Associated Banc-corp · NYSE:ASB
Associated Banc-corp — Investor Presentation (November 2018)
21 slides from Associated Banc-corp's investor presentation, Nov 2, 2018
Slide 1: Associated Banc-Corp Investor Presentation Fourth Quarter 2018
Exhibit 99.1 Associated Banc-Corp Investor Presentation 2018 FOURTH 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 Third Quarter 2018 $33 billion of assets1 $23 billion of loans1 Over $3 billion of equity2 $25 billion of deposits1 YTD 3Q 2018 Average Loans by Business Segment 3 Corporate and − Largest bank headquartered in Wisconsin 52% Commercial Specialty Community, Consumer, − Approximately 4,70
Slide 4: Attractive Midwest Markets
ATTRACTIVE MIDWEST MARKETS Large Population Base With a Manufacturing and Wholesale Trade-Centric Economy Midwest holds ~20% of the U.S. population1 and Commercial and Business Lending nearly 30% of all U.S. manufacturing jobs2 ASB Loan Composition by Industry U.S. Manufacturing Jobs Manufacturing &
Slide 5: Loan Growth Trends
LOAN GROWTH TRENDS Average Quarterly Loans Average Loan Growth1 ($ in billions) 3Q14 – 3Q18 ($ in millions) $23.0 CAGR $20.9 $20.1 Power and utilities $74 $18.5 $7.9 5% General commercial $57 $17.1 Total $7.3 Commercial & $7.6 Oil and gas $40 business loans: $7.1 + $242 million (+3%) $6.7 REIT $37 $
Slide 6: Deposit Growth Trends
DEPOSIT GROWTH TRENDS Average Quarterly Deposits Quarter-end Loan to Deposit Ratio ($ in billions) 3Q14 – 3Q18 98% CAGR 96% 96% $24.7 94% 94% 95% $22.4 6% $21.4 92% $20.3 $5.3 $5.0 91% $17.9 $5.2 13% 90% $4.6 89% $5.0 1Q 2Q 3Q 4Q $4.2 $4.0 Historical Quarter-end Range 2014-2018 2018 $3.2 $4.2 $2.0 H
Slide 7: Net Interest Margin Walkforward and Outlook
NET INTEREST MARGIN WALKFORWARD AND OUTLOOK Q2 to Q3 Net Interest Margin Walkforward Net Interest Margin Detail 2Q 2018 Reported Net Interest Margin 3.02% - Bank Mutual purchase loan related items 2.95% Prepayments and other adjustments -0.05% Purchased loan accretion -0.01% 2.83% 2.80% - LIBOR - Fe
Slide 8: Growing and Diversified Business Model
GROWING AND DIVERSIFIED BUSINESS MODEL Robust Capital Markets, Trust and ($Noninterest IN MILLIONS Income) Investments Solutions2 ($ in millions) $26 $23 $95 $22 $19 $18 $88 $86 $80 $75 3Q 2014 3Q 2015 3Q 2016 3Q 2017 3Q 2018 Strong Insurance Commissions Growth Driven by Acquisitions $74 $22 $19 $20
Slide 9: Overall Expense Efficiency
OVERALL EXPENSE EFFICIENCY AUTOMATION AND CONSOLIDATIONS ARE DRIVING BETTER EFFICIENCY OVER TIME Efficiency Enhanced Automation Branch Consolidations Operational Efficiencies Drivers Noninterest Expense Efficiency Ratio1 Branches and FTEs ($ in millions) $213 $211 4,792 4,707 $7 $204 68% 4,637 $21 $
Slide 10: Bank Mutual Expense Detail
BANK MUTUAL EXPENSE DETAIL Integration Completed Operational wind down completed during the third quarter Expected Total Acquisition Related 1 Recorded Costs Announced Total Costs Costs ($ in millions) 1Q 2018 2Q 2018 3Q 3018 Change of control and severance $10 $7 $(1) $1 $7 Merger advisors and cons
Slide 11: Evolving Delivery Model
EVOLVING DELIVERY MODEL Deposits by Digital & Remote Channels Increasing ATM Deposits Increasing 59% 47% September 2014 September 2018 September 2014 September 2018 Remote Deposit ATM Lockbox SnapDeposit Capture Non-branch Deposits / Total Deposits Increasing Recent and Planned Upgrades 76% Online b
Slide 12: Capital Priorities
CAPITAL PRIORITIES 1 Funding Organic Growth 2 Paying a Competitive Dividend Quarterly Average Loans; ($ in billions) Full Year Declared Dividends 8% $23.0 14% $0.62 CAGR1 CAGR2 $20.9 $0.50 $20.1 $0.45 $18.5 $0.41 $0.37 $17.1 3Q 2014 3Q 2015 3Q 2016 3Q 2017 3Q 2018 2014 2015 2016 2017 2018 3 Non-Orga
Slide 13: Expanding Bottom Line
EXPANDING BOTTOM LINE Per Share Data Dividends Declared 1 2 $1.52 3 +37% +21% $0.17 $0.14 $0.14 $1.38 $1.11 YTD 3Q17 YTD 3Q18 4Q 2017 4Q 2018 Acquisition related costs GAAP earnings per share Total Shareholder Return4 Return on Average Common Equity As of October 19, 2018 14.1% 57% 12.2% 32% 8.2% 9.
Slide 14: Appendix
APPENDIX
Slide 15: Credit Quality – Quarterly Trends
CREDIT QUALITY – QUARTERLY TRENDS ($ IN MILLIONS) Potential Problem Loans Nonaccrual Loans $282 $259 $40 $242 $236 $39 $211 $209 $209 $204 $34 $34 $177 $154 $92 $77 $69 $45 $40 $32 $220 $242 $208 $202 $159 $137 $119 $132 $140 $122 3Q 2017 4Q 2017 1Q 2018 2Q 2018 3Q 2018 3Q 2017 4Q 2017 1Q 2018 2Q 20
Slide 16: Loans Stratification
LOANS STRATIFICATION OUTSTANDINGS AS OF SEPTEMBER 30, 2018 C&BL by Geography Total Loans1 CRE by Geography $8.0 billion $5.3 billion Minnesota 6% Illinois Illinois 3 Illinois 24% 14% Minnesota 14% Texas 13% 10% Other Minnesota Wisconsin Midwest2 Wisconsin 11% Wisconsin 30% Other 28% 11% 33% Midwest2
Slide 17: High Quality Securities
HIGH QUALITY SECURITIES ($ IN BILLIONS) Portfolio Detail as of September 30, 2018 Strategic Portfolio Average Balance and Yield Trends Amortized Fair Duration Investment Type Cost Value (Yrs) $7$8 $6.92 5.00% $7 GNMA CMBS $7 $5.97 $5.98 $6.02 $1.82 $1.75 2.88 $6$7 $5.62 $6 4.00% GNMA MBS & CMOs 2.63
Slide 18: Net Interest Income and Margin - Quarterly Trends
NET INTEREST INCOME AND MARGIN - QUARTERLY TRENDS 4.98% ($ in millions) 4.02% 4.56% 3.73% $226 3.42% 3.41% $2 $219 3.46% 3.86% $1 3.45% $1 3.28% 3.15% 3.26% 3.13% $1 2.55% 2.61% 2.42% 2.29% 2.40% 1.26% 0.77% 0.29% 0.40% 0.41% 1.03% 0.63% 0.32% 0.19% 0.22% 3Q 2014 3Q 2015 3Q 2016 3Q 2017 3Q 2018 Comm
Slide 19: CRE Trends
CRE TRENDS Total CRE Commitments and Outstanding CRE Unfunded Commitments Balances ($ in billions) ($ in billions) Total commitments have increased... ...but unfunded commitments have become a larger percentage of total commitments CRE average total outstanding balance CRE avg unfunded commitments /
Slide 20: Reconciliation and Definitions of Non-GAAP Items
RECONCILIATION AND DEFINITIONS OF NON-GAAP ITEMS Efficiency Ratio YTD 3Q16 YTD 3Q17 YTD 3Q18 Federal Reserve efficiency ratio 67.51% 65.64% 67.50% Fully tax-equivalent adjustment (1.32) (1.27) (0.69) Other intangible amortization (0.20) (0.18) (0.64) Fully tax-equivalent efficiency ratio 65.99% 64.1
Slide 21: Reconciliation and Definitions of Non-GAAP Items
RECONCILIATION AND DEFINITIONS OF NON-GAAP ITEMS Average Tangible Common Equity Reconciliation ($ in millions) 3Q 2017 3Q 2018 Average common equity $3,025 $3,589 Average goodwill and other intangible assets, net (986) (1,246) Average tangible common equity 2,039 2,343 YTD 3Q 2018 2Q 2018 1Q 2018 20
Associated Banc-Corp — Investor Presentation (November 2018) on 6ix