Associated Banc-corp · NYSE:ASB
Associated Banc-corp — Investor Presentation (February 2020)
29 slides from Associated Banc-corp's investor presentation, Feb 11, 2020
Slide 1: Associated Banc-Corp Investor Presentation 2020
Exhibit 99.1 Associated Banc-Corp Investor Presentation 2020 DePere Office (Green Bay MSA) – Opened February 2019 FIRST QUARTER
Slide 2: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS 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
Slide 3: Our Franchise
OUR FRANCHISE Fourth Quarter 20191 Highlights and Accomplishments $32 billion of assets $23 billion of loans . Largest bank headquartered in Wisconsin3 $4 billion of equity $24 billion of deposits . Approximately 4,700 employees, servicing 1.3 million customer accounts in 8 states and over 120 commu
Slide 4: Midwestern Strong
MIDWESTERN STRONG We make most of our loans in local communities with robust employment bases and sound consumer credit Deep Roots: Midwest Wisconsin Footprint 82% of our 30% 13% Texas loans1 are within 5% our branch and commercial office Minnesota Other footprint 10% 18% Illinois 25% Footprint Stat
Slide 5: Loan Trends
LOAN TRENDS 2019 loan growth impacted by loan sales and oil & gas portfolio de-risking Average Annual Loans Average Loan Growth (2018 to 2019) ($ in billions) 2015 – 2019 ($ in millions) CAGR $23.1 $22.7 General commercial $314 $20.6 $19.7 Power & utilities $208 $18.3 $7.7 $8.4 5% $7.3 Mortgage ware
Slide 6: Commercial Loan Management
COMMERCIAL LOAN MANAGEMENT1 We de-risked our oil & gas portfolio while growing power & utilities; commercial real estate rebounded Oil & Gas Loans Power & Utilities Loans Commercial Real Estate ($ in billions) ($ in billions) ($ in billions) $1.5 $0.8 $1.4 $1.4 $1.3 $1.3 $7.0 $7.1 $7.2 $0.7 $0.7 $0.
Slide 7: Deposit Portfolio Trends
DEPOSIT PORTFOLIO TRENDS The Huntington branch acquisition and balance sheet repositioning drove increase in low-cost deposit mix Average Annual Deposits Year End Low-cost Deposit Mix ($ in billions) 2015 – 2019 56% 50% 51% CAGR 46% 49% $24.7 $24.1 23% 25% 24% 23% $21.9 26% $21.0 $5.2 4% $19.9 $5.2
Slide 8: Investment Securities Portfolio Trends
INVESTMENT SECURITIES PORTFOLIO TRENDS Investment portfolio balances expected to level off in 1Q20 and remain at ~17% of assets through 2020 Portfolio1 and Yield Trends (Quarterly) Investments / Total Assets2 ($ in billions) 3.73% 3.74% 3.77% 3.78% 3.79% 22% 21% 20% 20% 2.29% 2.34% 2.36% 2.33% 2.32%
Slide 9: Net Interest Income and Yields — Quarterly Trends
NET INTEREST INCOME AND YIELDS — QUARTERLY TRENDS Lower deposit costs have helped stabilize net interest margin Net Interest Income and Net Interest Margin Average Yields ($ in millions) 5.51% 3.02% 5.19% 5.19% 2.90% 2.88% 4.92% 2.83% 2.81% 4.55% 4.78% 4.86% 4.79% 4.49% $224 3.52% 3.54% 3.47% 4.13%
Slide 10: Growing and Diversified Business Model
GROWING AND DIVERSIFIED BUSINESS MODEL Mortgage banking and wealth management are benefitting from current environment Noninterest Income Mortgage Banking, Net ($ in millions) ($ in millions) $32 $381 $19 $20 $353 $356 $329 $333 2017 2018 2019 Assets Under Management ($ in billions) $12.1 $296 $294
Slide 11: Noninterest Expense – Annual Trends
NONINTEREST EXPENSE – ANNUAL TRENDS We continue to control our overall costs while increasing technology spending Noninterest Expense Technology and Equipment Expense ($ in millions) ($ in millions) $106 $822 $96 $794 $84 $29 $7 $698 $703 $709 2017 2018 2019 $2 $5 Noninterest Expense / Average Asset
Slide 12: Enhancing Our Digital Platforms
ENHANCING OUR DIGITAL PLATFORMS Delivered significant customer-facing enhancements in 2019; will optimize recent initiatives in 2020 Banking Services Are Current Focus ASB Fintech Initiatives in 2019 - 2020 Innovation has so far focused on Partner Application Status/Timing . Unbundling of banking Pe
Slide 13: Capital Priorities
CAPITAL PRIORITIES Committed to a consistent capital management philosophy2 with rigorous capital discipline Annual $22.7 $23.1 Average Loans $20.6 Funding $19.7 ($ in billions) 1. Organic Highest Priority $18.3 Growth 2015 2016 2017 2018 2019 14% Annual $0.69 CAGR $0.62 Commitment Dividends $0.50 P
Slide 14: Current Expected Credit Losses (CECL)
CURRENT EXPECTED CREDIT LOSSES (CECL) Our current capital levels and expected earnings should allow us to readily absorb the anticipated CECL impact CECL Adoption in 1Q 2020 Expected CECL Impact in 1Q 2020 . Life-of-loan CECL reserves will be driven by our . $93 million to $106 million increase to A
Slide 15: Credit Quality – Quarterly Trends
CREDIT QUALITY – QUARTERLY TRENDS Continued benign credit environment with stable provision outlook for 2020 Potential Problem Loans1 Nonaccrual Loans1 ($ in millions) ($ in millions) $351 $302 $275 $250 $209 $178 $177 $157 $128 $118 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 Provision for Cr
Slide 16: 2020 Outlook
2020 OUTLOOK This outlook reflects our expectation for a stable economy. We may adjust our outlook if, and when, we have more clarity on economic factors. ▪ Annual average loan growth of ▪ Noninterest expense of 2% to 4% $790 million to $795 million, including all First Staunton costs ▪ Maintain loa
Slide 17: Line of Business Profiles
LINE OF BUSINESS PROFILES
Slide 18: Balanced Business Segments
BALANCED BUSINESS SEGMENTS1 Corporate and Community, Consumer, Commercial Specialty and Business . Corporate Banking . Consumer and Business Banking . Commercial Real Estate . Community Markets . Wealth Management and Institutional Services Average Loans and Net Interest Income and Return on Average
Slide 19: Corporate Banking
CORPORATE BANKING CORPORATE AND COMMERCIAL SPECIALTY SEGMENT Business Units 2019 Overview Commercial . $14.1 billion in average loans Specialized Corporate Deposits Capital and deposits Lending Lending and Treasury Markets Verticals . 9 offices across 5 states Management . ~270 colleagues Creative,
Slide 20: Commercial Real Estate
COMMERCIAL REAL ESTATE CORPORATE AND COMMERCIAL SPECIALTY SEGMENT Business Units 2019 Overview . $6.5 billion in average loans Real Estate CRE CRE and deposits CRE Lending Investment Syndications Tax Credits Trusts . 12 offices across 8 states . ~100 colleagues Local experienced teams create custom
Slide 21: Consumer and Business Banking
CONSUMER AND BUSINESS BANKING COMMUNITY, CONSUMER, AND BUSINESS SEGMENT Business Units Serving Metro Markets 2019 Overview . $17.5 billion in average loans Retail Residential Business and deposits Banking Lending Banking . 175 branches1 . ~1,900 colleagues Full-range services for individuals and sma
Slide 22: Community Markets
COMMUNITY MARKETS COMMUNITY, CONSUMER, AND BUSINESS SEGMENT Business Units Serving Midsize Markets 2019 Overview . $4.5 billion in average loans Commercial & Branch Residential Private and deposits Business Banking Lending Banking Banking . 73 branches . ~440 colleagues Localized approach ensures th
Slide 23: Wealth Mgmt and Institutional Services
WEALTH MGMT AND INSTITUTIONAL SERVICES COMMUNITY, CONSUMER, AND BUSINESS SEGMENT Business Units 2019 Overview Private Banking Personal Trust Asset Management . $2.7 billion in average loans and deposits Retirement Plan Associated Benefits Associated . $12.1 billion AUM Services and Risk Consulting I
Slide 24: Appendix
APPENDIX
Slide 25: FNB Staunton Transaction Summary
FNB STAUNTON TRANSACTION SUMMARY Seller: First Staunton Bancshares Transaction Value: . ~$76 million for franchise Staunton . ~1.30x 1Q 2019 reported tangible book value Alton . ~4% deposit premium Bethalto Consideration: 100% cash Assets Purchased: Edwardsville . Nine branches . ~$350 million of lo
Slide 26: Acquisitions
ACQUISITIONS Huntington completed… …and Staunton up next Was an in-market, cost takeout Is an in-market, cost takeout driven driven depository acquisition depository acquisition Delivering on Filled in network gaps and boosted Fills in network gaps and boosts our Our Strategy our network in key loca
Slide 27: Community, Diversity & Sustainability
COMMUNITY, DIVERSITY & SUSTAINABILITY We remain committed to initiatives to improve our communities, promote diversity and enhance sustainability Over $900 million1 in credit $3.6 million1 in grants to support commitments to support wind, CRA programing at various nonprofit hydroelectric and solar p
Slide 28: Loan Stratification
LOAN STRATIFICATION OUTSTANDINGS AS OF DECEMBER 31, 2019 C&BL by Geography Total Loans1 CRE by Geography $8.3 billion $5.2 billion Minnesota 6% Illinois Illinois Illinois Minnesota 15% 25% 16% 11% Texas3 Minnesota Wisconsin 9% 10% Other 25% Wisconsin Wisconsin Midwest2 Other 30% 27% 24% Midwest2 Oth
Slide 29: Reconciliation and Definitions of Non-GAAP Items
RECONCILIATION AND DEFINITIONS OF NON-GAAP ITEMS ($ IN MILLIONS) Adjusted Noninterest Expense Reconcilation1 2019 2018 2017 Noninterest expense $794 $822 $709 Acquisition related costs 7 29 - Severance 522 Adjusted noninterest expense $782 $791 $708 Fee-based Revenue1 2019 2018 2017 2016 2015 Insura
Associated Banc-Corp — Investor Presentation (February 2020) on 6ix