ASSOCIATED BANC-CORP [ASB] Filings

10-Q 1 asb-20220930.htm 10-Q asb-20220930

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: September 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 October 24, 2022 was 150,359,198.


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	77

	Item 6. Exhibits	78

	Signatures	79


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


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


	Sep 30, 2022		Dec 31, 2021
(In Thousands, except share and per share data)	(Unaudited)		(Audited)
Assets
Cash and due from banks	$	386,231	$	343,831
Interest-bearing deposits in other financial institutions	112,173		681,684
Federal funds sold and securities purchased under agreements to resell	4,015		—
AFS investment securities, at fair value	2,487,312		4,332,015
HTM investment securities, net, at amortized cost	3,951,491		2,238,947
Equity securities	24,879		18,352
Federal Home Loan Bank and Federal Reserve Bank stocks, at cost	279,334		168,281
Residential loans held for sale	51,134		136,638

Loans	27,817,280		24,224,949
Allowance for loan losses	(292,904)		(280,015)
Loans, net	27,524,376		23,944,934
Tax credit and other investments	275,247		293,733

Premises and equipment, net	379,462		385,173
Bank and corporate owned life insurance	677,129		680,021
Goodwill	1,104,992		1,104,992
Other intangible assets, net	51,485		58,093
Mortgage servicing rights, net(a)	78,352		54,862

Interest receivable	115,782		80,528
Other assets	546,214		582,168
Total assets	$	38,049,607	$	35,104,253
Liabilities and Stockholders' Equity
Noninterest-bearing demand deposits	$	8,224,579	$	8,504,077
Interest-bearing deposits	20,974,003		19,962,353
Total deposits	29,198,581		28,466,430
Federal funds purchased and securities sold under agreements to repurchase	276,674		319,532
Commercial paper	7,687		34,730

FHLB advances	3,777,478		1,621,047
Other long-term funding	249,484		249,324

Allowance for unfunded commitments	39,776		39,776
Accrued expenses and other liabilities	545,976		348,560
Total liabilities	$	34,095,656	$	31,079,399
Stockholders’ Equity
Preferred equity	$	194,112	$	193,195
Common equity
Common stock	$	1,752	$	1,752
Surplus	1,710,075		1,713,851
Retained earnings	2,830,877		2,672,601
Accumulated other comprehensive (loss)	(255,391)		(10,317)
Treasury stock, at cost	(527,473)		(546,229)
Total common equity	3,759,840		3,831,658
Total stockholders’ equity	3,953,952		4,024,853
Total liabilities and stockholders’ equity	$	38,049,607	$	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	150,328,196		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 Sep 30,				Nine Months Ended Sep 30,
(In Thousands, except per share data)	2022		2021		2022		2021
Interest income
Interest and fees on loans	$	275,666	$	174,643	$	643,239	$	522,920
Interest and dividends on investment securities
Taxable	19,221		8,745		54,009		24,600
Tax-exempt	16,538		14,613		49,025		43,141
Other interest	3,284		2,281		7,696		5,802
Total interest income	314,708		200,282		753,969		596,462
Interest expense
Interest on deposits	26,000		4,427		37,590		14,945
Interest on federal funds purchased and securities sold under agreements to repurchase	756		48		1,200		103
Interest on other short-term funding	1		8		2		21
Interest on FHLB advances	20,792		8,962		38,663		27,979
Interest on long-term funding	2,722		3,163		8,182		14,323
Total interest expense	50,270		16,607		85,637		57,371
Net interest income	264,439		183,675		668,332		539,092
Provision for credit losses	16,998		(24,010)		13,006		(82,018)
Net interest income after provision for credit losses	247,440		207,685		655,326		621,110
Noninterest income
Wealth management fees	19,984		22,110		63,719		67,229
Service charges and deposit account fees	15,029		16,962		48,392		47,366
Card-based fees	11,479		11,113		32,847		31,838
Other fee-based revenue	4,487		3,929		12,613		12,769
Capital markets, net	7,675		7,114		24,331		20,928
Mortgage banking, net	2,098		10,657		16,635		42,710
Bank and corporate owned life insurance	1,827		2,760		8,004		8,551

Asset gains, net	18		5,228		1,883		10,024
Investment securities gains (losses), net	5,664		—		5,676		(16)
Gains on sale of branches, net(a)	—		—		—		1,038
Other	2,527		2,205		6,613		8,425
Total noninterest income	70,788		82,076		220,713		250,862
Noninterest expense
Personnel	118,243		107,880		335,720		318,900
Technology	22,694		19,927		65,401		60,902
Occupancy	13,717		15,814		43,948		46,649
Business development and advertising	6,778		6,156		17,388		15,522
Equipment	4,921		5,200		14,841		16,199
Legal and professional	4,159		4,304		14,118		17,495
Loan and foreclosure costs	1,631		1,616		5,121		6,508
FDIC assessment	5,800		5,000		16,300		13,350
Other intangible amortization	2,203		2,203		6,608		6,642

Other	15,645		9,793		31,057		25,547
Total noninterest expense	195,791		177,892		550,503		527,713
Income before income taxes	122,438		111,870		325,536		344,259
Income tax expense	26,163		23,060		68,176		70,142
Net income	96,275		88,809		257,360		274,117
Preferred stock dividends	2,875		4,155		8,625

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