PR Newswire
GREEN BAY, Wis., Jan. 20, 2022
GREEN BAY, Wis., Jan. 20, 2022 /PRNewswire/ -- Associated Banc-Corp (NYSE: ASB) ("Associated" or "Company") today reported net income available to common equity ("earnings") of $74 million, or $0.49 per common share, for the quarter ended December 31, 2021. These amounts compare to earnings of $62 million, or $0.40 per common share for the quarter ended December 31, 2020 and earnings of $85 million, or $0.56 per common share for the quarter ended September 30, 2021. For the year ended December 31, 2021, the Company reported earnings of $334 million, or $2.18 per common share. These amounts compare to earnings of $288 million, or $1.86 per common share, for the year ended December 31, 2020.
"This quarter was marked by a resurgence in lending growth as commercial outstandings, line utilization, and our new initiatives all kicked into gear," said President and CEO Andy Harmening. "We were pleased to grow in most of our key loan and deposit verticals and took advantage of the positive economic backdrop to largely exit our remaining Oil & Gas exposure at minimal cost. We see 2022 as primed for a rebound in general commercial lending," he continued. "Alongside the balance sheet growth, we also enjoyed growing revenues, expanding margins, and further positive credit trends."
2021 SUMMARY (all comparisons to 2020)
1This is a non-GAAP financial measure. Please refer to page 10 of the attached tables for a reconciliation of fee-based revenues to noninterest income. |
The Company also announced today that Executive Vice President, CFO Christopher Del Moral-Niles will retire from Associated later this year. To ensure a seamless transition, Mr. Del Moral-Niles will continue in his role until a successor is in place. The Company has retained Diversified Search Group to assist in the search for a successor. Additional details can be found in the press release available at http://investor.associatedbank.com.
Loans
Fourth quarter 2021 period-end total loans of $24.2 billion were up approximately 3%, or $603 million from the prior quarter and were down 1%, or $227 million from the same period last year. Excluding PPP, period-end total loans of $24.2 billion were up over 3%, or $719 million from the prior quarter and were up 2%, or $475 million from the same period last year. With respect to fourth quarter 2021 period-end balances by loan category:
Fourth quarter 2021 average total loans of $23.8 billion were down $89 million from the prior quarter and were down 4%, or $887 million from the same period last year. Excluding PPP, average total loans of $23.7 billion were up $72 million from the prior quarter and were down $72 million from the same period last year. With respect to fourth quarter 2021 average balances by loan category:
Full-year 2021 average loans of $24.1 billion were down 2%, or $480 million from 2020. With respect to full-year 2021 average balances by loan category compared to 2020:
In 2022, we expect Auto Finance loan growth of more than $1.2 billion and Total Commercial loan growth of $750 million to $1 billion.
Deposits
Fourth quarter 2021 period-end deposits of $28.5 billion were up 2%, or $615 million compared to the prior quarter and were up 7%, or $2.0 billion from the same period last year. Low-cost core deposits (interest-bearing demand, noninterest-bearing demand and savings) made up 68% of deposit balances as of December 31, 2021. With respect to fourth quarter 2021 period-end balances by deposit category:
Fourth quarter 2021 average deposits of $28.4 billion were up 1%, or $328 million compared to the prior quarter and were up 6%, or $1.7 billion from the same period last year. With respect to fourth quarter 2021 average balances by deposit category:
Full-year 2021 average deposits of $27.7 billion were up 6%, or $1.7 billion from 2020. With respect to full-year 2021 average balances by deposit category as compared to 2020:
Net Interest Income and Net Interest Margin
Full-year 2021 net interest income of $726 million was down 5%, or $37 million from 2020. Net interest margin of 2.39% was down 14 basis points from the prior year. The decreases in net interest income and margin were driven by continued low interest rates and significant increases in liquidity during 2021.
Fourth quarter 2021 net interest income of $187 million was up 2%, or $3 million from the prior quarter and the net interest margin increased 2 basis points from the prior quarter to 2.40%. Compared to the same period last year, net interest income decreased 1%, or $1 million, and the net interest margin decreased 9 basis points.
We expect total net interest income to exceed $800 million in 2022.
Noninterest Income
Full-year 2021 noninterest income of $332 million decreased $182 million from the prior year. The decrease was largely driven by $9 million in investment securities gains in 2020 as well as several non-routine items in 2020, including $163 million in asset gains tied to the sale of Associated Benefits and Risk Consulting (ABRC) and a $7 million gain on branch sales. The sale of ABRC in 2020 also drove a $45 million reduction in insurance revenues year-over-year. Excluding 2020 ABRC revenues and related gains, all other noninterest income increased 9%, or $27 million year-over-year. With respect to 2021 noninterest income line items:
Fourth quarter 2021 total noninterest income of $82 million decreased $1 million from the prior quarter and decreased $4 million from the same period last year. With respect to fourth quarter 2021 noninterest income line items:
We expect total noninterest income to exceed $300 million in 2022.
Noninterest Expense
Full-year 2021 noninterest expense of $710 million decreased 9%, or $66 million from the prior year. Included in 2020 noninterest expense figures is the loss on prepayments of FHLB advances of $45 million. With respect to full year 2021 noninterest expense line items:
Fourth quarter 2021 total noninterest expense of $182 million increased $4 million from the prior quarter and increased $9 million compared to the same period last year. With respect to fourth quarter 2021 noninterest expense line items:
We expect 2022 noninterest expense to be approximately $725 million to $740 million.
Taxes
The fourth quarter 2021 tax expense was $15 million compared to $23 million of tax expense in the prior quarter and $17 million of tax expense in the same period last year. The effective tax rate for fourth quarter 2021 was 16.5% compared to an effective tax rate of 20.6% in the prior quarter and an effective tax rate of 20.1% 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 compared to the prior quarter and the same period last year.
We expect the annual 2022 tax rate to be between 19% to 21%, assuming no change in the corporate tax rate.
Credit
Full-year 2021 provision for credit losses was negative $88 million, compared to a provision of $174 million in the prior year.
The fourth quarter 2021 provision for credit losses was negative $6 million, compared to a negative provision of $24 million in the prior quarter and provision of $17 million in the same period last year. With respect to fourth quarter 2021 credit quality:
In 2022, 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 10.3% at December 31, 2021. 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 2021 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 20, 2022. 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 2021 earnings call. The fourth quarter 2021 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 $35 billion and is Wisconsin's largest bank holding company. 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, and commercial financial services in Indiana, Michigan, Missouri, 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.
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
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SOURCE Associated Banc-Corp
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