Associated Banc-corp · NYSE:ASB
Associated Banc-corp — Investor Presentation (November 2013)
30 slides from Associated Banc-corp's investor presentation, Nov 4, 2013
Slide 1: Fourth Quarter 2013 Investor Presentation
FOURTH QUARTER 2013 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 • $24 billion in assets; largest bank headquartered in Wisconsin • 239 branches serving approximately one million customers About Associated ASBC Deposits ² ($ in billions) ASBC Branches ² WI $11.9 IL $4.9 MN $1.5 Total
Slide 4: Attractive Midwest Markets
ATTRACTIVE MIDWEST MARKETS • Population : Over mm people live in our footprint (~ 20% of USA) . – Favorable Credit : Five of the top ten cities with the best consumer credit scores are in our footprint. • GDP Metrics : $2.9 trillion in (18.4% of US GDP). 4% growth from is consistent with the nationa
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: Highlights and Outlook
HIGHLIGHTS AND OUTLOOK • Net income of $137 mm; EPS of $0.82, up 11% from YTD 2012 • Average loans of $15.7 bn, up 5% compared to 3Q 2012 • Average deposits up $2 bn from 3Q 2012 to $17.6 bn • Efficiency Ratio down 90 bps, FTEs down 5% • T1CE ratio of 11.6% • Repurchased $120 mm of stock (through Oc
Slide 7: Internal Portfolio Management
Strong lending base in high-quality, low- volatility diversified assets to provide foundation for selective and prudent risk taking in higher risk asset classes. Core lending markets in Midwest with primary emphasis placed on Wisconsin, Minnesota, Illinois, Missouri, Iowa, Indiana, Ohio and Michigan
Slide 8: Reshaping & Rebuilding the Loan Portfolio
RESHAPING & REBUILDING THE LOAN PORTFOLIO Based on Average Balances, $ in Billions Installment Home Equity Residential Mortgage & HE 1 Liens Construction CRE Investor Commercial & Business Lending st
Slide 9: Current Market Conditions
Current Market Conditions UNDERWRITING CONSIDERATIONS Stronger Bank Balance Sheets • Unused Capital • Improved Credit trends leading to more “supply”/more appetite for credit More Competition Low Economic Growth • Low new loan demand • Borrower de-leveraging Competitive Industry Wide Implications Lo
Slide 10: YOY Loan Portfolio Growth
YOY LOAN PORTFOLIO GROWTH AVERAGE LOAN GROWTH OF $808 MILLION OR 5% FROM Q3 2012 TO Q3 2013 YOY Average Net Loan Change to 3Q 2013 ($ in millions) Home Equity & Installment Commercial Real Estate Residential Mortgage Power & Utilities Oil & Gas Mortgage Warehouse General Commercial Loans +11.9% % Ch
Slide 11: Growing Net Interest Income While Margin Compresses
GROWING NET INTEREST INCOME WHILE MARGIN COMPRESSES Yield on Interest-earning Assets Cost of Interest-bearing Liabilities Net Interest Income & Net Interest Margin ($ in millions)
Slide 12: Committed to Efficiency Improvements
COMMITTED TO EFFICIENCY IMPROVEMENTS $ IN MILLIONS Efficiency Ratio Trend – Efficiency ratio = Noninterest expense, excluding amortization of intangibles, divided by sum of taxable equivalent net interest income plus noninterest income, excluding investment securities gains, net, and asset gains, ne
Slide 13: Areas of Focus: Pursuing Efficiency Gains
Areas of Focus 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 Model Initiatives: • Optimize the ways that we interact with our custom
Slide 14: Rationalize Footprint
RATIONALIZE FOOTPRINT Consolidated 24% of branches since 2007. * Projection based on three branches closing during 4Q 2013 and eight more in 1Q 2014.
Slide 15: Reinvigorate Model
Deposit Automation ATM Lower Cost Branch Concepts Enhanced Virtual Banking Digital Channels Person to Person Virtual Financial Outlet Mobile Banking & Remote Deposit REINVIGORATE MODEL • Deposit Automation ATM • Transaction Express • Financial Outlets • Online & Mobile Banking • Remote Deposit • Per
Slide 16: Capital Management Priorities
CAPITAL MANAGEMENT PRIORITIES Funding Organic Growth Paying a Competitive Dividend Non-organic Growth Opportunities Share Buybacks and Redemptions Priority Highest Lowest • Fund Loan Growth and other Capital Investments • Repurchased $60 mm of Common Stock • Redeemed $205 mm in Trust Preferred • Rep
Slide 17: Capital Deployment Opportunities
CAPITAL DEPLOYMENT OPPORTUNITIES Basel I ASBC 3Q = 11.6% 3Q = 11.0% 8% - 9.5% Basel III ASBC Basel III Systematically Important Financial Institutions Regional and Community Banks = 7% +1 - 2.5% Organic Asset Growth Non Organic Cash Acquisition Repurchase / Special Dividend Capacity In July 2013, th
Slide 18: Why Associated
WHY ASSOCIATED • Committed to Efficiency Ratio Improvement • Strong Capital Profile & Opportunities for Capital Deployment • Leading Midwest Bank Operating in Attractive Markets • Core Organic Growth Opportunity • Disciplined Loan and Deposit Pricing • Improving Credit Quality • Improving Earnings P
Slide 19: Promoting the Associated Brand
PROMOTING THE ASSOCIATED BRAND
Slide 20: Advertising Campaign
ADVERTISING CAMPAIGN
Slide 21: Our Vision
OUR VISION ASSOCIATED will be the most admired Midwestern financial services company, distinguished by sound, value-added financial solutions with personal service for our customers, built upon a strong commitment to our colleagues and the communities we serve, resulting in exceptional value for our
Slide 22: Appendix
APPENDIX
Slide 23: Improvement in Credit Quality Indicators
IMPROVEMENT IN CREDIT QUALITY INDICATORS ($ IN MILLIONS)
Slide 24: Investment Securities Portfolio
Market Value Composition – September 30, 2013 Investment Portfolio – September 30, 2013 Credit Rating ($ in thousands) Mkt Value (000’s) % of Total Govt & Agency $ 4,047,191 81.6% AAA 77,000 1.6% AA 613,006 12.4% A 211,919 4.3% BAA1, BAA2 & BAA3 0.0% BA1 & Lower 2,438 0.1% Non-rated 9,338 0.2% TOTAL
Slide 25: Segment Profitability
SEGMENT PROFITABILITY YTD SEPTEMBER 2013 * Average Earning Assets
Slide 26: Commercial Loans by Industry
COMMERCIAL LOANS BY INDUSTRY AS OF SEPTEMBER 30, 2013 CB&L Loans by Industry Based on NAICS codes ($5.9 billion) CRE Loans by Industry ($3.7 billion)
Slide 27: Commercial Loan Portfolios by Geography
COMMERCIAL LOAN PORTFOLIOS BY GEOGRAPHY AS OF SEPTEMBER 30, 2013 Commercial & Business Loans by State CRE Loans by State ($5.9 billion) ($3.7 billion) Includes Missouri, Indiana, Ohio, Michigan, & Iowa
Slide 28: Consumer Loan Portfolios by Geography
CONSUMER LOAN PORTFOLIOS BY GEOGRAPHY AS OF SEPTEMBER 30, 2013 Residential Mortgage Loans by State Home Equity Loans by State Approximately half of home equity portfolio is in first-lien position ($3.7 billion) ($1.9 billion) Includes Missouri, Indiana, Ohio, Michigan, & Iowa
Slide 29: Noninterest Income and Expense Composition
NONINTEREST INCOME AND EXPENSE COMPOSITION YTD SEPTEMBER 2013 Noninterest Income by Category Noninterest Expense by Category ($237 million) ($501 million)
Slide 30: Reconciliation and Definitions of Non-GAAP Items
RECONCILIATION AND DEFINITIONS OF NON-GAAP ITEMS YTD 2013 YTD 2012 3Q 2013 2Q 2013 1Q 2013 4Q 2012 3Q 2012 Efficiency Ratio Reconciliation: Efficiency ratio (1) 70.11% 72.65% 71.10% 69.54% 69.74% 73.71% 72.81% Taxable equivalent adjustment (1.44) (1.62) (1.49) (1.39) (1.46) (1.57) (1.61) Asset gains
Associated Banc-Corp — Investor Presentation (November 2013) on 6ix