Slide 1: Third Quarter 2022 Earnings Presentation
Third Quarter 2022 Earnings Presentation OCTOBER 20, 2022
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: Third Quarter 2022 Update
Third Quarter 2022 Update 3Q 2022 results reflect strong loan and deposit growth, expanding margins and stable credit Associated Banc-Corp Reports Third Quarter 2022 Net Income Available to Common Equity of $93 Million, or $0.62 per Common Share ▪ $720 million (+4%) of total ▪ NCOs / Average Loans c
Slide 4: 3Q 2022 Loan Trends
3Q 2022 Loan Trends Total average loans grew by 7% vs. the prior quarter, while total period end loans grew by 5% Average Quarterly Loans EoP Loan Change (6/30/2022 to 9/30/2022) ($ in billions) ($ in millions) Residential Mortgage $312 $27.1 $25.4 $0.0 CRE Investor $274 $23.9 $23.8 $24.1 $0.0 $0.0
Slide 5: Growing and Expanding our Lending Capabilities
Growing and Expanding our Lending Capabilities Our strategic lending initiatives remain on track, providing additional pathways to drive balanced growth Progress Update Balance Trends ($ in millions) ▪ We’ve strategically increased $18,000 + our total commercial and $17,201 $17,000 + Core Commercial
Slide 6: 3Q 2022 Deposit Trends
3Q 2022 Deposit Trends Deposits grew at a 9% annualized rate vs. the prior quarter, a result of our strategic actions over time ASB Deposit Thesis EoP Quarterly Deposits ($ in billions) 9% annualized We’ve cultivated low-cost, granular growth 1 core deposits over time, leading to a high degree of st
Slide 7: Pre-Tax Pre-Provision Income Trends
Pre-Tax Pre-Provision Income1 Trends Strong revenue growth and disciplined expense management are driving positive operating leverage ($ in millions) $(0) 3Q21 Pre- 3Q21 3Q21 4Q21 Pre- 4Q21 4Q21 1Q22 Pre- 1Q22 1Q22 2Q22 Pre- 2Q22 2Q22 3Q22 Pre- 3Q22 3Q22 Tax Income Provision PTPP Tax Income Provisio
Slide 8: Poised for Further Margin Expansion
Poised for Further Margin Expansion ASB’s structurally asset sensitive balance sheet continues to benefit from the rising rate environment Average Yields (%) Average Yield Trends (%) 4.62 4.28 +113 bps 3.36 3.72 2.91 2.88 2.97 3.12 2.84 2.97 2.89 2.59 2.42 2.44 2.44 2.29 1.96 1.76 +54 bps 0.36 0.81
Slide 9: Net Interest Income & Net Interest Margin Trends
Net Interest Income & Net Interest Margin Trends NII and NIM continued to grow in 3Q, driven by rising loan yields and controlled deposit costs ($ in millions) $264 $216 $184 $187 $188 3.13% 2.71% 2.40% 2.42% 2.38% 3Q 2021 4Q 2021 1Q 2022 2Q 2022 3Q 2022 Quarterly Net Interest Income Quarterly Net I
Slide 10: Interest Rate Risk Management
Interest Rate Risk Management While ASB remains well-positioned to benefit from higher rates, we are proactively managing the downside risk Well-Positioned for Rising Rates Managing Downside Risk 92% of commercial loans 1 outstanding were floating rate, Already executed adjustable rate, re-pricing w
Slide 11: Noninterest Income Trends
Noninterest Income Trends Noninterest income remains pressured by mortgage banking and service charge headwinds Noninterest Income Trends Service Charges & Deposit Account Fees ($ in millions) ($ in millions) $17 $17 $17 $17 $15 $82 $82 $74 $75 $10 $9 $71 $4 $8 $7 $10 $6 $9 $8 3Q 2021 4Q 2021 1Q 202
Slide 12: Noninterest Expense Trends
Noninterest Expense Trends We continue to invest in people and technology while keeping expense growth below total revenue growth Noninterest Expense Trends Fully Tax-Equivalent Efficiency Ratio2 (%) ($ in millions) 67.4 65.4 65.5 65.7 63.6 63.8 $196 61.5 $182 $181 $6 59.8 60.3 $178 58.8 $1 $3 $173
Slide 13: Capital Profile
Capital Profile We are managing capital levels toward our target ranges, while holding TBVPS steady 3Q 2022 Regulatory Capital Ratios (%) Year-End 2022 Capital Targets (%) 9.75 11.4 9.41 7.25 7.06 9.25 10.0 9.4 7.00 3Q 2022 YE2022 3Q 2022 YE2022 1 TCE Ratio Target CET1 Ratio Target Range Range Tangi
Slide 14: Allowance for Credit Losses on Loans (ACLL) Update
Allowance for Credit Losses on Loans (ACLL) Update Our ACLL held firm at 1.20%, with an allowance build largely driven by loan growth 3Q 2022 ACLL1 Update ACLL / Total Loans (%) ▪ ACLL ($) increased $15 million from the prior quarter, largely driven by loan growth and stable credit factors 1.41 1.32
Slide 15: Credit Quality Trends
Credit Quality Trends YTD net charge offs remain negligible in 2022, reflecting stability of portfolio Total Nonperforming Assets Nonaccrual Loans ($ in millions) ($ in millions) $169 $160 $161 $135 $130 $143 $34 $18 $126 $133 $0 $108 $116 $30 $9 $6 $18 $16 $16 $62 $61 $81 $1 $47 $38 $135 $130 $143
Slide 16: 2022 Full-Year Outlook Updates
2022 Full-Year Outlook Updates Previous Guidance (9/13/2022) Updated Guidance ▪ Total commercial2 loan growth of ~$1.7B ▪ No updates ▪ Target investments/total assets ratio of ~18% Balance Sheet Management1 ▪ We expect to maintain wholesale funding of ~15% of total funding ▪ Net interest income (GAA
Slide 17: Associated Bank
“ Associated Bank Your money works here: Growth S Higher Focused Returns
Slide 18: Appendix
Appendix
Slide 19: Additional Third Quarter 2022 Loan Trends
Additional Third Quarter 2022 Loan Trends EoP Quarterly Loan Trends Average Loan Change (2Q 2022 to 3Q 2022) ($ in billions) ($ in millions) General Commercial $388 $27.8 $26.5 $0.0 Residential Mortgage $363 $0.0 $24.2 $24.5 $23.6 $0.0 CRE Investor $321 $0.1 $0.2 $10.6 Auto Finance $281 $10.2 $9.4 $
Slide 20: Total Loans Outstanding Balances as of September 30, 2022
Total Loans Outstanding Balances as of September 30, 2022 Well-diversified $28 billion loan portfolio ($ in millions) % of Total % of Total 1 1 9/30/2022 Loans 9/30/2022 Loans 2 C&BL (by NAICS ) CRE (by property type) Manufacturing & Wholesale Trade $ 2,119 7.6% Multi-Family $ 2,296 8.3% Utilities 2
Slide 21: Loan Stratification Outstanding Balances as of September 30, 2022
Loan Stratification Outstanding Balances as of September 30, 2022 Illinois Illinois Minnesota 14% 23% Illinois 10% Minnesota 7% 14% Texas Minnesota 5% 10% Other Wisconsin Midwest2 C&BL by Other CRE by 23% 24% Geography Midwest 2 Wisconsin Total 11% Other Geography $10.6 billion 28% Loans1 Midwest 2
Slide 22: Reconciliation and Definitions of Non-GAAP Items
Reconciliation and Definitions of Non-GAAP Items ($ in millions) Pre-tax Pre-Provision Income Reconciliation1 3Q 2021 4Q 2021 1Q 2022 2Q 2022 3Q 2022 Income (loss) before income taxes $112 $92 $93 $110 $122 Provision for credit losses (24) (6) (4) - $17 Pre-tax pre-provision income $88 $86 $89 $110
Slide 23: Reconciliation and Definitions of Non-GAAP Items
Reconciliation and Definitions of Non-GAAP Items ($ in millions) Efficiency Ratio Reconciliation 3Q 2021 4Q 2021 1Q 2022 2Q 2022 3Q 2022 Federal Reserve efficiency ratio 65.43% 67.36% 65.71% 61.53% 60.32% Fully tax-equivalent adjustment (1.01)% (1.10)% (1.13)% (0.98)% (0.87)% Other intangible amorti