ASSOCIATED BANC-CORP — Earnings Release 2001

Jul 27, 2001

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest reported) July 19, 2001 ------------------------------------- Associated Banc-Corp - ------------------------------------------------------------------------------- (Exact name of registrant as specified in its chapter) Wisconsin 39-1098068 - ------------------------------------------------------------------------------- (State or other jurisdiction of Commission(IRS Employer Identification No.) incorporation) File Number) 1200 Hansen Road, Green Bay, Wisconsin 54304 - ------------------------------------------------------------------------------- (Address of principal executive offices) (Zip code) 920-491-7000 - ------------------------------------------------------------------------------- (Registrant's telephone number, including area code) (Former name or former address, if changed since last report) Item 5. Other Events. On July 19, 2001, Associated Banc-Corp reported second quarter of 2001 earnings of 69 cents per diluted share. Associated Banc-Corp is placing on file as Exhibit 99 a copy of the Company's financial results for the quarter ended June 30, 2001. Final financial statements with additional analyses will be filed as part of the Company's Form 10-Q for the quarter ended June 30, 2001. Item 7. Financial Statements and Exhibits. (c) Exhibits. Exhibit 99. Earnings news release of Associated Banc-Corp, dated July 19, 2001, of financial results for the quarter ended June 30, 2001. 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: July 26, 2001 /s/ Joseph B. Selner ------------------------------------------------------- Joseph B. Selner Chief Financial Officer EXHIBIT 99 [GRAPHIC OMITTED] Contacts: Investors: Joe Selner, Chief Financial Officer 920-491-7120 Media: Jon Drayna, Corporate Communications 920-491-7006 News Release Associated Banc-Corp reports record 2nd quarter earnings of 69 cents per share GREEN BAY, Wis. - July 19, 2001 - Associated Banc-Corp (NASDAQ: ASBC) reported record earnings of 69 cents per diluted share for the second quarter of 2001, compared to 63 cents in the second quarter of 2000, an increase of 9.5 percent. Net income was $46.0 million, compared to $43.7 million in the year-earlier quarter. Return on average assets rose to 1.42 percent, compared to 1.39 percent in the comparable 2000 quarter. Return on average equity was 18.02 percent, compared to 19.06 percent in the year-earlier period. Net interest income rose to $104.0 million in the second quarter, compared to $96.4 million in the year-earlier quarter, as the company's net interest margin continued to benefit from declining interest rates. Associated's net interest margin was 3.56 percent for the second quarter, compared to 3.37 percent in the year-earlier quarter and 3.34 percent in the first quarter. Commercial loans grew by 12.2 percent while overall loan growth was 3.3 percent over the second quarter of 2000. As the company experienced heavy mortgage refinancing in the quarter, the resulting new mortgages were sold into the secondary market, tempering total loan growth. Associated retained servicing for these residential mortgage loans. Credit quality remained strong overall, with second quarter net charge-offs of 16 basis points of average loans, annualized. Net charge-offs in the second quarter totaled $3.6 million, compared to $1.9 million in the year-earlier quarter, and $2.1 million in the first quarter, reflecting economic softening, which is affecting the bank's customers. Non-interest income for the second quarter of 2001 was $51.0 million, up from $50.5 million for the same quarter in 2000. The year-earlier quarter reflected a net $7.6 million gain from both the sale of Associated's credit card portfolio and certain investment securities. Second quarter mortgage banking income increased by $10.5 million from the year-earlier quarter due to record origination and sale of fixed rate first mortgage loans of $664 million, compared to $97 million in the second quarter of 2000. In addition, this quarter reflects a gain of $3 million from the sale of mortgage loan servicing rights. - More - ASBC 2Q, add one The increase in second quarter non-interest income overall was tempered by a decline in wealth management revenue resulting from weaker financial markets. Non-interest expenses were $82.3 million for the second quarter, up 1.5 percent from the $81.0 million in the year-earlier quarter. While total non-interest expenses have increased modestly, the company's efficiency ratio improved from 56.03 percent last year to 51.38 percent for the second quarter of 2001. Also in the second quarter, the company continued progress on its initiative to streamline operations in a way that improves Associated's ability to build customer relationships and improve productivity, most notably by successfully completing the consolidation of its six Wisconsin banking charters into a single national bank. Associated President and CEO Robert C. Gallagher said he was pleased with the company's positioning for the future and its ability to effectively capitalize on declining interest rates. "Earning $15 million in mortgage banking income and growing commercial loans by 12.2 percent are highlights of our financial improvement. These results demonstrate our commitment to providing value to both customers and shareholders. "Certainly, declining interest rates, our pricing discipline, and shifting mix toward greater growth in commercial loans have significantly improved our net interest margin and helped our strong second quarter results. At the same time, our associates' commitment to providing value to customer relationships, in conjunction with our recent organizational changes, position us for strong performance over the long term," Gallagher said. He reiterated Associated's previously stated expectation for 2001 earnings of $2.60 to $2.65 per diluted share, noting the relatively large contribution of mortgage banking fee income to the quarter's earnings, and that mortgage banking activity may have peaked in the second quarter due to the rapid decline in interest rates. Associated Banc-Corp, headquartered in Green Bay, Wis., is a diversified multibank holding company with $13.2 billion in total assets. Associated has approximately 4,000 associates serving individuals, small, and large businesses with a full array of deposit, lending and wealth management services through more than 200 banking locations across Wisconsin, Illinois and Minnesota. Associated has paid a dividend for 125 consecutive quarters, with increases in each of the last 10 years, including an increase from 29 cents to 31 cents per share in the second quarter. This news release contains forward-looking statements that involve a number of risks and uncertainties. Among the important factors that could cause actual results to differ materially from those indicated by such forward-looking statements are interest rates, changes in the mix of the company's business, competitive pressures, general economic conditions and the risk factors detailed in the company's periodic reports and registration statements filed with the Securities and Exchange Commission. - 30 - Tables follow. Consolidated Balance Sheets (Unaudited) Associated Banc-Corp

Consolidated Statements of Income (Unaudited) Associated Banc-Corp

Selected Quarterly Information Associated Banc-Corp

(1) Per share data adjusted retroactively for stock splits and stock dividends. (2) Cash diluted EPS excludes the after-tax effect of the amortization of goodwill related intangibles in net income. (3) Efficiency ratio = Noninterest expense divided by sum of taxable equivalent net interest income plus noninterest income, excluding investment securities gain, net, and asset sales gains, net. (4) Does not include guaranteed student loans. Guaranteed student loans 90+ days past due and still accruing totaled $18.4 million as of June 30, 2001. Financial Summary and Comparison Associated Banc-Corp

(1) Per share data adjusted retroactively for stock splits and stock dividends. (2) Cash diluted EPS excludes the after-tax effect of the amortization of goodwill related intangibles in net income. (3) Efficiency ratio = Noninterest expense divided by sum of taxable equivalent net interest income plus noninterest income, excluding investment securities gain, net, and asset sales gains, net.