Slide 1: Third Quarter 2014 Investor Presentation
THIRD QUARTER 2014 ASSOCIATED BANC-CORP INVESTOR PRESENTATION Exhibit 99.1
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 Footprint and Franchise
OUR FOOTPRINT AND FRANCHISE • Top 50, publicly traded, U.S. bank holding company • $26 billion in assets; largest bank headquartered in Wisconsin • 227 branches serving approximately one million customers About Associated ASBC Deposits ($ in billions) ASBC Branches WI $12.1 IL $3.8 MN $1.4 Total $17
Slide 4: Attractive Midwest Markets
ATTRACTIVE MIDWEST MARKETS • Serve a Large Market Place: (Footprint is ~ 20% of USA) • Manufacturing Concentrated : Top states (Indiana, Wisconsin, and Iowa) for concentration of manufacturing jobs and two other states in the top 10 • Favorable Employment Dynamics : Wisconsin, Minnesota, Indiana, Io
Slide 5: Associated at Its Core
ASSOCIATED AT ITS CORE Community bank values, flexibility, decision- making, attention to relationships and service Big bank products, strength, lending limits, efficiency, innovation, depth of expertise
Slide 6: 1H 2014 Highlights and Outlook
1H 2014 HIGHLIGHTS AND OUTLOOK • Loan Growth of ~ $900 mm YoY – Total average loans of $16.6 bn, up 6% YoY – Purchased credit card participation for $108 mm on June 30, 2014 • Net interest income up $9 mm or 5% YoY • Disciplined Expense Management – Improving efficiency ratio – FTEs down 7% from 2Q1
Slide 7: Reshaping & Rebuilding the Loan Portfolio
RESHAPING & REBUILDING THE LOAN PORTFOLIO Based on Average Annual Balances, $ in Billions Installment HELOCs & nd Liens Residential Mortgage & HE st Liens Construction CRE Investor Commercial & Business Lending $16.1 $13.4 $13.0 $14.6 $15.7 5% 7% 5% 11% 12% 13% 13% 15% 21% 34% 9% 19% 20% 32% 4% 18%
Slide 8: Loan Portfolio Growth
LOAN PORTFOLIO GROWTH AVERAGE LOAN GROWTH OF $898 MILLION OR 6% IN ST HALF OF 2Q vs. 4Q Change in Average Net Loan Balances by Category ($ in millions) Home Equity & Installment Commercial Real Estate Residential Mortgage Power & Utilities Oil & Gas Mortgage Warehouse General Commercial Loans Total
Slide 9: Commercial Line Utilization Trends
COMMERCIAL LINE UTILIZATION TRENDS Line utilization increased in Commercial & Business Lending Change from 1Q 14 Commercial Real Estate (including construction) - 260 bps Commercial & Business Lending + 290 bps
Slide 10: Credit Card Portfolio Purchase
160,000 “Associated Bank” branded card accounts CREDIT CARD PORTFOLIO PURCHASE Summary Details: • ASBC acquired a 45% participation interest in a credit card portfolio of customers who currently hold “Associated Bank” branded credit card accounts for $108 million. – ASBC and US Bank will both partic
Slide 11: Growing Net Interest Income While Margin Compresses
GROWING NET INTEREST INCOME WHILE MARGIN COMPRESSES
Slide 12: Noninterest Income Trends
NONINTEREST INCOME TRENDS – Core Fee-based Revenue = Trust service fees plus Service charges on deposit accounts plus Card-based and other nondeposit fees plus Insurance commissions plus Brokerage and annuity commissions. This is a non-GAAP measure. Please refer to the press release tables for a rec
Slide 13: Noninterest Expense Trends
NONINTEREST EXPENSE TRENDS ($ IN MILLIONS) – Efficiency ratio = Noninterest expense, excluding other intangible amortization, divided by sum of taxable equivalent net interest income plus noninterest income, excluding investment securities gains/losses, net, and asset gains/losses, net. This is a no
Slide 14: Pursuing Efficiency Gains
Areas of Focus Efficiency Ratio 1 at 2Q 2014 = 68% Goal = Peer Average or Better PURSUING EFFICIENCY GAINS Back Office Initiatives: Implementing technology solutions in labor intensive processes Real Estate Initiatives: Actions to optimize our real estate holdings and capacity Distribution Initiativ
Slide 15: Branch Evolution
BRANCH EVOLUTION • Eagle River, Wisconsin • Milwaukee, Wisconsin Branches coming in 2014: Lower construction costs, higher visibility profile • Madison, Wisconsin (UW Campus) Express Branch: Demonstration Kiosk – “Hands On” & Automated Teller Machine
Slide 16: Rationalizing the Footprint
RATIONALIZING THE FOOTPRINT Branch counts are as of period end .
Slide 17: Capital Management Priorities
CAPITAL MANAGEMENT PRIORITIES Funding Organic Growth Paying a Competitive Dividend Non-organic Growth Opportunities Share Buybacks and Redemptions • Fund Loan Growth and other Capital Investments • Repurchased $60 mm of Common Stock • Redeemed $205 mm in Trust Preferred • Repurchased $120 mm of Comm
Slide 18: Disciplined Capital Deployment
Recent Transactions DISCIPLINED CAPITAL DEPLOYMENT $ Repurchased Jan –Jun 2013 Jul –Dec 2013 Jan –Jun 2014 July 2014 $60 mm $60 mm $69 mm $90 mm Shares Outstanding, end of period (in Millions) 11.49% 11.46% 10.72% 10.22% Estimated pro forma calculation Basel I ratio calculation Tier 1 Common Ratio •
Slide 19: Second Half Outlook
SECOND HALF OUTLOOK Asset Growth Deposits / Funding Mix Margin Noninterest Income Noninterest Expense Capital Provision • Full year 2014 annual average loan growth of approximately 8% • Mid single digit average deposit and slightly higher other funding growth • NIM compression of a few basis points
Slide 20: Why Associated: Reasons to Invest
WHY ASSOCIATED Reasons to Invest Management Team Focused on Creating Long-Term Shareholder Value – Return on Tier Common Equity (ROT1CE) = Management uses Tier common equity, along with other capital measures, to assess and monitor our capital position. This is a non-GAAP financial measure. Please r
Slide 21: Credit Quality Indicators
CREDIT QUALITY INDICATORS ($ IN MILLIONS)
Slide 22: Segment Profitability
SEGMENT PROFITABILITY YTD JUNE 2014 * Average Earning Assets
Slide 23: Commercial Loan Detail
COMMERCIAL LOAN DETAIL C&BL Loans by Industry ($6.7 billion – Jun 2014 – Period End) C&BL Loans by State Includes Missouri, Indiana, Ohio, Michigan, & Iowa ($6.7 billion – Jun 2014 – Period End) CRE Loans by Industry ($4.0 billion – Jun 2014 – Period End) CRE Loans by State ($4.0 billion – Jun 2014
Slide 24: Retail Loans by State
RETAIL LOANS BY STATE Residential Mortgage Loans ($4.1 billion – Jun 2014 – Period End) Home Equity Loans ($1.7 billion – Jun 2014 – Period End) Includes Missouri, Indiana, Ohio, Michigan, & Iowa Approximately 40% is in first lien position
Slide 25: Noninterest Income and Expense Composition
NONINTEREST INCOME AND EXPENSE COMPOSITION SECOND QUARTER 2014 Noninterest Income by Category Noninterest Expense by Category ($72 million) ($168 million)
Slide 26: Investment Securities Portfolio
Amortized Cost Composition – June 30, 2014 Investment Portfolio – June 30, 2014 Credit Rating ($ in thousands) Fair Value (000’s) % of Total Govt & Agency $4,823,263 83.8% AAA 108,481 1.9% AA 676,732 11.8% A 139,612 2.4% BAA1, BAA2 & BAA3 - 0.0% BA1 & Lower 1,917 0.0% Non-rated 5,603 0.1% TOTAL Mark
Slide 27: Reconciliation and Definitions of Non-GAAP Items
RECONCILIATION AND DEFINITIONS OF NON-GAAP ITEMS 2Q 2013 3Q 2013 4Q 2013 1Q 2014 2Q 2014 Efficiency Ratio Reconciliation: Efficiency ratio (1) 69.01% 71.45% 73.70% 70.41% 69.70% Taxable equivalent adjustment (1.38) (1.50) (1.49) (1.35) (1.32) Asset gains (losses), net (0.01) 0.59 0.80 0.22 0.26 Othe
Slide 28: Our Vision
OUR VISION ASSOCIATED 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 exceptional value for our