Associated Banc-corp · NYSE:ASB
Associated Banc-corp — Debt Investor Presentation (May 2024)
34 slides from Associated Banc-corp's debt investor presentation, May 28, 2024
Slide 1: 2Q 2024 Fixed Income Investor Presentation
May 28, 2024 2Q 2024 Fixed Income Investor Presentation Associated Banc-Corp 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: Today's Presenters
2 Today’s Presenters ▪ Derek S. Meyer joined Associated Bank in August 2022 and is the executive vice president and chief financial officer. He is responsible for the company’s financial management. He also serves on the executive leadership team for Associated. ▪ Meyer has over 30 years of experien
Slide 4: Associated Banc-Corp at a glance
3 Commercial & Business Lending 37% Commercial Real Estate 25% Consumer 38% Corporate & Commercial Specialty 28% Community, Consumer & Business 54% Risk Mgmt & Shared Services 18% With origins dating back to 1861, ASB is the largest bank holding company based in Wisconsin2 Associated Banc-Corp (NYSE
Slide 5: Our Strong Foundation
4 Our Strong Foundation We’ve strengthened our company over time by managing risk & prioritizing the customer experience Strengthened Credit Risk Profile Enhanced Liquidity & Interest Rate Risk Management Sharpened Customer Experience Focus ▪ Geographically anchored in stable Midwest markets ▪ Exite
Slide 6: Key Themes in 2024
5 Key Themes in 2024 We’ve positioned ASB for success by advancing our growth strategy while remaining disciplined on credit ▪ Conservative credit culture refined over the past 15 years ▪ Geographically anchored in stable Midwest markets (no rent-controlled NYC exposure) ▪ Maintaining prime/super pr
Slide 7: Disciplined Credit Approach
Disciplined Credit Approach
Slide 8: Strengthened Balance Sheet
7 4% 0% 1Q 2017 1Q 2024 7% 1% 1Q 2009 1Q 2024 Strengthened Balance Sheet1 We have exited or greatly reduced certain historically volatile portfolios while growing historically stable assets $9.4 $10.7 $2.2 $7.9$4.3 $11.0 $15.9 $29.5 1Q 2009 1Q 2024 Land & For-Sale Housing Loans / Total Loans Oil & G
Slide 9: Diversified Credit Risk Profile
8 Com'l & Business Lending 37% Other 36% Residential Mortgage 27% 1 All data as of and for the period ended March 31, 2024 unless otherwise noted. 2 Other Midwest includes Missouri, Indiana, Ohio, Michigan and Iowa. 3 Property class mix determined by third-party vendor partner mapping of portfolio.
Slide 10: Quarterly Loan Trends
9 Period end loans grew by $278 million vs. the prior quarter, led by growth in Auto and C&I Quarterly Loan Trends Commercial & Business Lending Commercial Real Estate Consumer Lending $2.4 $2.5 $2.8 $3.0 $3.3 $8.6 $8.7 $8.8 $8.7 $7.9 $7.3 $7.3 $7.3 $7.4 $7.4 $10.6 $10.9 $11.0 $10.8 $10.8 $28.8 $29.
Slide 11: Credit Quality Trends
10 Net Charge Offs and Provision Total Delinquent Loans Credit Quality Trends $2 $2 $2 $22 $2$29 $40 $47 $62 $48 $31 $42 $50 $84 $51 1Q 2023 2Q 2023 3Q 2023 4Q 2023 1Q 2024 1Q 2024 credit quality remained solid with a modest uptick in NCOs balanced by decreasing delinquencies ($ in millions) Accruin
Slide 12: Allowance for Credit Losses on Loans (ACLL) Update
11 ACLL / Total Loans (%)ACLL1 Update ▪ ACLL increased $2 million from the prior quarter to $388 million, driven primarily by nominal credit movement coupled with general macroeconomic trends ▪ CECL forward-looking assumptions based on Moody’s February 2024 Baseline forecast 1 Includes funded and un
Slide 13: High-Quality Commercial Real Estate Portfolio
12 Multi-Family 38% Retail 9% Office 14% Industrial 25% Other 15% Consumer 38% Com'l & Business Lending 37% CRE 25% Wisconsin 20% Illinois 15% Minnesota 9% Other Midwest2 21% Texas 8% Other 26% 1 All updates as of or for the period ended March 31, 2024 unless otherwise noted. 2 Other Midwest include
Slide 14: Advancing our Growth Strategy
Advancing our Growth Strategy
Slide 15: Phase 1: Established Track Record of Execution
14 Phase 1: Established Track Record of Execution Launched in 2021, Phase 1 of our plan was designed to attract & deepen relationships, enhance profitability Enhanced our Lending Capabilities Expanded our Deposit Capabilities Invested in Digital Transformation ▪ Diversify our consumer portfolio by g
Slide 16: Phase 2: Advancing our Growth Strategy
15 Phase 2: Advancing our Growth Strategy Announced in 4Q 2023, Phase 2 of our strategic plan builds on our foundation & positions us for future success Diligent Expense Control Balance Sheet Repositioning Reinvesting for Organic Growth Repositioned our balance sheet in 4Q 2023 to accelerate the fin
Slide 17: Advancing our Growth Strategy
16 Advancing our Growth Strategy We are building on our momentum through organic investments designed to further enhance our return profile Phase 2 ProgressPhase 1 Achievements ▪ Expanded commercial capabilities & added RMs ▪ Modernized digital banking experience ▪ Upgraded product & service offerin
Slide 18: Momentum is Building Across our Company
17 Momentum is Building Across our Company1 We are combining foundational strengths with targeted investments to drive transformational results Satisfied Colleagues Satisfied Customers ▪ Named #1 for Retail Banking Customer Satisfaction in the Upper Midwest Region by J.D. Power2 Balance Sheet Growth
Slide 19: Quarterly Deposit & Funding Trends
18 Average Quarterly Deposits Quarterly Deposit & Funding Trends We grew core customer deposits1 once again in 1Q 2024 while decreasing our reliance on wholesale funding ($ in billions) EoP Funding Change (12/31/2023 to 3/31/2024) ($ in millions) $1.1 $1.5 $1.6 $1.6 $1.7 $0.8 $3.0 $3.4 $3.5 $4.3 $1.
Slide 20: Net Interest Income & Net Interest Margin Trends
19 Net Interest Income & Net Interest Margin Trends We continue to benefit from rising asset yields, while total interest-bearing liability costs were flat vs. 4Q Asset & Liability Yield / Rate Trends (%) Net Interest Income & Net Interest Margin Trends $274 $258 $254 $253 $258 1Q 2023 2Q 2023 3Q 20
Slide 21: Improving our Return Profile Over Time
20 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 Strategy Progress Since 2021 1Q24 Results Growing diversified asset classes to decrease reliance on legacy low-yielding, low-relationship asset classes ▪ Ex
Slide 22: Building on our Strong Momentum with Digital
21 26% Consumer Checking Household Acquisition 1Q 2023 to 1Q 2024 9% Consumer Checking Household Attrition 1Q 2023 to 1Q 2024 Net Growth Consumer & Business Checking Households 1Q 2024 #1 for Retail Banking Customer Satisfaction in the Upper Midwest Region (J.D. Power)1 We are continuing to make dig
Slide 23: Balance Sheet Repositioning Summary
22 Balance Sheet Repositioning Summary Estimated 11/9/2023 Actual Total Assets Sold $1.8B $1.68B Total Loans Sold $1.0B in ARMs $969M in ARMs Wtd. Avg. Yield 3.72% Wtd. Avg. Yield 3.81% Total Securities Sold (Book Value) $0.8B in AFS Securities $780M in AFS Securities Wtd. Avg. Yield 2.60% Wtd. Avg.
Slide 24: Well-Positioned for 2024+
23 Well-Positioned for 2024+ Leadership in multiple organizational units has been boosted by recent hires, bringing in new ideas and continuing to build upon our already strong foundation Loan growth expected as our investments in customer-facing colleagues and enhanced lending capacity provide a ta
Slide 25: 2024 Outlook
24 1 Adjusted 2023 figures have been provided for noninterest income and noninterest expense to exclude the impact of one time items incurred as a result of a balance sheet repositioning that the Corporation announced in the fourth quarter of 2023 and the FDIC special assessment booked during the fo
Slide 26: Appendix
Appendix
Slide 27: Stable, Granular Deposit Portfolio
26 Stable, Granular Deposit Portfolio Uninsured, uncollateralized deposits were only 23% of total deposits as of 3/31/2024 1 Liquidity coverage based on current levels of readily available (within one business day) funding. See slide 27 for additional details. 26% 22% 23% 23% 23% 74% 78% 77% 77% 77%
Slide 28: Liquidity Sources
27 Liquidity Sources As of 3/31/2024, ASB’s total liquidity sources covered 156% of uninsured, uncollateralized deposits 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 $1,433.7 $1,4
Slide 29: Cash & Investment Securities Portfolio
28 Cash & Investment Securities Portfolio We continue to target investments to total assets of 18% to 20% in 2024 19% 19% 18% 19% 19% 2% 2% 2% 2% 2% 21% 20% 20% 21% 21% 1Q 2023 2Q 2023 3Q 2023 4Q 2023 1Q 2024 Securities EoP Securities + Cash / Total Assets Cash $3.4 $3.5 $3.5 $3.6 $3.7 $4.0 $3.9 $3.
Slide 30: 1Q 2024 Capital Ratios
29 1Q 2024 Capital Ratios (%) 7.08 9.43 10.02 12.08 TCE Ratio Common Equity Tier 1 Capital Tier 1 Capital Total Capital 1 Tangible common equity / tangible assets. This is a non-GAAP financial measure. See appendix for a reconciliation of non-GAAP financial measures to GAAP financial measures. Our c
Slide 31: Total Loans Outstanding
30 Total Loans Outstanding Balances as of March 31, 2024 ($ in millions) 1 All values as of period end. 2 North American Industry Classification System. 3/31/2024 1 % of Total Loans 3/31/2024 1 % of Total Loans C&BL (by NAICS 2 ) CRE (by property type) Utilities 2,584$ 8.8% Multi-Family 2,780$ 9.4%
Slide 32: Loan Stratification
31 Multi-Family 38% Retail 9% Office 14% Industrial 25% 1-4 Family Construction 3% Warehouse 3% Hotel / Motel 3% Other 6% Wisconsin 28% Illinois 21% Minnesota 10% Other Midwest 13% Texas 5% Other 24% Manufacturing & Wholesale Trade 21% Real Estate 16% Power & Utilities 24% Mortgage Warehouse 6%Finan
Slide 33: Reconciliation & Definitions of Non-GAAP Items
32 Reconciliation & Definitions of Non-GAAP Items 1 The ratio tangible common equity to tangible assets excludes goodwill and other intangible assets, net. This financial measure has been included as it is considered to be a critical metric with which to analyze and evaluate financial condition and
Slide 34: Reconciliation & Definitions of Non-GAAP Items
33 Reconciliation & Definitions of Non-GAAP Items Common Equity Tier 1 Capital Ratio Reconciliation 1Q 2023 2Q 2023 3Q 2023 4Q 2023 1Q 2024 Common equity Tier 1 capital ratio 9.45% 9.48% 9.55% 9.39% 9.43% Accumulated other comprehensive loss adjustment (0.72)% (0.88)% (1.01)% (0.52)% (0.64)% Common
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