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 event reported) May 15, 2015

 

 

Associated Banc-Corp

(Exact name of registrant as specified in its chapter)

 

 

 

Wisconsin   001-31343   39-1098068

(State or other jurisdiction

of incorporation)

  

(Commission

File Number)

  

(IRS Employer

Identification No.)

433 Main Street, Green Bay, Wisconsin 54301

(Address of principal executive offices) (Zip code)

Registrant’s telephone number, including area code 920-491-7500

(Former name or former address, if changed since last report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 

Item 7.01. Regulation FD Disclosure

Associated Banc-Corp is furnishing the investor presentation, included as Exhibit 99.1 to this Report on Form 8-K, which will be used, in whole or in part, from time to time by executives of the Registrant in one or more meetings with investors and analysts.

The information furnished pursuant to this Item 7.01, including Exhibit 99.1, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities under that Section and shall not be deemed to be incorporated by reference into any filing of the Registrant under the Securities Act of 1933 or the Exchange Act.

 

Item 9.01. Financial Statements and Exhibits.

The following exhibit is furnished as part of this Report on Form 8-K.

(d) Exhibits

99.1 Associated Banc-Corp Investor Presentation

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: May 15, 2015 By:

/s/ Christopher J. Del Moral-Niles

Christopher J. Del Moral-Niles
Chief Financial Officer

Exhibit Index

 

Exhibit

Number

     
99.1    Associated Banc-Corp Investor Presentation.


ASSOCIATED BANC-
CORP INVESTOR
PRESENTATION
SECOND QUARTER 2015
Exhibit 99.1

FORWARD-LOOKING STATEMENTS AND
TRADEMARKS
1
Important note regarding forward-looking statements: 
Statements made in this presentation 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”, “outlook”, 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.
Trademarks:
All trademarks, service marks and trade names referenced in this material are the property of their
respective owners. Apple, the Apple logo, and iPhone are trademarks of Apple Inc., registered in the U.S
and other countries. Apple Pay and Touch ID are trademarks of Apple Inc. ,MasterPass, MasterCard and
the MasterCard Brand Mark are registered trademarks of MasterCard International Incorporated. 
Popmoney is a registered trademark of Fiserv, Inc. or its affiliates.

OUR FOOTPRINT AND FRANCHISE
Deposits
($ in billions)
Branches
WI
$13.4
161
IL
$5.0
43
MN
$1.5
23
Total
$19.9
227
1
FDIC market share data 6/30/14
2
As of 03/31/15 (Period End)
2
Total Loan Distribution/Mix
Q1 Period End
Wisconsin
Upper
Midwest
Other
Largest bank headquartered in
Wisconsin
$27 billion in assets (Top 50 bank
holding company in the U.S.)
227 banking offices serving
approximately one million customers
Q1 Average
23%
39%
38%
Commercial
38%
46%
16%
Consumer
CRE
>$1bn deposits
>$500mm deposits
2
1
2
1861
1999
2006
1987
2011
2011
2012
1

ATTRACTIVE MIDWEST MARKETS
Serve a Large Market Place: 
(Footprint is ~ 20% of USA)
Manufacturing
Concentrated
2
:
Top 3 states (Indiana, Wisconsin,
and Iowa) for concentration of
manufacturing jobs and two other
states in the top 10
Favorable Employment
Dynamics:
Wisconsin,
Minnesota
and Iowa all have unemployment
rates that are under 4.7%
Positive
Economic
Trends:
Continuing job growth
Best Consumer Credit:
Top 4
and 8 of top 10 cities within
footprint
1
Based on Population -
US Census Bureau 2012 ;
2
Area Development Online –
Author: Mark Crawford (Winter 2013);
3
March 2015 US
Bureau of Labor Statistics;
4
Experian.com –
State of Credit 2014 –
VantageScore registered trademark.
3
Mar 14 to Mar 15
Total
Employment
up 454k
Manufacturing
Employment
up 64k
Top Ten US Cities by Credit Score
4
1 –
Mankato, MN (706)
6 –
Wausau, WI (699)
2 –
Rochester, MN (703)
7 –
Green Bay, WI (698)
3 –
Minneapolis, MN (702)
8 –
Sioux Falls, SD (697)
4 –
Duluth, MN (699)
9 –
Cedar Rapids, IA (697)
5 –
Fargo, ND (699)
10 –
La Crosse, WI (696)
*National Average: 666
88.2
77.4
71.6
53.2
50.8
49.4
36.2
26.9
Mar 2014 to Mar 2015 Net Change
in Employment (in ‘000’s)
3
3
1
3

1Q 2015 HIGHLIGHTS AND OUTLOOK
4
1Q 2015 Highlights:
2015 Focus:
Average Loan Growth of over $400 million on a
linked-quarter basis
Total average loans of $17.8 billion, up 10%
on a year-over-
year basis 
Average Deposit Growth of over $500 million on a
linked-quarter basis
Total average deposits of $19.1 billion, up
12% on a year-over-
year basis
Net interest income up $3 million on a year-over-
year basis
Noninterest income up $10 million on a linked-
quarter basis
Completed Ahmann & Martin acquisition
Net income to common shareholders of $45
million, or $0.30 / share
ROT1CE of 10.22%
Consistent Capital Deployment
Enhancing the customer
experience
Evolving our overall delivery
model to meet customer needs
1
Return on Tier 1 Common Equity (ROT1CE).
Management uses Tier 1 Common Equity, along with other capital measures to assess
and monitor our capital position.  This is a non-GAAP financial measure.  Please refer to the appendix for a reconciliation of Tier 1
Common Equity to stockholders’
equity.
In addition to growing the franchise
and creating long-term shareholder
value, in 2015 we are focused on
four key areas:
Managing expenses
Delivering strong, well balanced
earnings from all our core
businesses
1
Repurchased $30 million of common stock

BUILDING THE LOAN PORTFOLIO
1
Based on Average Balances, $ in Billions
5
Cumulative
1Q 2012 –
1Q 2015 Change
+$0.9 bn
+$1.5 bn
+$2.2 bn
$17.8
$16.2
$17.4
$15.4
$14.3
-$1.0 bn
1
$4.8
$5.6
$6.1
$6.7
$7.0
$3.2
$3.6
$3.9
$4.1
$4.1
$3.2
$3.6
$3.9
$4.5
$4.7
$3.1
$2.6
$2.2
$2.1
$2.1
1Q 2012
1Q 2013
1Q 2014
4Q 2014
1Q 2015
Commercial & Business
Commercial Real Estate
Residential Mortgage
Home Equity & Installment

LOAN PORTFOLIO GROWTH
1Q 2015 AVERAGE LOAN GROWTH OF $428 MILLION OR 2% FROM 4Q 2014
$ IN MILLIONS
6
Home Equity & Installment
Commercial Real Estate
Residential Mortgage
Power & Utilities
Oil & Gas
Mortgage Warehouse
General Commercial Loans
+4%
% Change
+3%
+13%
+1%
+5%
Total
Commercial
& Business
Lending
+4%
($272 mln)
(3%)
(1%)
($55)
($6)
$18
$37
$92
$168
$174

NET INTEREST INCOME AND MARGIN
TRENDS
7
Yield on Interest-earning Assets
Cost of Interest-bearing Liabilities
Net Interest Income & Net Interest Margin
($ in millions)
$165
Net Interest Margin
$169
0.31%
0.29%
0.29%
0.39%
$173
Total Loan Yield
Total Interest-earning Yield
<$1
<$1
$168
0.35%
$175
3.36%
3.31%
3.29%
3.32%
3.20%
1Q 2014
2Q 2014
3Q 2014
4Q 2014
1Q 2015
3.61%
3.55%
3.55%
3.60%
3.46%
3.12%
3.08%
3.06%
3.04%
2.89%
$164
$168
$172
$170
$165
$1
$5
$3
1Q 2014
2Q 2014
3Q 2014
4Q 2014
1Q 2015
Net Interest Income Net of Interest Recoveries & Prepayment Fees
Interest Recoveries & Prepayment Fees
+8 bps
0.19%
0.19%
0.19%
0.20%
0.21%
1Q 2014
2Q 2014
3Q 2014
4Q 2014
1Q 2015
Interest Bearing Deposit Costs
Other Funding Costs

DIVERSIFIED PORTFOLIO OF VALUE-ADDED
BUSINESSES
8
Corporate and
Specialized Lending
Consumer
and
Business
Banking
Private
Client and
Institutional
Services
Commercial Real
Estate Lending
Private
Banking
Personal
Trust
Asset
Management
Retirement
Plan Services
Associated
Financial
Group
Community
Markets
Branch
Banking
Commercial
Banking
Residential
Lending
Payments
and Direct
Channels
AIS
(Brokerage)
Corporate
Commercial and
Specialized Lending
Commercial
Deposits and
Treasury
Management
Global Markets        
(FX swaps)
Community,  Consumer, and Business
Corporate and Commercial Specialty
Rochester, MN
Eau Claire, WI
La Crosse, WI
Central
Wisconsin
Rockford, IL
Peoria, IL
Southern
Illinois
CRE lending
Real Estate
Investment Trusts
Developers

EVOLVING MODEL WITH CUSTOMER TRENDS
9
Associated
Bank
Customer
Trends
Since 2011:
Branch transactions -15%
Mobile banking adoption +280%
Since 2013:
Evolve Selling Tools:
Coming Soon:
Redesigned website
that  
features:
Responsive design
across devices
Enhanced eCommerce
capabilities including
guided selling and
product comparison tools
Rationalize Branch Network
Since 2007:
Over
25%
of
branches
closed
or sold
~36%
reduction
in
branch
FTE
Focused
on
smaller,
lower
construction
cost,
and
more
visibility
Enhance Digital Banking:
Current Offerings:
Note:  All trademarks, service marks and trade names referenced in this material are the property of their respective owners.
Piloting
video
teller
Digital Deposits +78%
Online
Deposit
and
Lending
Sales
Platforms
ATM
Deposit
Automation
&
Remote
Deposit
Technology
Kiosks
Apple
Pay
&
MasterPass

PURSUING EFFICIENCY GAINS
($ IN MILLIONS)
Efficiency Ratio
1
at 2014 =
69%
Goal =
Peer Average
or Better
1
–
Efficiency
ratio
=
Noninterest
expense,
excluding
other
intangible
amortization,
divided
by
sum
of
taxable
equivalent
net
interest
income
plus
noninterest
income,
excluding
investment
securities
gains/losses,
net,
and
asset
gains/losses,
net.
This
is
a
non-GAAP
financial
measure.
Please
refer
to
the
appendix
for a
reconciliation
of
this
measure
to
the
efficiency
ratio
as
defined
by
the
Federal
Reserve.
2
–
FTE
= Average Full Time Equivalent Employees
3
–
Technology
Spend
=
Technology
and
Equipment
expenses
10
Efficiency Ratio
1
2
3
Back Office Initiatives:
Implementing technology
solutions in labor intensive
processes
Real Estate Initiatives:
Actions to optimize our real
estate holdings and capacity
Distribution Initiatives:
Optimize the ways that we
interact with our customers
70.4%
69.3%
69.5%
69.0%
68.9%
$52
$67
$75
$21
4,985
4,968
4,728
4,406
4,422
2011
2012
2013
2014
1Q 2015
$-
$20
$40
$60
$80
$100
$120
$140
$160
$180
Technology Spend
$80
Areas of Focus
Avg FTE

CAPITAL MANAGEMENT PRIORITIES
Funding
Organic Growth
Paying a
Competitive
Dividend
Non-organic
Growth
Opportunities
Share Buybacks
and
Redemptions
Fund Loan Growth and other Capital Investments
Repurchased
$120 million of
Common Stock
Retired $26
million in Sub-
Debt
Increased
quarterly dividend
in Q4 2013
Paid $0.33/
common share
Focused on Cost Take-out Driven Depository M&A
Maintaining Discipline in Pricing of any Transaction
Repurchased $259
million of Common
Stock
Retired $155 million
in Senior Notes in
Q1 2014
Increased
quarterly dividend
in Q4 2014
Paid $0.37/
common share
11
ASB
Basel
III
Tier
1
Common
Ratio
Goal
=
8
–
9.5%
Repurchased ~ $30
million of Common
Stock in both Q1
and Q2 2015
Declared quarterly
common dividend
of $0.10/ share
both in Q1 and Q2
2015

WHY ASSOCIATED
EPS
and
Dividends
Paid
&
ROT1CE
1
Return on Tier 1
Common Equity
$0.24
$0.27
$0.27
$0.30
Diluted
Earnings
per
Common
Share
Dividends per Common Share
12
Leading Midwest Bank Operating in    
Attractive Markets
Well Diversified Lending Portfolio
Stable Core Deposit Franchise
Committed to Expense Containment
Strong Credit Quality
Disciplined Capital Deployment
Management Team Focused on Creating
Long-Term Value
Reasons to Invest
1
Return
on
Tier
1
Common
Equity
(ROT1CE).
Management
uses
Tier
1
Common
Equity,
along
with
other
capital
measures
to
assess
and monitor our capital position.  This is a non-GAAP financial measure.  Please refer to the appendix for a reconciliation of Tier 1
Common Equity to stocklholders’
equity.
9.2%
10.1%
9.4%
10.2%
$0.05
$0.08
$0.09
$0.10
1Q 2012
1Q 2013
1Q 2014
1Q 2015

APPENDIX

SEGMENT PROFITABILITY
FIRST QUARTER 2015
ASB –
Consolidated Total
Earning Assets* = $24.1 bn
Total Revenue = $247.9 mm
Net Income = $46.7 mm
ROT1CE: 10.2%
* Average Earning Assets
14
Earning Assets*
Total Revenue
Net Income
Community, Consumer, & Business Banking
Risk Management & Shared Services
Corporate and Commercial Specialty Banking
ROT1CE
10.7%
(1.1%)
12.5%
35%
27%
38%
61%
3%
36%
37%
1%
62%

LOANS BY INDUSTRY AND STATE
PERIOD END BALANCES
15
C&BL Loans by Industry
($7.2 billion –
Mar 2015)
C&BL Loans by State
($7.2 billion –
Mar 2015)
CRE Loans by Industry
($4.1 billion –
Mar 2015)
CRE Loans by State
($4.1 billion –
Mar 2015)
Residential Mortgage Loans by State
($4.7 billion –
Mar 2015)
Home Equity Loans by State
($1.6 billion –
Mar 2015)
1
Includes Missouri, Indiana, Ohio, Michigan, & Iowa
Manufacturing
22%
Other
13%
Wholesale
Trade
9%
Power &
Utilities
9%
Oil & Gas 11%
Finance &
Insurance 11%
Retail Trade
5%
Real Estate
7%
Health Care
and Soc.
Assist.
5%
Profsnl,
Scientific, and
Tech Svs
3%
Rental and
Leasing Svs
3%
Transport. and
Whsing
2%
Multi-Family
22%
Office /
Mixed Use
22%
Construction
25%
Retail
17%
Industrial
6%
Other
3%
Hotel / Motel
4%
Wisconsin
40%
Illinois
37%
Minnesota
14%
In-
Footprint
8%
Other
1%
Wisconsin
71%
Illinois
16%
Minnesota
11%
Other
2%
Wisconsin
35%
Illinois
23%
Minnesota
10%
In
Footprint
1
21%
Other 11%
Wisconsin
33%
Illinois
16%
Minnesota
11%
In
Footprint
1
7%
Other
33%
1

NONINTEREST INCOME TRENDS
($ IN MILLIONS)
Core
Fee-based
1
Revenue
Mortgage Banking (net) Income
Total Noninterest Income
Other Noninterest Income
2
16
–
Core
Fee-based
Revenue
=
Trust
service
fees
plus
Service
charges
on
deposit
accounts
plus
Card-based
and
other
nondeposit
fees
plus
Insurance
commissions
plus
Brokerage
and
annuity
commissions.
This
is
a
non-GAAP
measure.
Please
refer
to
the
April
16,
2015
Earning’s
press
release
tables
for
a
reconciliation
of
core
fee-based revenue to noninterest income.
2
–
Other
Noninterest
Income
=
Total
Noninterest
Income
minus
net
Mortgage
Banking
Income
minus
Core
Fee-based
Revenue.
This
is
a
non-GAAP
measure. 
Please
refer
to
the
April
16,
2015
Earning’s
press
release
tables
for
a
reconciliation
of
other
noninterest
income
to
noninterest
income.
$80
$70
$72
$75
$74
Insurance commissions
$12
$14
$8
$11
$20
$57
$60
$54
$56
$64
$6
$5
$7
$3
$7
$10
$7
$14
$11
$9
1Q
2014
2Q
2014
3Q
2014
4Q
2014
1Q
2015
1Q
2014
2Q
2014
3Q
2014
4Q
2014
1Q
2015
1Q
2014
2Q
2014
3Q
2014
4Q
2014
1Q
2015
1Q
2014
2Q
2014
3Q
2014
4Q
2014
1Q
2015
1

NONINTEREST EXPENSE TRENDS
($ IN MILLIONS)
Technology
3
Spend
Total Noninterest Expense
Other
Non-Personnel
Spend
4
Personnel
Spend
/
FTE
2
Trend
1
–
Efficiency
ratio
=
Noninterest
expense,
excluding
other
intangible
amortization,
divided
by
sum
of
taxable
equivalent
net
interest
income
plus
noninterest
income,
excluding
investment
securities
gains/losses,
net,
and
asset
gains/losses,
net.
This
is
a
non-GAAP
financial
measure.
Please
refer
to
the
appendix
for
a
reconciliation
of
this
measure
to
the
efficiency
ratio
as
defined by the Federal Reserve
2
–
FTE
= Average Full Time Equivalent Employees
3
–
Technology
Spend
=
Technology
and
Equipment
expenses
4
–
Other
Non-Personnel
Spend
=
Total
Noninterest
Expense
less
Personnel
and
Technology
spend
Efficiency Ratio
1
69%
68%
69%
70%
69%
17
$51
$49
$54
$54
$53
Q1
2014
Q2
2014
Q3
2014
Q4
2014
Q1
2015
$168
$168
$172
$172
$174
1Q
2014
2Q
2014
3Q
2014
4Q
2014
1Q
2015
$19
$21
$20
$21
$21
Q1
2014
Q2
2014
Q3
2014
Q4
2014
Q1
2015
$98
$98
$98
$97
$100
4,517
4,431
4,359
4,320
4,422
Q1
2014
Q2
2014
Q3
2014
Q4
2014
Q1
2015
Personnel Spend
Avg FTE

CREDIT QUALITY INDICATORS
($ IN MILLIONS)
18
Potential Problems Loans & PPLs to Total Loans
Nonaccruals & NA / Total Loans
ALL to Nonaccruals and Total Loans
Net Charge Offs & NCOs to Avg Loans
$220
$288
$220
$190
$219
1.34%
1.69%
1.28%
1.08%
1.22%
1Q 2014
2Q 2014
3Q 2014
4Q 2014
1Q 2015
Potential Problem Loans
PPLs / Total Loans
$178
$179
$184
$177
$174
1.08%
1.05%
1.07%
1.01%
0.97%
1Q 2014
2Q 2014
3Q 2014
4Q 2014
1Q 2015
Nonaccruals
Nonaccruals / Total Loans
151%
152%
145%
150%
152%
1.63%
1.59%
1.55%
1.51%
1.48%
1Q 2014
2Q 2014
3Q 2014
4Q 2014
1Q 2015
ALLL/ Nonaccruals
ALLL/ Total Loans
$5
$3
$3
$4
$6
0.14%
0.06%
0.06%
0.10%
0.13%
1Q 2014
2Q 2014
3Q 2014
4Q 2014
1Q 2015
Net Charge Offs
NCOs / Avg Loans

Amortized Cost Composition –
March 31, 2015
Investment Portfolio –
March 31, 2015
Type
Amortized
Cost
(000’s)
Fair Value
(000’s)
TEY
(%)
Duration
(Yrs)
Govt & Agencies
$999
$1,002
0.67
1.88
Agency MBS
2,743,852
2,800,382
2.53
2.53
CMOs
871,254
876,685
2.28
2.78
GNMA CMBS
1,158,217
1,149,256
2.04
4.17
Municipals
939,726
971,284
4.92
5.47
Corporates
6,320
6,348
1.30
1.43
Other
18
50
Total HTM & AFS
$5,720,386
$5,805,007
2.79
3.38
INVESTMENT SECURITIES PORTFOLIO
19
Portfolio Ratings Composition –
March 31, 2015
Type
Fair Value
(000’s)
% of Total
0% RWA
$1,317,083
22.7
20% RWA
4,381,224
75.4
50% RWA
20,674
0.4
=>100% RWA
3,367
0.1
Not subject to RW
82,659
1.4
Total Market Value
$5,805,007
100.0%
Risk Weighting Profile –
March 31, 2015
Type
Fair Value
(000’s)
% of Total
Govt & Agency
$4,825,372
83.2
AAA
94,737
1.6
AA
756,250
13.0
A
122,627
2.1
BAA1, BAA2 & BAA3
-
-
BA1 & Lower
1,750
0.0
Non-rated
4,271
0.1
Total Market Value
$5,805,007
100.0%
Agency MBS
Hybrid
31%
Agency
MBS
17%
CMOs
15%
GNMA
CMBS
20%
Municipals
17%

RECONCILIATION AND DEFINITIONS OF
NON-GAAP ITEMS (1 OF 2)
2010
2011
2012
2013
2014
Efficiency Ratio Reconciliation:
Efficiency ratio, as defined by the Federal Reserve (1)
65.35%
73.64%
72.16%
71.04%
69.97%
Taxable equivalent adjustment
(1.60)
(1.74)
(1.59)
(1.45)
(1.36)
Asset gains (losses), net
(0.77)
(0.92)
(0.86)
0.39
0.73
Other intangible amortization
(0.52)
(0.54)
(0.45)
(0.42)
(0.39)
Efficiency ratio, fully taxable equivalent (1)
62.46%
70.44%
69.26%
69.56%
68.95%
20
1Q 2014
2Q 2014
3Q 2014
4Q 2014
1Q 2015
Efficiency Ratio Reconciliation:
Efficiency ratio, as defined by the Federal Reserve (1)
70.41%
69.70%
69.44%
70.33%
70.30%
Taxable equivalent adjustment
(1.35)
(1.32)
(1.36)
(1.40)
(1.42)
Asset gains, net
0.22
0.26
1.36
1.05
0.30
Other intangible amortization
(0.42)
(0.41)
(0.40)
(0.32)
(0.32)
Efficiency ratio, fully taxable equivalent (1)
68.86%
68.23%
69.04%
69.66%
68.86%
(1) Efficiency ratio is defined by the Federal Reserve guidance as noninterest expense divided by the sum of net interest income plus noninterest
income, excluding investment securities gains / losses, net.  Efficiency ratio, fully taxable equivalent, is noninterest expense, excluding other
intangible amortization, divided by the sum of taxable equivalent net interest income plus noninterest income, excluding investment securities
gains / losses, net and asset gains / losses, net.  This efficiency ratio is presented on a taxable equivalent basis, which adjusts net interest income
for the tax-favored status of certain loans and investment securities.  Management believes this measure to be the preferred industry
measurement of net interest income as it enhances the comparability of net interest income arising from taxable and tax-exempt sources and it
excludes certain specific revenue items (such as investment securities gains / losses, net and asset gains / losses, net).

RECONCILIATION AND DEFINITIONS OF
NON-GAAP ITEMS (2 OF 2)
21
Tier
1
Common
Equity,
a
non-GAAP
financial
measure,
is
used
by
banking
regulators,
investors
and
analysts
to
assess
and
compare
the
quality
and
composition
of
our
capital
with
the
capital
of
other
financial
services
companies.
Management
uses
Tier
1
common
equity,
along
with
other capital measures, to assess and monitor our capital position.  The Corporation adopted the Basel III regulatory standards during the first
quarter
of
2015;
all
prior
periods
presented
are
disclosed
under
Basel
I
regulatory
standards.
Tier
1
Common
Equity
for
2015
follows
Basel
III
and
is
defined
as
common
stock
and
related
surplus,
net
of
treasury
stock,
plus
retained
earnings.
Tier
1
Common
Equity
for
2014
follows
Basel
I
and is defined as Tier 1 capital excluding qualifying perpetual preferred stock and qualifying trust preferred securities.
($ in thousands)
1Q 2012
1Q 2013
1Q 2014
1Q 2015
Tier 1 Common Equity Reconciliation:
Stockholders’
Equity
$2,900,873
$2,936,265
$2,901,024
$2,882,138
Accumulated other comprehensive income (loss)
(65,278)
(42,991)
11,577
(24,800)
Preferred equity
(63,272)
(63,272)
(61,158)
(59,727)
Intangible assets
(947,541)
(943,385)
(939,361)
(950,892)
Deferred tax assets (DTAs)
0
0
0
(9,056)
Disallowed servicing assets
(5,000)
(5,207)
0
0
Tier 1 Common Equity
$1,819,782
$1,881,410
$1,912,083
$1,837,663        
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