Associated Banc-corp · NYSE:ASB
Associated Banc-corp — Q1 2020 Earnings Presentation
21 slides from Associated Banc-corp's earnings presentation, Apr 23, 2020
Slide 1: First Quarter 2020 Earnings Presentation
FIRST QUARTER 2020 EARNINGS PRESENTATION April 23, 2020
Slide 2: Disclaimer
DISCLAIMER 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 plans, objectiv
Slide 3: COVID-19 Response
COVID-19 RESPONSE Associated supports its Customers, Colleagues and Communities during these challenging times ▪ Funded over 3,600 loans totaling nearly $900 million as part of the Paycheck Protection Program ▪ Consumers: suspended certain transaction and late fees; initiated consumer and mortgage l
Slide 4: First Quarter 2020 Update
FIRST QUARTER 2020 UPDATE Associated funded a record volume of loans to assist its customers while remaining strong, with substantial liquidity and capital to continue this support Net income available to common equity of $42 million, or $0.27 per common share, or $0.28 per common share excluding ac
Slide 5: Loan Portfolio - Quarterly Trends
LOAN PORTFOLIO - QUARTERLY TRENDS Average Quarterly Loans Average Net Loan Change (from 4Q19) ($ in billions) ($ in millions) $23.4 $23.3 $23.3 Residential mortgage $237 $23.1 $22.8 Power & utilities $133 $8.4 $8.6 $8.5 $8.2 $8.4 General commercial $107 REIT $85 Total commercial & business loans: +$
Slide 6: Loan Portfolio Trends
LOAN PORTFOLIO TRENDS EOP Loan Change1 4Q19 to 1Q20 Loan Change1 from 3/31/20 to 4/21/20 ($ in millions) ($ in millions) Paycheck General commercial $627 Protection $896 Program Mortgage warehouse $325 REIT $26 CRE investor $244 CRE $15 REIT $198 Total commercial & business loans: Other commercial &
Slide 7: COVID-19 Relief
COVID-19 RELIEF Data as of April 21, 2020 We utilized the PPP and initiated our COVID-19 Relief Program to help our customers overcome challenges related to the pandemic PPP Highlights Loan Deferrals & Modifications1 ▪ Originated over 3,600 loans totaling nearly Loan Deferrals $900 million ▪ $733 mi
Slide 8: Key Commercial Loan Exposures
KEY COMMERCIAL LOAN EXPOSURES ($ IN MILLIONS) AS OF 3/31/2020 % of total C&BL Utilization CRE Utilization Total loans Retailers/Shopping Centers1 Retailers $ 149.7 81% $ 527.5 91% $ 677.2 2.78% Retail REITs 303.9 67% 148.7 100% 452.6 1.86% Subtotal 453.6 71% 676.1 93% 1,129.8 4.64% Oil & Gas Texas E
Slide 9: CECL Update
CECL UPDATE CECL Adopted in 1Q 2020 Allowance by Portfolio ▪ Allowance for credit losses on loans (ACLL) • Reserves on oil & increased $171 million, or 76%, at the end of 1Q gas increased $64 Total consumer Comm. & bus. 2020 from 4Q 2019 million 22% lending - excluding oil & gas ▪ Assumptions based
Slide 10: Credit Quality - Quarterly Trends
CREDIT QUALITY - QUARTERLY TRENDS ($ IN MILLIONS) Potential Problem Loans Nonaccrual Loans $241 $234 $156 $167 $27 $166 $161 $67 $129 $137 $51 $63 $118 $4 $133 $29 $43 $36 $23 $32 $215 $167 $161 $101 $118 $105 $104 $93 $95 $109 1Q 2019 2Q 2019 3Q 2019 4Q 2019 1Q 2020 1Q 2019 2Q 2019 3Q 2019 4Q 2019
Slide 11: Deposit Portfolio - Quarterly Trends
DEPOSIT PORTFOLIO - QUARTERLY TRENDS Average Quarterly Deposits EOP Deposit Change (from 4Q19) ($ in billions) ($ in millions) $25.1 $25.2 Interest-bearing demand $708 $24.6 $24.1 $24.3 Noninterest-bearing demand $657 $5.1 $5.3 $5.0 $396 $5.5 $5.5 Network transaction deposits Savings $298 $4.7 $5.0
Slide 12: Liquidity Measures
LIQUIDITY MEASURES Liquidity Highlights Wholesale Funds2 / Total Assets ▪ Liquidity remains abundant with $11 billion of funding available from FHLB Chicago, Fed funds lines, 18.8% unencumbered securities and the Discount Window ▪ Fully fund Paycheck Protection Program loans through 16.9% the Federa
Slide 13: Net Interest Income and Margin Trends
NET INTEREST INCOME AND MARGIN TRENDS Net Interest Income & Net Interest Margin Average Monthly Yields ($ in millions) 4.72% 4.49% 4.44% 4.41% 4.43% 2.90% 2.88% 2.81% 2.83% 2.84% 4.19% 4.26% 4.18% 3.97% 4.05% 3.87% 3.65% $216 3.35% 3.38% 3.37% $214 3.21% 3.25% 3.24% 2.86% 2.82% 2.87% 2.89% 2.86% 2.8
Slide 14: Noninterest Income - Quarterly Trends
NONINTEREST INCOME - QUARTERLY TRENDS ($ IN MILLIONS) Noninterest Income Gross Mortgage Banking Income $15 $11 $101 $9 $96 $98 $(9) $93 $7 $91 $5 $11 $9 $7 $6 $5 1Q 2019 2Q 2019 3Q 2019 4Q 2019 1Q 2020 Mortgage banking, net MSR Impairment $15 $15 $17 $15 Capital Markets Fees $16 $20 $21 $21 $8 $8 $2
Slide 15: Noninterest Expense Trends
NONINTEREST EXPENSE TRENDS ($ IN MILLIONS) Noninterest Expense EOP Branch Count and Average FTE1 $201 $204 $198 $1 $192 $4 $2 $192 $1 $2 4,782 $76 $82 4,696 $71 $71 $76 4,660 4,666 4,631 247 248 248 249 233 29 $120 $123 $123 $121 $114 220 1Q 2019 2Q 2019 3Q 2019 4Q 2019 1Q 2020 1Q 2019 2Q 2019 3Q 20
Slide 16: Customer Activity Update
CUSTOMER ACTIVITY UPDATE Average Daily Branch Average Monthly Mobile Average Daily Customer Activity1 Banking Sessions Per User2 Care Calls3 Our mid-April branch activity ...as our customers ramped ...and call volume grew 32% declined 17% from January... up mobile sessions by as we increasingly inte
Slide 17: Strong Capital Position
STRONG CAPITAL POSITION Highlights Capital Ratio Walkdowns1 0.05% ▪ Strong asset growth and the First Staunton acquisition 0.21% moderated capital ratios during 1Q 2020 (0.23)% (0.47)% (0.41)% ▪ Election to utilize modified CECL transition mitigated CECL impact to regulatory capital; CECL negatively
Slide 18: 2020 Outlook
2020 OUTLOOK We are withdrawing our prior guidance due to extraordinary economic uncertainty. We expect to update our guidance as conditions become more clear. ▪ Maintain loan to deposit ratio ▪ Anticipate noninterest under 100%, excluding PPP expense run rate to be flat from Q1 through the ▪ Target
Slide 19: Appendix
APPENDIX
Slide 20: Loan Stratification Outstandings as of March 31, 2020
LOAN STRATIFICATION OUTSTANDINGS AS OF MARCH 31, 2020 C&BL by Geography Total Loans1 CRE by Geography $9.5 billion $5.6 billion Illinois Illinois Minnesota Illinois 26% 17% 10% Wisconsin 16% 23% Minnesota Minnesota 6% 10% Other Midwest 2 Other Midwest 2 Wisconsin Other Wisconsin 22% 11% 28% Midwest
Slide 21: Reconciliation and Definitions of Non-GAAP Items
RECONCILIATION AND DEFINITIONS OF NON-GAAP ITEMS ($ in millions, except per share data) 1Q 2020 Acquisition Related Costs 1Q 2020 per share data2 GAAP earnings $ 42 $ 0.27 Contract terminations and conversion costs 1 All other acquisition related costs 1 Total acquisition related costs $ 2 Less addi