Associated Banc-corp · NYSE:ASB
Associated Banc-corp — Q1 2022 Earnings Presentation
24 slides from Associated Banc-corp's earnings presentation, Apr 21, 2022
Slide 1: First Quarter 2022 Earnings Presentation
First Quarter 2022 Earnings Presentation APRIL 21, 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: First Quarter 2022 Update
First Quarter 2022 Update 1Q 2022 results reflect positive margin, expense and credit trends Associated Banc-Corp Reports First Quarter 2022 Net Income Available to Common Equity of $71 Million, or $0.47 per Common Share ▪ Annualized total loan growth of ▪ Negative provision of $4 million 5% QoQ (Eo
Slide 4: 1Q 2022 Loan Trends
1Q 2022 Loan Trends Total loans increased by an annualized 5% QoQ, led by our strategic initiatives and general commercial EoP Quarterly Loan Trends Average Loan Change (4Q 2021 to 1Q 2022) ($ in billions) ($ in millions) QoQ Growth: +5% annualized Growth vs. 3Q21: +8% annualized Auto Finance $252 $
Slide 5: Emerging Commercial Growth Dynamics
Emerging Commercial Growth Dynamics Key indicators of commercial activity point to additional growth later in 2022 EoP Total Commercial Loan Trends Regional Commercial Line Utilization3 (%) ($ in billions) 43.5 42.8 43.0 % 42.2 42.8 42.5 42.9 41.2 40.2 $15.6 $15.6 $15.5 $15.4 $15.1 38.3 39.3% $1.2 $
Slide 6: Our Strategic Initiatives Remain on Track
Our Strategic Initiatives Remain on Track EoP Balance Trends ($ in millions) $17,000 $16,000 $15,120 $15,550 $15,434 Total Commercial1 $1,247 $1,013 $1,414 $13,706 $14,303 $14,422 3Q 2021 4Q 2021 1Q 2022 YE2022 YE2023 Total Commercial Mortgage Warehouse + PPP Target Target $600 New Asset-Based Lendi
Slide 7: Strategic Initiative Updates
Strategic Initiative Updates1 We continue to make meaningful progress on our initiatives ▪ Auto Finance: Over 16,000 auto loans in portfolio; 763 avg. FICO Expanding our ▪ Asset-Based Lending: Added four additional team members in 1Q Lending Capabilities ▪ Equipment Finance: Added two additional tea
Slide 8: Net Interest Income and Yield Trends
Net Interest Income and Yield Trends 1Q 2022 NII and NIM continued to expand QoQ, driven primarily by higher securities yields NII and NIM Trends Average Yields (%) ($ in millions) 2.91 2.87 2.89 2.91 2.89 2.50% 2.88 2.45% 2.79 2.82 2.83 2.84 2.40% 2.38% 2.44 2.57 2.56 2.42% 2.47 2.44 2.40% 2.37% 2.
Slide 9: Cash and Investment Securities Portfolio
Cash and Investment Securities Portfolio We are on track to rebuild the investment portfolio to between 20% and 22% of total assets by year-end 2022 Average Investments and Yield Trends EoP Securities + Cash / Total Assets ($ in billions) 21% 21% 22% 22% 21% 1.96% 5% 3% 1% 6% 5% 1.81% 1.76% 1.66% 17
Slide 10: Quarterly Funding Trends
Quarterly Funding Trends We continue to see strong low-cost, core customer funding levels and reductions in higher-cost liabilities Average Quarterly Deposits EoP Wholesale Funding Trends ($ in billions) ($ in billions) $28.4 $28.6 $27.5 $28.1 $26.8 $3.2 $3.0 $0.5 $2.8 $2.6 $2.6 $0.5 $0.2 $8.3 $0.2
Slide 11: Noninterest Income Trends
Noninterest Income Trends Moderation in noninterest income driven by macro market dynamics Noninterest Income Trends Overdraft Program Update ($ in millions) ▪ In 3Q, we plan to eliminate our continuous overdraft fee, overdraft protection transfer fee, $95 and the Nonsufficient Funds fee charged whe
Slide 12: Noninterest Expense Trends
Noninterest Expense Trends 1Q 2022 expenses down YoY, but expected to increase with planned technology and staffing additions Noninterest Expense Trends Technology & Equipment Expense Trends ($ in millions) ($ in millions) $106 $103 $103 $96 $24 $22 $21 $23 $178 $182 $175 $174 $1 $173 $82 $26 $2 $73
Slide 13: 1Q 2022 Pre-Tax Pre-Provision Income Walk-Forward
1Q 2022 Pre-Tax Pre-Provision Income1 Walk-Forward 1Q PTPP income grew by $3 million QoQ, driven by increased NII and decreased expense ($ in millions) Lower expense levels in several major categories $(4) $93 $89 Reduced BOLI, asset gains, card and capital markets fees 4Q 2021 Pre- 4Q 2021 4Q 2021
Slide 14: Pre-Tax Pre-Provision Income Trend
Pre-Tax Pre-Provision Income1 Trend Amid expanding operating leverage, PTPP income has remained above 2Q 2021’s $78 million baseline ($ in millions) 2Q21 Pre-Tax 2Q21 2Q21 PTPP 3Q21 Pre-Tax 3Q21 3Q21 PTPP 4Q21 Pre-Tax 4Q21 4Q21 PTPP 1Q22 Pre-Tax 1Q22 1Q22 PTPP Income Provision Income Income Provisio
Slide 15: Strong Capital Position
Strong Capital Position Capital ratios are expected to drive toward targets as we fund loan growth on the balance sheet Tangible Common Equity / Tangible Assets1 (%) Regulatory Capital Ratios (%) 14.4 12.4 12.1 10.8 10.9 10.2 8.0 7.9 7.9 7.8 7.7 7.5% Target 1Q 2021 2Q 2021 3Q 2021 4Q 2021 1Q 2022 Co
Slide 16: Allowance Update
Allowance Update Net recoveries of $2 million in 1Q 2022, reflecting strong dynamics throughout the portfolio 1Q 2022 ACLL Update ACLL / Total Loans (%) ▪ Allowance for credit losses on loans (ACLL) 1.67 decreased $2 million QoQ 1.52 1.41 ▪ Net recoveries of $2 million 1.32 1.30 ▪ 1Q 2022 negative p
Slide 17: Credit Quality Trends
Credit Quality Trends Credit metrics largely continued to improve during 1Q 2022 Total Nonperforming Assets Nonaccrual Loans ($ in millions) ($ in millions) $188 $171 $169 $163 $25 $161 $147 $135 $143 $160 $33 $130 $24 $18 $9 $0 $34 $18 $6 $30 $59 $63 $62 $61 $81 $163 $147 $135 $143 $130 $71 $65 $65
Slide 18: 2022 Outlook
2022 Outlook FY 2022 Guidance ▪ Auto Finance loan growth of $1.2+ billion Balance Sheet ▪ Total commercial2 loan growth of $750 million to $1 billion Management1 ▪ Target investments / total assets ratio of 20% to 22% ▪ Net interest income of $840+ million (vs. prior guidance of $800+ million) Net I
Slide 19: Associated Bank
“ Associated Bank Your money works here: Growth S Higher Focused Returns
Slide 20: Appendix
Appendix
Slide 21: Additional 1Q 2022 Loan Trends
Additional 1Q 2022 Loan Trends Average Quarterly Loan Trends EoP Loan Change (4Q 2021 to 1Q 2022) ($ in billions) ($ in millions) Auto Finance $354 $24.5 $24.1 $24.1 CRE Investor $85 $23.9 $23.8 $0.8 $0.7 $0.3 $0.1 $0.0 ABL + Equipment $53 REIT $44 +2% $8.5 $8.4 $8.7 $8.8 $9.0 QoQ Residential Mortga
Slide 22: Total Loans Outstanding Balances as of March 31, 2022
Total Loans Outstanding Balances as of March 31, 2022 Well-diversified $25 billion loan portfolio ($ in millions) % of Total % of Total 1 1 3/31/2022 Loans 3/31/2022 Loans 2 C&BL (by NAICS ) CRE (by property type) Wholesale/Manufacturing $ 1,882 7.7% Multi-Family $ 1,988 8.1% Utilities 1,827 7.4% In
Slide 23: Loan Stratification Outstanding Balances as of March 31, 2022
Loan Stratification Outstanding Balances as of March 31, 2022 Illinois Illinois Illinois Minnesota 15% 23% Minnesota Texas 15% 10% 8% 4% Minnesota 10% Wisconsin C&BL by CRE by Other 24% Geography Other 2 Wisconsin Total Midwest2 Midwest 29% Wisconsin Geography 23% $9.3 billion 11% Loans1 Other 2 Mid
Slide 24: Reconciliation and Definitions of Non-GAAP Items
Reconciliation and Definitions of Non-GAAP Items ($ in millions) Pre-tax Pre-Provision Income Reconciliation1 2Q 2021 3Q 2021 4Q 2021 1Q 2022 Income (loss) before income taxes $113 $112 $92 $93 Provision for credit losses (35) (24) (6) (4) Pre-tax pre-provision income $78 $88 $86 $89 Average Tangibl