Associated Banc-corp · NYSE:ASB

Associated Banc-corp — Investor Presentation (February 2016)

35 slides from Associated Banc-corp's investor presentation, Feb 29, 2016

  1. Slide 1: Investor Presentation First Quarter 2016

    INVESTOR PRESENTATION FIRST QUARTER 2016 ASSOCIATED BANC-CORP Exhibit 99.1

  2. 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

  3. Slide 3: Our Footprint and Franchise

    Loans2 Deposits2 WI 36% IL 24% MN 11% In Footprint3 11% Other 18% 1861 OUR FOOTPRINT AND FRANCHISE Company YE 2015  Headquarters: Green Bay, WI  Employees: ~4,400  Branches: 215  Fastest growing bank in Wisconsin1 Financials YE 2015  Assets: Over $27 billion  Loans: $19 billion  Deposits: $21

  4. Slide 4: Attractive Midwest Markets

    ASB Mortgage Portfolio FICO Score3 ATTRACTIVE MIDWEST MARKETS 3.4% 3.5% 4.3% 4.4% 4.7% 5.0% IA MN WI IN OH National Average Midwest holds ~30% of all U.S. manufacturing jobs2 1 – U.S. Census Bureau, Annual Estimates of the Resident Population, 2015 2 – U.S. Bureau of Labor Statistics, Manufacturing

  5. Slide 5: Management Priorities

    Enhanced Customer Experience Organic Balance Sheet Growth Diverse Business Lines Disciplined Credit Approach Expense Control Prudent Capital Management 1. We are committed to providing efficient solutions that improve each customer’s experience and which help them better manage their finances across

  6. Slide 6: Robust Affinity Programs

    ROBUST AFFINITY PROGRAMS ENHANCED CUSTOMER EXPERIENCE CHALLENGER PHILOSOPHY  We have pursued an ambitious agenda to differentiate Associated Bank  We are focused on removing barriers that stand in the way of delivering a great customer experience  We share compelling messages to invite consumers

  7. Slide 7: Multi-Channel Initiatives

    MULTI- CHANNEL INITIATIVES ENHANCED CUSTOMER EXPERIENCE OUTSTANDING CUSTOMER SERVICE  Our Wisconsin-based customer care team supports all business lines 24/7, 365 days a year  We believe that providing extraordinary service leads to customer satisfaction and loyalty  We deliver financial products

  8. Slide 8: Evolving Delivery Model

     Changing customer preferences has driven our continued investment in digital platforms  ATMs, direct deposit activity, and mobile and online bill pay (ACH and wire) account for the vast majority of our customers’ deposit and withdrawal activity EVOLVING DELIVERY MODEL 7 Jan 12 Dec 15 Jan 12 Dec 1

  9. Slide 9: Organic Loan Growth

    ORGANIC LOAN GROWTH (AVERAGE BALANCES, $ IN BILLIONS) $2.1 $1.8 $1.6 $1.5 $1.5 $3.9 $4.4 $4.6 $4.9 $5.5 $3.0 $3.4 $3.7 $4.0 $4.2 $4.3 $5.1 $5.8 $6.5 $7.0 2011 2012 2013 2014 2015 Home Equity & Installment Residential Mortgage Commercial Real Estate Commercial & Business $18.3 $15.7 $16.8 $14.7 $13.3

  10. Slide 10: Year Over Year Loan Growth

    ($33) $53 $131 $142 $214 $232 $675 YEAR OVER YEAR LOAN GROWTH 2015 AVERAGE LOAN GROWTH OF $1.4 BILLION, OR 8% FROM 2014 ($ IN MILLIONS) Home Equity & Installment Power & Utilities Oil & Gas Mortgage Warehouse Residential Mortgage Commercial Real Estate General Commercial Loans % of Growth 48% 16% 15

  11. Slide 11: Organic Deposit Growth

    $2.9 $2.2 $1.8 $1.6 $1.6 $3.4 $3.9 $4.2 $4.2 $4.5 $1.0 $1.1 $1.2 $1.2 $1.3 $1.9 $2.1 $2.8 $3.0 $3.2 $5.1 $6.1 $7.3 $7.6 $9.2 2011 2012 2013 2014 2015 Money market deposits Interest-bearing demand deposits Savings deposits Noninterest-bearing demand deposits Time deposits ORGANIC DEPOSIT GROWTH (AVER

  12. Slide 12: Year Over Year Deposit Growth

    $737 $26 $87 $107 $329 $969 Network transaction deposits Time deposits Savings deposits Interest-bearing demand deposits Noninterest-bearing demand deposits Money market deposits YEAR OVER YEAR DEPOSIT GROWTH 2015 AVERAGE GROWTH OF $2.3 BILLION, OR 13% FROM 2014 ($ IN MILLIONS) % of Growth 43% 15% 5

  13. Slide 13: Diverse Business Lines

    Consumer and Commercial Banking Branch Banking Commercial Banking Residential Lending Payments and Direct Channels Community Markets Eau Claire, WI La Crosse, WI Central Wisconsin Rockford, IL Peoria, IL Southern Illinois Rochester, MN Private Client and Institutional Services Private Banking Person

  14. Slide 14: Balanced Revenue Streams

    Insurance commissions 23% Service charges on deposit accounts 20% Card-based and other nondeposit fees 15% Trust service fees 15% Mortgage banking, net 10% Brokerage and annuity commissions 5% Capital market fees, net 3% Other2 9% Commercial and business lending 29% Commercial real estate lending 19

  15. Slide 15: Disciplined Credit Approach

    Asset Class Mix YE 2009 Asset Class Mix YE 2015 DISCIPLINED CREDIT APPROACH 14 Asset Class Target Range  Retail: 30 - 40%  C&BL: 30 - 40%  CRE: 25 - 35% Year End 2015  Retail: 39%  C&BL: 38%  CRE: 23% Geography  Focused on in-footprint growth, and select national specialty businesses and mark

  16. Slide 16: Loan Portfolio by Industry and Geography

    C&BL by Industry CRE by Industry Residential Mortgage by Geography ($7.1 billion) ($4.4 billion) ($5.8 billion) Manufacturing 20% Other 11% Oil & Gas 11% Finance & Insurance 11% Real Estate 10% Wholesale Trade 9% Power & Utilities 10% Retail Trade 4% Health Care and Soc. Assist. 5% Profsnl, Scientif

  17. Slide 17: Oil and Gas Portfolio

    OIL AND GAS PORTFOLIO $754 $780 $757 $758 $752 2.26% 3.46% 3.43% 3.83% 5.58% 0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% 7.00% 8.00% 9.00% $500 $550 $600 $650 $700 $750 $800 4Q 2014 1Q 2015 2Q 2015 3Q 2015 4Q 2015 Period End Oil & Gas Loans Related Reserves % ($ in millions)  Borrowing base redetermi

  18. Slide 18: Oil and Gas Portfolio by Geography

    Permian 20% East Texas North Louisiana Arkansas 16% Mid-Continent (primarily OK & KS) 15% South Texas & EagleFord 13% Rockies 8% Gulf Coast 8% Marcellus Utica Appalachia 7% Gulf Shallow 5% Bakken 2% Other (Onshore Lower 48) 6% OIL AND GAS PORTFOLIO BY GEOGRAPHY ESTIMATED EXPOSURE AS OF 12/31/2015 17

  19. Slide 19: Expense Control and Efficiency Ratio

    $360 $381 $397 $390 $391 $14 $52 $67 $75 $80 $84 $241 $227 $209 $209 $208 2011 2012 2013 2014 2015 Other Technology and Equipment Personnel - Acquisition Personnel - Legacy 71% 71% 69% 69% 68%  Branch Closures & Staffing Initiatives  Enhanced Automation  Operational Efficiencies  Technology Inve

  20. Slide 20: Prudent Capital Management

    Funding Organic Growth Paying a Competitive Dividend Non-organic Growth Opportunities Share Buybacks and Redemptions PRUDENT CAPITAL MANAGEMENT  Prudent capital management has brought capital into our target CET1 range of 8.0% - 9.5%  Well positioned for changing economic cycles and future challen

  21. Slide 21: 2016 Outlook

    2016 OUTLOOK Balance Sheet  High single digit annual average loan growth  Maintain Loan to Deposit ratio under 100% Net Interest Margin  Modest upward trend, assuming additional Federal Reserve action to raise rates Noninterest Income  Flat to prior year, excluding investment securities gains No

  22. Slide 22: Appendix

    APPENDIX

  23. Slide 23: Consumer and Commercial Banking

    CONSUMER AND COMMERCIAL BANKING  Nearly 1,900 colleagues servicing individuals and small business owners across four business units; approximately a $7 billion loan portfolio  Branch Banking offers simplified customer solutions across multiple channels with best-in-class customer service  Commerc

  24. Slide 24: Community Markets

    Rochester La Crosse Rockford Peoria COMMUNITY MARKETS  Over 350 colleagues support our seven community markets; nearly a $1 billion loan portfolio  Launched in mid 2014, our strategy created virtual community banks with our full suite of financial and risk management solutions in non-metro markets

  25. Slide 25: Private Client & Institutional Services

    PRIVATE CLIENT & INSTITUTIONAL SERVICES  Approximately 700 colleagues support our Private Client and Institutional customers across six business units; a nearly $1 billion loan portfolio and $8 billion of assets under management  Private Client Services offers a suite of services tailored to the u

  26. Slide 26: Corporate Banking

    Treasury and Capital Market Solutions  Receivables, Payables, Fraud Protection, Information and Card Services  International Trade Services, Interest Rate and Commodity Derivatives, Syndications, Foreign Exchange Specialized Lending Solutions  Financial Institutions  Mortgage Warehouse  Healthc

  27. Slide 27: Commercial Real Estate Lending

    COMMERCIAL REAL ESTATE LENDING  Approximately a $4 billion diversified lending platform, including Real Estate Investment Trust, For-Sale Housing and Tax Credit Financing, and supported by over 100 colleagues  Customized real estate financing provided by local and experienced lending teams  Relat

  28. Slide 28: Net Interest Income and Net Interest Margin

    $613 $626 $646 $681 $676 2011 2012 2013 2014 2015 Net Interest Income 4.27% 3.98% 3.78% 3.60% 3.37% 0.00% 0.50% 1.00% 1.50% 2.00% 2.50% 3.00% 3.50% 4.00% 4.50% $140 $144 $148 $153 $157 $161 $165 $169 $174 $178 3.26% 3.30% 3.17% 3.08% 2.84% 0.00% 0.50% 1.00% 1.50% 2.00% 2.50% 3.00% 3.50% 4.00% $- $4

  29. Slide 29: Noninterest Income Trends

    $236 $220 $224 $227 $256 $37 $93 $89 $63 $72 2011 2012 2013 2014 2015 Mortgage Banking (net) and Other Noninterest Income Core Fee-based Revenue NONINTEREST INCOME TRENDS ($ IN MILLIONS) Mortgage Banking (net) Income Other Noninterest Income2 1 – Core Fee-based Revenue = Trust service fees plus Serv

  30. Slide 30: Noninterest Expense Trends

    5,056 4,915 4,584 4,320 4,378 4Q 2011 4Q 2012 4Q 2013 4Q 2014 4Q 2015 $360 $381 $397 $390 $405 $293 $294 $284 $289 $292 2011 2012 2013 2014 2015 Personnel Other Noninterest Expense NONINTEREST EXPENSE TRENDS ($ IN MILLIONS) Technology and Equipment Spend Other Non-Personnel Spend2 1 – The fully tax-

  31. Slide 31: Credit Quality Trends

    $566 $361 $235 $190 $302 4.04% 2.34% 1.48% 1.08% 1.61% 0.50% 1.50% 2.50% 3.50% 4.50% 5.50% $- $48 $126 204 $ 832 640 $ 48 526 $604 872 $ 680 4 8 $926 $1004 812 $1 620 48 $1326 404 $1 852 660 $1 48 72 6 $1804 892 $1 6200 48 $ 122 6 204 $ 8232 640 $ 42 8 526 $ 60 2 4 872 $ 6280 48 $ 922 6 3004 $ 812 3

  32. Slide 32: Oil and Gas Credit Profile

    $3 $3 $7 $17 $27 $26 $29 $42 4Q 2014 1Q 2015 2Q 2015 3Q 2015 4Q 2015 Specific Energy Reserve Total Energy Related Reserve OIL AND GAS CREDIT PROFILE Oil and Gas Loans Outstanding, $ millions 4Q 2014 1Q 2015 2Q 2015 3Q 2015 4Q 2015 Pass $725 $706 $658 $587 $522 Criticized / Classified 29 74 88 158 21

  33. Slide 33: High Quality Securities

    HIGH QUALITY SECURITIES ($ IN MILLIONS) 32 $4,937 $4,966 $5,420 $5,810 $6,152 3.11% 2.97% 2.66% 2.63% 2.50% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% $- $0.01326395265 78910.1047$ 0 4360. 9820. 5 2 82134$ 760 730. 6990.3125 851$ 40. 7 0 403629420. 5 0. 68$ 81945 70 3360. 59725 0. 8$ 6112470. 0 636897025 $

  34. Slide 34: Reconciliation and Definitions of Non-GAAP Items

    RECONCILIATION AND DEFINITIONS OF NON-GAAP ITEMS 33 Tangible Common Equity and Common Equity Tier 1 Reconciliation, ($ in thousands) 2011 2012 2013 2014 2015 Common equity $2,802,522 $2,873,127 $2,829,428 $2,740,524 $2,815,867 Goodwill and other intangible assets (948,590) (944,395) (940,352) (936,6

  35. Slide 35: Reconciliation and Definitions of Non-GAAP Items (Continued)

    RECONCILIATION AND DEFINITIONS OF NON-GAAP ITEMS (CONTINUED) 34 Efficiency Ratio Reconciliation 2011 2012 2013 2014 2015 Federal Reserve efficiency ratio 73.33% 72.92% 71.05% 70.28% 69.93% Fully tax-equivalent adjustment (1.73) (1.61) (1.46) (1.36) (1.42) Other intangible amortization (0.51) (0.43)

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