ASB 8-K
Associated Banc-Corp (ASB)
8-K
2023-01-26
For: 2023-01-26
View Original
Added on
April 06, 2026
| UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 | |||||
| FORM | |||||
| CURRENT REPORT | |||||
| Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934 | |||||
| Date of Report (Date of earliest event reported) | |||||
| | ||
| (Exact name of registrant as specified in its chapter) | ||
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) | ||||||
| (Address of principal executive offices) | (Zip code) | ||||||||||
| Registrant’s telephone number, including area code | ||||||||
| (Former name or former address, if changed since last report) | |||||
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): | |||||
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |||||
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |||||
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |||||
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | |||||
Securities Registered Pursuant to Section 12(b) of the act:
| Title of each class | Trading symbol | Name of each exchange on which registered | ||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). | |||||
Emerging growth company | |||||
☐ | If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. | ||||
| Item 2.02 Results of Operations and Financial Condition. | ||
| On January 26, 2023, Associated Banc-Corp announced its earnings for the quarter ended December 31, 2022. A copy of the registrant’s press release containing this information and the slide presentation discussed on the conference call for investors and analysts on January 26, 2023, are being furnished as Exhibit 99.1 and Exhibit 99.2, respectively, to this Report on Form 8-K and are incorporated herein by reference. | ||
| Item 9.01 Financial Statements and Exhibits. | ||
(d) Exhibits. | ||
The following exhibits are furnished as part of this Report on Form 8-K: | ||
| SIGNATURES | ||||||||
| Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. | ||||||||
| Associated Banc-Corp | ||||||||
| (Registrant) | ||||||||
| Date: January 26, 2023 | By: /s/ Derek S. Meyer | |||||||
| Derek S. Meyer | ||||||||
| Chief Financial Officer | ||||||||
 | NEWS RELEASE Investor Contact: Ben McCarville, 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 Fourth Quarter 2022 Earnings of $0.70 Per Common Share and $2.34 Per Common Share for the Full Year 2022.
GREEN BAY, Wis. -- January 26, 2023 -- Associated Banc-Corp (NYSE: ASB) ("Associated" or "Company") today reported net income available to common equity ("earnings") of $106 million, or $0.70 per common share, for the quarter ended December 31, 2022. These amounts compare to earnings of $74 million, or $0.49 per common share for the quarter ended December 31, 2021 and earnings of $93 million, or $0.62 per common share for the quarter ended September 30, 2022. For the year ended December 31, 2022, the Company reported earnings of $355 million, or $2.34 per common share. These amounts compare to earnings of $334 million, or $2.18 per common share, for the year ended December 31, 2021.
“This quarter served as a fitting exclamation point for the most profitable year in our company’s 162-year history,” said President and CEO Andy Harmening. “By listening to our customers and empowering our colleagues, we’ve enhanced engagement, deepened relationships, and delivered more meaningful solutions to the communities we serve. This momentum has enabled us to add nearly $4.6 billion in high-quality loan balances over the course of the year, expand margins, drive operating leverage into the double-digits, and enhance our profitability profile. Importantly, we’ve achieved all of this without abandoning our foundational discipline on expenses and credit quality."
“While we’re proud of what we’ve accomplished so far, we feel like we’re just getting started,” Harmening continued. “As we shift to 2023, we’re closely monitoring the economic environment, but continue to feel well-positioned thanks to the diversifying benefits of our strategic plan and our decade-long effort to de-risk our balance sheet. We’ve laid the groundwork to create a stronger Associated Bank for years to come.”
2022 SUMMARY (all comparisons to 2021)
•End of period total commercial loans were up $2.4 billion to $18.0 billion
•End of period total consumer loans were up $2.2 billion to $10.8 billion
•End of period total deposits were up $1.2 billion to $29.6 billion
•Net interest income was up $231 million to $957 million
•Noninterest income was down $50 million to $282 million
•Noninterest expense was up $37 million to $747 million
•Provision for credit losses was $33 million, compared to a negative provision of $88 million in 2021
•Net income available to common equity was up $21 million to $355 million
•Earnings per common share increased $0.16 to $2.34
Loans
Fourth quarter 2022 period-end total loans of $28.8 billion were up 4%, or $982 million, from the prior quarter and were up 19%, or $4.6 billion from the same period last year. With respect to fourth quarter 2022 period-end balances by loan category:
•Commercial and business lending increased $179 million from the prior quarter and increased $1.3 billion from the same period last year to $10.8 billion.
•Commercial real estate lending increased $336 million from the prior quarter and increased $1.0 billion from the same period last year to $7.2 billion.
•Consumer lending increased $467 million from the prior quarter and increased $2.2 billion from the same period last year to $10.8 billion.
Fourth quarter 2022 average total loans of $28.2 billion were up 4%, or $1.1 billion, from the prior quarter and were up 18%, or $4.4 billion, from the same period last year. With respect to fourth quarter 2022 average balances by loan category:
•Commercial and business lending increased $338 million from the prior quarter and increased $1.6 billion compared to the same period last year to $10.5 billion.
•Commercial real estate lending increased $294 million from the prior quarter and increased $928 million from the same period last year to $7.1 billion.
•Consumer lending increased $508 million from the prior quarter and increased $1.9 billion from the same period last year to $10.6 billion.
Full year 2022 average loans of $26.2 billion were up 9%, or $2.1 billion, from 2021. With respect to full year 2022 average balances by loan category:
•Commercial and business lending increased $748 million to $9.9 billion.
•Commercial real estate lending increased $439 million to $6.6 billion.
•Consumer lending increased $955 million to $9.8 billion.
In 2023, we expect total loan growth of 7% to 9% on an end of period basis as compared to the year ended December 31, 2022.
Deposits
Fourth quarter 2022 period-end deposits of $29.6 billion were up 1%, or $438 million, from the prior quarter and were up 4%, or $1.2 billion from the same period last year. With respect to fourth quarter 2022 period-end balances by deposit category:
•Noninterest-bearing demand deposits decreased $464 million from the prior quarter and decreased $743 million from the same period last year to $7.8 billion.
•Savings decreased $104 million from the prior quarter and increased $195 million from the same period last year to $4.6 billion.
•Interest-bearing demand deposits decreased $21 million from the prior quarter and increased $81 million from the same period last year to $7.1 billion.
•Money market deposits increased $330 million from the prior quarter and increased $1.1 billion from the same period last year to $8.2 billion.
•Total time deposits increased $696 million from the prior quarter and increased $583 million from the same period last year to $1.9 billion.
•Network transaction deposits (included in money market and interest-bearing deposits) increased $115 million from the prior quarter and increased $212 million from the same period last year to $979 million.
Fourth quarter 2022 average deposits of $29.3 billion were up 2%, or $453 million, from the prior quarter and were up 3%, or $925 million from the same period last year. With respect to fourth quarter 2022 average balances by deposit category:
•Noninterest-bearing demand deposits decreased $31 million from the prior quarter and decreased $328 million from the same period last year to $8.1 billion.
•Savings decreased $75 million from the prior quarter and increased $293 million from the same period last year to $4.7 billion.
•Interest-bearing demand deposits increased $244 million from the prior quarter and increased $325 million from the same period last year to $6.8 billion.
•Money market deposits increased $55 million from the prior quarter and increased $490 million from the same period last year to $7.4 billion.
•Total time deposits increased $232 million from the prior quarter and increased $82 million from the same period last year to $1.5 billion.
•Network transaction deposits increased $28 million from the prior quarter and increased $63 million from the same period last year to $901 million.
Full year 2022 average deposits of $28.8 billion were up 4%, or $1.1 billion from 2021. With respect to full year 2022 average balances by deposit category:
•Noninterest-bearing demand deposits increased $88 million to $8.2 billion.
•Savings increased $514 million to $4.7 billion.
•Interest-bearing demand deposits increased $525 million to $6.6 billion.
•Money market deposits increased $224 million to $7.2 billion.
•Network transaction deposits decreased $108 million to $822 million.
•Time deposits decreased $179 million to $1.3 billion.
Net Interest Income and Net Interest Margin
Full year 2022 net interest income of $957 million was up 32%, or $231 million, from 2021. Net interest margin of
2.91% was up 52 basis points from the prior year. The increases in net interest income and margin were driven by the execution of our strategic initiatives and rising interest rates during 2022.
•The average yield on total earning assets increased 85 basis points from the prior year to 3.47%.
•The average cost of interest-bearing liabilities increased 45 basis points from the prior year to 0.78%.
•The net free funds benefit increased 12 basis points from the prior year to 0.22%.
Fourth quarter 2022 net interest income of $289 million was up 9%, or $25 million, from the prior quarter. Net interest margin of 3.31% was up 18 basis points from the prior quarter. Compared to the same period last year, net interest income increased 55%, or $102 million, and the net interest margin increased 91 basis points.
•The average yield on total earning assets for the fourth quarter of 2022 increased 74 basis points from the prior quarter and increased 187 basis points from the same period last year to 4.46%.
•The average cost of total interest-bearing liabilities for the fourth quarter of 2022 increased 77 basis points from the prior quarter and increased 131 basis points from the same period last year to 1.58%.
•The net free funds benefit for the fourth quarter of 2022 increased 21 basis points from the prior quarter and increased 35 basis points from the same period last year to 0.43%.
We expect total net interest income growth of 15% to 17% in 2023.
Noninterest Income
Full year 2022 noninterest income of $282 million decreased $50 million from the prior year. The decrease was largely influenced by market-driven decreases in mortgage banking income and wealth management fees, customer-friendly changes to our overdraft program, and asset gains recognized during 2021. With respect to 2022 noninterest income line items:
•Mortgage Banking, net decreased $32 million from the prior year, driven by slowing refinance activity and higher retention of mortgages on our balance sheet.
•Asset gains (losses), net decreased $10 million from the prior year, driven primarily by gains on private equity investments in 2021.
•Wealth management fees decreased $6 million from the prior year, driven by lower market valuations.
•Service charges and deposit account fees decreased $2 million from the prior year. Guided by customer feedback, we announced several customer-friendly changes to our overdraft program in the third quarter of 2022.
Fourth quarter 2022 total noninterest income of $62 million decreased $9 million from the prior quarter and decreased $20 million from the same period last year. With respect to fourth quarter 2022 noninterest income line items:
•Investment securities gains (losses) decreased $8 million from the prior quarter and decreased $2 million from the same period last year.
•Capital markets fees decreased $2 million from the prior quarter and decreased $4 million from the same period last year.
•Mortgage Banking, net was $2 million for the fourth quarter, flat to the prior quarter and down $6 million from the same period last year, driven by slowing refinance activity and higher retention of mortgages on our balance sheet.
We expect total noninterest income to compress by 6% to 8% in 2023.
Noninterest Expense
Full year 2022 noninterest expense of $747 million increased 5%, or $37 million, from the prior year as we continued to invest in people and technology. With respect to full year 2022 noninterest expense line items:
•Personnel expense increased $27 million from the prior year, largely driven by higher incentive compensation and additional hiring tied to our strategic initiatives.
•Technology expense increased $9 million from the prior year, driven by digital investments tied to our strategic initiatives.
•Business development and advertising increased $4 million from the prior year as business activity picked up throughout the year.
Fourth quarter 2022 total noninterest expense of $197 million increased $1 million from the prior quarter and increased $14 million from the same period last year. With respect to fourth quarter 2022 noninterest expense line items:
•Personnel expense was flat to the prior quarter and increased $11 million from the same period last year.
•Technology expense increased $3 million from the prior quarter and increased $5 million from the same period last year.
•Occupancy expense increased $2 million from the prior quarter and decreased $1 million from the same period last year.
We expect noninterest expense to grow by 4% to 6% in 2023.
Taxes
The fourth quarter 2022 tax expense was $25 million compared to $26 million of tax expense in the prior quarter and $15 million of tax expense in the same period last year. The effective tax rate for fourth quarter 2022 was 18.9% compared to an effective tax rate of 21.4% in the prior quarter and an effective tax rate of 16.5% in the same period last year. The lower effective tax rate in fourth quarter 2021 was due in part to an increase in tax-exempt interest and benefits from bank and corporate owned life insurance.
In 2023, we expect the annual effective tax rate to be between 20% and 21%, assuming no change in the corporate tax rate.
Credit
Full year 2022 provision for credit losses was $33 million, compared to a negative provision of $88 million in the prior year. The increase in provision in 2022 was primarily driven by loan growth related to our strategic initiatives.
The fourth quarter 2022 provision for credit losses was $20 million, compared to a provision of $17 million in the prior quarter and a negative provision of $6 million in the same period last year. With respect to fourth quarter 2022 credit quality:
•Nonaccrual loans of $111 million were down $5 million, or 4%, from the prior quarter and down $19 million, or 15%, from the same period last year. The nonaccrual loans to total loans ratio was 0.39% in the fourth quarter, down from 0.42% in the prior quarter and down from 0.54% in the same period last year.
•Net charge offs of $1 million were down $1 million, or 37%, from the prior quarter and down $5 million, or 82%, from the same period last year.
•The allowance for credit losses on loans (ACLL) of $351 million was up $19 million from the prior quarter and up $32 million from the same period last year. The ACLL to total loans ratio was 1.22% in the fourth quarter, up from 1.20% in the prior quarter and down from 1.32% in the same period last year.
In 2023, we expect to adjust provision to reflect changes to risk grades, economic conditions, loan volumes, and other indications of credit quality.
Capital
The Company’s capital position remains strong, with a CET1 capital ratio of 9.35% at December 31, 2022. The Company’s capital ratios continue to be in excess of the Basel III “well-capitalized” regulatory benchmarks on a fully phased in basis.
FOURTH QUARTER 2022 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 26, 2023. 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 2022 earnings call. The fourth quarter 2022 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 $39 billion and is the largest bank holding company based in Wisconsin. Headquartered in Green Bay, Wisconsin, Associated is a leading Midwest banking franchise, offering a full range of financial products and services from more than 200 banking locations serving more than 100 communities throughout Wisconsin, Illinois and Minnesota. The Company also operates loan production offices in Indiana, Michigan, Missouri, New York, 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,” "project," "guidance," 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) | December 31, 2022 | September 30, 2022 | Seql Qtr $ Change | June 30, 2022 | March 31, 2022 | December 31, 2021 | Comp Qtr $ Change | ||||||||||||||||
| Assets | |||||||||||||||||||||||
| Cash and due from banks | $ | 436,952 | $ | 386,231 | $ | 50,721 | $ | 397,364 | $ | 334,138 | $ | 343,831 | $ | 93,121 | |||||||||
| Interest-bearing deposits in other financial institutions | 156,693 | 112,173 | 44,520 | 436,887 | 166,929 | 681,684 | (524,991) | ||||||||||||||||
| Federal funds sold and securities purchased under agreements to resell | 27,810 | 4,015 | 23,795 | 32,820 | — | — | 27,810 | ||||||||||||||||
| Investment securities available for sale, at fair value | 2,742,025 | 2,487,312 | 254,713 | 2,677,511 | 2,780,803 | 4,332,015 | (1,589,990) | ||||||||||||||||
| Investment securities held to maturity, net, at amortized cost | 3,960,398 | 3,951,491 | 8,907 | 3,945,206 | 3,939,855 | 2,238,947 | 1,721,451 | ||||||||||||||||
| Equity securities | 25,216 | 24,879 | 337 | 19,039 | 18,560 | 18,352 | 6,864 | ||||||||||||||||
| Federal Home Loan Bank and Federal Reserve Bank stocks, at cost | 295,496 | 279,334 | 16,162 | 237,616 | 168,281 | 168,281 | 127,215 | ||||||||||||||||
| Residential loans held for sale | 20,383 | 51,134 | (30,751) | 42,676 | 91,582 | 136,638 | (116,255) | ||||||||||||||||
| Commercial loans held for sale | — | — | — | 44,721 | — | — | — | ||||||||||||||||
| Loans | 28,799,569 | 27,817,280 | 982,289 | 26,494,698 | 24,531,926 | 24,224,949 | 4,574,620 | ||||||||||||||||
| Allowance for loan losses | (312,720) | (292,904) | (19,816) | (280,771) | (279,058) | (280,015) | (32,705) | ||||||||||||||||
| Loans, net | 28,486,849 | 27,524,376 | 962,473 | 26,213,927 | 24,252,867 | 23,944,934 | 4,541,915 | ||||||||||||||||
| Tax credit and other investments | 276,773 | 275,247 | 1,526 | 275,165 | 284,561 | 293,733 | (16,960) | ||||||||||||||||
| Premises and equipment, net | 376,906 | 379,462 | (2,556) | 387,633 | 387,550 | 385,173 | (8,267) | ||||||||||||||||
| Bank and corporate owned life insurance | 676,530 | 677,129 | (599) | 675,347 | 679,538 | 680,021 | (3,491) | ||||||||||||||||
| Goodwill | 1,104,992 | 1,104,992 | — | 1,104,992 | 1,104,992 | 1,104,992 | — | ||||||||||||||||
| Other intangible assets, net | 49,282 | 51,485 | (2,203) | 53,687 | 55,890 | 58,093 | (8,811) | ||||||||||||||||
Mortgage servicing rights, net(a) | 77,351 | 78,352 | (1,001) | 76,570 | 67,015 | 54,862 | 22,489 | ||||||||||||||||
| Interest receivable | 144,449 | 115,782 | 28,667 | 95,426 | 83,120 | 80,528 | 63,921 | ||||||||||||||||
| Other assets | 547,621 | 546,214 | 1,407 | 519,403 | 540,218 | 582,168 | (34,547) | ||||||||||||||||
| Total assets | $ | 39,405,727 | $ | 38,049,607 | $ | 1,356,120 | $ | 37,235,990 | $ | 34,955,900 | $ | 35,104,253 | $ | 4,301,474 | |||||||||
| Liabilities and stockholders’ equity | |||||||||||||||||||||||
| Noninterest-bearing demand deposits | $ | 7,760,811 | $ | 8,224,579 | $ | (463,768) | $ | 8,085,702 | $ | 8,315,699 | $ | 8,504,077 | $ | (743,266) | |||||||||
| Interest-bearing deposits | 21,875,343 | 20,974,003 | 901,340 | 20,490,874 | 20,089,710 | 19,962,353 | 1,912,990 | ||||||||||||||||
| Total deposits | 29,636,154 | 29,198,581 | 437,573 | 28,576,577 | 28,405,409 | 28,466,430 | 1,169,724 | ||||||||||||||||
| Federal funds purchased and securities sold under agreements to repurchase | 585,139 | 276,674 | 308,465 | 682,839 | 368,768 | 319,532 | 265,607 | ||||||||||||||||
| Commercial paper | 20,798 | 7,687 | 13,111 | 22,781 | 30,593 | 34,730 | (13,932) | ||||||||||||||||
| FHLB advances | 4,319,861 | 3,777,478 | 542,383 | 3,258,039 | 1,537,948 | 1,621,047 | 2,698,814 | ||||||||||||||||
| Other long-term funding | 248,071 | 249,484 | (1,413) | 249,820 | 249,797 | 249,324 | (1,253) | ||||||||||||||||
| Allowance for unfunded commitments | 38,776 | 39,776 | (1,000) | 36,776 | 38,776 | 39,776 | (1,000) | ||||||||||||||||
| Accrued expenses and other liabilities | 541,438 | 545,976 | (4,538) | 449,776 | 376,322 | 348,560 | 192,878 | ||||||||||||||||
| Total liabilities | 35,390,237 | 34,095,656 | 1,294,581 | 33,276,608 | 31,007,613 | 31,079,399 | 4,310,838 | ||||||||||||||||
| Stockholders’ equity | |||||||||||||||||||||||
| Preferred equity | 194,112 | 194,112 | — | 193,195 | 193,195 | 193,195 | 917 | ||||||||||||||||
| Common equity | 3,821,378 | 3,759,840 | 61,538 | 3,766,187 | 3,755,092 | 3,831,658 | (10,280) | ||||||||||||||||
| Total stockholders’ equity | 4,015,490 | 3,953,952 | 61,538 | 3,959,382 | 3,948,287 | 4,024,853 | (9,363) | ||||||||||||||||
| Total liabilities and stockholders’ equity | $ | 39,405,727 | $ | 38,049,607 | $ | 1,356,120 | $ | 37,235,990 | $ | 34,955,900 | $ | 35,104,253 | $ | 4,301,474 | |||||||||
Numbers may not sum due to rounding.
(a) On January 1, 2022, the Corporation made the irrevocable election to account for mortgage servicing rights, net at fair value. For all prior periods, mortgage servicing rights, net were carried at lower of cost or market.
1
| Associated Banc-Corp Consolidated Statements of Income (Unaudited) | Comp Qtr | YTD | YTD | Comp YTD | ||||||||||||||||||||||
| ($ in thousands, except per share data) | 4Q22 | 4Q21 | $ Change | % Change | Dec 2022 | Dec 2021 | $ Change | % Change | ||||||||||||||||||
| Interest income | ||||||||||||||||||||||||||
| Interest and fees on loans | $ | 349,403 | $ | 170,809 | $ | 178,594 | 105 | % | $ | 992,642 | $ | 693,729 | $ | 298,913 | 43 | % | ||||||||||
| Interest and dividends on investment securities | ||||||||||||||||||||||||||
| Taxable | 21,435 | 13,317 | 8,118 | 61 | % | 75,444 | 37,916 | 37,528 | 99 | % | ||||||||||||||||
| Tax-exempt | 16,666 | 15,569 | 1,097 | 7 | % | 65,691 | 58,710 | 6,981 | 12 | % | ||||||||||||||||
| Other interest | 3,779 | 2,031 | 1,748 | 86 | % | 11,475 | 7,833 | 3,642 | 46 | % | ||||||||||||||||
| Total interest income | 391,283 | 201,726 | 189,557 | 94 | % | 1,145,252 | 798,189 | 347,063 | 43 | % | ||||||||||||||||
| Interest expense | ||||||||||||||||||||||||||
| Interest on deposits | 60,719 | 3,677 | 57,042 | N/M | 98,309 | 18,622 | 79,687 | N/M | ||||||||||||||||||
| Interest on federal funds purchased and securities sold under agreements to repurchase | 2,280 | 40 | 2,240 | N/M | 3,480 | 143 | 3,337 | N/M | ||||||||||||||||||
| Interest on other short-term funding | — | 2 | (2) | (100) | % | 2 | 22 | (20) | (91) | % | ||||||||||||||||
| Interest on FHLB Advances | 36,824 | 8,514 | 28,310 | N/M | 75,487 | 36,493 | 38,994 | 107 | % | |||||||||||||||||
| Interest on long-term funding | 2,470 | 2,730 | (260) | (10) | % | 10,653 | 17,053 | (6,400) | (38) | % | ||||||||||||||||
| Total interest expense | 102,294 | 14,963 | 87,331 | N/M | 187,931 | 72,334 | 115,597 | 160 | % | |||||||||||||||||
| Net interest income | 288,989 | 186,763 | 102,226 | 55 | % | 957,321 | 725,855 | 231,466 | 32 | % | ||||||||||||||||
| Provision for credit losses | 19,992 | (5,993) | 25,985 | N/M | 32,998 | (88,011) | 121,009 | N/M | ||||||||||||||||||
| Net interest income after provision for credit losses | 268,997 | 192,756 | 76,241 | 40 | % | 924,323 | 813,866 | 110,457 | 14 | % | ||||||||||||||||
| Noninterest income | ||||||||||||||||||||||||||
| Wealth management fees | 20,403 | 22,625 | (2,222) | (10) | % | 84,122 | 89,854 | (5,732) | (6) | % | ||||||||||||||||
| Service charges and deposit account fees | 13,918 | 17,039 | (3,121) | (18) | % | 62,310 | 64,406 | (2,096) | (3) | % | ||||||||||||||||
| Card-based fees | 11,167 | 11,176 | (9) | — | % | 44,014 | 43,014 | 1,000 | 2 | % | ||||||||||||||||
| Other fee-based revenue | 3,290 | 4,316 | (1,026) | (24) | % | 15,903 | 17,086 | (1,183) | (7) | % | ||||||||||||||||
Capital markets, net | 5,586 | 9,674 | (4,088) | (42) | % | 29,917 | 30,602 | (685) | (2) | % | ||||||||||||||||
| Mortgage banking, net | 2,238 | 8,041 | (5,803) | (72) | % | 18,873 | 50,751 | (31,878) | (63) | % | ||||||||||||||||
| Bank and corporate owned life insurance | 3,427 | 4,704 | (1,277) | (27) | % | 11,431 | 13,254 | (1,823) | (14) | % | ||||||||||||||||
| Asset gains (losses), net | (545) | 985 | (1,530) | N/M | 1,338 | 11,009 | (9,671) | (88) | % | |||||||||||||||||
| Investment securities gains (losses), net | (1,930) | — | (1,930) | N/M | 3,746 | (16) | 3,762 | N/M | ||||||||||||||||||
Gains on sale of branches, net(a) | — | — | — | N/M | — | 1,038 | (1,038) | (100) | % | |||||||||||||||||
Other | 4,102 | 2,941 | 1,161 | 39 | % | 10,715 | 11,366 | (651) | (6) | % | ||||||||||||||||
| Total noninterest income | 61,657 | 81,502 | (19,845) | (24) | % | 282,370 | 332,364 | (49,994) | (15) | % | ||||||||||||||||
| Noninterest expense | ||||||||||||||||||||||||||
| Personnel | 118,381 | 107,787 | 10,594 | 10 | % | 454,101 | 426,687 | 27,414 | 6 | % | ||||||||||||||||
| Technology | 25,299 | 20,787 | 4,512 | 22 | % | 90,700 | 81,689 | 9,011 | 11 | % | ||||||||||||||||
| Occupancy | 15,846 | 16,863 | (1,017) | (6) | % | 59,794 | 63,513 | (3,719) | (6) | % | ||||||||||||||||
| Business development and advertising | 8,136 | 5,627 | 2,509 | 45 | % | 25,525 | 21,149 | 4,376 | 21 | % | ||||||||||||||||
| Equipment | 4,791 | 4,905 | (114) | (2) | % | 19,632 | 21,104 | (1,472) | (7) | % | ||||||||||||||||
| Legal and professional | 4,132 | 4,428 | (296) | (7) | % | 18,250 | 21,923 | (3,673) | (17) | % | ||||||||||||||||
| Loan and foreclosure costs | 804 | 1,636 | (832) | (51) | % | 5,925 | 8,143 | (2,218) | (27) | % | ||||||||||||||||
| FDIC assessment | 6,350 | 4,800 | 1,550 | 32 | % | 22,650 | 18,150 | 4,500 | 25 | % | ||||||||||||||||
| Other intangible amortization | 2,203 | 2,203 | — | — | % | 8,811 | 8,844 | (33) | — | % | ||||||||||||||||
| Other | 10,618 | 13,173 | (2,555) | (19) | % | 41,675 | 38,721 | 2,954 | 8 | % | ||||||||||||||||
| Total noninterest expense | 196,560 | 182,210 | 14,350 | 8 | % | 747,063 | 709,924 | 37,139 | 5 | % | ||||||||||||||||
| Income before income taxes | 134,094 | 92,048 | 42,046 | 46 | % | 459,630 | 436,307 | 23,323 | 5 | % | ||||||||||||||||
| Income tax expense | 25,332 | 15,171 | 10,161 | 67 | % | 93,508 | 85,313 | 8,195 | 10 | % | ||||||||||||||||
| Net income | 108,762 | 76,877 | 31,885 | 41 | % | 366,122 | 350,994 | 15,128 | 4 | % | ||||||||||||||||
| Preferred stock dividends | 2,875 | 2,875 | — | — | % | 11,500 | 17,111 | (5,611) | (33) | % | ||||||||||||||||
| Net income available to common equity | $ | 105,887 | $ | 74,002 | $ | 31,885 | 43 | % | $ | 354,622 | $ | 333,883 | $ | 20,739 | 6 | % | ||||||||||
| Earnings per common share | ||||||||||||||||||||||||||
| Basic | $ | 0.70 | $ | 0.49 | $ | 0.21 | 43 | % | $ | 2.36 | $ | 2.20 | $ | 0.16 | 7 | % | ||||||||||
| Diluted | $ | 0.70 | $ | 0.49 | $ | 0.21 | 43 | % | $ | 2.34 | $ | 2.18 | $ | 0.16 | 7 | % | ||||||||||
| Average common shares outstanding | ||||||||||||||||||||||||||
| Basic | 149,454 | 148,697 | 757 | 1 | % | 149,162 | 150,773 | (1,611) | (1) | % | ||||||||||||||||
| Diluted | 150,886 | 150,057 | 829 | 1 | % | 150,496 | 151,987 | (1,491) | (1) | % | ||||||||||||||||
N/M = Not meaningful
Numbers may not sum due to rounding.
(a) Includes the deposit premium on the sale of branches net of miscellaneous costs to sell.
2
| Associated Banc-Corp Consolidated Statements of Income (Unaudited) - Quarterly Trend | |||||||||||||||||||||||||||||
| ($ in thousands, except per share data) | Seql Qtr | Comp Qtr | |||||||||||||||||||||||||||
| 4Q22 | 3Q22 | $ Change | % Change | 2Q22 | 1Q22 | 4Q21 | $ Change | % Change | |||||||||||||||||||||
| Interest income | |||||||||||||||||||||||||||||
| Interest and fees on loans | $ | 349,403 | $ | 275,666 | $ | 73,737 | 27 | % | $ | 199,876 | $ | 167,697 | $ | 170,809 | $ | 178,594 | 105 | % | |||||||||||
| Interest and dividends on investment securities | |||||||||||||||||||||||||||||
| Taxable | 21,435 | 19,221 | 2,214 | 12 | % | 18,317 | 16,472 | 13,317 | 8,118 | 61 | % | ||||||||||||||||||
| Tax-exempt | 16,666 | 16,538 | 128 | 1 | % | 16,379 | 16,108 | 15,569 | 1,097 | 7 | % | ||||||||||||||||||
| Other interest | 3,779 | 3,284 | 495 | 15 | % | 2,420 | 1,993 | 2,031 | 1,748 | 86 | % | ||||||||||||||||||
| Total interest income | 391,283 | 314,708 | 76,575 | 24 | % | 236,991 | 202,270 | 201,726 | 189,557 | 94 | % | ||||||||||||||||||
| Interest expense | |||||||||||||||||||||||||||||
| Interest on deposits | 60,719 | 26,000 | 34,719 | 134 | % | 8,019 | 3,571 | 3,677 | 57,042 | N/M | |||||||||||||||||||
| Interest on federal funds purchased and securities sold under agreements to repurchase | 2,280 | 756 | 1,524 | N/M | 406 | 38 | 40 | 2,240 | N/M | ||||||||||||||||||||
| Interest on other short-term funding | — | 1 | (1) | (100) | % | 1 | 1 | 2 | (2) | (100) | % | ||||||||||||||||||
| Interest on FHLB Advances | 36,824 | 20,792 | 16,032 | 77 | % | 9,689 | 8,182 | 8,514 | 28,310 | N/M | |||||||||||||||||||
| Interest on long-term funding | 2,470 | 2,722 | (252) | (9) | % | 2,730 | 2,730 | 2,730 | (260) | (10) | % | ||||||||||||||||||
| Total interest expense | 102,294 | 50,270 | 52,024 | 103 | % | 20,845 | 14,522 | 14,963 | 87,331 | N/M | |||||||||||||||||||
| Net interest income | 288,989 | 264,439 | 24,550 | 9 | % | 216,146 | 187,747 | 186,763 | 102,226 | 55 | % | ||||||||||||||||||
| Provision for credit losses | 19,992 | 16,998 | 2,994 | 18 | % | (2) | (3,990) | (5,993) | 25,985 | N/M | |||||||||||||||||||
| Net interest income after provision for credit losses | 268,997 | 247,440 | 21,557 | 9 | % | 216,148 | 191,737 | 192,756 | 76,241 | 40 | % | ||||||||||||||||||
| Noninterest income | |||||||||||||||||||||||||||||
| Wealth management fees | 20,403 | 19,984 | 419 | 2 | % | 21,332 | 22,404 | 22,625 | (2,222) | (10) | % | ||||||||||||||||||
| Service charges and deposit account fees | 13,918 | 15,029 | (1,111) | (7) | % | 16,506 | 16,856 | 17,039 | (3,121) | (18) | % | ||||||||||||||||||
| Card-based fees | 11,167 | 11,479 | (312) | (3) | % | 11,442 | 9,926 | 11,176 | (9) | — | % | ||||||||||||||||||
| Other fee-based revenue | 3,290 | 4,487 | (1,197) | (27) | % | 4,360 | 3,766 | 4,316 | (1,026) | (24) | % | ||||||||||||||||||
| Capital markets, net | 5,586 | 7,675 | (2,089) | (27) | % | 8,010 | 8,646 | 9,674 | (4,088) | (42) | % | ||||||||||||||||||
| Mortgage banking, net | 2,238 | 2,098 | 140 | 7 | % | 6,145 | 8,391 | 8,041 | (5,803) | (72) | % | ||||||||||||||||||
| Bank and corporate owned life insurance | 3,427 | 1,827 | 1,600 | 88 | % | 4,106 | 2,071 | 4,704 | (1,277) | (27) | % | ||||||||||||||||||
| Asset gains (losses), net | (545) | 18 | (563) | N/M | 1,677 | 188 | 985 | (1,530) | N/M | ||||||||||||||||||||
| Investment securities gains (losses), net | (1,930) | 5,664 | (7,594) | N/M | (8) | 21 | — | (1,930) | N/M | ||||||||||||||||||||
| Other | 4,102 | 2,527 | 1,575 | 62 | % | 1,888 | 2,198 | 2,941 | 1,161 | 39 | % | ||||||||||||||||||
| Total noninterest income | 61,657 | 70,788 | (9,131) | (13) | % | 75,458 | 74,467 | 81,502 | (19,845) | (24) | % | ||||||||||||||||||
| Noninterest expense | |||||||||||||||||||||||||||||
| Personnel | 118,381 | 118,243 | 138 | — | % | 112,666 | 104,811 | 107,787 | 10,594 | 10 | % | ||||||||||||||||||
| Technology | 25,299 | 22,694 | 2,605 | 11 | % | 21,223 | 21,485 | 20,787 | 4,512 | 22 | % | ||||||||||||||||||
| Occupancy | 15,846 | 13,717 | 2,129 | 16 | % | 14,151 | 16,080 | 16,863 | (1,017) | (6) | % | ||||||||||||||||||
| Business development and advertising | 8,136 | 6,778 | 1,358 | 20 | % | 5,655 | 4,954 | 5,627 | 2,509 | 45 | % | ||||||||||||||||||
| Equipment | 4,791 | 4,921 | (130) | (3) | % | 4,960 | 4,960 | 4,905 | (114) | (2) | % | ||||||||||||||||||
| Legal and professional | 4,132 | 4,159 | (27) | (1) | % | 4,873 | 5,087 | 4,428 | (296) | (7) | % | ||||||||||||||||||
| Loan and foreclosure costs | 804 | 1,631 | (827) | (51) | % | 1,476 | 2,014 | 1,636 | (832) | (51) | % | ||||||||||||||||||
| FDIC assessment | 6,350 | 5,800 | 550 | 9 | % | 5,400 | 5,100 | 4,800 | 1,550 | 32 | % | ||||||||||||||||||
| Other intangible amortization | 2,203 | 2,203 | — | — | % | 2,203 | 2,203 | 2,203 | — | — | % | ||||||||||||||||||
| Other | 10,618 | 15,645 | (5,027) | (32) | % | 8,815 | 6,597 | 13,173 | (2,555) | (19) | % | ||||||||||||||||||
| Total noninterest expense | 196,560 | 195,791 | 769 | — | % | 181,420 | 173,292 | 182,210 | 14,350 | 8 | % | ||||||||||||||||||
| Income before income taxes | 134,094 | 122,438 | 11,656 | 10 | % | 110,187 | 92,912 | 92,048 | 42,046 | 46 | % | ||||||||||||||||||
| Income tax expense | 25,332 | 26,163 | (831) | (3) | % | 23,363 | 18,650 | 15,171 | 10,161 | 67 | % | ||||||||||||||||||
| Net income | 108,762 | 96,275 | 12,487 | 13 | % | 86,824 | 74,262 | 76,877 | 31,885 | 41 | % | ||||||||||||||||||
| Preferred stock dividends | 2,875 | 2,875 | — | — | % | 2,875 | 2,875 | 2,875 | — | — | % | ||||||||||||||||||
| Net income available to common equity | $ | 105,887 | $ | 93,400 | $ | 12,487 | 13 | % | $ | 83,949 | $ | 71,387 | $ | 74,002 | $ | 31,885 | 43 | % | |||||||||||
| Earnings per common share | |||||||||||||||||||||||||||||
| Basic | $ | 0.70 | $ | 0.62 | $ | 0.08 | 13 | % | $ | 0.56 | $ | 0.48 | $ | 0.49 | $ | 0.21 | 43 | % | |||||||||||
| Diluted | $ | 0.70 | $ | 0.62 | $ | 0.08 | 13 | % | $ | 0.56 | $ | 0.47 | $ | 0.49 | $ | 0.21 | 43 | % | |||||||||||
| Average common shares outstanding | |||||||||||||||||||||||||||||
| Basic | 149,454 | 149,321 | 133 | — | % | 149,083 | 148,781 | 148,697 | 757 | 1 | % | ||||||||||||||||||
| Diluted | 150,886 | 150,262 | 624 | — | % | 150,203 | 150,492 | 150,057 | 829 | 1 | % | ||||||||||||||||||
N/M = Not meaningful
Numbers may not sum due to rounding.
3
| Associated Banc-Corp Selected Quarterly Information | |||||||||||||||||||||||
| ($ in millions except per share data; shares repurchased and outstanding in thousands) | YTD Dec 2022 | YTD Dec 2021 | 4Q22 | 3Q22 | 2Q22 | 1Q22 | 4Q21 | ||||||||||||||||
| Per common share data | |||||||||||||||||||||||
| Dividends | $ | 0.81 | $ | 0.76 | $ | 0.21 | $ | 0.20 | $ | 0.20 | $ | 0.20 | $ | 0.20 | |||||||||
| Market value: | |||||||||||||||||||||||
| High | 25.71 | 23.92 | 25.13 | 21.87 | 22.48 | 25.71 | 23.92 | ||||||||||||||||
| Low | 17.63 | 17.20 | 20.54 | 17.63 | 18.01 | 22.41 | 21.49 | ||||||||||||||||
| Close | 23.09 | 20.08 | 18.26 | 22.76 | 22.59 | ||||||||||||||||||
| Book value / share | 25.40 | 25.01 | 25.09 | 25.03 | 25.66 | ||||||||||||||||||
| Tangible book value / share | 17.73 | 17.32 | 17.37 | 17.29 | 17.87 | ||||||||||||||||||
| Performance ratios (annualized) | |||||||||||||||||||||||
| Return on average assets | 1.00 | % | 1.02 | % | 1.12 | % | 1.02 | % | 0.97 | % | 0.86 | % | 0.87 | % | |||||||||
| Noninterest expense / average assets | 2.04 | % | 2.06 | % | 2.03 | % | 2.08 | % | 2.04 | % | 2.00 | % | 2.06 | % | |||||||||
| Effective tax rate | 20.34 | % | 19.55 | % | 18.89 | % | 21.37 | % | 21.20 | % | 20.07 | % | 16.48 | % | |||||||||
Dividend payout ratio(a) | 34.32 | % | 34.55 | % | 30.00 | % | 32.26 | % | 35.71 | % | 41.67 | % | 40.82 | % | |||||||||
| Net interest margin | 2.91 | % | 2.39 | % | 3.31 | % | 3.13 | % | 2.71 | % | 2.42 | % | 2.40 | % | |||||||||
| Selected trend information | |||||||||||||||||||||||
Average full time equivalent employees(b) | 4,118 | 4,003 | 4,169 | 4,182 | 4,101 | 4,018 | 3,992 | ||||||||||||||||
| Branch count | 202 | 215 | 215 | 215 | 215 | ||||||||||||||||||
Assets under management, at market value(c) | $ | 11,843 | $ | 11,142 | $ | 11,561 | $ | 12,937 | $ | 13,679 | |||||||||||||
| Mortgage loans originated for sale during period | $ | 600 | $ | 1,750 | $ | 64 | $ | 132 | $ | 152 | $ | 252 | $ | 404 | |||||||||
| Mortgage loan settlements during period | $ | 715 | $ | 1,775 | $ | 95 | $ | 120 | $ | 204 | $ | 296 | $ | 427 | |||||||||
| Mortgage portfolio serviced for others | $ | 6,712 | $ | 6,800 | $ | 6,910 | $ | 6,972 | $ | 6,995 | |||||||||||||
Mortgage servicing rights, net / mortgage portfolio serviced for others(d) | 1.15 | % | 1.15 | % | 1.11 | % | 0.96 | % | 0.78 | % | |||||||||||||
Shares repurchased during period(e) | — | 6,295 | — | — | — | — | 1,096 | ||||||||||||||||
| Shares outstanding, end of period | 150,444 | 150,328 | 150,126 | 150,038 | 149,343 | ||||||||||||||||||
| Selected quarterly ratios | |||||||||||||||||||||||
| Loans / deposits | 97.18 | % | 95.27 | % | 92.71 | % | 86.36 | % | 85.10 | % | |||||||||||||
| Stockholders’ equity / assets | 10.19 | % | 10.39 | % | 10.63 | % | 11.30 | % | 11.47 | % | |||||||||||||
Risk-based capital(f)(g) | |||||||||||||||||||||||
| Total risk-weighted assets | $ | 32,472 | $ | 31,406 | $ | 29,864 | $ | 27,781 | $ | 27,243 | |||||||||||||
| Common equity Tier 1 | $ | 3,036 | $ | 2,956 | $ | 2,897 | $ | 2,838 | $ | 2,808 | |||||||||||||
| Common equity Tier 1 capital ratio | 9.35 | % | 9.41 | % | 9.70 | % | 10.22 | % | 10.31 | % | |||||||||||||
| Tier 1 capital ratio | 9.95 | % | 10.03 | % | 10.35 | % | 10.91 | % | 11.02 | % | |||||||||||||
| Total capital ratio | 11.33 | % | 11.41 | % | 11.74 | % | 12.41 | % | 13.10 | % | |||||||||||||
| Tier 1 leverage ratio | 8.59 | % | 8.66 | % | 8.87 | % | 8.86 | % | 8.83 | % | |||||||||||||
| Mortgage banking, net | |||||||||||||||||||||||
Mortgage servicing fees, net(h) | $ | 8 | $ | — | $ | 2 | $ | 2 | $ | 2 | $ | 2 | $ | 1 | |||||||||
| Gains (losses) and fair value adjustments on loans held for sale | 1 | 35 | — | 1 | — | 1 | 3 | ||||||||||||||||
Changes in mortgage servicing rights valuation, net of economic hedge(d) | 10 | 16 | — | (1) | 5 | 6 | 4 | ||||||||||||||||
| Mortgage banking, net | $ | 19 | $ | 51 | $ | 2 | $ | 2 | $ | 6 | $ | 8 | $ | 8 | |||||||||
N/M = Not meaningful
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)On January 1, 2022, the Corporation made the irrevocable election to account for mortgage servicing rights at fair value. For all prior periods, mortgage servicing rights were carried at lower of cost or market.
(e)Does not include repurchases related to tax withholding on equity compensation.
(f)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.
(g)December 31, 2022 data is estimated.
(h)Includes mortgage origination and servicing fees, net of mortgage servicing rights amortization/decay.
4
| Associated Banc-Corp Selected Asset Quality Information | |||||||||||||||||||||||
| ($ in thousands) | Dec 31, 2022 | Sep 30, 2022 | Seql Qtr % Change | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Comp Qtr % Change | ||||||||||||||||
| Allowance for loan losses | |||||||||||||||||||||||
| Balance at beginning of period | $ | 292,904 | $ | 280,771 | 4 | % | $ | 279,058 | $ | 280,015 | $ | 290,997 | 1 | % | |||||||||
| Provision for loan losses | 21,000 | 14,000 | 50 | % | 2,000 | (3,000) | (4,500) | N/M | |||||||||||||||
| Charge offs | (2,982) | (3,346) | (11) | % | (1,791) | (2,028) | (8,869) | (66) | % | ||||||||||||||
| Recoveries | 1,798 | 1,478 | 22 | % | 1,504 | 4,072 | 2,387 | (25) | % | ||||||||||||||
| Net (charge offs) recoveries | (1,183) | (1,867) | (37) | % | (287) | 2,044 | (6,482) | (82) | % | ||||||||||||||
| Balance at end of period | $ | 312,720 | $ | 292,904 | 7 | % | $ | 280,771 | $ | 279,058 | $ | 280,015 | 12 | % | |||||||||
| Allowance for unfunded commitments | |||||||||||||||||||||||
| Balance at beginning of period | $ | 39,776 | $ | 36,776 | 8 | % | $ | 38,776 | $ | 39,776 | $ | 41,276 | (4) | % | |||||||||
| Provision for unfunded commitments | (1,000) | 3,000 | N/M | (2,000) | (1,000) | (1,500) | (33) | % | |||||||||||||||
| Balance at end of period | $ | 38,776 | $ | 39,776 | (3) | % | $ | 36,776 | $ | 38,776 | $ | 39,776 | (3) | % | |||||||||
| Allowance for credit losses on loans (ACLL) | $ | 351,496 | $ | 332,680 | 6 | % | $ | 317,547 | $ | 317,835 | $ | 319,791 | 10 | % | |||||||||
| Provision for credit losses on loans | $ | 20,000 | $ | 17,000 | 18 | % | $ | — | $ | (4,000) | $ | (6,000) | N/M | ||||||||||
| ($ in thousands) | Dec 31, 2022 | Sep 30, 2022 | Seql Qtr % Change | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Comp Qtr % Change | ||||||||||||||||
| Net (charge offs) recoveries | |||||||||||||||||||||||
Asset-based lending & equipment finance(a) | $ | — | $ | — | N/M | $ | — | $ | — | $ | 27 | (100) | % | ||||||||||
| Commercial and industrial | 278 | (897) | N/M | (444) | 1,854 | (6,669) | N/M | ||||||||||||||||
| Commercial real estate—owner occupied | 3 | 3 | — | % | 4 | 3 | 4 | (25) | % | ||||||||||||||
| Commercial and business lending | 281 | (894) | N/M | (440) | 1,857 | (6,638) | N/M | ||||||||||||||||
| Commercial real estate—investor | — | — | N/M | — | — | 109 | (100) | % | |||||||||||||||
| Real estate construction | 16 | 9 | 78 | % | 2 | 32 | 52 | (69) | % | ||||||||||||||
| Commercial real estate lending | 16 | 9 | 78 | % | 2 | 32 | 162 | (90) | % | ||||||||||||||
| Total commercial | 297 | (885) | N/M | (439) | 1,889 | (6,476) | N/M | ||||||||||||||||
| Residential mortgage | (125) | (42) | 198 | % | 220 | 288 | (6) | N/M | |||||||||||||||
| Auto finance | (768) | (165) | N/M | (14) | 4 | (11) | N/M | ||||||||||||||||
| Home equity | 123 | (101) | N/M | 461 | 315 | 546 | (77) | % | |||||||||||||||
| Other consumer | (711) | (675) | 5 | % | (516) | (451) | (534) | 33 | % | ||||||||||||||
| Total consumer | (1,480) | (983) | 51 | % | 151 | 155 | (6) | N/M | |||||||||||||||
| Total net (charge offs) recoveries | $ | (1,183) | $ | (1,867) | (37) | % | $ | (287) | $ | 2,044 | $ | (6,482) | (82) | % | |||||||||
| (In basis points) | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | ||||||||||||||||||
| Net (charge offs) recoveries to average loans (annualized) | |||||||||||||||||||||||
Asset-based lending & equipment finance(a) | — | — | — | — | 9 | ||||||||||||||||||
| Commercial and industrial | 1 | (4) | (2) | 10 | (33) | ||||||||||||||||||
| Commercial real estate—owner occupied | — | — | — | — | — | ||||||||||||||||||
| Commercial and business lending | 1 | (3) | (2) | 8 | (29) | ||||||||||||||||||
| Commercial real estate—investor | — | — | — | — | 1 | ||||||||||||||||||
| Real estate construction | — | — | — | 1 | 1 | ||||||||||||||||||
| Commercial real estate lending | — | — | — | — | 1 | ||||||||||||||||||
| Total commercial | 1 | (2) | (1) | 5 | (17) | ||||||||||||||||||
| Residential mortgage | (1) | — | 1 | 2 | — | ||||||||||||||||||
| Auto finance | (24) | (7) | (1) | 1 | (9) | ||||||||||||||||||
| Home equity | 8 | (7) | 32 | 22 | 36 | ||||||||||||||||||
| Other consumer | (95) | (89) | (70) | (62) | (71) | ||||||||||||||||||
| Total consumer | (6) | (4) | 1 | 1 | — | ||||||||||||||||||
| Total net (charge offs) recoveries | (2) | (3) | — | 3 | (11) | ||||||||||||||||||
| ($ in thousands) | Dec 31, 2022 | Sep 30, 2022 | Seql Qtr % Change | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Comp Qtr % Change | ||||||||||||||||
| Credit Quality | |||||||||||||||||||||||
| Nonaccrual loans | $ | 111,467 | $ | 116,406 | (4) | % | $ | 108,345 | $ | 143,221 | $ | 130,443 | (15) | % | |||||||||
| Other real estate owned (OREO) | 14,784 | 16,373 | (10) | % | 17,879 | 18,194 | 29,619 | (50) | % | ||||||||||||||
| Repossessed Assets | $ | 215 | $ | 299 | (28) | % | $ | 102 | $ | — | $ | — | N/M | ||||||||||
| Total nonperforming assets | $ | 126,466 | $ | 133,078 | (5) | % | $ | 126,327 | $ | 161,414 | $ | 160,062 | (21) | % | |||||||||
| Loans 90 or more days past due and still accruing | $ | 1,728 | $ | 1,417 | 22 | % | $ | 1,555 | $ | 1,595 | $ | 1,263 | 37 | % | |||||||||
| Allowance for credit losses on loans to total loans | 1.22 | % | 1.20 | % | 1.20 | % | 1.30 | % | 1.32 | % | |||||||||||||
| Allowance for credit losses on loans to nonaccrual loans | 315.34 | % | 285.79 | % | 293.09 | % | 221.92 | % | 245.16 | % | |||||||||||||
| Nonaccrual loans to total loans | 0.39 | % | 0.42 | % | 0.41 | % | 0.58 | % | 0.54 | % | |||||||||||||
| Nonperforming assets to total loans plus OREO and repossessed assets | 0.44 | % | 0.48 | % | 0.48 | % | 0.66 | % | 0.66 | % | |||||||||||||
| Nonperforming assets to total assets | 0.32 | % | 0.35 | % | 0.34 | % | 0.46 | % | 0.46 | % | |||||||||||||
| Annualized year-to-date net charge offs (recoveries) to year-to-date average loans | — | % | — | % | (0.01) | % | (0.03) | % | 0.10 | % | |||||||||||||
N/M = Not meaningful
5
| Associated Banc-Corp Selected Asset Quality Information (continued) | |||||||||||||||||||||||
| (In thousands) | Dec 31, 2022 | Sep 30, 2022 | Seql Qtr % Change | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Comp Qtr % Change | ||||||||||||||||
| Nonaccrual loans | |||||||||||||||||||||||
| Commercial and industrial | $ | 14,329 | $ | 15,576 | (8) | % | $ | 843 | $ | 266 | $ | 6,279 | 128 | % | |||||||||
| Commercial and business lending | 14,329 | 15,576 | (8) | % | 843 | 266 | 6,279 | 128 | % | ||||||||||||||
| Commercial real estate—investor | 29,380 | 37,479 | (22) | % | 46,823 | 80,886 | 60,677 | (52) | % | ||||||||||||||
| Real estate construction | 105 | 141 | (26) | % | 604 | 609 | 177 | (41) | % | ||||||||||||||
| Commercial real estate lending | 29,485 | 37,620 | (22) | % | 47,427 | 81,495 | 60,855 | (52) | % | ||||||||||||||
| Total commercial | 43,814 | 53,196 | (18) | % | 48,270 | 81,761 | 67,134 | (35) | % | ||||||||||||||
| Residential mortgage | 58,480 | 55,485 | 5 | % | 52,840 | 53,827 | 55,362 | 6 | % | ||||||||||||||
| Auto finance | 1,490 | 302 | N/M | 53 | 49 | 52 | N/M | ||||||||||||||||
| Home equity | 7,487 | 7,325 | 2 | % | 7,100 | 7,490 | 7,726 | (3) | % | ||||||||||||||
| Other consumer | 197 | 98 | 101 | % | 83 | 95 | 170 | 16 | % | ||||||||||||||
| Total consumer | 67,654 | 63,210 | 7 | % | 60,075 | 61,460 | 63,309 | 7 | % | ||||||||||||||
| Total nonaccrual loans | $ | 111,467 | $ | 116,406 | (4) | % | $ | 108,345 | $ | 143,221 | $ | 130,443 | (15) | % | |||||||||
| Dec 31, 2022 | Sep 30, 2022 | Seql Qtr % Change | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Comp Qtr % Change | |||||||||||||||||
| Restructured loans (accruing) | |||||||||||||||||||||||
| Commercial and industrial | $ | 12,453 | $ | 14,829 | (16) | % | $ | 13,882 | $ | 7,426 | $ | 8,687 | 43 | % | |||||||||
| Commercial real estate—owner occupied | 316 | 369 | (14) | % | 421 | 473 | 967 | (67) | % | ||||||||||||||
| Commercial and business lending | 12,769 | 15,198 | (16) | % | 14,303 | 7,899 | 9,655 | 32 | % | ||||||||||||||
| Commercial real estate—investor | 128 | 733 | (83) | % | 943 | 2,045 | 12,866 | (99) | % | ||||||||||||||
| Real estate construction | 195 | 165 | 18 | % | 179 | 183 | 242 | (19) | % | ||||||||||||||
| Commercial real estate lending | 324 | 898 | (64) | % | 1,122 | 2,228 | 13,108 | (98) | % | ||||||||||||||
| Total commercial | 13,093 | 16,097 | (19) | % | 15,425 | 10,127 | 22,763 | (42) | % | ||||||||||||||
| Residential mortgage | 16,829 | 16,169 | 4 | % | 15,829 | 16,644 | 16,316 | 3 | % | ||||||||||||||
| Home equity | 2,148 | 2,103 | 2 | % | 2,246 | 2,486 | 2,648 | (19) | % | ||||||||||||||
| Other consumer | 798 | 764 | 4 | % | 753 | 747 | 803 | (1) | % | ||||||||||||||
| Total consumer | 19,775 | 19,036 | 4 | % | 18,828 | 19,876 | 19,768 | — | % | ||||||||||||||
| Total restructured loans (accruing) | $ | 32,868 | $ | 35,132 | (6) | % | $ | 34,253 | $ | 30,003 | $ | 42,530 | (23) | % | |||||||||
| Nonaccrual restructured loans (included in nonaccrual loans) | $ | 20,127 | $ | 21,650 | (7) | % | $ | 22,172 | $ | 19,352 | $ | 17,426 | 15 | % | |||||||||
| Dec 31, 2022 | Sep 30, 2022 | Seql Qtr % Change | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Comp Qtr % Change | |||||||||||||||||
| Accruing Loans 30-89 Days Past Due | |||||||||||||||||||||||
| Commercial and industrial | $ | 6,283 | $ | 1,861 | N/M | $ | 1,642 | $ | 1,086 | $ | 715 | N/M | |||||||||||
| Commercial real estate—owner occupied | 230 | — | N/M | — | 198 | 163 | 41 | % | |||||||||||||||
| Commercial and business lending | 6,512 | 1,861 | N/M | 1,642 | 1,284 | 878 | N/M | ||||||||||||||||
| Commercial real estate—investor | 1,067 | — | N/M | 5,484 | — | 616 | 73 | % | |||||||||||||||
| Real estate construction | 39 | 43 | (9) | % | — | — | 1,620 | (98) | % | ||||||||||||||
| Commercial real estate lending | 1,105 | 43 | N/M | 5,484 | — | 2,236 | (51) | % | |||||||||||||||
| Total commercial | 7,618 | 1,904 | N/M | 7,126 | 1,284 | 3,114 | 145 | % | |||||||||||||||
| Residential mortgage | 9,874 | 6,517 | 52 | % | 5,315 | 4,957 | 6,169 | 60 | % | ||||||||||||||
| Auto finance | 9,408 | 6,206 | 52 | % | 2,906 | 949 | 11 | N/M | |||||||||||||||
| Home equity | 5,607 | 4,234 | 32 | % | 2,961 | 4,207 | 3,711 | 51 | % | ||||||||||||||
| Other consumer | 1,610 | 1,592 | 1 | % | 1,365 | 1,232 | 2,307 | (30) | % | ||||||||||||||
| Total consumer | 26,499 | 18,549 | 43 | % | 12,547 | 11,345 | 12,198 | 117 | % | ||||||||||||||
| Total accruing loans 30-89 days past due | $ | 34,117 | $ | 20,452 | 67 | % | $ | 19,673 | $ | 12,629 | $ | 15,312 | 123 | % | |||||||||
| Dec 31, 2022 | Sep 30, 2022 | Seql Qtr % Change | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Comp Qtr % Change | |||||||||||||||||
| Potential Problem Loans | |||||||||||||||||||||||
Asset-based lending & equipment finance(a) | $ | 17,698 | $ | 19,266 | (8) | % | $ | 19,813 | $ | 19,057 | $ | 17,697 | — | % | |||||||||
| Commercial and industrial | 118,851 | 89,290 | 33 | % | 84,832 | 93,450 | 122,562 | (3) | % | ||||||||||||||
| Commercial real estate—owner occupied | 34,422 | 28,287 | 22 | % | 38,628 | 24,005 | 26,723 | 29 | % | ||||||||||||||
| Commercial and business lending | 170,971 | 136,843 | 25 | % | 143,273 | 136,513 | 166,981 | 2 | % | ||||||||||||||
| Commercial real estate—investor | 92,535 | 117,982 | (22) | % | 132,635 | 130,792 | 106,138 | (13) | % | ||||||||||||||
| Real estate construction | 970 | — | N/M | 82 | 200 | 21,408 | (95) | % | |||||||||||||||
| Commercial real estate lending | 93,505 | 117,982 | (21) | % | 132,717 | 130,992 | 127,546 | (27) | % | ||||||||||||||
| Total commercial | 264,476 | 254,825 | 4 | % | 275,990 | 267,505 | 294,527 | (10) | % | ||||||||||||||
| Residential mortgage | 1,978 | 2,845 | (30) | % | 3,297 | 3,032 | 2,214 | (11) | % | ||||||||||||||
| Home equity | 197 | 185 | 6 | % | 188 | 156 | 165 | 19 | % | ||||||||||||||
| Total consumer | 2,175 | 3,030 | (28) | % | 3,486 | 3,188 | 2,379 | (9) | % | ||||||||||||||
| Total potential problem loans | $ | 266,651 | $ | 257,855 | 3 | % | $ | 279,475 | $ | 270,693 | $ | 296,905 | (10) | % | |||||||||
N/M = Not meaningful
Numbers may not sum due to rounding.
(a) Periods prior to Mar 31, 2022 do not include equipment finance.
6
| Associated Banc-Corp Net Interest Income Analysis - Fully Tax-Equivalent Basis - Sequential and Comparable Quarter | |||||||||||||||||||||||||||||
| Three Months Ended | |||||||||||||||||||||||||||||
| December 31, 2022 | September 30, 2022 | December 31, 2021 | |||||||||||||||||||||||||||
| ($ 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) | |||||||||||||||||||||||||||||
Asset-based lending (ABL) & equipment finance (d) | $ | 421,540 | $ | 5,901 | 5.56 | % | $ | 317,857 | $ | 4,027 | 5.03 | % | $ | 125,507 | $ | 971 | 3.07 | % | |||||||||||
| Commercial and business lending (excl ABL and equipment finance) | 10,108,444 | 141,283 | 5.55 | % | 9,874,606 | 106,188 | 4.27 | % | 8,830,871 | 58,456 | 2.57 | % | |||||||||||||||||
| Commercial real estate lending | 7,062,405 | 105,479 | 5.93 | % | 6,768,054 | 78,887 | 4.62 | % | 6,134,049 | 45,040 | 2.91 | % | |||||||||||||||||
| Total commercial | 17,592,389 | 252,663 | 5.70 | % | 16,960,517 | 189,101 | 4.42 | % | 15,090,427 | 104,468 | 2.75 | % | |||||||||||||||||
| Residential mortgage | 8,443,661 | 68,069 | 3.22 | % | 8,223,531 | 64,069 | 3.12 | % | 7,751,337 | 54,952 | 2.84 | % | |||||||||||||||||
| Auto finance | 1,244,436 | 12,911 | 4.12 | % | 969,918 | 9,170 | 3.75 | % | 53,120 | 587 | 4.39 | % | |||||||||||||||||
| Other retail | 914,848 | 16,366 | 7.13 | % | 901,738 | 13,868 | 6.13 | % | 900,369 | 11,188 | 4.95 | % | |||||||||||||||||
| Total loans | 28,195,334 | 350,009 | 4.93 | % | 27,055,703 | 276,209 | 4.06 | % | 23,795,253 | 171,195 | 2.86 | % | |||||||||||||||||
| Investment securities | |||||||||||||||||||||||||||||
| Taxable | 4,336,132 | 21,435 | 1.98 | % | 4,328,586 | 19,221 | 1.78 | % | 4,053,781 | 13,317 | 1.31 | % | |||||||||||||||||
Tax-exempt(a) | 2,428,751 | 21,000 | 3.46 | % | 2,435,957 | 20,838 | 3.42 | % | 2,257,106 | 19,617 | 3.48 | % | |||||||||||||||||
| Other short-term investments | 408,091 | 3,779 | 3.68 | % | 378,528 | 3,284 | 3.45 | % | 1,592,840 | 2,031 | 0.51 | % | |||||||||||||||||
| Investments and other | 7,172,975 | 46,213 | 2.57 | % | 7,143,071 | 43,342 | 2.42 | % | 7,903,726 | 34,965 | 1.77 | % | |||||||||||||||||
| Total earning assets | 35,368,309 | $ | 396,222 | 4.46 | % | 34,198,774 | $ | 319,551 | 3.72 | % | 31,698,979 | $ | 206,160 | 2.59 | % | ||||||||||||||
| Other assets, net | 3,017,127 | 3,073,005 | 3,317,180 | ||||||||||||||||||||||||||
| Total assets | $ | 38,385,436 | $ | 37,271,779 | $ | 35,016,159 | |||||||||||||||||||||||
| Liabilities and stockholders' equity | |||||||||||||||||||||||||||||
| Interest-bearing liabilities | |||||||||||||||||||||||||||||
| Interest-bearing deposits | |||||||||||||||||||||||||||||
| Savings | $ | 4,660,696 | $ | 3,607 | 0.31 | % | $ | 4,735,285 | $ | 516 | 0.04 | % | $ | 4,367,233 | $ | 369 | 0.03 | % | |||||||||||
| Interest-bearing demand | 6,831,213 | 20,861 | 1.21 | % | 6,587,404 | 10,306 | 0.62 | % | 6,506,438 | 1,015 | 0.06 | % | |||||||||||||||||
| Money market | 7,382,793 | 23,728 | 1.28 | % | 7,328,165 | 9,474 | 0.51 | % | 6,892,803 | 927 | 0.05 | % | |||||||||||||||||
| Network transaction deposits | 901,168 | 8,261 | 3.64 | % | 873,168 | 4,716 | 2.14 | % | 838,255 | 239 | 0.11 | % | |||||||||||||||||
| Time deposits | 1,463,204 | 4,262 | 1.16 | % | 1,230,859 | 989 | 0.32 | % | 1,381,092 | 1,127 | 0.32 | % | |||||||||||||||||
| Total interest-bearing deposits | 21,239,073 | 60,719 | 1.13 | % | 20,754,882 | 26,000 | 0.50 | % | 19,985,821 | 3,677 | 0.07 | % | |||||||||||||||||
| Federal funds purchased and securities sold under agreements to repurchase | 424,352 | 2,280 | 2.13 | % | 380,674 | 756 | 0.79 | % | 293,948 | 40 | 0.05 | % | |||||||||||||||||
| Commercial Paper | 12,927 | — | 0.01 | % | 18,308 | 1 | 0.01 | % | 44,250 | 2 | 0.01 | % | |||||||||||||||||
| FHLB advances | 3,790,101 | 36,824 | 3.85 | % | 3,283,328 | 20,792 | 2.51 | % | 1,621,097 | 8,514 | 2.08 | % | |||||||||||||||||
| Long-term funding | 248,645 | 2,470 | 3.97 | % | 249,838 | 2,722 | 4.36 | % | 249,223 | 2,730 | 4.38 | % | |||||||||||||||||
| Total short and long-term funding | 4,476,025 | 41,575 | 3.69 | % | 3,932,149 | 24,270 | 2.45 | % | 2,208,518 | 11,286 | 2.03 | % | |||||||||||||||||
| Total interest-bearing liabilities | 25,715,098 | $ | 102,294 | 1.58 | % | 24,687,031 | $ | 50,270 | 0.81 | % | 22,194,339 | $ | 14,963 | 0.27 | % | ||||||||||||||
| Noninterest-bearing demand deposits | 8,088,435 | 8,119,475 | 8,416,525 | ||||||||||||||||||||||||||
| Other liabilities | 590,223 | 480,672 | 401,433 | ||||||||||||||||||||||||||
| Stockholders’ equity | 3,991,679 | 3,984,602 | 4,003,863 | ||||||||||||||||||||||||||
| Total liabilities and stockholders’ equity | $ | 38,385,436 | $ | 37,271,779 | $ | 35,016,159 | |||||||||||||||||||||||
| Interest rate spread | 2.88 | % | 2.91 | % | 2.32 | % | |||||||||||||||||||||||
| Net free funds | 0.43 | % | 0.22 | % | 0.08 | % | |||||||||||||||||||||||
| Fully tax-equivalent net interest income and net interest margin ("NIM") | $ | 293,929 | 3.31 | % | $ | 269,281 | 3.13 | % | $ | 191,197 | 2.40 | % | |||||||||||||||||
| Fully tax-equivalent adjustment | 4,939 | 4,843 | 4,434 | ||||||||||||||||||||||||||
| Net interest income | $ | 288,989 | $ | 264,439 | $ | 186,763 | |||||||||||||||||||||||
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)Periods prior to March 31, 2022 do not include equipment finance.
7
| Associated Banc-Corp Net Interest Income Analysis - Fully Tax-Equivalent Basis - Year Over Year | ||||||||||||||||||||
| Year Ended December 31, | ||||||||||||||||||||
| 2022 | 2021 | |||||||||||||||||||
| ($ 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) | ||||||||||||||||||||
Asset-based lending (ABL) & equipment finance (d) | $ | 297,308 | $ | 13,559 | 4.56 | % | $ | 120,903 | $ | 3,704 | 3.06 | % | ||||||||
| Commercial and business lending (excl ABL and equipment finance) | 9,554,995 | 370,597 | 3.88 | % | 8,983,580 | 246,381 | 2.73 | % | ||||||||||||
| Commercial real estate lending | 6,595,635 | 281,485 | 4.27 | % | 6,156,214 | 178,354 | 2.90 | % | ||||||||||||
| Total commercial | 16,447,938 | 665,640 | 4.05 | % | 15,260,697 | 428,439 | 2.81 | % | ||||||||||||
Residential mortgage | 8,052,277 | 245,975 | 3.05 | % | 7,847,564 | 221,099 | 2.82 | % | ||||||||||||
| Auto finance | 805,179 | 30,749 | 3.82 | % | 19,815 | 871 | 4.39 | % | ||||||||||||
| Other retail | 894,948 | 52,266 | 5.84 | % | 929,905 | 44,852 | 4.82 | % | ||||||||||||
| Total loans | 26,200,341 | 994,630 | 3.80 | % | 24,057,980 | 695,260 | 2.89 | % | ||||||||||||
| Investment securities | ||||||||||||||||||||
| Taxable | 4,362,394 | 75,444 | 1.73 | % | 3,369,612 | 37,916 | 1.13 | % | ||||||||||||
Tax-exempt (a) | 2,419,262 | 82,771 | 3.42 | % | 2,036,030 | 73,975 | 3.63 | % | ||||||||||||
| Other short-term investments | 570,887 | 11,475 | 2.01 | % | 1,644,995 | 7,833 | 0.48 | % | ||||||||||||
| Investments and other | 7,352,542 | 169,690 | 2.31 | % | 7,050,637 | 119,724 | 1.70 | % | ||||||||||||
| Total earning assets | 33,552,884 | $ | 1,164,320 | 3.47 | % | 31,108,616 | $ | 814,984 | 2.62 | % | ||||||||||
| Other assets, net | 3,105,049 | 3,355,640 | ||||||||||||||||||
| Total assets | $ | 36,657,932 | $ | 34,464,257 | ||||||||||||||||
| Liabilities and stockholders' equity | ||||||||||||||||||||
| Interest-bearing liabilities | ||||||||||||||||||||
| Interest-bearing deposits | ||||||||||||||||||||
| Savings | $ | 4,652,774 | $ | 5,033 | 0.11 | % | $ | 4,138,732 | $ | 1,435 | 0.03 | % | ||||||||
| Interest-bearing demand | 6,638,592 | 35,169 | 0.53 | % | 6,113,660 | 4,610 | 0.08 | % | ||||||||||||
| Money market | 7,164,518 | 36,370 | 0.51 | % | 6,940,513 | 4,028 | 0.06 | % | ||||||||||||
| Network transaction deposits | 821,804 | 14,721 | 1.79 | % | 929,544 | 1,120 | 0.12 | % | ||||||||||||
| Time deposits | 1,315,793 | 7,016 | 0.53 | % | 1,495,060 | 7,429 | 0.50 | % | ||||||||||||
| Total interest-bearing deposits | 20,593,482 | 98,309 | 0.48 | % | 19,617,508 | 18,622 | 0.09 | % | ||||||||||||
| Federal funds purchased and securities sold under agreements to repurchase | 388,701 | 3,480 | 0.90 | % | 207,132 | 143 | 0.07 | % | ||||||||||||
| Commercial Paper | 20,540 | 2 | 0.01 | % | 49,546 | 22 | 0.04 | % | ||||||||||||
| FHLB advances | 2,784,403 | 75,487 | 2.71 | % | 1,623,508 | 36,493 | 2.25 | % | ||||||||||||
| Long-term funding | 249,478 | 10,653 | 4.27 | % | 407,912 | 17,053 | 4.18 | % | ||||||||||||
| Total short and long-term funding | 3,443,123 | 89,621 | 2.60 | % | 2,288,098 | 53,712 | 2.35 | % | ||||||||||||
| Total interest-bearing liabilities | 24,036,605 | $ | 187,931 | 0.78 | % | 21,905,605 | $ | 72,334 | 0.33 | % | ||||||||||
| Noninterest-bearing demand deposits | 8,163,703 | 8,075,906 | ||||||||||||||||||
| Other liabilities | 482,538 | 403,296 | ||||||||||||||||||
| Stockholders’ equity | 3,975,086 | 4,079,449 | ||||||||||||||||||
| Total liabilities and stockholders’ equity | $ | 36,657,932 | $ | 34,464,257 | ||||||||||||||||
| Interest rate spread | 2.69 | % | 2.29 | % | ||||||||||||||||
| Net free funds | 0.22 | % | 0.10 | % | ||||||||||||||||
| Fully tax-equivalent net interest income and net interest margin ("NIM") | $ | 976,389 | 2.91 | % | $ | 742,650 | 2.39 | % | ||||||||||||
| Fully tax-equivalent adjustment | 19,068 | 16,796 | ||||||||||||||||||
| Net interest income | $ | 957,321 | $ | 725,855 | ||||||||||||||||
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)Periods prior to March 31, 2022 do not include equipment finance.
8
| Associated Banc-Corp Loan and Deposit Composition | |||||||||||||||||||||||
| ($ in thousands) | |||||||||||||||||||||||
| Period end loan composition | Dec 31, 2022 | Sep 30, 2022 | Seql Qtr % Change | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Comp Qtr % Change | ||||||||||||||||
Asset-based lending & equipment finance(a) | $ | 458,887 | $ | 380,830 | 20 | % | $ | 263,044 | $ | 231,040 | $ | 178,027 | 158 | % | |||||||||
| Commercial and industrial | 9,300,567 | 9,191,094 | 1 | % | 8,993,640 | 8,120,375 | 8,274,358 | 12 | % | ||||||||||||||
| Commercial real estate—owner occupied | 991,722 | 999,786 | (1) | % | 928,152 | 973,572 | 971,326 | 2 | % | ||||||||||||||
| Commercial and business lending | 10,751,176 | 10,571,711 | 2 | % | 10,184,836 | 9,324,986 | 9,423,711 | 14 | % | ||||||||||||||
| Commercial real estate—investor | 5,080,344 | 5,064,289 | — | % | 4,790,241 | 4,469,241 | 4,384,569 | 16 | % | ||||||||||||||
| Real estate construction | 2,155,222 | 1,835,159 | 17 | % | 1,775,648 | 1,760,076 | 1,808,976 | 19 | % | ||||||||||||||
| Commercial real estate lending | 7,235,565 | 6,899,449 | 5 | % | 6,565,889 | 6,229,317 | 6,193,545 | 17 | % | ||||||||||||||
| Total commercial | 17,986,742 | 17,471,159 | 3 | % | 16,750,726 | 15,554,303 | 15,617,256 | 15 | % | ||||||||||||||
| Residential mortgage | 8,511,550 | 8,314,902 | 2 | % | 8,002,943 | 7,609,343 | 7,567,310 | 12 | % | ||||||||||||||
| Auto finance | 1,382,073 | 1,117,136 | 24 | % | 847,969 | 497,523 | 143,045 | N/M | |||||||||||||||
| Home equity | 624,353 | 612,608 | 2 | % | 592,843 | 580,867 | 595,615 | 5 | % | ||||||||||||||
| Other consumer | 294,851 | 301,475 | (2) | % | 300,217 | 289,889 | 301,723 | (2) | % | ||||||||||||||
| Total consumer | 10,812,828 | 10,346,121 | 5 | % | 9,743,972 | 8,977,622 | 8,607,693 | 26 | % | ||||||||||||||
| Total loans | $ | 28,799,569 | $ | 27,817,280 | 4 | % | $ | 26,494,698 | $ | 24,531,926 | $ | 24,224,949 | 19 | % | |||||||||
| Period end deposit and customer funding composition | Dec 31, 2022 | Sep 30, 2022 | Seql Qtr % Change | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Comp Qtr % Change | ||||||||||||||||
| Noninterest-bearing demand | $ | 7,760,811 | $ | 8,224,579 | (6) | % | $ | 8,085,702 | $ | 8,315,699 | $ | 8,504,077 | (9) | % | |||||||||
| Savings | 4,604,848 | 4,708,720 | (2) | % | 4,708,156 | 4,661,232 | 4,410,198 | 4 | % | ||||||||||||||
| Interest-bearing demand | 7,100,727 | 7,122,218 | — | % | 6,789,722 | 6,616,767 | 7,019,782 | 1 | % | ||||||||||||||
| Money market | 8,239,610 | 7,909,232 | 4 | % | 7,769,415 | 7,522,797 | 7,185,111 | 15 | % | ||||||||||||||
| Brokered CDs | 541,916 | — | N/M | 2,121 | — | — | N/M | ||||||||||||||||
| Other time deposits | 1,388,242 | 1,233,833 | 13 | % | 1,221,460 | 1,288,913 | 1,347,262 | 3 | % | ||||||||||||||
| Total deposits | 29,636,154 | 29,198,581 | 1 | % | 28,576,577 | 28,405,409 | 28,466,430 | 4 | % | ||||||||||||||
Other customer funding(b) | 261,767 | 283,856 | (8) | % | 296,440 | 299,301 | 354,142 | (26) | % | ||||||||||||||
| Total deposits and other customer funding | $ | 29,897,921 | $ | 29,482,437 | 1 | % | $ | 28,873,017 | $ | 28,704,710 | $ | 28,820,572 | 4 | % | |||||||||
Network transaction deposits(c) | $ | 979,003 | $ | 864,086 | 13 | % | $ | 891,902 | $ | 762,680 | $ | 766,965 | 28 | % | |||||||||
Net deposits and other customer funding(d) | $ | 28,377,001 | $ | 28,618,351 | (1) | % | $ | 27,978,993 | $ | 27,942,029 | $ | 28,053,607 | 1 | % | |||||||||
| Quarter average loan composition | Dec 31, 2022 | Sep 30, 2022 | Seql Qtr % Change | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Comp Qtr % Change | ||||||||||||||||
Asset-based lending & equipment finance(a) | $ | 421,540 | $ | 317,857 | 33 | % | $ | 244,369 | $ | 202,836 | $ | 125,507 | N/M | ||||||||||
| Commercial and industrial | 9,106,639 | 8,904,113 | 2 | % | 8,407,441 | 7,885,953 | 7,931,335 | 15 | % | ||||||||||||||
| Commercial real estate—owner occupied | 1,001,805 | 970,493 | 3 | % | 952,802 | 973,496 | 899,536 | 11 | % | ||||||||||||||
| Commercial and business lending | 10,529,984 | 10,192,463 | 3 | % | 9,604,612 | 9,062,286 | 8,956,378 | 18 | % | ||||||||||||||
| Commercial real estate—investor | 5,048,419 | 4,891,530 | 3 | % | 4,570,300 | 4,439,051 | 4,304,579 | 17 | % | ||||||||||||||
| Real estate construction | 2,013,986 | 1,876,524 | 7 | % | 1,793,095 | 1,738,011 | 1,829,470 | 10 | % | ||||||||||||||
| Commercial real estate lending | 7,062,405 | 6,768,054 | 4 | % | 6,363,395 | 6,177,062 | 6,134,049 | 15 | % | ||||||||||||||
| Total commercial | 17,592,389 | 16,960,517 | 4 | % | 15,968,007 | 15,239,348 | 15,090,427 | 17 | % | ||||||||||||||
| Residential mortgage | 8,443,661 | 8,223,531 | 3 | % | 7,860,220 | 7,671,329 | 7,751,337 | 9 | % | ||||||||||||||
| Auto finance | 1,244,436 | 969,918 | 28 | % | 689,027 | 305,202 | 53,120 | N/M | |||||||||||||||
| Home equity | 619,044 | 601,821 | 3 | % | 586,072 | 588,281 | 600,963 | 3 | % | ||||||||||||||
| Other consumer | 295,804 | 299,917 | (1) | % | 294,837 | 293,578 | 299,406 | (1) | % | ||||||||||||||
| Total consumer | 10,602,945 | 10,095,186 | 5 | % | 9,430,156 | 8,858,390 | 8,704,826 | 22 | % | ||||||||||||||
Total loans(e) | $ | 28,195,334 | $ | 27,055,703 | 4 | % | $ | 25,398,163 | $ | 24,097,738 | $ | 23,795,253 | 18 | % | |||||||||
| Quarter average deposit composition | Dec 31, 2022 | Sep 30, 2022 | Seql Qtr % Change | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Comp Qtr % Change | ||||||||||||||||
| Noninterest-bearing demand | $ | 8,088,435 | $ | 8,119,475 | — | % | $ | 8,133,492 | $ | 8,316,399 | $ | 8,416,525 | (4) | % | |||||||||
| Savings | 4,660,696 | 4,735,285 | (2) | % | 4,682,783 | 4,529,991 | 4,367,233 | 7 | % | ||||||||||||||
| Interest-bearing demand | 6,831,213 | 6,587,404 | 4 | % | 6,413,077 | 6,722,038 | 6,506,438 | 5 | % | ||||||||||||||
| Money market | 7,382,793 | 7,328,165 | 1 | % | 6,910,505 | 7,030,945 | 6,892,803 | 7 | % | ||||||||||||||
| Network transaction deposits | 901,168 | 873,168 | 3 | % | 775,593 | 734,895 | 838,255 | 8 | % | ||||||||||||||
| Brokered CDs | 190,406 | 734 | N/M | 978 | — | — | N/M | ||||||||||||||||
| Other time deposits | 1,272,797 | 1,230,126 | 3 | % | 1,254,314 | 1,313,101 | 1,381,092 | (8) | % | ||||||||||||||
| Total deposits | $ | 29,327,509 | $ | 28,874,357 | 2 | % | $ | 28,170,742 | $ | 28,647,369 | $ | 28,402,345 | 3 | % | |||||||||
Other customer funding(b) | $ | 306,122 | $ | 326,324 | (6) | % | $ | 315,639 | $ | 319,982 | $ | 337,916 | (9) | % | |||||||||
| Total deposits and other customer funding | $ | 29,633,631 | $ | 29,200,680 | 1 | % | $ | 28,486,381 | $ | 28,967,352 | $ | 28,740,261 | 3 | % | |||||||||
Net deposits and other customer funding(d) | $ | 28,542,056 | $ | 28,326,779 | 1 | % | $ | 27,709,810 | $ | 28,232,457 | $ | 27,902,006 | 2 | % | |||||||||
N/M = Not meaningful
Numbers may not sum due to rounding.
(a) Periods prior to Mar 31, 2022 do not include equipment finance.
(b) Includes repurchase agreements and commercial paper.
(c) Included above in interest-bearing demand and money market.
(d) Total deposits and other customer funding, excluding brokered CDs and network transaction deposits
(e) Nonaccrual loans and loans held for sale have been included in the average balances.
9
| Associated Banc-Corp Non-GAAP Financial Measures Reconciliation | YTD | YTD | |||||||||||||||||||||
| ($ in millions, except per share data) | Dec 2022 | Dec 2021 | 4Q22 | 3Q22 | 2Q22 | 1Q22 | 4Q21 | ||||||||||||||||
Selected equity and performance ratios(a)(b)(c) | |||||||||||||||||||||||
| Tangible common equity / tangible assets | 6.97 | % | 7.06 | % | 7.23 | % | 7.68 | % | 7.86 | % | |||||||||||||
| Return on average equity | 9.21 | % | 8.60 | % | 10.81 | % | 9.59 | % | 8.85 | % | 7.55 | % | 7.62 | % | |||||||||
| Return on average tangible common equity | 13.77 | % | 12.99 | % | 16.15 | % | 14.32 | % | 13.29 | % | 11.26 | % | 11.34 | % | |||||||||
| Return on average common equity Tier 1 | 12.23 | % | 12.08 | % | 14.04 | % | 12.69 | % | 11.77 | % | 10.27 | % | 10.50 | % | |||||||||
| Return on average tangible assets | 1.05 | % | 1.07 | % | 1.18 | % | 1.08 | % | 1.03 | % | 0.90 | % | 0.92 | % | |||||||||
| Average stockholders' equity / average assets | 10.84 | % | 11.84 | % | 10.40 | % | 10.69 | % | 11.02 | % | 11.33 | % | 11.43 | % | |||||||||
Tangible common equity reconciliation(a) | |||||||||||||||||||||||
| Common equity | $ | 3,821 | $ | 3,760 | $ | 3,766 | $ | 3,755 | $ | 3,832 | |||||||||||||
| Goodwill and other intangible assets, net | (1,154) | (1,156) | (1,159) | (1,161) | (1,163) | ||||||||||||||||||
| Tangible common equity | $ | 2,667 | $ | 2,603 | $ | 2,608 | $ | 2,594 | $ | 2,669 | |||||||||||||
Tangible assets reconciliation(a) | |||||||||||||||||||||||
| Total assets | $ | 39,406 | $ | 38,050 | $ | 37,236 | $ | 34,956 | $ | 35,104 | |||||||||||||
| Goodwill and other intangible assets, net | (1,154) | (1,156) | (1,159) | (1,161) | (1,163) | ||||||||||||||||||
| Tangible assets | $ | 38,251 | $ | 36,893 | $ | 36,077 | $ | 33,795 | $ | 33,941 | |||||||||||||
Average tangible common equity and average common equity tier 1 reconciliation(a) | |||||||||||||||||||||||
| Common equity | $ | 3,782 | $ | 3,789 | $ | 3,798 | $ | 3,791 | $ | 3,744 | $ | 3,794 | $ | 3,811 | |||||||||
| Goodwill and other intangible assets, net | (1,159) | (1,169) | (1,155) | (1,158) | (1,160) | (1,162) | (1,164) | ||||||||||||||||
| Tangible common equity | 2,623 | 2,621 | 2,642 | 2,634 | 2,584 | 2,631 | 2,646 | ||||||||||||||||
| Modified CECL transitional amount | 67 | 102 | 67 | 67 | 67 | 67 | 91 | ||||||||||||||||
| Accumulated other comprehensive loss | 174 | 1 | 254 | 190 | 170 | 80 | 19 | ||||||||||||||||
| Deferred tax assets, net | 34 | 40 | 29 | 30 | 39 | 39 | 40 | ||||||||||||||||
| Average common equity tier 1 | $ | 2,899 | $ | 2,764 | $ | 2,993 | $ | 2,921 | $ | 2,860 | $ | 2,818 | $ | 2,795 | |||||||||
Average tangible assets reconciliation(a) | |||||||||||||||||||||||
| Total assets | $ | 36,658 | $ | 34,464 | $ | 38,385 | $ | 37,272 | $ | 35,733 | $ | 35,200 | $ | 35,016 | |||||||||
| Goodwill and other intangible assets, net | (1,159) | (1,169) | (1,155) | (1,158) | (1,160) | (1,162) | (1,164) | ||||||||||||||||
| Tangible assets | $ | 35,499 | $ | 33,296 | $ | 37,230 | $ | 36,114 | $ | 34,573 | $ | 34,038 | $ | 33,852 | |||||||||
Adjusted net income reconciliation(b) | |||||||||||||||||||||||
| Net income | $ | 366 | $ | 351 | $ | 109 | $ | 96 | $ | 87 | $ | 74 | $ | 77 | |||||||||
| Other intangible amortization, net of tax | 7 | 7 | 2 | 2 | 2 | 2 | 2 | ||||||||||||||||
| Adjusted net income | $ | 373 | $ | 358 | $ | 110 | $ | 98 | $ | 88 | $ | 76 | $ | 79 | |||||||||
Adjusted net income available to common equity reconciliation(b) | |||||||||||||||||||||||
| Net income available to common equity | $ | 355 | $ | 334 | $ | 106 | $ | 93 | $ | 84 | $ | 71 | $ | 74 | |||||||||
| Other intangible amortization, net of tax | 7 | 7 | 2 | 2 | 2 | 2 | 2 | ||||||||||||||||
| Adjusted net income available to common equity | $ | 361 | $ | 341 | $ | 108 | $ | 95 | $ | 86 | $ | 73 | $ | 76 | |||||||||
Selected trend information(d) | |||||||||||||||||||||||
| Wealth management fees | $ | 84 | $ | 90 | $ | 20 | $ | 20 | $ | 21 | $ | 22 | $ | 23 | |||||||||
| Service charges and deposit account fees | 62 | 64 | 14 | 15 | 17 | 17 | 17 | ||||||||||||||||
| Card-based fees | 44 | 43 | 11 | 11 | 11 | 10 | 11 | ||||||||||||||||
| Other fee-based revenue | 16 | 17 | 3 | 4 | 4 | 4 | 4 | ||||||||||||||||
| Fee-based revenue | 206 | 214 | 49 | 51 | 54 | 53 | 55 | ||||||||||||||||
| Other | 76 | 118 | 13 | 20 | 22 | 22 | 26 | ||||||||||||||||
| Total noninterest income | $ | 282 | $ | 332 | $ | 62 | $ | 71 | $ | 75 | $ | 74 | $ | 82 | |||||||||
Pre-tax pre-provision income(e) | |||||||||||||||||||||||
| Income before income taxes | $ | 460 | $ | 436 | $ | 134 | $ | 122 | $ | 110 | $ | 93 | $ | 92 | |||||||||
| Provision for credit losses | 33 | (88) | 20 | 17 | — | (4) | (6) | ||||||||||||||||
| Pre-tax pre-provision income | $ | 493 | $ | 348 | $ | 154 | $ | 139 | $ | 110 | $ | 89 | $ | 86 | |||||||||
Efficiency ratio reconciliation(f) | |||||||||||||||||||||||
| Federal Reserve efficiency ratio | 60.36 | % | 66.33 | % | 55.47 | % | 60.32 | % | 61.53 | % | 65.71 | % | 67.36 | % | |||||||||
| Fully tax-equivalent adjustment | (0.92) | % | (1.04) | % | (0.77) | % | (0.87) | % | (0.98) | % | (1.13) | % | (1.10) | % | |||||||||
| Other intangible amortization | (0.71) | % | (0.84) | % | (0.62) | % | (0.67) | % | (0.76) | % | (0.84) | % | (0.82) | % | |||||||||
| Fully tax-equivalent efficiency ratio | 58.74 | % | 64.47 | % | 54.08 | % | 58.79 | % | 59.80 | % | 63.76 | % | 65.46 | % | |||||||||
| Provision for unfunded commitments adjustment | 0.08 | % | 0.74 | % | 0.28 | % | (0.90) | % | 0.67 | % | 0.37 | % | 0.55 | % | |||||||||
| Asset gains (losses), net adjustment | 0.06 | % | 0.67 | % | (0.08) | % | — | % | 0.34 | % | 0.05 | % | 0.24 | % | |||||||||
| Acquisitions, branch sales, and initiatives | (0.14) | % | (0.53) | % | — | % | (0.53) | % | — | % | — | % | (1.43) | % | |||||||||
| Adjusted efficiency ratio | 58.75 | % | 65.36 | % | 54.28 | % | 57.36 | % | 60.82 | % | 64.18 | % | 64.82 | % | |||||||||
Numbers may not sum due to rounding.
(a)Tangible common equity and tangible assets exclude goodwill and other intangible assets, net.
(b)Adjusted net income and adjusted net income available to common equity, which are used in the calculation of return on average tangible assets and return on average tangible common equity, respectively, add back other intangible amortization, net of tax.
(c)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.
(d)These financial measures have been included as they provide meaningful supplemental information to assess trends in the Corporation’s results of operations.
(e)Management believes these measures are meaningful because they reflect adjustments commonly made by management, investors, regulators, and analysts to evaluate the adequacy of earnings and provide greater understanding of ongoing operations and enhanced comparability of results with prior periods.
(f)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 excludes the provision for unfunded commitments, other intangible amortization, acquisition related costs, and announced initiatives, divided by the sum of fully tax-equivalent net interest income plus noninterest income, excluding investment securities gains (losses), net, asset gains (losses), net, and gain on sale of branches, net. Management believes the adjusted efficiency ratio is a meaningful measure as it enhances the comparability of net interest income arising from taxable and tax-exempt sources and provides a better measure as to how the Corporation is managing its expenses by adjusting for acquisition related costs, provision for unfunded commitments, asset gains (losses), net, branch sales, and announced initiatives.
10
Fourth Quarter 2022 Earnings Presentation JANUARY 26, 2023
1 Forward-Looking Statements Important note regarding forward-looking statements: Statements made in this presentation 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,” “project,” “guidance,” 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 Form 10-Qs and other SEC filings, and such factors are incorporated herein by reference. Trademarks: All trademarks, service marks, and trade names referenced in this material are official trademarks and the property of their respective owners. Presentation: Within the charts and tables presented, certain segments, columns and rows may not sum to totals shown due to rounding. Non-GAAP Measures: This presentation includes certain non-GAAP financial measures. These non-GAAP measures are provided in addition to, and not as substitutes for, measures of our financial performance determined in accordance with GAAP. Our calculation of these non-GAAP measures may not be comparable to similarly titled measures of other companies due to potential differences between companies in the method of calculation. As a result, the use of these non-GAAP measures has limitations and should not be considered superior to, in isolation from, or as a substitute for, related GAAP measures. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures can be found at the end of this presentation.
2 $460 million Income Before Income Taxes (+5% vs. 2021) Fourth Quarter and Full Year 2022 Results | 2 $29 billion Total Period End Loans (+19% vs. 12/31/2021) $30 billion Total Period End Deposits (+4% vs. 12/31/2021) 12% Full-Year Operating Leverage 1 All figures shown on an end of period basis with comparisons to the third quarter of 2022 unless otherwise noted. 2 This is a non-GAAP financial measure. See appendix for a reconciliation of non-GAAP financial measures to GAAP financial measures. 3 Based on net income available to common equity. Associated Banc-Corp Reports Fourth Quarter 2022 Net Income Available to Common Equity of $106 Million, or $0.70 per Common Share ▪ Total average loan growth of $1.1 billion (+4%) ▪ Total average deposit growth of $453 million (+2%) ▪ Net interest income of $289 million (+9%) ▪ Net interest margin expanded by 18 bps ▪ Pre-tax income up 10%; pre-tax pre-provision income2 up 11% ▪ Return on average equity of 10.81%; return on average tangible common equity2 of 16.15% ▪ CET1 ratio of 9.35% ▪ NCOs / Average Loans (annualized) of 0.02% in 4Q ▪ $20 million build in provision for credit losses on loans ▪ ACLL / Loans increased slightly to 1.22% 4Q 2022 Highlights1 $355 million Net Income Available to Common Equity (+6% vs. 2021) 2022: The Most Profitable Year in ASB History3 $493 million Pre-Tax Pre-Provision Income2 (+41% vs. 2021)
3 EoP Loan Change (9/30/2022 to 12/31/2022) Total loans continued to grow in most key categories, but at a slower pace than the prior quarter Quarterly Loan Trends $(237) $(3) $8 $16 $41 $51 $78 $116 $131 $197 $265 $320 Mortgage Warehouse Home Equity and Other Cons. CRE Investor Power & Utilities General Commercial REIT ($ in millions) Credit Cards CRE Construction Auto Finance Commercial & Business Lending Commercial Real Estate Consumer Lending ABL + Equipment All Other Specialized Residential Mortgage $1.0 $1.2 $1.6 $1.9 $2.2 $7.8 $7.7 $7.9 $8.2 $8.4 $6.1 $6.2 $6.4 $6.8 $7.1 $9.0 $9.1 $9.6 $10.2 $10.5 $23.8 $24.1 $25.4 $27.1 $28.2 4Q 2021 1Q 2022 2Q 2022 3Q 2022 4Q 2022 ($ in billions) Commercial & Business Lending Commercial Real Estate Residential Mortgage Auto Finance, Home Equity & Other Consumer Average Quarterly Loans
4 $1.3 $1.2 $1.1 $0.9 $1.7 $8.3 $8.3 $8.2 $7.8 $8.1 $5.4 $5.2 $5.8 $6.2 $6.6 $7.7 $8.4 $9.4 $9.1 $9.9 $22.7 $23.1 $24.5 $24.1 $26.2 2018 2019 2020 2021 2022 Annual Loan Trends Successful deployment of our consumer and commercial lending initiatives drove broad growth in 2022 ($ in billions) Commercial & Business Lending Commercial Real Estate Residential Mortgage Auto Finance, Home Equity & Other Consumer ($ in millions) $(581) $4 $18 $95 $281 $307 $346 $352 $696 $874 $944 Power & Utilities Mortgage Warehouse REIT Home Equity & Other Cons. CRE Investor General Commercial All Other Specialized EoP Loan Change (12/31/2021 to 12/31/2022)Average Annual Loans Credit Cards CRE Construction ABL + Equipment Auto Finance Residential Mortgage $1,239 Commercial & Business Lending Commercial Real Estate Consumer Lending
5 $143 $1,382 $1,400 12/31/21 12/31/22 12/31/22 Target $67 $348 $300 12/31/21 12/31/22 12/31/22 Target $15,550 $17,639 $17,000 12/31/21 12/31/22 12/31/22 Target Our strategic lending initiatives have provided additional versatility to drive balanced growth Growing and Expanding our Lending Capabilities Core Commercial1 New Asset-Based Lending & Equipment Finance2 Auto Finance Balance Trends ($ in millions) 1 Includes $111 million of legacy baseline asset-based lending & equipment finance balances and excludes the balances captured in footnote 2. 2 Reflected as balance growth above the 3Q 2021 legacy baseline of $111 million; the baseline balances are reflected in Core Commercial above. + + ▪ Increasing our total commercial and business relationship manager ranks by 35% from March 2021 to December 2022 enabled us to surpass our core commercial loan growth target in 2022 ▪ This core growth has been augmented by momentum in our asset-based lending and equipment finance portfolios, where we comfortably achieved our combined target of $300 million for 2022 ▪ Our experienced auto finance team is continuing to execute a prime/super-prime growth strategy, but we’ve selectively slowed our production to align with current market conditions Progress Update
6 Average Quarterly Deposits $0.8 $0.7 $0.8 $0.9 $0.9 $1.4 $1.3 $1.3 $1.2 $1.5 $6.9 $7.0 $6.9 $7.3 $7.4 $4.4 $4.5 $4.7 $4.7 $4.7 $6.5 $6.7 $6.4 $6.6 $6.8 $8.4 $8.3 $8.1 $8.1 $8.1 $28.4 $28.6 $28.2 $28.9 $29.3 4Q 2021 1Q 2022 2Q 2022 3Q 2022 4Q 2022 Quarterly Deposit Trends Average deposits grew by 2% vs. the prior quarter, led by growth in core customer deposits ($ in billions) $28 $190 $235 Core Customer Deposits1 Brokered CDs Network Transaction Deposits Average Deposit Change (4Q 2022 vs. 3Q 2022) ($ in millions) 1 Reflects total deposits, excluding brokered CDs and network transaction deposits. Time Deposits Savings Money Market Network Transaction Deposits Noninterest-Bearing Demand Interest-Bearing Demand +0.8%
7 $2.1 $1.9 $1.4 $0.9 $0.8 $2.8 $3.1 $2.3 $1.5 $1.3 $7.3 $7.0 $6.5 $6.9 $7.2 $1.9 $2.4 $3.3 $4.1 $4.7 $4.8 $5.1 $5.6 $6.1 $6.6 $5.2 $5.2 $6.9 $8.1 $8.2 $24.1 $24.7 $26.0 $27.7 $28.8 2018 2019 2020 2021 2022 Annual Deposit Trends Time Deposits Savings Money Market Network Transaction Deposits In 2022, average annual deposits grew for the 11th consecutive year Noninterest-Bearing Demand Interest-Bearing Demand ($ in billions) Average Annual Deposits +4% $63 $190 $672 Average Deposit Change (4Q 2022 vs. 4Q 2021) ($ in millions) Core Customer Deposits1 Brokered CDs Network Transaction Deposits 1 Reflects total deposits, excluding brokered CDs and network transaction deposits. +2.4%
8 Full-year impact expected in 2023 Growing and Expanding our Deposit Capabilities Several initiatives are underway to build on our deposit growth momentum into 2023 and beyond 21% increase in commercial RMs vs. 2021, with a 57% increase in new customer names Sharpened focus on TM, HSA and other deposit- centric businesses October: Launched new digital account opening platform for consumers and small businesses December: Launched new Mass Affluent initiative Full-year impact expected in 2023 Full-year impact expected in 2023 Growth begins in 2023 Launching several new consumer products and enhancements beginning in 2Q 2023 Shifting marketing spend to an acquisition focus; new brand campaign to launch February 2023 20232022 1 Year-over-year growth based on fourth quarter average balances. Core customer deposits reflect total deposits, excluding brokered CDs and network transaction deposits. 2.4% Core Customer Deposit Growth1 3% - 5% Est. Core Customer Deposit Growth1
9 Pre-Tax Pre-Provision Income1 Trends Strong revenue growth and disciplined expense management are driving positive operating leverage ($ in millions) 1 This is a non-GAAP financial measure. Please refer to the appendix for a reconciliation of pre-tax pre-provision income to income before income taxes. Given the adoption of CECL and the volatility of provision, we believe pre-tax pre-provision income provides meaningful disclosure to investors regarding the Company’s operations. 4Q21 Pre- Tax Income 4Q21 Provision 4Q21 PTPP Income 4Q22 Pre- Tax Income 4Q22 Provision 4Q22 PTPP Income FY21 Pre- Tax Income FY21 Provision FY21 PTPP Income FY22 Pre- Tax Income FY22 Provision FY22 PTPP Income 4Q 2022 vs. 4Q 2021 FY 2022 vs. FY 2021 ($ in millions) +79% +41%
10 Average Yields (%) Average Yield Trends 2.88 3.36 4.62 5.93 2.48 2.98 4.29 5.55 3.52 3.50 3.75 4.12 2.89 2.97 3.12 3.22 1.96 2.29 2.42 2.57 0.26 0.36 0.81 1.58 0.07 0.16 0.50 1.13 1Q 2022 2Q 2022 3Q 2022 4Q 2022 ASB’s balance sheet continues to benefit from loan growth and the rising rate environment Total Residential Mortgage Loans Commercial & Business Lending Loans Commercial Real Estate Loans Total Interest-Bearing Liabilities Total Interest-Bearing Deposits Auto Finance Loans Asset & Liability Yield / Rate Trends (%) Rate on Total Interest- Bearing Liabilities Yield on Total Earning Assets 2.59 2.60 2.97 3.72 4.46 0.27 0.26 0.36 0.81 1.58 4Q 2021 1Q 2022 2Q 2022 3Q 2022 4Q 2022 Investments and Other
11 $187 $188 $216 $264 $289 4Q 2021 1Q 2022 2Q 2022 3Q 2022 4Q 2022 Net Interest Income & Net Interest Margin Trends ($ in millions) NII and NIM continued to grow in 4Q, driven by rising loan yields and controlled deposit costs Quarterly Net Interest Income Quarterly Net Interest Margin 3.31% 3.13% 2.71% 2.42% 2.40%
12 Interest Rate Risk Management While ASB remains well-positioned to benefit from higher rates, we continue to manage the downside risk Estimated NII Sensitivity Profile Δ in interest rates 2Q 22 3Q 22 4Q 22 +200 bps ramp over 12 months 10.8% 9.2% 7.8% +100 bps ramp over 12 months 5.4% 4.6% 3.9% -100 bps ramp over 12 months (5.0%) (4.3%) (3.4%) 1 Beta calculated as change in quarterly average yield from 4Q 2021 to 4Q 2022 vs. change in average Fed Effective Rate. Fed data derived from St. Louis FRED database. ▪ We’ve decreased our reliance on higher-beta network and wholesale funding since the last rate cycle (19% of total funding in 4Q 2022 vs. 30% in 4Q 2016) ▪ This higher-beta funding has been replaced by lower-cost, core customer deposits, helping us drive cumulative interest-bearing deposit betas of ~30% in 20221 ▪ In the second half of 2022, we executed over $2 billion of received fixed swaps Increased received fixed swaps from $850 million in 3Q 2022 to over $2 billion in 4Q 2022
13 Noninterest Income Trends ($ in millions) ($ in millions) Noninterest income remains pressured by market dynamics and customer-friendly fee adjustments 1 This is a non-GAAP financial measure. Please refer to the appendix for a reconciliation of fee-based revenue to noninterest income. 2 Other noninterest income is primarily comprised of bank and corporate owned life insurance, asset gains (losses), net and investment securities gains (losses), net. Service Charges & Deposit Account FeesNoninterest Income Trends Card-Based Fees & Other Fee-Based Revenue ($ in millions) $11 $10 $11 $11 $11 $4 $4 $4 $4 $3 $15 $14 $16 $16 $14 4Q 2021 1Q 2022 2Q 2022 3Q 2022 4Q 2022 Other Fee-Based RevenueCard-Based Fees $17 $17 $17 $15 $14 4Q 2021 1Q 2022 2Q 2022 3Q 2022 4Q 2022 $55 $53 $54 $51 $49 $8 $8 $6 $2 $2 $10 $9 $8 $8 $6 $9 $4 $8 $10 $5 $82 $74 $75 $71 $62 4Q 2021 1Q 2022 2Q 2022 3Q 2022 4Q 2022 Fee-Based Revenue1 Capital Markets, net Mortgage Banking, net Other2
14 $108 $105 $113 $118 $118 $21 $21 $21 $23 $25 $51 $47 $48 $49 $53 $3 $6 $182 $173 $181 $196 $197 4Q 2021 1Q 2022 2Q 2022 3Q 2022 4Q 2022 Noninterest Expense / Average Assets (%) Fully Tax-Equivalent Efficiency Ratio2 (%)Noninterest Expense Trends Noninterest Expense Trends 1 Other expenses are primarily comprised of occupancy, business development & advertising, equipment, legal & professional, and FDIC assessment costs. 2 This is a non-GAAP financial measure. Please refer to the appendix for a reconciliation of the fully tax-equivalent efficiency ratio to the Federal Reserve efficiency ratio. ($ in millions) We continue to invest in people and technology while keeping expense growth below total revenue growth 2.06 2.04 FY 2021 FY 2022 Fully Tax-Equivalent Efficiency Ratio Federal Reserve Efficiency Ratio 67.4 65.7 61.5 60.3 55.5 65.5 63.8 59.8 58.8 54.1 4Q 2021 1Q 2022 2Q 2022 3Q 2022 4Q 2022 Personnel Expense Other1 Technology Expense Charitable Contributions
15 Year-End 2023 Capital Targets (%) $17.87 $17.29 $17.37 $17.32 $17.73 4Q 2021 1Q 2022 2Q 2022 3Q 2022 4Q 2022 Tangible Book Value / Share 6.97 4Q 2022 TCE Ratio YE2023 Target Range 4Q 2022 Regulatory Capital Ratios (%) 9.35 9.95 11.33 Common Equity Tier 1 Capital Tier 1 Capital Total Capital 1 Tangible common equity / tangible assets. This is a non-GAAP financial measure. See appendix for a reconciliation of non-GAAP financial measures to GAAP financial measures. We are managing capital levels toward our target ranges, while holding TBVPS steady Capital Profile 9.35 4Q 2022 CET1 Ratio YE2023 Target Range 7.25 9.50 6.75 9.00 1
16 ACLL / Total Loans (%)4Q 2022 ACLL1 Update ▪ ACLL ($) increased $19 million from the prior quarter to $351 million, largely driven by loan growth and stable credit factors ▪ Net charge offs of only $1 million in FY 2022 ▪ CECL forward-looking assumptions based on Moody’s November 2022 Baseline forecast 1 Includes funded and unfunded reserve for loans, excludes reserve for HTM securities. ($ in thousands) Our ACLL increased slightly to 1.22%, with an allowance build largely driven by loan growth Allowance for Credit Losses on Loans (ACLL) Update 1.32 1.30 1.20 1.20 1.22 4Q 2021 1Q 2022 2Q 2022 3Q 2022 4Q 2022 Loan Category ACLL ACLL / Loans ACLL ACLL / Loans ACLL ACLL / Loans C&BL 119,997$ 1.27% 135,200$ 1.28% 141,652$ 1.32% CRE - Investor 73,739 1.68% 61,404 1.21% 55,108 1.08% CRE - Construction 53,229 2.94% 52,557 2.86% 66,171 3.07% Residential Mortgage 40,787 0.54% 38,907 0.47% 38,298 0.45% Other Consumer 32,038 3.08% 44,610 2.20% 50,267 2.18% Total 319,791$ 1.32% 332,680$ 1.20% 351,496$ 1.22% 12/31/20229/30/202212/31/2021
17 Net Charge Offs (Recoveries) and ProvisionDelinquent Loans / EoP Total Loans (%) Nonaccrual LoansTotal Nonperforming Assets Credit Quality Trends $63 $61 $60 $63 $68 $61 $81 $47 $38 $29 $6 $0 $1 $16 $14 $130 $143 $108 $116 $111 4Q 2021 1Q 2022 2Q 2022 3Q 2022 4Q 2022 0.06% 0.05% 0.07% 0.07% 0.12% 4Q 2021 1Q 2022 2Q 2022 3Q 2022 4Q 2022 Credit remains benign with NPAs, NALs and NCOs all declining vs. the prior quarter ($ in millions) ($ in millions) Accruing Loans 30-89 Days Past Due CREConsumer $130 $143 $108 $116 $111 $30 $18 $18 $16 $15 $160 $161 $126 $133 $126 4Q 2021 1Q 2022 2Q 2022 3Q 2022 4Q 2022 ($ in millions) $6 $(2) $0 $2 $1 $(6) $(4) $(0) $17 $20 4Q 2021 1Q 2022 2Q 2022 3Q 2022 4Q 2022 Total Net Charge Offs (Recoveries) Provision for Credit Losses on Loans Commercial & Business LendingNonaccrual Loans OREO
18 Balance Sheet Management Net Interest Income & Noninterest Income ▪ Total net interest income & noninterest income growth of 10% to 12% ▪ Net interest income (GAAP) growth of 15% to 17% ▪ Noninterest income compression of 6% to 8% Expense Management ▪ Noninterest expense growth of 4% to 6% ▪ Effective tax rate of 20% to 21% Capital Targets ▪ Target TCE ratio range of 6.75% to 7.25% ▪ Target CET1 ratio range of 9.00% to 9.50% 1 Projections are on an end of period basis as of and for the year ended 12/31/2023 as compared to 12/31/2022. ▪ Total loan growth of 7% to 9% ▪ Target investments/total assets ratio of 18% to 20% 2023 Full-Year Outlook1
19
Appendix
21 Additional Loan Trends ($ in billions) Commercial & Business Lending Commercial Real Estate Residential Mortgage Auto Finance, Home Equity & Other Consumer ($ in millions) Commercial & Business Lending Commercial Real Estate Consumer Lending $(133) $5 $8 $39 $51 $104 $121 $137 $156 $157 $220 $275 Mortgage Warehouse Home Equity and Other Cons. CRE Investor Power & Utilities General Commercial REIT Credit Cards CRE Construction Auto Finance ABL + Equipment All Other Specialized Residential Mortgage Average Loan Change (3Q 2022 to 4Q 2022)EoP Quarterly Loan Trends $1.0 $1.4 $1.7 $2.0 $2.3 $7.6 $7.6 $8.0 $8.3 $8.5 $6.2 $6.2 $6.6 $6.9 $7.2 $9.4 $9.3 $10.2 $10.6 $10.8 $24.2 $24.5 $26.5 $27.8 $28.8 4Q 2021 1Q 2022 2Q 2022 3Q 2022 4Q 2022
22 Total Loans Outstanding Balances as of December 31, 2022 Well-diversified $29 billion loan portfolio ($ in millions) 1 All values as of period end. 2 North American Industry Classification System. 12/31/2022 1 % of Total Loans 12/31/2022 1 % of Total Loans C&BL (by NAICS 2 ) CRE (by property type) Manufacturing & Wholesale Trade 2,182$ 7.6% Multi-Family 2,487$ 8.6% Utilities 2,160 7.5% Industrial 1,640 5.7% Real Estate (includes REITs) 1,982 6.9% Office/Mixed 1,296 4.5% Mortgage Warehouse 600 2.1% Retail 683 2.4% Finance & Insurance 577 2.0% Single Family Construction 491 1.7% Retail Trade 468 1.6% Hotel/Motel 212 0.7% Construction 440 1.5% Land 83 0.3% Health Care and Social Assistance 412 1.4% Mobile Home Parks 65 0.2% Professional, Scientific, and Tech. Serv. 331 1.2% Parking Lots and Garages 9 0.0% Rental and Leasing Services 323 1.1% Other 271 0.9% Transportation and Warehousing 306 1.1% Total CRE 7,236$ 25.1% Waste Management 229 0.8% Accommodation and Food Services 88 0.3% Consumer Arts, Entertainment, and Recreation 84 0.3% Residential Mortgage 8,512$ 29.6% Management of Companies & Enterprises 81 0.3% Auto Finance 1,382 4.8% Information 77 0.3% Home Equity 624 2.2% Financial Investments & Related Activities 74 0.3% Credit Cards 132 0.5% Mining 33 0.1% Student Loans 76 0.3% Public Administration 27 0.1% Other Consumer 87 0.3% Educational Services 27 0.1% Total Consumer 10,813$ 37.5% Agriculture, Forestry, Fishing and Hunting 0 0.0% Other 248 0.9% Total C&BL 10,751$ 37.3% Total Loans 28,800$ 100.0%
23 Wisconsin 28% Illinois 23% Minnesota 10% Other Midwest 14% Texas 4%Other 22% Manufacturing & Wholesale Trade 20% Real Estate 18% Power & Utilities 20% Mortgage Warehouse 6% 1 Excludes Other Consumer portfolio. 2 Other Midwest includes Missouri, Indiana, Ohio, Michigan and Iowa. Wind 38% Natural Gas 32% Solar 20% Transmission, Control and Distribution 2% Geothermal 3% Other 5% Wisconsin 24% Illinois 14% Minnesota 7% Texas 5% Other Midwest 11% Other 38% Wisconsin 23% Illinois 15% Minnesota 9% Other Midwest2 23% Texas 6% Other 24% 2 2 Loan Stratification Outstanding Balances as of December 31, 2022 C&BL by Geography $10.8 billion Power & Utilities Lending $2.2 billion C&BL by Industry $10.8 billion Total Loans1 CRE by Geography $7.2 billion CRE by Property Type $7.2 billion Multi-Family 34% Retail 9% Office / Mixed Use 18% Industrial 23% 1-4 Family Construction 7% Hotel / Motel 3% Other 6%
24 Reconciliation and Definitions of Non-GAAP Items ($ in millions) 1 Management believes this measure is meaningful because it reflects 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. 2 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. 3 These financial measures have been included as they provide meaningful supplemental information to assess trends in the Corporation’s results of operations. Pre-Tax Pre-Provision Income Reconciliation1 4Q 2021 4Q 2022 YTD Dec 2021 YTD Dec 2022 Income before income taxes $92 $134 $436 $460 Provision for credit losses (6) 20 (88) 33 Pre-tax pre-provision income $86 $154 $348 $493 Average Tangible Common Equity Reconciliation2 4Q 2022 Common equity $3,798 Goodwill and other intangible assets, net (1,155) Tangible common equity $2,642 Selected Trend Information3 4Q 2021 1Q 2022 2Q 2022 3Q 2022 4Q 2022 Wealth management fees $23 $22 $21 $20 $20 Service charges and deposit account fees 17 17 17 15 14 Card-based fees 11 10 11 11 11 Other fee-based revenue 4 4 4 4 3 Fee-based revenue 55 53 54 51 49 Other 26 22 22 20 13 Total noninterest income $82 $74 $75 $71 $62
25 Reconciliation and Definitions of Non-GAAP Items ($ in millions) 1 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, provide greater understanding of ongoing operations, and enhance comparability of results with prior periods. 2 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. Tangible Common Equity and Tangible Assets Reconciliation2 4Q 2021 1Q 2022 2Q 2022 3Q 2022 4Q 2022 Common equity $3,832 $3,755 $3,766 $3,760 $3,821 Goodwill and other intangible assets, net (1,163) (1,161) (1,159) (1,156) (1,154) Tangible common equity $2,669 $2,594 $2,608 $2,603 $2,667 Total assets $35,104 $34,956 $37,236 $38,050 $39,406 Goodwill and other intangible assets, net (1,163) (1,161) (1,159) (1,156) (1,154) Tangible assets $33,941 $33,795 $36,077 $36,893 $38,251 Efficiency Ratio Reconciliation 4Q 2021 1Q 2022 2Q 2022 3Q 2022 4Q 2022 Federal Reserve efficiency ratio 67.36% 65.71% 61.53% 60.32% 55.47% Fully tax-equivalent adjustment (1.10)% (1.13)% (0.98)% (0.87)% (0.77)% Other intangible amortization (0.82)% (0.84)% (0.76)% (0.67)% (0.62)% Fully tax-equivalent efficiency ratio1 65.46% 63.76% 59.80% 58.79% 54.08% 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.