(11.0%)Loan expense3,1303,469(339)(9.8%)12,28512,0082772.3%Legal and professional fees8,1744,6513,52375.7%31,23218,20513,02771.6%Losses other than loans3,07111,890(8,819)(74.2%)12,25817,921(5,663)(31.6%)Foreclosure/OREO expense3,2935,169(1,876)(36.3%)15,06921,393(6,324)(29.6%)FDIC expense4,8136,136(1,323)(21.6%)19,47828,484(9,006)(31.6%)Other13,90714,461(554)(3.8%)56,69156,3293620.6%    Total noninterest expense176,328172,3274,0012.3%681,823650,52331,3004.8%Income before income taxes60,03250,03010,00220.0%254,459183,42771,03238.7%Income tax expense 13,4048,9054,49950.5%75,48643,72831,75872.6%Net income46,62841,1255,50313.4%178,973139,699$        39,27428.1%Preferred stock dividends and discount1,3001,300-0.0%5,20024,830(19,630)(79.1%)Net income available to common equity$         45,328$       39,825$      5,50313.8%$        173,773$      114,869$        58,90451.3%Earnings Per Common Share:  Basic$             0.26$           0.23$        0.0313.0%$              1.00$            0.66$            0.3451.5%  Diluted$             0.26$           0.23$        0.0313.0%$              1.00$            0.66$            0.3451.5%Average Common Shares Outstanding:  Basic170,707173,523(2,816)(1.6%)172,255173,370(1,115)(0.6%)  Diluted170,896173,523(2,627)(1.5%)172,357173,372(1,015)(0.6%)N/M = Not meaningful. Consolidated Statements of Income (Unaudited) - Quarterly TrendAssociated Banc-CorpSequential QtrComparable Qtr(in thousands, except per share amounts)4Q123Q12$ Change% Change2Q121Q124Q11$ Change% ChangeInterest IncomeInterest and fees on loans$      150,107$      149,647$         4600.3%$      147,188$      149,023$      149,832$         2750.2%Interest and dividends on investment securities:  Taxable20,36820,548(180)(0.9%)23,00023,02922,855(2,487)(10.9%)  Tax-exempt7,1197,127(8)(0.1%)7,1357,2747,344(225)(3.1%)Other interest 2,8761,3341,542115.6%1,2621,2471,2511,625129.9%    Total interest income180,470178,6561,8141.0%178,585180,573181,282(812)(0.4%)Interest ExpenseInterest on deposits 9,0919,751(660)(6.8%)10,55312,03614,954(5,863)(39.2%)Interest on Federal funds purchased and securities sold under agreements to repurchase558750(192)(25.6%)6127671,278(720)(56.3%)Interest on other short-term funding226815(589)(72.3%)1,1971,056879(653)(74.3%)Interest on long-term funding9,14011,738(2,598)(22.1%)11,95612,04612,346(3,206)(26.0%)    Total interest expense19,01523,054(4,039)(17.5%)24,31825,90529,457(10,442)(35.4%)Net Interest Income161,455155,6025,8533.8%154,267154,668151,8259,6306.3%Provision for loan losses3,000-3,000--1,0002,000200.0%Net interest income after provision for loan losses158,455155,6022,8531.8%154,267154,668150,8257,6305.1%Noninterest IncomeTrust service fees10,42910,396330.3%10,1259,7879,5119189.7%Service charges on deposit accounts16,81717,290(473)(2.7%)16,76818,04217,783(966)(5.4%)Card-based and other nondeposit fees12,69012,2094813.9%12,08410,87911,2691,42112.6%Insurance commissions10,86211,650(788)(6.8%)12,91211,59011,216(354)(3.2%)Brokerage and annuity commissions3,6783,632461.3%4,2064,1273,665130.4%  Total core fee-based revenue54,47655,177(701)(1.3%)56,09554,42553,4441,0321.9%Mortgage banking, net13,53015,581(2,051)(13.2%)16,73517,6549,6773,85339.8%Capital market fees, net4,2433,60963417.6%2,6733,7163,9502937.4%Bank owned life insurance income3,2063,290(84)(2.6%)3,1644,2923,820(614)(16.1%)Asset losses, net(209)(3,309)3,100(93.7%)(4,984)(3,594)(1,799)1,590(88.4%)Investment securities gains (losses), net1523,506(3,354)(95.7%)56340(310)462(149.0%)Other2,5073,134(627)(20.0%)1,7051,9132,750(243)(8.8%)    Total noninterest income77,90580,988(3,083)(3.8%)75,95178,44671,5326,3738.9%Noninterest ExpensePersonnel expense98,07395,2312,8423.0%93,81994,28190,3067,7678.6%Occupancy 17,27314,3342,93920.5%14,00815,17913,7963,47725.2%Equipment 6,4445,9355098.6%5,7195,4685,2861,15821.9%Data processing11,70611,0226846.2%11,3049,5169,0802,62628.9%Business development and advertising5,3955,0593366.6%5,4685,3816,904(1,509)(21.9%)Other intangible amortization1,0491,04810.1%1,0491,0491,179(130)(11.0%)Loan expense3,1303,297(167)(5.1%)2,9482,9103,469(339)(9.8%)Legal and professional fees8,1747,6864886.3%5,6579,7154,6513,52375.7%Losses other than loans3,0713,577(506)(14.1%)2,0603,55011,890(8,819)(74.2%)Foreclosure/OREO expense3,2934,071(778)(19.1%)4,3433,3625,169(1,876)(36.3%)FDIC expense4,8135,017(204)(4.1%)4,7784,8706,136(1,323)(21.6%)Other13,90713,4264813.6%14,87714,48114,461(554)(3.8%)    Total noninterest expense176,328169,7036,6253.9%166,030169,762172,3274,0012.3%Income before income taxes60,03266,887(6,855)(10.2%)64,18863,35250,03010,00220.0%Income tax expense 13,40420,492(7,088)(34.6%)20,87120,7198,9054,49950.5%Net income46,62846,3952330.5%43,31742,63341,1255,50313.4%Preferred stock dividends and discount1,3001,300-0.0%1,3001,3001,300-0.0%Net income available to common equity$        45,328$        45,095$         2330.5%$        42,017$        41,333$        39,825$      5,50313.8%Earnings Per Common Share:  Basic$            0.26$            0.26$            -0.0%$            0.24$            0.24$            0.23$        0.0313.0%  Diluted$            0.26$            0.26$            -0.0%$            0.24$            0.24$            0.23$        0.0313.0%Average Common Shares Outstanding:  Basic170,707171,650(943)(0.5%)172,839173,846173,523(2,816)(1.6%)  Diluted170,896171,780(884)(0.5%)172,841173,848173,523(2,627)(1.5%)N/M = Not meaningful.Selected Quarterly InformationAssociated Banc-Corp(in thousands, except per share, full time equivalent employee data and otherwise noted)YTD 2012YTD 20114th Qtr 20123rd Qtr 20122nd Qtr 20121st Qtr 20124th Qtr 2011Summary of OperationsNet interest income$           625,992$           612,831$           161,455$           155,602$           154,267$           154,668$           151,825Provision for loan losses3,00052,0003,000---1,000Asset losses, net(12,096)(12,199)(209)(3,309)(4,984)(3,594)(1,799)Investment securities gains (losses), net4,261(1,112)1523,50656340(310)Noninterest income (excluding securities & asset gains)321,125286,43077,96280,79180,37282,00073,641Noninterest expense681,823650,523176,328169,703166,030169,762172,327Income before income taxes254,459183,42760,03266,88764,18863,35250,030Income tax expense75,48643,72813,40420,49220,87120,7198,905Net income178,973139,69946,62846,39543,31742,63341,125Net income available to common equity173,773114,86945,32845,09542,01741,33339,825Taxable equivalent adjustment21,04621,3745,2215,2685,2545,3035,307Per Common Share Data Net income:  Basic$                 1.00$                 0.66$                 0.26$                 0.26$                 0.24$                 0.24$                 0.23  Diluted1.000.660.260.260.240.240.23Dividends0.230.040.080.050.050.050.01Market Value:  High$               14.63$               15.36$               13.54$               13.79$               13.97$               14.63$               11.78  Low11.438.9512.1912.0411.7611.439.15  Close13.1211.1713.1213.1613.1913.9611.17Book value16.9716.1516.9716.8216.5916.3216.15Tier 1 common equity / share11.0810.2811.0810.8910.6610.4610.28Tangible book value11.3910.6811.3911.3111.0710.8710.68Performance Ratios (annualized)Earning assets yield3.77%3.92%3.70%3.73%3.80%3.85%3.81%Interest-bearing liabilities rate0.620.850.510.620.650.700.78Net interest margin3.303.263.323.263.303.313.21Return on average assets0.810.650.830.840.800.790.75Return on average tangible common equity8.966.459.159.328.878.858.57Return on average Tier 1 common equity (1)9.456.719.619.699.269.238.96Efficiency ratio (2)70.4270.6672.0870.2269.2170.1674.67Effective tax rate29.6723.8422.3330.6432.5232.7017.80Dividend payout ratio (3)23.006.0630.7719.2320.8320.834.35Average BalancesAssets$      21,976,357$      21,588,620$      22,461,886$      22,016,748$      21,684,600$      21,659,139$      21,755,870Earning assets19,613,77719,442,26320,032,43219,659,79619,386,04619,371,72919,506,627Interest-bearing liabilities14,905,73515,120,82414,840,16214,940,69714,922,00614,920,41315,095,689Loans (4)14,741,78513,278,84815,131,10214,916,79314,602,60214,310,44114,043,585Deposits15,582,36914,401,12716,650,26815,615,85615,050,68415,000,56714,893,469Short and long-term funding3,272,2124,100,8252,638,6613,286,9433,566,3463,603,7003,857,252Common stockholders' equity2,885,7162,730,6432,915,3462,870,4382,852,0502,826,9132,792,823Stockholders' equity2,948,9882,997,2902,978,6182,933,7102,915,3222,890,1852,856,095Average Tier 1 common equity (5)1,838,4241,713,1551,876,6861,850,6101,825,4411,801,6491,763,522At Period EndAssets$      23,531,790$      22,738,354$      22,081,100$      21,913,670$      21,924,217Loans15,411,02214,966,21414,698,90214,253,72514,031,071Allowance for loan losses297,409315,150332,658356,298378,151Goodwill929,168929,168929,168929,168929,168Mortgage servicing rights, net45,94945,01847,48850,00148,152Other intangible assets, net15,22716,27617,32418,37319,422Deposits16,939,86516,450,59215,106,87115,653,37615,090,655Loans / deposits90.97%90.98%97.30%91.06%92.98%Risk weighted assets ($ in millions) (6)16,19415,57515,18814,57014,568Tier 1 common equity (5)1,875,5341,869,9311,828,5291,819,7821,783,515Stockholders' equity / assets12.48%12.98%13.18%13.24%13.07%Tangible common equity / tangible assets (7)8.54%8.91%8.99%9.01%8.84%Tangible equity / tangible assets (8)8.82%9.20%9.29%9.32%9.14%Tier 1 common equity / risk-weighted assets (6)11.58%12.01%12.04%12.49%12.24%Tier 1 leverage ratio (6)8.98%9.99%9.95%10.03%9.81%Tier 1 risk-based capital ratio (6)11.97%13.57%13.64%14.33%14.08%Total risk-based capital ratio (6)13.39%15.00%15.08%15.78%15.53%Shares outstanding, end of period169,304171,657171,611173,923173,575Selected trend informationAverage full time equivalent employees4,9154,9654,9515,0455,056Trust assets under management, at market value ($ in millions)$               6,454$               6,163$               5,934$               5,983$               5,616Mortgage loans originated for sale during period780,469715,184738,091563,688843,614Mortgage portfolio serviced for others ($ in millions)7,4537,5477,5117,2847,321Mortgage servicing rights, net / Portfolio serviced for others0.62%0.60%0.63%0.69%0.66%(1) Return on average Tier 1 common equity = Net income available to common equity divided by average Tier 1 common equity.  This is a non-GAAP financial measure.(2) Efficiency ratio = Noninterest expense divided by sum of taxable equivalent net interest income plus noninterest income, excluding investment securities gains, net, and asset gains, net. This is a non-GAAP financial measure.(3) Ratio is based upon basic earnings per common share.(4) Loans held for sale have been included in the average balances.(5) Tier 1 common equity (period end and average) is Tier 1 capital excluding qualifying perpetual preferred stock and qualifying trust preferred securities.(6) December 31, 2012 data is estimated.(7) Tangible common equity to tangible assets = Common stockholders' equity excluding goodwill and other intangible assets divided by assets excluding goodwill and other intangible assets. This is a non-GAAP financial measure.(8) Tangible equity to tangible assets = Stockholders' equity excluding goodwill and other intangible assets divided by assets excluding goodwill and other intangible assets. This is a non-GAAP financial measure. Selected Asset Quality InformationAssociated Banc-CorpDec12 vs Sep12Dec12 vs Dec11(in thousands)Dec 31, 2012Sep 30, 2012% ChangeJun 30, 2012Mar 31, 2012Dec 31, 2011% ChangeAllowance for Loan LossesBeginning balance$             315,150$             332,658(5.3%)$           356,298$        378,151$        399,723(21.2%)Provision for loan losses3,000-0.0%--1,000200.0%Charge offs(30,417)(25,030)21.5%(30,340)(31,259)(34,056)(10.7%)Recoveries9,6767,52228.6%6,7009,40611,484(15.7%)Net charge offs(20,741)(17,508)18.5%(23,640)(21,853)(22,572)(8.1%)Ending balance$             297,409$             315,150(5.6%)$           332,658$        356,298$        378,151(21.4%)Reserve for losses on unfunded commitments$               21,800$               19,80010.1%$             18,900$          15,600$          14,70048.3%Net Charge OffsDec12 vs Sep12Dec12 vs Dec11Dec 31, 2012Sep 30, 2012% ChangeJun 30, 2012Mar 31, 2012Dec 31, 2011% ChangeCommercial and industrial$                 2,630$                 3,831(31.3%)$             14,544$            3,872$               231N/MCommercial real estate - owner occupied2,056(8)N/M1,164415539N/MLease financing754(20)N/M-(1,836)19N/M  Commercial and business lending5,4403,80343.0%15,7082,451789N/MCommercial real estate - investor(232)1,905(112.2%)1777,3542,394(109.7%)Real estate construction858(187)N/M5582307,088(87.9%)  Commercial real estate lending6261,718(63.6%)7357,5849,482(93.4%)    Total commercial6,0665,5219.9%16,44310,03510,271(40.9%)Home equity8,0717,9221.9%5,2848,9508,113(0.5%)Installment1,027324N/M371101452127.2%    Total retail9,0988,24610.3%5,6559,0518,5656.2%    Residential mortgage5,5773,74149.1%1,5422,7673,73649.3%        Total net charge offs$               20,741$               17,50818.5%$             23,640$          21,853$          22,572(8.1%)Net Charge Offs to Average Loans (in basis points) *Dec 31, 2012Sep 30, 2012Jun 30, 2012Mar 31, 2012Dec 31, 2011Commercial and industrial2537151423Commercial real estate - owner occupied69(0)431620Lease financing480(13)- N/M 14  Commercial and business lending4029126207Commercial real estate - investor(3)27311338Real estate construction54(12)4016 N/M   Commercial real estate lending720996122    Total commercial2725795053Home equity14013286144127Installment862628732    Total retail13111476119110    Residential mortgage6445193446        Total net charge offs5547656164Credit QualityDec12 vs Sep12Dec12 vs Dec11Dec 31, 2012Sep 30, 2012% ChangeJun 30, 2012Mar 31, 2012Dec 31, 2011% ChangeNonaccrual loans$             252,868$             278,172(9.1%)$           317,872$        327,085$        356,772(29.1%)Other real estate owned (OREO)34,90036,053(3.2%)40,02934,42541,571(16.0%)    Total nonperforming assets$             287,768$             314,225(8.4%)$           357,901$        361,510$        398,343(27.8%)Loans 90 or more days past due and still accruing2,2892,334(1.9%)5,2242,4974,925(53.5%)Restructured loans (accruing)121,087135,791(10.8%)122,229120,719113,1647.0%Allowance for loan losses / loans1.93%2.11%2.26%2.50%2.70%Allowance for loan losses / nonaccrual loans117.61113.29104.65108.93105.99Nonaccrual loans / total loans1.641.862.162.292.54Nonperforming assets / total loans plus OREO1.862.092.432.532.83Nonperforming assets / total assets1.221.381.621.651.82Net charge offs / average loans (annualized)0.550.470.650.610.64Year-to-date net charge offs / average loans0.570.580.630.611.13Nonaccrual loans by type:Commercial and industrial$               39,182$               41,694(6.0%)$             46,111$          50,641$          56,075(30.1%)Commercial real estate - owner occupied24,25427,161(10.7%)33,41731,88835,718(32.1%)Lease financing3,0315,927(48.9%)8,2609,04010,644(71.5%)  Commercial and business lending66,46774,782(11.1%)87,78891,569102,437(35.1%)Commercial real estate - investor58,68771,522(17.9%)88,80689,03099,352(40.9%)Real estate construction27,30231,684(13.8%)36,40336,47141,806(34.7%)  Commercial real estate lending85,989103,206(16.7%)125,209125,501141,158(39.1%)    Total commercial152,456177,988(14.3%)212,997217,070243,595(37.4%)Home equity39,21538,4671.9%41,53644,62846,907(16.4%)Installment1,8382,893(36.5%)3,0472,6272,715(32.3%)  Total retail41,05341,360(0.7%)44,58347,25549,622(17.3%)  Residential mortgage59,35958,8240.9%60,29262,76063,555(6.6%)    Total consumer100,412100,1840.2%104,875110,015113,177(11.3%)        Total nonaccrual loans$             252,868$             278,172(9.1%)$           317,872$        327,085$        356,772(29.1%)* Annualized.N/M = Not meaningful.Selected Asset Quality Information (continued)Associated Banc-CorpDec12 vs Sep12Dec12 vs Dec11(in thousands)Dec 31, 2012Sep 30, 2012% ChangeJun 30, 2012Mar 31, 2012Dec 31, 2011% ChangeRestructured loans (accruing)Commercial and industrial$               28,140$               35,015(19.6%)$               28,399$             25,622$          22,55224.8%Commercial real estate - owner occupied13,85215,706(11.8%)7,1156,9268,13870.2%Lease financing--0.0%---0.0%  Commercial and business lending41,99250,721(17.2%)35,51432,54830,69036.8%Commercial real estate - investor41,66049,249(15.4%)49,32545,84543,417(4.0%)Real estate construction4,5303,56127.2%5,83811,77010,977(58.7%)  Commercial real estate lending46,19052,810(12.5%)55,16357,61554,394(15.1%)    Total commercial88,182103,531(14.8%)90,67790,16385,0843.6%Home equity9,9689,4675.3%9,4719,0928,95011.4%Installment653672(2.8%)7799991,015(35.7%)  Total retail10,62110,1394.8%10,25010,0919,9656.6%  Residential mortgage22,28422,1210.7%21,30220,46518,11523.0%    Total consumer32,90532,2602.0%31,55230,55628,08017.2%        Total restructured loans (accruing)$             121,087$             135,791(10.8%)$             122,229$           120,719$        113,1647.0%Restructured loans in nonaccrual loans (not included above)$               80,590$               74,2518.5%$               86,395$             79,946$          87,493(7.9%)Loans Past Due 30-89 DaysDec12 vs Sep12Dec12 vs Dec11Dec 31, 2012Sep 30, 2012% ChangeJun 30, 2012Mar 31, 2012Dec 31, 2011% ChangeCommercial and industrial$               11,339$                 3,795N/M$                 4,465$             12,643$            8,74329.7%Commercial real estate - owner occupied11,0534,843128.2%2,1257,5327,09255.9%Lease financing1217(29.4%)3940104(88.5%)  Commercial and business lending22,4048,655158.9%6,62920,21515,93940.6%Commercial real estate - investor13,4728,80952.9%12,8548,3134,970171.1%Real estate construction3,1551,254151.6%1,6181,736996216.8%  Commercial real estate lending16,62710,06365.2%14,47210,0495,966178.7%    Total commercial39,03118,718108.5%21,10130,26421,90578.2%Home equity13,53814,823(8.7%)15,30218,00712,18911.1%Installment2,1091,69324.6%1,5582,8132,592(18.6%)  Total retail15,64716,516(5.3%)16,86020,82014,7815.9%  Residential mortgage9,4036,87836.7%9,83610,1147,22430.2%    Total consumer25,05023,3947.1%26,69630,93422,00513.8%        Total loans past due 30-89 days$               64,081$               42,11252.2%$               47,797$             61,198$          43,91045.9%Potential Problem LoansDec12 vs Sep12Dec12 vs Dec11Dec 31, 2012Sep 30, 2012% ChangeJun 30, 2012Mar 31, 2012Dec 31, 2011% ChangeCommercial and industrial$             128,434$             120,8886.2%$             121,764$           157,778$        153,306(16.2%)Commercial real estate - owner occupied99,592120,034(17.0%)108,508112,673136,366(27.0%)Lease financing26421423.4%32448715867.1%  Commercial and business lending228,290241,136(5.3%)230,596270,938289,830(21.2%)Commercial real estate - investor107,068133,046(19.5%)142,453167,339230,206(53.5%)Real estate construction13,09218,477(29.1%)23,90527,65427,649(52.6%)  Commercial real estate lending120,160151,523(20.7%)166,358194,993257,855(53.4%)    Total commercial348,450392,659(11.3%)396,954465,931547,685(36.4%)Home equity3,6703,3439.8%4,1734,4415,451(32.7%)Installment111131(15.3%)127142233(52.4%)  Total retail3,7813,4748.8%4,3004,5835,684(33.5%)  Residential mortgage8,7628,1976.9%8,6589,58013,037(32.8%)    Total consumer12,54311,6717.5%12,95814,16318,721(33.0%)        Total potential problem loans$             360,993$             404,330(10.7%)$             409,912$           480,094$        566,406(36.3%) Net Interest Income Analysis - Taxable Equivalent BasisAssociated Banc-CorpYear ended December 31, 2012Year ended December 31, 2011 Average InterestAverage Average InterestAverage(in thousands) Balance  Income / Expense  Yield / Rate  Balance  Income / Expense  Yield / Rate Earning assets:   Loans: (1) (2) (3)      Commercial and business lending$        5,139,155$             202,4443.94%$        4,301,377$              182,3624.24%      Commercial real estate lending3,350,190140,8814.212,973,351132,7894.47         Total commercial8,489,345343,3254.04$        7,274,728$              315,1514.33      Residential mortgage3,330,123121,3993.652,819,702116,2074.12      Retail2,922,317135,0944.623,184,418154,7934.86         Total loans14,741,785599,8184.0713,278,848586,1514.41      Investment securities4,469,541132,7932.975,497,297171,2703.12      Other short-term investments402,4516,7191.67666,1185,5750.84         Investments and other4,871,992139,5122.866,163,415176,8452.87Total earning assets19,613,777739,3303.7719,442,263762,9963.92   Other assets, net2,362,5802,146,357Total assets$      21,976,357$      21,588,620Interest-bearing liabilities:   Savings deposits$        1,096,692$                    8510.08%$           987,198$                  1,0910.11%   Interest-bearing demand deposits2,148,4593,7410.171,947,5063,4290.18   Money market deposits6,148,66315,3360.255,147,43716,3850.32   Time deposits2,239,70921,5030.962,937,85844,8431.53      Total interest-bearing deposits11,633,52341,4310.3611,019,99965,7480.60   Federal funds purchased and securities sold underagreements to repurchase1,177,1052,6870.231,926,4746,1960.32   Other short-term funding936,3763,2940.35767,2306,2150.81   Total long-term funding1,158,73144,8803.871,407,12150,6323.60      Total short and long-term funding3,272,21250,8611.554,100,82563,0431.54Total interest-bearing liabilities14,905,73592,2920.6215,120,824128,7910.85   Noninterest-bearing demand deposits3,948,8463,381,128   Other liabilities172,78889,378   Stockholders' equity2,948,9882,997,290Total liabilities and stockholders' equity$      21,976,357$      21,588,620Net interest income and rate spread (1)$             647,0383.15%$              634,2053.07%Net interest margin (1)3.30%3.26%Taxable equivalent adjustment$               21,046$                21,374Net Interest Income Analysis - Taxable Equivalent BasisAssociated Banc-CorpThree months ended December 31, 2012Three months ended December 31, 2011 Average InterestAverage Average InterestAverage(in thousands) Balance  Income / Expense  Yield / Rate  Balance  Income / Expense  Yield / Rate Earning assets:   Loans: (1) (2) (3)      Commercial and business lending$        5,431,195$               53,4423.92%$        4,638,160$                48,2434.13%      Commercial real estate lending3,451,10435,6234.113,090,64334,1814.39         Total commercial8,882,29989,0653.99$        7,728,803$                82,4244.23      Residential mortgage3,485,71930,1263.463,216,46631,6433.93      Retail2,763,08431,8654.593,098,31636,6664.71         Total loans15,131,102151,0563.9814,043,585150,7334.27      Investment securities4,545,17831,7592.795,020,42934,6052.76      Other short-term investments356,1522,8763.22442,6131,2511.13         Investments and other4,901,33034,6352.835,463,04235,8562.63Total earning assets20,032,432185,6913.7019,506,627186,5893.81   Other assets, net2,429,4542,249,243Total assets$      22,461,886$      21,755,870Interest-bearing liabilities:   Savings deposits$        1,129,983$                    2250.08%$        1,017,271$                     2300.09%   Interest-bearing demand deposits2,236,8269540.172,152,5181,1150.21   Money market deposits6,797,3064,1030.245,308,1743,6490.27   Time deposits2,037,3863,8090.742,760,4749,9601.43      Total interest-bearing deposits12,201,5019,0910.3011,238,43714,9540.53   Federal funds purchased and securities sold under agreements to repurchase984,8695580.231,824,9991,2780.28   Other short-term funding550,1372260.16691,9608790.50   Total long-term funding1,103,6559,1403.311,340,29312,3463.68      Total short and long-term funding2,638,6619,9241.503,857,25214,5031.50Total interest-bearing liabilities14,840,16219,0150.5115,095,68929,4570.78   Noninterest-bearing demand deposits4,448,7673,655,032   Other liabilities194,339149,054   Stockholders' equity2,978,6182,856,095Total liabilities and stockholders' equity$      22,461,886$      21,755,870Net interest income and rate spread (1)$             166,6763.19%$              157,1323.03%Net interest margin (1)3.32%3.21%Taxable equivalent adjustment$                 5,221$                  5,307(1) The yield on tax exempt loans and securities is computed on a taxable 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. Net Interest Income Analysis - Taxable Equivalent BasisAssociated Banc-CorpThree months ended December 31, 2012Three months ended September 30, 2012 Average InterestAverage Average InterestAverage(in thousands) Balance  Income / Expense  Yield / Rate  Balance  Income / Expense  Yield / Rate Earning assets:   Loans: (1) (2) (3)      Commercial and business lending$        5,431,195$               53,4423.92%$        5,275,069$                51,4323.88%      Commercial real estate lending3,451,10435,6234.113,440,22035,9134.16         Total commercial8,882,29989,0653.99$        8,715,289$                87,3453.99      Residential mortgage3,485,71930,1263.463,320,21230,0443.62      Retail2,763,08431,8654.592,881,29233,2514.60         Total loans15,131,102151,0563.9814,916,793150,6404.02      Investment securities4,545,17831,7592.794,319,40431,9502.96      Other short-term investments356,1522,8763.22423,5991,3341.26         Investments and other4,901,33034,6352.834,743,00333,2842.81Total earning assets20,032,432185,6913.7019,659,796183,9243.73   Other assets, net2,429,4542,356,952Total assets$      22,461,886$      22,016,748Interest-bearing liabilities:   Savings deposits$        1,129,983$                    2250.08%$        1,117,194$                     2290.08%   Interest-bearing demand deposits2,236,8269540.172,136,2809260.17   Money market deposits6,797,3064,1030.246,240,5963,9320.25   Time deposits2,037,3863,8090.742,159,6844,6640.86      Total interest-bearing deposits12,201,5019,0910.3011,653,7549,7510.33   Federal funds purchased and securities sold under agreements to repurchase984,8695580.231,266,9957500.24   Other short-term funding550,1372260.16837,3168150.39   Total long-term funding1,103,6559,1403.311,182,63211,7383.97      Total short and long-term funding2,638,6619,9241.503,286,94313,3031.62Total interest-bearing liabilities14,840,16219,0150.5114,940,69723,0540.62   Noninterest-bearing demand deposits4,448,7673,962,102   Other liabilities194,339180,239   Stockholders' equity2,978,6182,933,710Total liabilities and stockholders' equity$      22,461,886$      22,016,748Net interest income and rate spread (1)$             166,6763.19%$              160,8703.11%Net interest margin (1)3.32%3.26%Taxable equivalent adjustment$                 5,221$                  5,268(1) The yield on tax exempt loans and securities is computed on a taxable 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.Financial Summary and ComparisonAssociated Banc-CorpPeriod End Loan CompositionDec12 vs Sep12Dec12 vs Dec11Dec 31, 2012Sep 30, 2012% ChangeJun 30, 2012Mar 31, 2012Dec 31, 2011% ChangeCommercial and industrial$        4,502,021$          4,265,3565.5%$        4,076,370$           3,719,016$   3,724,73620.9%Commercial real estate - owner occupied1,219,7471,197,5171.9%1,116,8151,074,7551,086,82912.2%Lease financing64,19660,8185.6%62,75061,20858,19410.3%    Commercial and business lending5,785,9645,523,6914.7%5,255,9354,854,9794,869,75918.8%Commercial real estate - investor2,906,7592,787,1584.3%2,810,5212,664,2512,563,76713.4%Real estate construction655,381611,1867.2%612,556565,953584,04612.2%    Commercial real estate lending3,562,1403,398,3444.8%3,423,0773,230,2043,147,81313.2%        Total commercial9,348,1048,922,0354.8%8,679,0128,085,1838,017,57216.6%Home equity2,219,4942,356,900(5.8%)2,429,5942,501,7702,504,704(11.4%)Installment466,727482,451(3.3%)510,831537,628557,782(16.3%)    Total retail2,686,2212,839,351(5.4%)2,940,4253,039,3983,062,486(12.3%)    Residential mortgage3,376,6973,204,8285.4%3,079,4653,129,1442,951,01314.4%        Total consumer6,062,9186,044,1790.3%6,019,8906,168,5426,013,4990.8%        Total loans$      15,411,022$        14,966,2143.0%$      14,698,902$         14,253,725$ 14,031,0719.8%Period End Deposit and Customer Funding CompositionDec12 vs Sep12Dec12 vs Dec11Dec 31, 2012Sep 30, 2012% ChangeJun 30, 2012Mar 31, 2012Dec 31, 2011% ChangeNoninterest-bearing demand$        4,759,556$          4,320,43710.2%$        3,874,429$           3,989,156$   3,928,79221.1%Savings1,109,8611,115,783(0.5%)1,117,5931,098,975986,76612.5%Interest-bearing demand2,554,4792,230,74014.5%2,078,0372,040,9002,297,45411.2%Money market6,518,0756,682,640(2.5%)5,822,4496,176,9815,150,27526.6%Brokered CDs26,27033,612(21.8%)41,10446,493202,948(87.1%)Other time 1,971,6242,067,380(4.6%)2,173,2592,300,8712,524,420(21.9%)  Total deposits16,939,86516,450,5923.0%15,106,87115,653,37615,090,65512.3%Customer repo sweeps564,038600,225(6.0%)592,203635,697664,624(15.1%)Customer repo term115,032448,782(74.4%)619,897509,332695,131(83.5%)  Total customer funding679,0701,049,007(35.3%)1,212,1001,145,0291,359,755(50.1%)    Total deposits and customer funding$      17,618,935$        17,499,5990.7%$      16,318,971$         16,798,405$ 16,450,4107.1%Network transaction deposits included above in interest-bearing demand and money market1,684,7451,740,434(3.2%)1,234,0101,171,679875,05292.5%Brokered CDs26,27033,612(21.8%)41,10446,493202,948(87.1%)    Total network and brokered funding1,711,0151,774,046(3.6%)1,275,1141,218,1721,078,00058.7%    Net customer deposits and funding (4)15,907,92015,725,5531.2%15,043,85715,580,23315,372,4103.5%(4) Total deposits and customer funding excluding total network and brokered funding.SOURCE Associated Banc-Corp