Associated Banc-corp · NYSE:ASB
Associated Banc-corp — Q1 2024 Earnings Presentation
26 slides from Associated Banc-corp's earnings presentation, Apr 25, 2024
Slide 1: First Quarter 2024 Earnings Presentation
First Quarter 2024 Earnings Presentation APRIL 25, 2024
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 2024 Results
First Quarter 2024 Results1 1Q 2024 Operating Results ▪ Total deposit growth of $267 million $0.52 Diluted EPS ▪ Core customer deposit growth of $557 million2 ▪ Total loan growth of $278 million 0.8% 2.0% Core Customer ▪ Loans / deposits of 87.5% Total Deposit Growth Deposit Growth2 ▪ Net interest i
Slide 4: Momentum is Building Across our Company
Momentum is Building Across our Company1 We are combining foundational strengths with targeted investments to drive transformational results ▪ Named #1 for Retail Banking ▪ Net consumer checking HH Customer Satisfaction in the growth in 1Q24 Upper Midwest Region by ▪ Net business checking HH J.D. Po
Slide 5: Advancing our Growth Strategy
Advancing our Growth Strategy We are building on our momentum through organic investments designed to further enhance our return profile Phase 1 Initiatives Phase 2 Updates People Products, Process & Technology ▪ Expanded commercial capabilities & added RMs ▪ Bolstered leadership across key ▪ Launch
Slide 6: Quarterly Deposit & Funding Trends
Quarterly Deposit & Funding Trends We grew core customer deposits1 once again in 1Q 2024 while decreasing our reliance on wholesale funding Average Quarterly Deposits EoP Funding Change (12/31/2023 to 3/31/2024) ($ in billions) ($ in millions) $33.3 $32.0 $32.2 $31.3 Total Deposits +$267mm (+1%) $29
Slide 7: Quarterly Loan Trends
Quarterly Loan Trends Period end loans grew by $278 million vs. the prior quarter, led by growth in Auto and C&I Average Quarterly Loans EoP Loan Change (12/31/2023 to 3/31/2024) ($ in billions) ($ in millions) $29.4 $29.9 $30.0 $29.4 $28.8 $215 Auto Finance $10.9 $11.0 $10.8 $10.8 Commercial & Indu
Slide 8: Average Yield Trends
Average Yield Trends We continue to benefit from rising asset yields, while total interest-bearing liability costs were flat vs. 4Q Average Yields (%) Asset & Liability Yield / Rate Trends (%) 7.42 7.56 7.29 7.04 6.66 7.11 7.22 7.04 6.77 5.64 5.36 5.51 6.39 5.52 5.18 5.42 4.94 5.07 4.78 4.48 3.55 3.
Slide 9: Net Interest Income & Net Interest Margin Trends
Net Interest Income & Net Interest Margin Trends Net interest income grew by $4 million while net interest margin grew by 10 bps vs. the prior quarter ($ in millions) $274 $258 $258 $254 $253 3.07% 2.80% 2.79% 2.71% 2.69% 1Q 2023 2Q 2023 3Q 2023 4Q 2023 1Q 2024 Quarterly Net Interest Income Quarterl
Slide 10: Improving our Return Profile Over Time
Improving our Return Profile Over Time1 Our efforts to remix the balance sheet & drive toward our 3.00%+ medium-term NIM target are on track Assets Liabilities Growing diversified asset classes to decrease Attracting and deepening customer relationships reliance on legacy low-yielding, low-relations
Slide 11: Cash & Investment Securities Portfolio
Cash & Investment Securities Portfolio We continue to target investments to total assets of 18% to 20% in 2024 EoP Securities Book Composition CET1 Including AOCI1 (%) ($ in billions) 9.45 9.48 9.55 9.39 9.43 $7.7 $7.7 $7.7 $7.7 $7.8 8.74 8.87 8.79 8.60 8.53 $0.4 $0.3 $0.3 $0.3 $0.2 1Q 2023 2Q 2023
Slide 12: Noninterest Income Trends
Noninterest Income Trends Our 1Q 2024 noninterest income was up 5% vs. the same period a year ago Quarterly Noninterest Income Trends ($ in millions) $66 $67 $70 $62 $65 $5 $4 $5 $12 $8 $5 $5 $4 $4 $5 $8 $7 $9 $2 $3 $48 $49 $50 $47 $50 1Q 2023 2Q 2023 3Q 2023 4Q 2023 Adjusted 1 1Q 2024 4Q 2023 GAAP
Slide 13: Noninterest Expense Trends
Noninterest Expense Trends Our 1Q 2024 noninterest expense included $8 million in FDIC special assessment expense Noninterest Expense Trends Efficiency Ratio (%) ($ in millions) 132.0 $239 $31 64.1 60.1 58.5 61.0 $196 $198 58.5 57.0 57.2 $191 56.1 54.6 $187 $8 $60 $52 $53 $44 1Q 2023 2Q 2023 3Q 2023
Slide 14: Capital Profile
Capital Profile Our capital ratios remained well within our target ranges during 1Q 2024 1Q 2024 Capital Ratios (%) 2024 Capital Target Ranges (%) 12.08 10.00 7.75 9.43 7.08 9.00 10.02 9.43 6.75 1Q 2024 2024 1Q 2024 2024 7.08 TCE Ratio1 Target CET1 Ratio Target Range Range Tangible Book Value / Shar
Slide 15: Allowance for Credit Losses on Loans (ACLL) Update
Allowance for Credit Losses on Loans (ACLL) Update Our ACLL percentage decreased by 1 basis point vs. the prior quarter to 1.31% ACLL1 Update ACLL / Total Loans (%) ▪ ACLL increased $2 million from the prior quarter to $388 million, driven primarily by nominal credit movement coupled with general ma
Slide 16: Credit Quality Trends
Credit Quality Trends 1Q 2024 credit quality remained solid with a modest uptick in NCOs balanced by decreasing delinquencies Total Delinquent Loans Nonaccrual Loans ($ in millions) ($ in millions) $169 $178 $149 $118 $131 $79 $74 $84 $24 $36 $63 $25 $22 $11 $0 $19 $42 $50 $51 $31 $62 $86 $85 $47 $2
Slide 17: High-Quality Commercial Real Estate Portfolio
High-Quality Commercial Real Estate Portfolio1 ASB has built a diversified CRE portfolio by partnering with well-known developers in stable Midwest markets CRE Credit Quality 1Q 23 2Q 23 3Q 23 4Q 23 1Q 24 Portfolio LTV 60% 60% 59% 58% 59% Consumer Com'l & Delinquencies/Loans 0.00% 0.00% 0.14% 0.25%
Slide 18: FY 2024 Outlook
FY 2024 Outlook GAAP Adjusted FY 2023 Result FY 2023 Result1 FY 2024 Guidance2 EoP Total Loans $29.2B $29.2B 4% to 6% Growth (+1.4% vs. 2022) (+1.4% vs. 2022) Core Customer Deposits3 EoP Total Deposits $33.4B 3% to 5% Growth (+12.9% vs. 2022) $27.4B (Core Customer Deposits) (-2.4% vs. 2022) Net Inte
Slide 19: Appendix
Appendix
Slide 20: Stable, Granular Deposit Portfolio
Stable, Granular Deposit Portfolio Uninsured, uncollateralized deposits were only 23% of total deposits as of 3/31/2024 EoP Total Deposit Trends (Associated Bank, N.A.) ($ in billions) $32.1 $32.1 $33.5 $33.7 23% $30.4 Percentage of total deposits that were uninsured and uncollateralized as of 3/31/
Slide 21: Liquidity Sources
Liquidity Sources As of 3/31/2024, ASB’s total liquidity sources covered 156% of uninsured, uncollateralized deposits ($ in millions) Liquidity Sources 12/31/2023 3/31/2024 Federal Reserve Balance $421.8 $419.6 Available FHLB Chicago Capacity $5,985.4 $7,035.8 Available Fed Discount Window Capacity
Slide 22: Additional Loan Trends
Additional Loan Trends EoP Quarterly Loan Trends Average Loan Change (4Q 2023 to 1Q 2024) ($ in billions) ($ in millions) $29.8 $30.2 $29.5 $29.2 $29.2 Auto Finance $235 $11.1 $11.2 CRE Construction $107 $10.9 $10.8 $11.0 CRE-Owner Occupied $35 $7.2 $7.3 $7.3 $7.4 $7.3 $(12) Home Equity & Other Cons
Slide 23: Total Loans Outstanding Balances as of March 31, 2024
Total Loans Outstanding Balances as of March 31, 2024 ($ in millions) % of Total % of Total 1 1 3/31/2024 Loans 3/31/2024 Loans 2 C&BL (by NAICS ) CRE (by property type) Utilities $ 2,584 8.8% Multi-Family $ 2,780 9.4% Manufacturing & Wholesale Trade 2,270 7.7% Industrial 1,807 6.1% Real Estate (inc
Slide 24: Loan Stratification Outstanding Balances as of March 31, 2024
Loan Stratification Outstanding Balances as of March 31, 2024 Illinois Illinois Minnesota 15% Minnesota 21% 9% 7% Illinois Texas Minnesota 15% Other 6% 10% Midwest2 21% Wisconsin C&BL by Other 2 CRE by 23% Geography Midwest 10% Wisconsin Total Other 2 Geography Midwest $11.0 billion 28% Loans1 13% W
Slide 25: Reconciliation & Definitions of Non-GAAP Items
Reconciliation & Definitions of Non-GAAP Items End of Period Core Customer Deposits Reconciliation ($ in millions) 1Q 2023 2Q 2023 3Q 2023 4Q 2023 1Q 2024 Total deposits $30,332 $32,014 $32,123 $33,446 $33,713 Brokered CDs (1,186) (3,818) (3,351) (4,447) (3,931) Network transaction deposits (1,273)
Slide 26: Reconciliation & Definitions of Non-GAAP Items
Reconciliation & Definitions of Non-GAAP Items Efficiency Ratio Reconciliation1 1Q 2023 2Q 2023 3Q 2023 4Q 2023 1Q 2024 Federal Reserve efficiency ratio 56.07% 58.49% 60.06% 132.01% 61.03% Fully tax-equivalent adjustment (0.79)% (0.85)% (0.89)% (3.29)% (0.71)% Other intangible amortization (0.66)% (