ASSOCIATED BANC-CORP [ASB] Filings

10-Q 1 asb-20220630.htm 10-Q asb-20220630

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


☑			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: June 30, 2022


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
			For the transition period from to

Commission file number: 001-31343

Associated Banc-Corp

(Exact name of registrant as specified in its charter)


Wisconsin									39-1098068
(State or other jurisdiction of incorporation or organization)									(I.R.S. Employer Identification No.)


433 Main Street
Green Bay,	Wisconsin	54301
(Address of principal executive offices)		(Zip Code)

(920) 491-7500

(Registrant’s telephone number, including area code)

(not applicable)

(Former name, former address and former fiscal year, if changed since last report)

Securities Registered Pursuant to Section 12(b) of the act:


Title of each class	Trading symbol(s)	Name of each exchange on which registered
Common stock, par value $0.01 per share	ASB	New York Stock Exchange
Depositary Shrs, each representing 1/40th intrst in a shr of 5.875% Non-Cum. Perp Pref Stock, Srs E	ASB PrE	New York Stock Exchange
Depositary Shrs, each representing 1/40th intrst in a shr of 5.625% Non-Cum. Perp Pref Stock, Srs F	ASB PrF	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☑

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☑

APPLICABLE ONLY TO CORPORATE ISSUERS:

The number of shares outstanding of registrant’s common stock, par value $0.01 per share, at July 25, 2022 was 150,305,412.


ASSOCIATED BANC-CORP
Table of Contents


		Page
PART I. Financial Information

	Item 1. Financial Statements (Unaudited):	5

	Consolidated Balance Sheets	5

	Consolidated Statements of Income	6

	Consolidated Statements of Comprehensive Income	7

	Consolidated Statements of Changes in Stockholders’ Equity	8

	Consolidated Statements of Cash Flows	10

	Notes to Consolidated Financial Statements	12

	Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	51

	Item 3. Quantitative and Qualitative Disclosures About Market Risk	75

	Item 4. Controls and Procedures	76

PART II. Other Information

	Item 1. Legal Proceedings	77

	Item 1A. Risk Factors	77

	Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	78

	Item 6. Exhibits	79

	Signatures	80


ASSOCIATED BANC-CORP
Commonly Used Acronyms and Abbreviations
The following listing provides a reference of common acronyms and abbreviations used throughout the document:





ACLL			Allowance for Credit Losses on Loans

AFS			Available for Sale
ALCO			Asset / Liability Committee
ARRC			Alternative Reference Rate Committee
ASC			Accounting Standards Codification
Associated / the Company / Corporation / our / we			Associated Banc-Corp collectively with all of its subsidiaries and affiliates

ASU			Accounting Standards Update
the Bank			Associated Bank, National Association

Basel III			International framework established by the Basel Committee on Banking Supervision for the regulation of capital and liquidity
bp			basis point(s)

CDs			Certificates of Deposit
CDIs			Core Deposit Intangibles
CECL			Current Expected Credit Losses
CET1			Common Equity Tier 1



CRA			Community Reinvestment Act
CRE			Commercial Real Estate

EAR			Earnings at Risk


Exchange Act			Securities Exchange Act of 1934, as amended
FASB			Financial Accounting Standards Board
FDIC			Federal Deposit Insurance Corporation
Federal Reserve			Board of Governors of the Federal Reserve System
FFELP			Federal Family Education Loan Program
FHLB			Federal Home Loan Bank
FHLMC			Federal Home Loan Mortgage Corporation
FICO			Fair Isaac Corporation, provider of a broad-based risk score to aid in credit decisions
FNMA			Federal National Mortgage Association

FOMC			Federal Open Market Committee
FTEs			Full-time equivalent employees
FTP			Funds Transfer Pricing
GAAP			Generally Accepted Accounting Principles
GNMA			Government National Mortgage Association
GSEs			Government-Sponsored Enterprises
HTM			Held to Maturity




LIBOR			London Interbank Offered Rate
LOCOM			Lower of Cost or Market
LTV			Loan-to-Value


MSRs			Mortgage Servicing Rights
MVE			Market Value of Equity
Net Free Funds			Noninterest-bearing sources of funds
NII			Net Interest Income
NPAs			Nonperforming Assets


OREO			Other Real Estate Owned
Parent Company			Associated Banc-Corp individually
PPP			Paycheck Protection Program


RAP			Retirement Account Plan - the Corporation's noncontributory defined benefit retirement plan
Repurchase Agreements			Securities sold under agreements to repurchase
Restricted Stock Awards			Restricted common stock and restricted common stock units to certain key employees
Retirement Eligible Colleagues			Colleagues whose retirement meets the early retirement or normal retirement definitions under the applicable equity compensation plan
ROCET1			Return on Common Equity Tier 1
Rockefeller			Rockefeller Capital Management
S&P			Standard & Poor's
SBA			Small Business Administration
SEC			U.S. Securities and Exchange Commission
Series C Preferred Stock			The Corporation's 6.125% Non-Cumulative Perpetual Preferred Stock, Series C, liquidation preference $1,000 per share
Series D Preferred Stock			The Corporation's 5.375% Non-Cumulative Perpetual Preferred Stock, Series D, liquidation preference $1,000 per share
Series E Preferred Stock			The Corporation's 5.875% Non-Cumulative Perpetual Preferred Stock, Series E, liquidation preference $1,000 per share
Series F Preferred Stock			The Corporation's 5.625% Non-Cumulative Perpetual Preferred Stock, Series F, liquidation preference $1,000 per share
SOFR			Secured Overnight Finance Rate

TBA			To-Be-Announced
TDRs			Troubled Debt Restructurings

Whitnell			Whitnell & Co.
YTD			Year-to-Date

Table of Contents


PART I - FINANCIAL INFORMATION

ITEM 1.			Financial Statements:

ASSOCIATED BANC-CORP

Consolidated Balance Sheets


	Jun 30, 2022		Dec 31, 2021
(In Thousands, except share and per share data)	(Unaudited)		(Audited)
Assets
Cash and due from banks	$	397,364	$	343,831
Interest-bearing deposits in other financial institutions	436,887		681,684
Federal funds sold and securities purchased under agreements to resell	32,820		—
AFS investment securities, at fair value	2,677,511		4,332,015
HTM investment securities, net, at amortized cost	3,945,206		2,238,947
Equity securities	19,039		18,352
Federal Home Loan Bank and Federal Reserve Bank stocks, at cost	237,616		168,281
Residential loans held for sale	42,676		136,638
Commercial loans held for sale	44,721		—
Loans	26,494,698		24,224,949
Allowance for loan losses	(280,771)		(280,015)
Loans, net	26,213,927		23,944,934
Tax credit and other investments	275,165		293,733

Premises and equipment, net	387,633		385,173
Bank and corporate owned life insurance	675,347		680,021
Goodwill	1,104,992		1,104,992
Other intangible assets, net	53,687		58,093
Mortgage servicing rights, net(a)	76,570		54,862

Interest receivable	95,426		80,528
Other assets	519,403		582,168
Total assets	$	37,235,990	$	35,104,253
Liabilities and Stockholders' Equity
Noninterest-bearing demand deposits	$	8,085,702	$	8,504,077
Interest-bearing deposits	20,490,874		19,962,353
Total deposits	28,576,577		28,466,430
Federal funds purchased and securities sold under agreements to repurchase	682,839		319,532
Commercial paper	22,781		34,730

FHLB advances	3,258,039		1,621,047
Other long-term funding	249,820		249,324

Allowance for unfunded commitments	36,776		39,776
Accrued expenses and other liabilities	449,776		348,560
Total liabilities	$	33,276,608	$	31,079,399
Stockholders’ Equity
Preferred equity	$	193,195	$	193,195
Common equity
Common stock	$	1,752	$	1,752
Surplus	1,710,319		1,713,851
Retained earnings	2,768,736		2,672,601
Accumulated other comprehensive (loss)	(182,788)		(10,317)
Treasury stock, at cost	(531,832)		(546,229)
Total common equity	3,766,187		3,831,658
Total stockholders’ equity	3,959,382		4,024,853
Total liabilities and stockholders’ equity	$	37,235,990	$	35,104,253
Preferred shares authorized (par value $1.00 per share)	750,000		750,000
Preferred shares issued and outstanding	200,000		200,000
Common shares authorized (par value $0.01 per share)	250,000,000		250,000,000
Common shares issued	175,216,409		175,216,409
Common shares outstanding	150,126,419		149,342,641

Numbers may not sum due to rounding.

(a) MSRs at December 31, 2021 were carried at LOCOM. On January 1, 2022, the Corporation made the irrevocable election to account for MSRs at fair value.

See accompanying notes to consolidated financial statements.

Table of Contents

Item 1. Financial Statements Continued:

ASSOCIATED BANC-CORP

Consolidated Statements of Income (Unaudited)


	Three Months Ended Jun 30,				Six Months Ended Jun 30,
(In Thousands, except per share data)	2022		2021		2022		2021
Interest income
Interest and fees on loans	$	199,876	$	174,228	$	367,573	$	348,277
Interest and dividends on investment securities
Taxable	18,317		8,840		34,789		15,855
Tax-exempt	16,379		14,366		32,487		28,528
Other interest	2,420		1,826		4,413		3,521
Total interest income	236,991		199,260		439,261		396,180
Interest expense
Interest on deposits	8,019		4,609		11,591		10,519
Interest on federal funds purchased and securities sold under agreements to repurchase	406		30		444		55
Interest on other short-term funding	1		7		2		13
Interest on FHLB advances	9,689		9,524		17,871		19,017
Interest on long-term funding	2,730		5,575		5,460		11,160
Total interest expense	20,845		19,745		35,367		40,764
Net interest income	216,146		179,515		403,893		355,416
Provision for credit losses	(2)		(35,004)		(3,992)		(58,009)
Net interest income after provision for credit losses	216,148		214,519		407,886		413,425
Noninterest income
Wealth management fees	21,332		22,706		43,735		45,120
Service charges and deposit account fees	16,506		15,549		33,363		30,404
Card-based fees	11,442		10,982		21,368		20,725
Other fee-based revenue	4,360		4,244		8,126		8,840
Capital markets, net	8,010		5,696		16,656		13,814
Mortgage banking, net	6,145		8,128		14,536		32,054
Bank and corporate owned life insurance	4,106		3,088		6,177		5,791

Asset gains (losses), net	1,677		(14)		1,865		4,796
Investment securities gains (losses), net	(8)		24		12		(16)
Gains on sale of branches, net(a)	—		36		—		1,038
Other	1,888		3,004		4,086		6,221
Total noninterest income	75,458		73,443		149,925		168,786
Noninterest expense
Personnel	112,666		106,994		217,477		211,020
Technology	21,223		20,236		42,707		40,975
Occupancy	14,151		14,679		30,231		30,835
Business development and advertising	5,655		4,970		10,610		9,366
Equipment	4,960		5,481		9,920		10,999
Legal and professional	4,873		6,661		9,960		13,191
Loan and foreclosure costs	1,476		2,671		3,490		4,891
FDIC assessment	5,400		3,600		10,500		8,350
Other intangible amortization	2,203		2,203		4,405		4,439

Other	8,815		6,979		15,412		15,755
Total noninterest expense	181,420		174,475		354,712		349,821
Income before income taxes	110,187		113,487		203,099		232,389
Income tax expense	23,363		22,480		42,013		47,082
Net income	86,824		91,007		161,086		185,307
Preferred stock dividends	2,875		4,875		5,750		10,082
Net income available to common equity	$	83,949	$	86,131	$	155,336	$	175,226
Earnings per common share
Basic	$	0.56	$	0.56	$	1.04	$	1.14
Diluted	$	0.56	$	0.56	$	1.03	$	1.13
Average common shares outstanding
Basic	149,083		152,042		148,933		152,198
Diluted	150,203		153,381		150,265		153,473

Numbers may not sum due to rounding.

(a) Includes the deposit premium on the sale of branches net of miscellaneous costs to sell. See Note 2 Acquisitions and Dispositions for additional details on the branch sales.

See accompanying notes to consolidated financial statements.

Table of Contents

Item 1. Financial Statements Continued:

ASSOCIATED BANC-CORP

Consolidated Statements of Comprehensive Income (Unaudited)


	Three Months Ended Jun 30,				Six Months Ended Jun 30,
($ in Thousands)	2022		2021		2022		2021

Net income	$	86,824	$	91,007	$	161,086	$

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