Associated Banc-corp · NYSE:ASB
Associated Banc-corp — Q4 2020 Earnings Presentation
35 slides from Associated Banc-corp's earnings presentation, Feb 9, 2021
Slide 1: Associated Banc-Corp First Quarter 2021 Investor Presentation
February 10, 2021 Associated Banc-Corp First Quarter 2021 Investor Presentation Associated Bank River Center, Downtown Milwaukee (© Nathan Vomhof) Exhibit 99.1
Slide 2: Forward-Looking Statements
1 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
Slide 3: Our Franchise
2 Our Franchise Illinois 21% Minnesota 8% Wisconsin 71% Consumer 36% Commercial Real Estate 25% Commercial and Business Lending 38% $33 billion of assets $24 billion of loans $4 billion of equity $26 billion of deposits 1 As of December 31, 2020. 2 Excludes loans held for sale. 3 FDIC Summary of Dep
Slide 4: Market Perspective
3 Market Perspective 1 As of 12/31/2020; excludes $313 million Other consumer portfolio. 2 Other Midwest includes Missouri, Indiana, Ohio, Michigan and Iowa. Unemployment map source: U.S. Bureau of Labor Statistics as of 12/31/2020; ASB footprint shown as simple average of the 8 states where we oper
Slide 5: 2020 results highlights: credit, earnings, NIM and cost savings
4 Improving Credit Position (Quarterly provision expense) Increasing Earnings (Quarterly EPS) Active NIM Management (Quarterly NIM) ...and completed cost saving initiatives... ▪ Further rationalized our branch network by 9%1 ▪ Reduced staffing levels by 12%1 ▪ Back office streamlining drove addition
Slide 6: 2020 PTPP higher year over year
5 2020 included multiple cost saving initiatives and asset sales which drove PTPP higher YoY ($ in millions) 1 A non-GAAP measure. Please refer to the appendix for a reconciliation of pre-tax pre-provision income to income before income taxes. 2 A non-GAAP measure. Please refer to the appendix for a
Slide 7: 4Q 2020 PTPP income excluding gain on sale of branches
6 4Q 2020 PTPP income excluding gain on sale of branches of $94 million ($ in millions) 1 A non-GAAP measure. Please refer to the appendix for a reconciliation of pre-tax pre-provision income to income before income taxes. 2 A non-GAAP measure. Please refer to the appendix for a reconciliation of ad
Slide 8: 2021 Outlook
7 Balance Sheet Management ▪ Commercial loan growth, excluding PPP, of 2-4% ▪ Full year margin of 2.55% to 2.65% ▪ Target investments / total assets ratio of 15% Fee Businesses ▪ Noninterest income of $280 million to $300 million ▪ Mortgage banking revenue expected to moderate ▪ Wealth management fe
Slide 9: Line of Business Profiles
Line of Business Profiles
Slide 10: Balanced Business Segments
9 Balanced Business Segments1 16.3% 12.4% Corporate and Commercial Specialty Community, Consumer, and Business Return on Average Allocated Capital Community, Consumer, and Business Corporate and Commercial Specialty $555 $535 Corporate and Commercial Specialty Community, Consumer, and Business Net I
Slide 11: Corporate Banking
10 Corporate Banking Corporate and Commercial Specialty Segment Corporate Lending Specialized Lending Verticals Commercial Deposits and Treasury Management Commercial Products and Services Creative, relationship-oriented teams build loyal, long-lasting client relationships ▪ Corporate Lending serves
Slide 12: Commercial Real Estate
11 Commercial Real Estate Corporate and Commercial Specialty Segment ▪ $7.1 billion in average loans and deposits ▪ 12 offices across 8 states ▪ ~100 colleagues Local experienced teams create custom real estate financing solutions ▪ Term, acquisition, construction and interim-bridge financing ▪ Depo
Slide 13: Wealth Management
12 Wealth Management Corporate and Commercial Specialty Segment AIS $19 Personal Trust $39 Private Banking $3 RPS $18 Whitnell $8 Inv. Mgmt. $1 Market-based teams are comprised of specialists ▪ Wealth Management Services offers a suite of services tailored to the unique needs of high-net-worth and u
Slide 14: Consumer and Business Banking
13 Consumer and Business Banking Community, Consumer and Business Segment ▪ $18.7 billion in average loans and deposits ▪ 158 branches1 ▪ ~1,900 colleagues Full-range services for individuals and small businesses ▪ Retail Banking provides best-in-class customer experience across branches and digital
Slide 15: Community Markets
14 Community Markets Community, Consumer and Business Segment Localized approach ensures the customer experience is at the forefront of decisions and actions ▪ Virtual community banks with our full suite of financial and risk management solutions in midsize markets ▪ Community market presidents are
Slide 16: Consumer Transaction Dynamics
15 Consumer Transaction Dynamics Customers have shifted their transactions away from branch lobbies to drive ups and mobile channels 2,880 2,573 2,198 2,405 2,272 4Q 2019 1Q 2020 2Q 2020 3Q 2020 4Q 2020 1 Quarterly branch transactions displayed in thousands. 2 Based on period end deposits. ▪ Overall
Slide 17: Branch Optimization Trend
16 Branch Optimization Trend We have consistently optimized our branch network over the last decade Pro Forma Branch Count Trend1 205 202 185 31 26 19 20 17 7 279 270 238 237 226 215 217 213 236 248 228 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 ASB BKMU (58) HBAN (32) FNB (9) 2 1 Branch
Slide 18: Financial Trends
Financial Trends
Slide 19: Annual Loan Trends
18 $1.4 $1.3 $1.3 $1.2 $1.1 $6.2 $7.1 $8.3 $8.3 $8.2 $4.7 $5.0 $5.4 $5.2 $5.8 $7.4 $7.3 $7.7 $8.4 $8.7 $0.7 $19.7 $20.6 $22.7 $23.1 $24.5 2016 2017 2018 2019 2020 $(236) $(180) $(122) $(108) $43 $275 $324 $337 $381 Annual Loan Trends CRE investor Residential mortgage Home equity & other consumer Gen
Slide 20: Quarterly Loan Trends
19 $1.2 $1.2 $1.2 $1.1 $1.1 $8.2 $8.4 $8.3 $8.1 $8.0 $5.2 $5.3 $5.7 $6.0 $6.2 $8.2 $8.4 $9.2 $8.8 $8.5 $0.8 $1.0 $0.9 $22.8 $23.3 $25.2 $25.0 $24.7 4Q 2019 1Q 2020 2Q 2020 3Q 2020 4Q 2020 $(374) $(216) $(161) $(138) $(10) $308 $481 $482 Quarterly Loan Trends CRE investor Residential mortgage Home eq
Slide 21: Loan Deferral Update
20 ▪ We generally granted 90 day deferrals for our commercial customers ▪ Total commercial deferrals have declined approximately 96% since the end of 2Q 2020 ▪ As of 12/31/20 commercial deferrals ($31 million) represent 0.20% of our commercial loan balances Active Commercial Loan Deferrals Active Co
Slide 22: Fourth Quarter ACLL / Allowance Update
21 Fourth Quarter ACLL ▪ Allowance for credit losses on loans (ACLL) decreased $11 million at the end of 4Q 2020 from 3Q 2020 ▪ ACLL to loans was 1.76%, or 1.82% excluding PPP loans ▪ 4Q 2020 provision of $17 million, down $26 million from 3Q 2020 ▪ CECL forward looking assumptions based on Moody’s
Slide 23: Credit Quality – Quarterly Trends
22 2.69% 16.63% 19.36% 15.29% 18.12% 0.98% 1.62% 1.73% 1.77% 1.76% 4Q 2019 1Q 2020 2Q 2020 3Q 2020 4Q 2020 $4 $9 $2 $7 $9 $10 $8 $25 $20 $3 $19 $14 $17 $26 $30 $28 4Q 2019 1Q 2020 2Q 2020 3Q 2020 4Q 2020 Credit Quality – Quarterly Trends $95 $107 $110 $145 $97 $23 $29 $50 $8 $37 $1 $11 $79 $77 $118
Slide 24: Annual Deposit Portfolio Trends
23 $3.5 $3.1 $2.1 $1.9 $1.4 $1.6 $2.0 $2.8 $3.1 $2.3 $6.0 $6.3 $7.3 $7.0 $6.5 $1.4 $1.5 $1.9 $2.4 $3.3 $3.4 $4.0 $4.8 $5.1 $5.6 $5.1 $5.0 $5.2 $5.2 $6.9 $21.0 $21.9 $24.1 $24.7 $26.0 2016 2017 2018 2019 2020 Annual Deposit Portfolio Trends ($ in billions) Average Annual Deposits Time depositsSavings
Slide 25: Quarterly Deposit Portfolio Trends
24 $1.4 $1.4 $1.5 $1.5 $1.3 $2.7 $2.6 $2.5 $2.1 $1.9 $6.6 $6.5 $6.5 $6.5 $6.5 $2.7 $2.9 $3.3 $3.5 $3.6 $5.1 $5.3 $5.4 $5.8 $5.7 $5.5 $5.5 $6.9 $7.4 $7.7 $24.1 $24.3 $26.1 $26.8 $26.7 4Q 2019 1Q 2020 2Q 2020 3Q 2020 4Q 2020 Quarterly Deposit Portfolio Trends ($ in billions) Average Quarterly Deposits
Slide 26: Net Interest Income and Yield Trends
25 Net Interest Income and Yield Trends Net Interest Income and Net Interest Margin 4.55% 4.34% 3.24% 2.93% 2.88% 4.13% 3.85% 2.80% 2.59% 2.69% 3.27% 3.33% 3.04% 3.06% 3.00% 1.23% 1.06% 0.60% 0.52% 0.43% 0.84% 0.65% 0.10% 0.08% 0.07% 1.74% 1.63% 1.44% 1.21% 0.97% 4Q 19 1Q 20 2Q 20 3Q 20 4Q 20 $203 $
Slide 27: Noninterest Income Trends
26 $15 $14 $14 $15 $15 $22 $21 $21 $21 $22 $16 $15 $11 $14 $15 $40 $48 $51 $25 $26 $7 $93 $98 $76 $86 4Q 2019 1Q 2020 2Q 2020 3Q 2020 4Q 2020 $254 Noninterest Income Trends Net Mortgage Banking IncomeNoninterest Income Trend $7 $6 $12 $13 $15 4Q 2019 1Q 2020 2Q 2020 3Q 2020 4Q 2020 $16 $15 $11 $14 $
Slide 28: Expense Trends
27 $121 $114 $111 $109 $98 $82 $76 $72 $69 $75 $1 $2 $1 $50 $204 $192 $183 $228 $173 4Q 2019 1Q 2020 2Q 2020 3Q 2020 4Q 2020 Expense Trends Adjusted Efficiency Ratio2Noninterest Expense 67% 63% 63% 63% 63% 69% 70% 43% 85% 60% 4Q 2019 1Q 2020 2Q 2020 3Q 2020 4Q 2020 2.45% 2.35% 2.09% 1.87% 2.02% 2.51
Slide 29: Strong Capital Position
28 6.90% 9.36% 10.35% 12.56% 7.94% 10.45% 11.81% 14.02% TCE Ratio Common Equity Tier 1 Capital Tier 1 Capital Total Capital 1 Tangible common equity / tangible assets. This is a non-GAAP financial measure. See Appendix for a reconciliation of non-GAAP financial measures to GAAP financial measures. R
Slide 30: Appendix
Appendix
Slide 31: Total Loans Outstanding
30 Total Loans Outstanding Balances as of December 31, 2020 1 All values as of period end. 2 North American Industry Classification System. 3 Includes mortgage warehouse financing. 4 Includes $296 million of oil and gas loans and one $16 million fracking sand mining company loan. Well diversified $2
Slide 32: Key COVID Commercial Loan Exposures
31 1 As of 12/31/2020. 2 C&BL excludes grocers, convenience stores, vehicle dealers, auto parts and tire dealers, direct and mail order retailers, and building material dealers; CRE excludes properties primarily anchored by grocers, self-storage facilities, and vehicle dealers. Key COVID commercial
Slide 33: Loan portfolio by geography and property type
32 Manufacturing & Wholesale Trade 17% Power & Utilities 17% Real Estate 12% Oil & Gas 4% Finance & Insurance 18% Other 15% 1 Excludes $313 million Other consumer portfolio. 2 Other Midwest includes Missouri, Indiana, Ohio, Michigan and Iowa. 3 Principally reflects the oil and gas portfolio. 4 Chart
Slide 34: Reconciliation and Definitions of Non-GAAP Items
33 Reconciliation and Definitions of Non-GAAP Items ($ in millions) Adjusted Noninterest Expense Reconcilation1 4Q19 1Q20 2Q20 3Q20 4Q20 Noninterest expense $204 $192 $183 $228 $173 Restructuring costs 0 0 0 50 0 Acquisition related costs 1 2 1 0 0 Severance / frontline pay 4 0 2 10 0 Adjusted nonin
Slide 35: Reconciliation and Definitions of Non-GAAP Items
34 Reconciliation and Definitions of Non-GAAP Items ($ in millions) 1 This is a non-GAAP financial measure. Management believes these measures are meaningful because they reflect adjustments commonly made by management, investors, regulators, and analysts to evaluate the adequacy of earnings per com