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» Associated Banc-Corp's CEO Discusses Q4 2011 Results - Earnings Call Transcript
» Associated Banc-Corp's Q3 2011 Investor Presentation Call Transcript
» Associated Banc-Corp CEO Discusses Q3 2011 Results - Earnings Call Transcript
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Philip FlynnThank you operator, and welcome to our first quarter conference call. Joining me today is Chris Niles, who recently assumed the role of chief financial officer from Joe Selner, after Joe’s retirement announcement last month. Joe has led the company’s finance function for nearly three decades, and has guidance Associated through periods of tremendous growth, including several mergers and acquisitions. I feel very fortunate to have worked with Joe to restore Associated to a strong and profitable company. Joe will continue to support the company as a member of various operating committees until his retirement later this summer. Joining us as well today is Scott Hickey, our chief credit officer. I’ll begin by reviewing our results for the quarter, then provide you with an update on the key drivers of our business, and finally share our outlook for the rest of the year. In general, this quarter’s performance was in line with our expectations and I’m pleased to reiterate our outlook for the balance of 2012. First quarter highlights are outlined on slide two. We reported net income available to common shareholders of $41 million, or $0.24 a share. this compares to net income of $40 million, or $0.23 a share for the fourth quarter and $15 million, or $0.09 a share from a year ago. This quarter’s net income to common shareholders now stands at the highest level since early 2008. Also during the quarter, we increased to common dividend to $0.05 per share. Loan balances continued to grow during the quarter, and increased by $223 million, or 2%, to $14.3 billion. Net interest income increased by $3 million to $155 million, while net interest margin grew from the prior quarter to 331 basis points. We continue to see steady improvement in credit quality including a 9% decline in nonperforming assets this quarter. Nonperforming assets of $362 million are at the lowest level in nine quarters, and now represent just 165% of total assets. We recorded zero provision for loan losses this quarter.
Moving on to slide three, you’ll see our improving earnings trend. The earnings profile of Associated has shown considerable progress over the prior year, with both net income and return on tier one common improving significantly in each period. Return on tier one common for the first quarter was 9.23%, up significantly from just under 4% a year ago as we continued to drive toward bringing long term value to our shareholders.On slide four, you’ll see some detail on our loan portfolio. The portfolio grew to $14.3 billion at March 31. This was up $223 million from year end and represents a 2% quarter-over-quarter and 13% year over year growth rate. Although loan growth this quarter was seasonally weaker than we would have liked, we remain optimistic for the balance of the year. First quarter loan growth was driven by net growth in the retail and residential mortgage portfolio of $155 million, and in commercial real estate lending of $82 million. Residential mortgage balances increased by $178 million, or 6%, during the quarter. Installment loan balances continued to decline by $20 million this quarter, and home equity balances were down $3 million. Investor commercial real estate loans grew by $100 million during the quarter, while construction loan balances declined by $18 million. The commercial and business lending portfolio declined by a net $15 million during the quarter. General commercial loans, which include middle market activity, grew by a net $27 million. Oil and gas lending increased by about $5 million during the quarter. Declines in the mortgage warehouse book of $37 million, and declines in the power and utilities portfolio of $12 million offset the growth in the other commercial and business lending portfolios during the quarter. On slide five, we have information about our deposits and cost of funding. Total deposits of $15.7 billion were up $563 million, or 4%, from the end of the fourth quarter. Net deposit growth was primarily driven by a $1 billion, or 20%, increase in money market deposits, and was driven by our pricing strategies to shift client funds away from repo agreements and into more traditional deposit products. Read the rest of this transcript for free on seekingalpha.com