Associated Reports Third Quarter Earnings of $0.07 Per Common Share

• Press Release
• Source: Associated Banc-Corp
• On 12:51 pm EDT, Thursday October 22, 2009

GREEN BAY, Wis.--(BUSINESS WIRE)--Associated Banc-Corp (NASDAQ: ASBC - News):

• 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

Related Quotes

Symbol	Price	Change
ASBC	11.28	-0.07

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Associated Banc-Corp (NASDAQ: ASBC - News) 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 - News) 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.

Associated Banc-Corp
Investors: Joseph B. Selner, Chief Financial Officer, 920-491-7120
Media: Janet L. Ford, SVP Public Relations Director, 414-704-1211
janet.ford@associatedbank.com