Associated Banc-corp · NYSE:ASB
Associated Banc-corp — Investor Presentation (August 2011)
60 slides from Associated Banc-corp's investor presentation, Aug 25, 2011
Slide 1: Investor Presentation Updated: August 25, 2011
Investor Presentation Updated: August 25, 2011
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: Associated Banc-Corp agenda
Associated Banc-Corp About Associated Banc-Corp Addressing Current Challenges Driving Loan Growth and Margin Expansion Strategic Initiative Highlights 2Q 2011 Highlights Summary 2
Slide 4: ASBC Vision Statement
ASBC Vision Statement Associated Banc-Corp will be the most admired Midwestern financial services company, distinguished by sound, value-added financial solutions with personal service for our customers, built upon a strong commitment to our colleagues and the communities we serve, resulting in exce
Slide 5: Snapshot (as of June 30, 2011)
Snapshot (as of June 30, 2011) (as of June 30, 2011) (as of June 30, 2011) 4
Slide 6: Strong Franchise: Regional Banking
Associated Bank is known for its strong relationships with the communities it serves, with many bank office roots dating back to the 1880s and 1890s. Market Share Offices Deposits #3 Wisconsin 209 $12.1B #6 Minnesota 26 $ 1.7B #18 Illinois 53 $ 3.2B Source: FDIC 6/30/10 5 MN IL WI Minneapolis St. Lo
Slide 7: Associated Markets - Economic Dashboard
Associated Markets - Economic Dashboard June 2011 June 2011 June 2011 6 *GDP measured in billions. (CHART) (CHART) (CHART) (CHART) (CHART) (CHART) Unemployment Rates: Bureau of Labor Statistics for June 2011
Slide 8: Major Metro Markets
Major Metro Markets Major Metro Markets 7 1Source: State of Wisconsin Department of Workforce Development for June 2011; Greater Milwaukee Association of Realtors, Aug 2011; 2Gross State Product; 3Source: Minnesota Department of Employment and Economic Development, July 2011; 4Source: Illinois Depta
Slide 9: Associated Banc-Corp agenda
Associated Banc-Corp About Associated Banc-Corp Addressing Current Challenges Driving Loan Growth and Margin Expansion Strategic Initiative Highlights 2Q 2011 Highlights Summary 8
Slide 10: Addressing Current Challenges
Addressing Current Challenges Addressing Current Challenges 9
Slide 11: Maintaining a Strong Capital Profile
Maintaining a Strong Capital Profile 2Q 2010 3Q 2010 4Q 2010 1Q 2011 2Q 2011 Peer Metrics1Q 2011 Excess Capital over Well-Capitalized ($ millions) ASBC Capital Ratios TCE/TA 7.88% 8.03% 8.12% 8.42% 8.49% 7.82% Tier 1 Common Ratio 12.00% 12.31% 12.26% 12.65% 12.61% 10.65% Tier 1 Ratio 17.25% 17.68% 1
Slide 12: Addressing Current Challenges
Addressing Current Challenges Addressing Current Challenges 11
Slide 13: Significant Improvements in Credit Quality Indicators
Significant Improvements in Credit Quality Indicators 2Q 2010 3Q 2010 4Q 2010 1Q 2011 2Q 2011 Provision for loan losses $ 97.7 $ 64.0 $ 63.0 $ 31.0 $ 16.0 Net charge offs $ 105.3 $ 109.9 $ 108.2 $ 53.4 $ 44.5 ALLL/Total loans 4.51% 4.22% 3.78% 3.59% 3.25% ALLL/Nonaccruals 58.21% 71.72% 83.02% 93.07%
Slide 14: Associated Banc-Corp agenda
Associated Banc-Corp About Associated Banc-Corp Addressing Current Challenges Driving Loan Growth and Earnings Expansion Strategic Initiative Highlights 2Q 2011 Highlights Summary 13
Slide 15: Driving Loan Growth and Earnings Expansion
Driving Loan Growth and Earnings Expansion Driving Loan Growth and Earnings Expansion 14
Slide 16: Driving Loan Growth and Earnings Expansion
Driving Loan Growth and Earnings Expansion Driving Loan Growth and Earnings Expansion 15
Slide 17: Associated Banc-Corp agenda
Associated Banc-Corp About Associated Banc-Corp Addressing Current Challenges Driving Loan Growth and Earnings Expansion Strategic Initiative Highlights 2Q 2011 Highlights Summary 16
Slide 18: Strategic Initiative Highlights
Strategic Initiative Highlights Strategic Initiative Highlights 17
Slide 19: ASBC Business Portfolio
ASBC Business Portfolio Commercial Real Estate Commercial Banking 18 Retail Banking Consumer Banking Business Banking Residential Lending Retail Payments Treasury Management Capital Markets Regional/ Middle Market Banking Specialized Financial Services Associated Financial Group Wealth Management Pr
Slide 20: Strategic Initiative Highlights - Commercial
Strategic Initiative Highlights - Commercial Strategic Initiative Highlights - Commercial 19
Slide 21: Strategic Initiative Highlights - Commercial Real Estate
Strategic Initiative Highlights - Commercial Real Estate Strategic Initiative Highlights - Commercial Real Estate 20
Slide 22: Strategic Initiative Highlights - Retail Banking
Strategic Initiative Highlights - Retail Banking Strategic Initiative Highlights - Retail Banking 21
Slide 23: Strategic Initiative Highlights - Wealth
Strategic Initiative Highlights - Wealth Strategic Initiative Highlights - Wealth 22
Slide 24: Associated Banc-Corp agenda
Associated Banc-Corp About Associated Banc-Corp Addressing Current Challenges 2011 - Driving Loan Growth and Earnings Expansion Strategic Initiative Highlights 2Q 2011 Highlights Summary 23
Slide 25: Second Quarter 2011 Highlights
Second Quarter 2011 Highlights Fourth consecutive quarter of profitability Pre-tax income improved $13M and net income to common shareholders improved $10M from the prior quarter Total loans of $13.1 billion, up 3% from the prior quarter Net growth of $230M in C&I loans on linked-quarter basis Speci
Slide 26: Loan Portfolio Growth and Composition
Loan Portfolio Growth and Composition 25 Total Loans of $13.1 billion at June 30, 2011 Loan Mix - 12/31/08 compared to 6/30/11 Loan Composition ($ billions) Total Loans ($ billions) (CHART) (CHART) (CHART) (CHART)
Slide 27: Second Quarter 2011 Highlights
Second Quarter 2011 Highlights Total deposits and customer funding grew $300M during the quarter to $16.1 billion Drove noncustomer network transaction deposits and brokered CDs down another 10% during 2Q11 Do not expect to see significant expansion of customer repos or FHLB balance going forward So
Slide 28: Quarterly Deposit and Funding Portfolio Trends
Quarterly Deposit and Funding Portfolio Trends 27 ($ in Thousands)
Slide 29: Second Quarter 2011 Highlights
Second Quarter 2011 Highlights Net interest margin of 3.29%, down 3 basis points from previous quarter Impact of March 2011 debt offering (~ -8 basis points) along with the impact of lower loan yields was partially offset by a 5 bps improvement in interest-bearing deposits For the balance of the yea
Slide 30: Net Interest Income and Net Interest Margin
Net Interest Income* and Net Interest Margin 29 Q2 vs. Q1 Impact on Margin During 2Q 2011, net interest income grew modestly while NIM compressed. Gross growth in interest income and lower deposit expenses, more than offset net funding expense growth, despite nearly $4 million of new CPP financing c
Slide 31: Second Quarter 2011 Highlights
Second Quarter 2011 Highlights Core fee-based revenue of $61M was relatively flat compared to 1Q2011 Impacted by a $6M reduction in the value of Mortgage Servicing Rights Impacted by a $4M valuation expense related to credit exposure on interest rate swap transactions Service charges on deposit acco
Slide 32: Second Quarter 2011 Highlights
Second Quarter 2011 Highlights Credit quality continued to improve Nonaccrual loans of $468M, the lowest level in six quarters Potential problem loans down $213M (23%) from $912M for 1Q11 Provision for loan losses of $16M, down from $31M for the first quarter; expect provision will continue to decli
Slide 33: Nonaccrual Loans Continue to Decline
Nonaccrual Loans Continue to Decline 3Q 2010 4Q 2010 1Q 2011 2Q 2011 Beginning balance $ 976 $ 728 $ 574 $ 488 New nonaccrual loans 100 136 81 95 Nonaccrual loan payoffs / downs (92) (73) (74) (62) Loans sold Book balance (199) (163) --- --- Charge-offs taken 85 42 --- --- Net Proceeds (114) (121) -
Slide 34: Five Consecutive Quarters of Declines in Potential Problem Loans
Five Consecutive Quarters of Declines in Potential Problem Loans 2Q 2010 3Q 2010 4Q 2010 1Q 2011 2Q 2011 Beginning balance $1,368 $1,272 $1,132 $ 964 $ 912 New inflow from downgrades 172 117 66 80 22 Net loans downgraded to impaired (128) (44) (66) (11) (46) Loans closed or paid off (103) (76) (142)
Slide 35: 2Q 2011 Provision Expense
2Q 2011 Provision Expense 34 Provision Components Provision Drivers Release of FAS 114 reserves due to restructurings, payoffs, and charge offs Accruing TDR allocation increase due to increased balances Decrease in FAS 5 allocation due to positive asset quality migration within the portfolio ($ in m
Slide 36: Associated Banc-Corp agenda
Associated Banc-Corp About Associated Banc-Corp Addressing Current Challenges Driving Loan Growth and Earnings Expansion Strategic Initiative Highlights 2Q 2011 Highlights Summary 35
Slide 37: 2Q 2011 Solid Quarterly Results Summary
Fourth consecutive quarter of profitability with EPS of $0.15 per common share Loan portfolio grew 3% to $13.1 billion, with the most significant growth in C&I loans Total loans, net of nonaccrual loans, grew by nearly $1 billion on a YoY basis Impact of debt offering on NIM offset by a 5 bps improv
Slide 38: Summary: 2012 and Beyond
37 Summary 2012 and Beyond - Poised for Revenue Growth and Earnings Expansion Strong, stable Midwest franchise Largest Wisconsin-based bank Long history and commitment to the communities we serve Four consecutive quarters of profitability Turned the corner on loan growth Focused on fee-generating bu
Slide 39: Appendix: Credit Details
Appendix Credit Details Past Due Loans Page 39 Potential Problem Loans 40 Nonaccrual Loans 41 Net Charge-offs 42 Loan Portfolio Residential Mortgages 44 Home Equity 45 Commercial Real Estate 46 Construction Loans 47 C&I Loans 48 Net Interest Income Page 50-51 Investment Portfolio Page 53 Senior Mana
Slide 40: Past Due Loans Remain Below 1% of Total Loans
Past Due Loans Remain Below 1% of Total Loans (30-89 Days) Total Past Due Loans Past Due Loan Mix - 2Q 2011 Past Due Loans Composition ($ millions) 39 (CHART) (CHART) (CHART)
Slide 41: Continued Downward Trend in Potential Problem Loans
Continued Downward Trend in Potential Problem Loans Potential Problem Loan Composition ($ millions) Total Potential Problem Loans ($ millions) Potential Problem Loan Mix 2Q 2011 40 (CHART) (CHART) (CHART)
Slide 42: Nonaccrual Loan Mix and Composition
Nonaccrual Loan Mix and Composition Total Nonaccruals ($ millions) Nonaccrual Mix - 2Q 2011 Nonaccrual Composition ($ millions) 41 (CHART) (CHART) (CHART)
Slide 43: Total Net Charge-Offs
Total Net Charge-Offs Total NCOs ($ millions) NCO Mix - 2Q 2011 NCO Composition ($ millions) 42 (CHART) (CHART) (CHART)
Slide 44: Appendix: Loan Portfolio
Appendix Credit Details Past Due Loans Page 39 Potential Problem Loans 40 Nonaccrual Loans 41 Net Charge-offs 42 Residential Mortgages 44 Home Equity 45 Commercial Real Estate 46 Construction Loans 47 C&I Loans 48 Net Interest Income Page 50-51 Investment Portfolio Page 54 Senior Management Team Pag
Slide 45: Residential Mortgages
Residential Mortgages Residential Housing Price Index (HPI*) Portfolio Mortgage Balance by State Portfolio Mortgage NCOs by State $2.7 billion, or 21% of Total Loans, at June 30, 2011 Comments June 30, 2011 vs. June 30, 2010 % Change(Projected**) June 30, 2011 vs.March 30, 2011% Change(Projected**)
Slide 46: Home Equity
Home Equity Comments Home Equity Balance by State Home Equity NCOs by State $2.6 billion, or 20% of Total Loans, at June 30, 2011 Nonaccruals remained on a downward trend: 2Q11 - $47 M 1Q11 - $50 M 4Q10 - $52 M 3Q10 - $51 M 2Q10 - $42 M 30-89 days past due remained stable: 2Q11 - $15 M 1Q11 - $15 M
Slide 47: Commercial Real Estate Loans
CRE Loans by State Comments Commercial Real Estate Loans Nonaccrual loans were slightly elevated: 2Q11 - $193 M 1Q11 - $187 M 4Q10 - $224 M 3Q10 - $276 M Potential Problem Loans were down for the third consecutive quarter: 2Q11 - $382 M 1Q11 - $465 M 4Q10 - $493 M 3Q10 - $553 M NCOs remained flat fo
Slide 48: Construction Loans
Construction Loans by State Comments Construction Loans Nonaccrual loans continued to decline for the third consecutive quarter: 2Q11 - $ 73 M 1Q11 - $ 85 M 4Q10 - $ 95 M 3Q10 - $132 M Potential Problem Loans were down slightly: 2Q11 - $ 63 M 1Q11 - $ 71 M 4Q10 - $ 92 M 3Q10 - $176 M NCOs were down
Slide 49: C&I Loans
C&I Loans by State C&I Loans 2Q 2011 nonaccrual loans declined from the prior quarter: 2Q11 - $ 84 M 1Q11 - $ 92 M 4Q10 - $117 M 3Q10 - $184 M Potential Problem Loans were significantly down from the prior quarter: 2Q11 - $231 M 1Q11 - $351 M 4Q10 - $357 M 3Q10 - $376 M NCOs were elevated from the p
Slide 50: Appendix: Net Interest Income
Appendix Credit Details Past Due Loans Page 39 Potential Problem Loans 40 Nonaccrual Loans 41 Net Charge-offs 42 Loan Portfolio Residential Mortgages 44 Home Equity 45 Commercial Real Estate 46 Construction Loans 47 C&I Loans 48 Investment Portfolio Page 53 Senior Management Team Page 55-59 49 Net I
Slide 51: Net Interest Income Analysis - Taxable Equivalent Basis
Net Interest Income Analysis - Taxable Equivalent Basis 50 Three months ended June 30, 2011 Three months ended June 30, 2011 Three months ended June 30, 2011 Three months ended March 31, 2011 Three months ended March 31, 2011 Three months ended March 31, 2011 Average Interest Average Average Interes
Slide 52: Asset Sensitivity - Interest Rate Shock Simulation
Asset Sensitivity - Interest Rate Shock Simulation 51 Quarter Ended NII % Change 06/30/2011 0.7% 03/31/2011 0.8% 12/31/2010 1.7% 09/30/2010 3.9% 06/30/2010 3.2% Rate Change: +100 bps Asset Sensitive = projected net interest income is positively impacted by projected rising rates.
Slide 53: Appendix: Investment Portfolio
Appendix Credit Details Past Due Loans Page 39 Potential Problem Loans 40 Nonaccrual Loans 41 Net Charge-offs 42 Loan Portfolio Residential Mortgages 44 Home Equity 45 Commercial Real Estate 46 Construction Loans 47 C&I Loans 48 Net Interest Income Page 50-51 Senior Management Team Page 55-59 52 Inv
Slide 54: High Quality Investment Securities Portfolio
High Quality Investment Securities Portfolio Investment Portfolio - June 30, 2011 Market Value Composition - June 30, 2011 Portfolio Composition Ratings - June 30, 2011 Type Bk Value(000's) Mkt Value (000's) TEY(%) Duration (Yrs) Govt & Agencies $ 28,255 $ 28,298 0.63 0.41 MBS Agency 1,574,269 1,668
Slide 55: Appendix: Senior Management Team
Appendix Credit Details Past Due Loans Page 39 Potential Problem Loans 40 Nonaccrual Loans 41 Net Charge-offs 42 Loan Portfolio Residential Mortgages 44 Home Equity 45 Commercial Real Estate 46 Construction Loans 47 C&I Loans 48 Net Interest Income Page 50-51 Investment Portfolio Page 53 54 Senior M
Slide 56: Experienced Senior Management Team
Experienced Senior Management Team Philip B. Flynn - President and Chief Executive Officer (2009) 30+ years of banking experience Previously Vice Chairman and Chief Operating Officer of Union Bank Other executive positions include Chief Credit Officer and Head of Commercial Banking, Union Bank Brian
Slide 57: Experienced Senior Management Team
Experienced Senior Management Team Christopher Del Moral-Niles - Deputy Chief Financial Officer and Treasurer (2010) 18+ years of financial services industry experience (10 years in investment banking) Previously, Corporate Treasurer, The First American Corporation; Divisional President, First Ameri
Slide 58: Experienced Senior Management Team
Experienced Senior Management Team Breck F. Hanson - Head of Commercial Real Estate (2010) 30+ years of commercial banking experience (over 20 years in the CRE segment) Served as Midwest Regional Executive, Commercial Real Estate for Bank of America (LaSalle Bank) Arthur G. Heise - Chief Risk Office
Slide 59: Experienced Senior Management Team
Experienced Senior Management Team Timothy J. Lau - Head of Wealth Management (1989) 24+ years of banking experience Broad range of experience including senior management positions in consumer and small business banking, residential lending, and commercial banking Mark J. McMullen - Vice Chairman of
Slide 60: Experienced Senior Management Team
Experienced Senior Management Team Joseph B. Selner - Chief Financial Officer (1973) 35+ years of banking industry experience; CPA and certified internal auditor Named Executive Vice President and CFO of Associated Banc-Corp in 1983 Donna N. Smith - Head of Commercial Middle Market & Regional Bankin
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