Oct 20, 2011
Executives
Philip Flynn – President and CEO Joseph Selner – CFO Scott Hickey – Chief Credit Officer
Analysts
Terry Mcevoy – Oppenheimer & Co. Chris McGratty – KBW Emlen Harmon – Jefferies & Co.
John Arfstrom – RBC Capital Scott Siefers – Sandler O'Neill Russell Gunther – BofA/Merrill Lynch
Operator
Good afternoon, everyone, and welcome to Associated Banc-Corp third quarter 2011 earnings conference call. My name is John and I will be your operator today.
At this time, all participants are in a listen-only mode. We will be conducting a question-and-answer session at the end of this conference.
As a reminder, this conference is being recorded. During the course of discussion today, Associated management may make statements that constitute projections, expectations, beliefs, or similar forward-looking statement.
Associated's actual results could differ materially from the results anticipated or projected in such forward-looking statement. Additional detailed information concerning the important factors that could cause Associated's actual results to differ materially from the information discussed today is readily available on the SEC website in the risk factor session of Associated's most recent form 10-K and any subsequent form 10-Q.
Following today’s presentation, instructions will be given with the question-and-answer session. As a reminder, this conference is being recorded, Thursday, October 20, 2011.
At this time, I would like to turn the conference over to Philip Flynn, president and CEO for opening remarks. Please go ahead, sir.
Philip Flynn
Thank you, John, and welcome to our third quarter conference call. Joining me today are Joe Selner, our CFO, and Scott Hickey, our chief credit officer, and our recently-appointed Deputy CFO Chris Niles.
This afternoon, I'll begin by reviewing our results for the quarter and then update you with what’s going on with our businesses. I'll begin by pointing out a few highlights from our third quarter results on Slide 2.
We reported net income to common shareholders of $34 million or $0.20 a share. This compares to net income of $26 million or $0.15 a share for the second quarter, a 33% increase.
Our loan portfolio grew 3% to 13.5 billion during the quarter, with solid growth from each of our major segments including commercial, commercial real estate and residential mortgage. We continue to see the results from the investments we are making in these areas.
Consistent with our strategy to fund loan growth, primarily through runoff of the securities portfolio, net interest income from loans grew quarter-over-quarter, while securities income continued to contract. The net interest margin for the quarter was 323 basis points, down 6 basis points from last quarter.
This was driven by a compression of yields on earning assets, partially offset by a decline in cost of non-brokered deposits, and partially reflecting the effect of our TARP refinancing. We’re pleased with the ongoing improvement in our credit quality indicators including a 14% decline in nonaccrual loans during this quarter.
Nonaccrual loans of 403 million are at the lowest level in seven quarters, and represent 3% of total loans, down from 3.6% last quarter. We recorded a provision for loan losses of $4 million, less the net charge-offs of 30 million.
The lower provision and reserve release were driven by the continued ongoing improvement in the credit quality of the loan portfolio. Despite this lower level of provision, we note that our overall allowance for loan losses now covers essentially 100% of period-end nonaccrual loans.
Our capital ratios remain very strong even after our repayment of TARP, with Tier 1 common ratio of 12.44% and a total capital ratio of 15.81% at September 30. As you know, we completed repayment of our remaining TARP funds in September through a secondary senior note offering and a preferred stock offering.
This action was in line with our prior commitment to exit TARP in a shareholder-friendly manner. If you go to Slide 3, you’ll see some information on our loan portfolio.
As mentioned, the company’s portfolio grew to 13.5 billion at September 30. This was up $414 million from June 30, representing a 3% quarter-over-quarter growth rate, and a 9% year-over-year growth rate.
The total commercial lending portfolio grew by a net $306 million while our retail and residential mortgage portfolio grew by a net 108. For the quarter, we increased commercial and business loan balances by a net 198 million and commercial real estate loans by net 108 million.
Within the $4.5 billion commercial and business lending portfolio, our specialized group accounted for the majority of the growth, including about 70 million of mortgage warehouse financing, which was driven by the current levels of mortgage refinancing activity. The commercial real estate lending portfolio grew by 108 million to 3 billion.
We’re working with strong regional developers, and continue to see opportunities for growth and expansion in CRE lending. We’re seeing positive results from the new CRE offices in Indianapolis and Cincinnati.
And additionally this past quarter, we’ve added commercial bankers to the team in Indianapolis in order to provide full relationship banking. The retail and residential mortgage portfolio grew by 108 million or 2% to 6 billion at the end of the quarter, driven by a significant increase of production volume due to the historic low rate environment.
We continue to be the leading mortgage originator in the state of Wisconsin, but we anticipate a slower pace of net growth for the fourth quarter of the year. Competitive pressures continue to be seen throughout the footprint, contributing to the decline in our average yield for loans.
But as we stated, we’ll continue to be competitive where we’ve seen opportunity to expand the client relationship through the offering of other products and services. Our investments and key hires in our treasury management segment, is one example of our commitment to supporting full relationship banking at Associated.
Our long-term risk appetite, calls for the portfolio to be roughly balanced in thirds. Today it remains somewhat over weighted on consumer assets, and somewhat underweighted on the commercial real estate side, primarily due to the significantly reduced levels of construction lending.
We’re pleased with our lending activity this quarter, and continue to expect a moderate pace of loan growth in the range of 2 to 3% for the coming quarter. Moving on to deposits on Slide 4, net customer deposits and funding of 15.7 billion at the end of the quarter were up 5% from 15 billion at the end of the second quarter.
We continue to focus on growing core customer funding, and reducing brokered CDs and network deposits. Net deposit growth was primarily driven by a 493 million or 15% increase in demand deposits and a $223 million or 5% increase in money market deposits during the quarter.
About half of the run-up in DDA reflects end-of-quarter rebalancing activity by our commercial and trust customers. And while we expect a significant portion of that liquidity to flow out in the fourth quarter, we’re nonetheless encouraged by the continuing positive trends.
Through our focus on growing core customer funding, we have decreased our cost of money market deposits by 22 basis points, or 44% year-over-year by reducing our reliance on higher-cost brokered network deposits. Third quarter net interest income was $153 million, declining by 1 million from the prior quarter.
Consistent with the company’s strategy of funding loan growth primarily through securities runoff, net interest income from loans grew quarter-over-quarter while securities income continued to contract. The third quarter net interest margin was 323 basis points, down 6 basis points from the prior period.
Yields on earning assets compressed by 12 basis points, quarter-over-quarter, while the cost of interest bearing deposits, excluding brokered CDs, declined by 6 basis points. This contributed to the net 6 basis point reduction in overall net interest margin.
For the balance of the year, we believe the margin will be impacted by the current rate environment. But we expect to sustain the current margin at about these levels.
Non-interest income for the quarter was 72 million, up 7 million or 11% from the second quarter. The improvement was primarily driven by increases in mortgage banking income, which benefited from a $5 million increase in income as a result of higher mortgage production, as well as 2 million from lower evaluation expense on mortgage servicing rights.
Non-interest income was also impacted by reduced counter-party evaluation allowances on our customer derivatives positions. Although this benefit was largely offset by lower evaluations on other investments.
Service charges on deposit accounts at 20 million were also relatively flat. However, regulatory changes coupled with changes and checking-related product fees and customer behavior will continue to have an impact on fee-based revenue during the fourth quarter.
During the fourth quarter the impact of the Durbin Amendment will be about $4 million, and we anticipate the annualized gross revenue impact from the final decision will be 17 to 19 million. We’re exploring various strategies to simplify and rebalance our fee structures in light of the regulatory changes, and we’ll be rolling those out in the fourth quarter.
Our outlook assumes we will continue to see refi activity carrying in to fourth quarter. And that increased mortgage banking revenues will also partially mitigate the pressure on fee revenues.
Total non-interest expense for the quarter was 162 million, up 3 million or 2% from the second quarter, primarily attributable to the increases in personnel and occupancy. Personnel expense increased $1 million, as investment and key hires continued, and occupancy expense was up 2 million from the second quarter.
Our increased occupancy cost partially reflect the effects of our footprint enhancement strategy. To date, we have deployed new signage to most of our branches, and have completed work on eight branches to conform to our new specifications.
Additionally, we have constructed or relocated four additional branches. By year end, we expect to complete over a dozen additional remodels, and we remain confident that these investments will enhance our returns in these communities for years to come.
We’d also note that our foreclosure and OREO expenses decreased during the quarter. However, this benefit was offset by net increases in our unfunded commitment expense.
We expect personnel expense will be relatively flat in the fourth quarter, while other non-interest expense will increase modestly as we continue to invest in our brand and our footprint. Moving on to credit on Slides 5 and 6, you’ll see the continued improvement in our key metrics.
Potential problem loans declined to 660 million down 6% from 699 million for the second quarter and down 42% from 1.1 billion a year ago. The level of nonaccrual loans to total loans continue to improve to 299 basis points from 357 at the end of the second quarter.
Nonaccrual loans were down 14% to 403 million from 468 last quarter, and down 45% from 728 million a year ago. Nonaccruals now stand at the lowest level we’ve seen in seven quarters.
The provision for loan losses for the quarter was 4 million, down significantly from 16 million at the prior quarter and down from 64 million a year ago. The key drivers of the provision expenses were net charge-offs of 30 million, down 32% from 45 million from the prior quarter.
The accruing TDR allocation decreased 3 million due to lower impairment on the retail portfolio. We released $22 million of FAS 114 reserved on nonaccrual loans, and an additional 1 million in reserves related to a slight decrease in the FAS 5 allocation due to the positive asset quality migration within the portfolio.
We expect provisioning to trend lower, and net charge-offs to remain at around these levels throughout the remainder of the year. We continue to be encouraged by the overall improvement in credit, which we believe is an indication that things will continue to improve for our customers.
Our capital ratios are on Slide 7, they remain very strong, even after our recent repayments of the remaining TARP funds. Capital levels continue to remain well in excess of regulatory benchmarks, and what will be expected under Basel III.
And finally, we just celebrated the 150th anniversary of Associated at the Downtown Neenah Wisconsin branch. This branch is the oldest location in our company’s family tree, dating back to 1861 as the First National Bank of Neenah.
The First National Bank of Neenah was one of the three founding banks in Northeast Wisconsin that formed Associated in 1970. We’re proud to celebrate this milestone as we look forward to the future of Associated.
Thank you, and now we’ll open it up for your questions.
Operator
(Operator instructions). We’ll take our first questions from Terry Mcevoy from Oppenheimer.
Please go ahead, Terry.
Terry Mcevoy – Oppenheimer & Co.
Thanks. Good afternoon.
I wonder if you could talk about the opportunities in Wisconsin and Milwaukee for just hiring any employees that are maybe looking for a new home given some consolidation in that marketplace. Is that window still open?
I know you provided some numbers on the last call in terms of hiring, any update there would be appreciated.
Philip Flynn
Sure, Terry. We continue to always look for high-quality people who can help us grow the company, and the window that you’ve referred to in Milwaukee remains open.
We’ve hired, I think as I said before, at this point, more than 100 people, most of those in customer-facing roles from M&I Bank and we continue to believe that over the coming quarters, the potential disruption that we’ll see from the integration of that bank will give us opportunities both on the hiring front, but most importantly an opportunity for us to grow our own business.
Terry Mcevoy – Oppenheimer & Co.
And then, I guess my second question, is it too early to think about buybacks, increases in dividends? I know the last third quarter you took care of TARP, is there, I guess, another window there or is there a gap that needs to happen before you kind of have those types of conversations with the appropriate people?
Philip Flynn
Yeah, we’ve said publically that we will be reviewing our dividend policy and so we’ll be taking a look at that prior to the end of the year.
Terry Mcevoy – Oppenheimer & Co.
Great, thanks, Phil.
Philip Flynn
Sure.
Operator
Okay, thank you sir. And we’ll take our next question from Chris McGratty from KBW.
Chris, please go ahead.
Chris McGratty - KBW
Good morning, guys, or good afternoon. In terms of the Durbin, you know you gave the revenue numbers, what is the, you know, what’s your sense of how much you’re going to be able to mitigate?
I know it’s a little early, but as you get into 2012, what percentage, you know, ballpark, do you think that you guys could offset?
Philip Flynn
Yeah, Chris, we’re still in the process of deciding how we’re going to respond to this. So I’m just not prepared right now to hazard a guess as to what we might be able to mitigate.
We’re committed with whatever we do to be sure that we deliver a valuable service to our customers and that we get paid a fair and reasonable price for that. So we are looking at all the different ways that we price our services to customers and certainly, we’re mindful of the fact that, you know, a significant amount of revenue that we used to receive from interchange fees has gone away because of Durbin.
And we need to do what we can to be sure that we’re receiving a fair amount of revenue for what we’re providing. But we’ll roll out more detail on exactly what we plan to do in this coming quarter.
Chris McGratty - KBW
Okay, great. You know, in light of the – in the revenue pressures in the industry, you guys are investing quite a bit in the branch, your kind of refurbishment initiative.
How much of the expenses are kind of in the numbers or you know, are a step up kind of going forward?
Philip Flynn
Yeah, we’ll provide more guidance as we get into January and talk about 2012, but we’re in the first year of a four-year project, so you know, certainly the expense of what we’re planning to do, particularly with our branch refurbishment is not yet completely reflected in our numbers.
Chris McGratty - KBW
Okay. That’s helpful.
And then lastly on the provision, you know, you guided, I think the lower dollar amount going forward. Is there a change of going negative?
Philip Flynn
There is a change it goes negative, yes.
Chris McGratty - KBW
Okay.
Philip Flynn
I’ve said before that I'm not a huge fan of that, but the reality is accounting rules and the rapid improvement in the portfolio could result in that.
Chris McGratty - KBW
Okay. And then last, the growth number you gave, was that – that was an unannualized number, the 2%?
Philip Flynn
Yeah, that’s quarter over quarter. We grew – we’ve grown about 9% year over year.
We’ve grown –we grew about 4%, I recall, first to second quarter, about 3% second to third quarter and we’re anticipating about 2 to 3% in the fourth quarter.
Chris McGratty - KBW
That helps a lot. Thanks a lot.
Philip Flynn
Sure.
Operator
Okay, thank you. And we’ll take our next question from Emlen Harmon from Jefferies.
Please go ahead with your questions.
Emlen Harmon – Jefferies & Co.
Thanks. Good evening.
Just – maybe a follow up to the question on expenses and understanding the ramp there. If you guys could talk on just kind of the – on the branch side, investment side of things there.
Could you talk too just about specialty lending, kind of where you are hiring from there and you know how we think about expenses ramping up in that part of the business as well?
Philip Flynn
Sure. A component of the growth that you saw in our commercial and business lending segment came out of our specialized lending area.
In fact, about 140 million of that was out of that growth – 70 of that was out of the mortgage warehouse so that’s, you know, that’s not long lived outstandings, it’s driven by refi activity out there in the broker world. We have hired the vast majority of the people that we need in our specialized lending group, so there isn’t a whole lot more hiring we have to do there.
A part of our specialized lending group, however, is the commercial deposit and treasury management area. We hired a new head of that.
We’ve hired a number of new people there, but there is some more hiring to do in Treasury Management. Overall, we’re up to just over half a billion dollars of outstandings in the specialty lending areas, as I said, a pretty good chunk of that is mortgage warehouse, about 240 actually.
So we’re getting steady, but not unreasonably rapid growth there, which we actually planned for.
Emlen Harmon – Jefferies & Co.
Got you. So it sounds like, at least from a salaries perspective, you’re getting kind of – you’re getting closer to a run rate at least and then is there a – is there a variable component to this comp on that side of the business?
You know, as you see that grow more, does that come into play at all?
Philip Flynn
Well, there’s a variable component to almost all of our customer-facing relationship managers. So sure.
Emlen Harmon – Jefferies & Co.
Okay. And then just one…
Philip Flynn
We accrued for that along the way, so you know, whatever incentives we plan on paying for this year’s performance in January has been accrued. They’re in the numbers.
Emlen Harmon – Jefferies & Co.
Got you. Okay.
And then again, just touching on the dividend, you said you were going to take a look at your policy in the fourth quarter. Does the outstandings [inaudible] and MOU affect your approach there at all or is that not much of a concern?
Philip Flynn
We’re in constant contact with the Feds, so whatever plans we would have around any capital activities, including the dividends repayment, we would run by them as a matter of course. So I’m not real concerned about that right now.
Emlen Harmon – Jefferies & Co.
Okay, great. Thanks for taking my questions.
Philip Flynn
Sure.
Operator
Okay, thank you. And we’ll take our next question from John Arfstrom from RBC Capital.
John, please go ahead. You phone may be muted.
We’ve opened up John Arfstom’s line.
John Arfstrom – RBC Capital
Can you hear me?
Philip Flynn
Yep.
John Arfstrom – RBC Capital
All right. Well, good afternoon.
A question on loan growth. Phil, you talked about how a lot of the growth had come from the national business and you said that 70 million was an increase in warehouse.
Where else did it come from, maybe geographically or type other than the warehouse growth?
Philip Flynn
Sure. Let me run through where the loan growth came from if you want.
First of all, on the commercial and business lending side. We had a – call it 200 million of growth there so about 138 million of that came out of the specialized groups of which 70 was from the mortgage warehouse business.
About 30 each from oil and gas, power and utilities. And then the rest from other odds and ends.
And then out of our general commercial business, we had about 60 million of growth and that was spread out, you know, across fee, the three state footprint. In the commercial real estate area, we had 108 million of growth, about 50 out of Wisconsin, about 30 out of Illinois, the rest of it in Minnesota, generally speaking.
We had quite a bit of growth in the multi-family area, which we’ve been focusing on. And then our residential mortgage business grew by about $113 million and much of that came out of Chicago, Milwaukee and then the rest was scattered in other places.
John Arfstrom – RBC Capital
Do you expect the mix to be similar in Q4? Meaning, will it be as warehoused every year?
Do you expect other drivers in Q4?
Philip Flynn
Yeah. We think our warehouse outstandings will start to tail off.
We’re already seeing our own origination pipelines slowing quite a bit this past couple of weeks. I’m sure that’s the case with our broker customers.
So I think by the time we get to the end of this quarter, you’ll see the warehouse outstandings come down. But that aside, we would expect to get good solid, balanced growth from each of the three areas.
We continue to grow our [inaudible] portfolio adjusted rate mortgage business, we continue to have a very strong pipeline in the commercial real estate business and the combination of the specialty as well the course of the general commercial lending in small business areas will continue to grow too.
John Arfstrom – RBC Capital
Okay. Good.
And then just a question on the securities portfolio side. Where would you like that to be in terms of overall size?
Philip Flynn
We’ve continued to allow securities portfolio to serve as a source of liquidity in funding for our ongoing loan growth and we would expect to see that portfolio continue to shrink for the next couple of quarters.
John Arfstrom – RBC Capital
That will the source of funds for lending?
Philip Flynn
We are pleasantly surprised by some of the influence we’re seeing on the DDA and other fronts as customers seek liquidity. But as we look forward, we’ll continue to optimize the [inaudible] of our liabilities and expect that we’ll continue to do the investment portfolio for the next couple of quarters.
John Arfstrom – RBC Capital
Okay. And then, Phil, just one last question for you.
I don’t know if you want to take a stab at it or not, but in your summary slide, Slide 8, in 2012 and beyond you talk about focusing on levers for expansion. I think I know some of the answers, but are there may be a top – top two or three priorities that we should focus on for ’12 and beyond?
Philip Flynn
Yeah. I don’t want to get deeply into talking about ’12, but since I kind of opened up the question with the slide, I think you’re going to continue to see loan growth.
I mean, that’s very important. If you recall the past at Associate, we had about a $16 billion loan portfolio which shrank by about 4 billion and is now climbing back to about 12.5 billion.
So you should continue to see probably the most important earnings driver being loan growth. And as Chris was just saying, over the coming quarters, we’ll get to a point where the securities portfolio will probably stick and then you’ll see some balance sheet expansion driven by loan growth.
That’s the most important area. Additionally, we’ll expect to see a pickup in our retail business reflecting the significant investment we’re making in refurbishing the branch system out there, probably later in the year although we are starting to see, you know, pretty encouraging deposit growth, which is, of course, critically important.
On the fee side, you know, we’ve had a lot of headwinds in fees, of course as we know form Reg E and coming Durbin. So certainly, year over year there’ll be a lot of pressure there.
But as I was saying before, we need to figure out an appropriate way to get paid for the services we’re providing and we will do that.
John Arfstrom – RBC Capital
Okay, thank you.
Operator
Okay, thank you. (Operator Instructions).
We’ll take our next question from Scott Siefers from Sandler O’Neill. Scott, please go ahead.
Scott Siefers – Sandler O'Neill
Good afternoon, guys. I think most of my questions have been answered, but I guess number one, so NII, you know, it looks like we’re hopefully reaching that reflection point.
Do you think given the ongoing securities portfolio reduction, I mean, can we – can I stabilize it in the fourth quarter? Is that going to be something we see maybe early next year?
How are you thinking about that? I mean, you give a give good color on the next couple of quarters of securities portfolio decline and then on margins, how are you thinking about reaching that reflection point?
Philip Flynn
Well, I think we’re close. Arguably, we’re there, but you know, within the next quarter or two it will be clearly – clearly we will reach that reflection point.
The issue that we’ve been facing is, you know, the plan for funding the loans has worked out very well. We expect it to be reducing the securities portfolio in order to fund, you know, reasonably robust loan growth and that’s what we’ve been doing.
What hasn’t worked out so well is that we’re trading a yield on securities for essentially about the same yield on loans while we expect the loan yields to be higher. But interest rates have come down so dramatically over the course of the year that it’s sort of a wash right now as we trade out of security and make a loan.
So until we get to the point where, you know, we’re done funding loan growth and start to see some balance sheet expansion, you know, it’s kind of a struggle to get a lot of NII growth right now.
Scott Siefers – Sandler O'Neill
Okay. I appreciate that.
And then, I wanted to ask, I guess basically the same question on the fee side. You’ve given a lot of good color on whether it’s the rate fee for Durbin, but I guess probably, you know, the biggest dollar over the, let’s call it the last several quarters has been in the mortgage business.
A good chunk of that is, for example, [inaudible] portfolio loans. I think where once we get beyond the fourth quarter and the impact of the Durbin, you know, should we be ultimately at a steady state on the fee income side, are you thinking?
Philip Flynn
Just for clarity, the portfolioing of loans actually reduced our fee income.
Scott Siefers – Sandler O'Neill
Yeah, that’s what I meant.
Philip Flynn
Yeah. So we dampened that fee income brand, which is in part why we alluded to the fact that we would expect in the current rate environment we’re not portfolioing the fixed rate [inaudible],that despite the slowdown, we’ll see some lips into the fourth quarter from those fees as well.
One day we would like to see a steady state, but it’s a very volital routine now.
Scott Siefers – Sandler O'Neill
Okay. I think that is about it.
All right, thank you.
Operator
Okay, thank you. We’ll take our final question at the moment coming from Erika Penala from Bank of Amercia.
Erika, please go ahead with your question.
Russell Gunther – BofA/Merrill Lynch
Hi. Good afternoon.
This is Russell Gunther on for Erika. Most of my questions have been asked and answered, but I just have one.
Within your early staged delinquency bucket, it looks like commercial real estate increased a bit. Also a little pickup in the restructured accruing loans in this bucket as well.
Could you give us a sense for what was going on in this quarter and how that commercial real estate is performing in general?
Philip Flynn
Sure. So there’s two questions.
First of all, the accruing TDR, a little bit of pickup was really a result of the new guidance on how we account for that. There wasn’t any news in there, Scott?
Scott Hickey
Accruing really this just – we – the accruing loans restructured, it went up slightly primarily as we looked – we had to look back three quarters to January 1. As we looked back, there were about 14 million in loans that we reclassified into restructuring relatively minor.
So that was kind of the look back for three quarters. On the 30-to-89 day tick up, you know, we’ve now seen that for two quarters and you know, we’ve done some digging there because we were a little bit concerned about that trend.
It turns out that of the – call it $100 million in that bucket today, that about 70 million or so is four loans. Two of those have since paid current since the end of September.
Another one that was going to be paid off is now being retained and rebooked and will be current. So as we sit today, I’m not really concerned about that 30-to-89 days bucket.
If it continued to trend up for some reason, we would certainly be concerned and we’ll talk about it more in the next call. But I think we’re okay there.
Philip Flynn
Overall, the commercial real estate continues to improve.
Russell Gunther – BofA/Merrill Lynch
Thank you for that. That’s very helpful.
Just one clarifying question please, on the loan growth, the 3%, is that end of period or averages?
Philip Flynn
That’s end of period.
Russell Gunther – BofA/Merrill Lynch
End of period, okay, great.
Philip Flynn
Although, the average has been about that too.
Russell Gunther – BofA/Merrill Lynch
Okay.
Philip Flynn
We’re not getting real spiky stuff at the end. I mean, this has been pretty steady throughout the quarters.
Russell Gunther – BofA/Merrill Lynch
Great. All right, thanks a lot, guys.
Philip Flynn
Sure.
Operator
Okay, thank you. I’m showing no further questions in the queue.
I’d like to turn the call back to Philip Flynn for closing comments.
Philip Flynn
Thanks. Thanks for joining us today on our call.
We’re very pleased with the results from the quarter and in spite of a soft economy we continue to see opportunities in our market to grow our business. We were proud to have delivered on our commitment to our shareholders to repay TARP in a shareholder-friendly manner.
We look forward to talking to you again next quarter and if you have any questions, as always in the meantime, give us a call. Thanks again for your interest in Associates.
Operator
Ladies and gentlemen, this concludes the Associated Banc-Corp Third Quarter 2011 conference call. You may now disconnect.