Associated Banc-corp · NYSE:ASB
Associated Banc-corp — Investor Presentation (February 2014)
32 slides from Associated Banc-corp's investor presentation, Feb 7, 2014
Slide 1: Associated Banc-Corp Investor Presentation First Quarter 2014
Exhibit 99.1 ASSOCIATED BANC-CORP INVESTOR PRESENTATION FIRST QUARTER 2014
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 1 About Associated >$1bn deposits 1 • Top 50, publicly traded, >$500mm deposits U.S. bank holding company • $24 billion in assets; largest bank 1999 headquartered in 1861 Wisconsin • 237 branches serving approximately one million customers 2012 ASBC Deposits ² ($ ASBC in
Slide 4: Attractive Midwest Markets
ATTRACTIVE MIDWEST MARKETS • Population: Over 60 mm people live in our footprint (~ 20% of USA)¹. – Favorable Credit: Six of the top seven cities with the best consumer credit scores are in our footprint.² • GDP Metrics: $3.0 trillion in 2013 (18.4% of US GDP). 3.3% growth from 2012 is consistent wi
Slide 5: Associated at Its Core
ASSOCIATED AT ITS CORE Community Big bank bank values, products, flexibility, strength, decision- lending limits, making, efficiency, attention to innovation, relationships depth of and service expertise 4
Slide 6: 2013 Highlights and Outlook
2013 HIGHLIGHTS AND OUTLOOK 2013 Highlights: Outlook – Growing the • Net income of $184 mm Franchise & Creating Long- Term Shareholder Value • EPS of $1.10, up 10% from 2012 • Average loans of $15.7 bn, up 6% • Continued focus on organic compared to 2012 growth opportunities • Average deposits up $1
Slide 7: Reshaping & Rebuilding the Loan Portfolio
RESHAPING & REBUILDING THE LOAN PORTFOLIO 1 $15.6 $15.7 Installment 5% $14.7 3% 3% 7% Home Equity 12% $13.2 $13.3 9% 5% 6% 5% 4% Construction 12% 13% 11% 19% 4% 19% CRE 8% 16% 18% Investor 19% 29% Residential 30% Mortgage & 20% HE 1st Liens 21% 29% Commercial & Business 35% 35% 37% Lending 33% 33% Y
Slide 8: YOY Loan Portfolio Growth
YOY LOAN PORTFOLIO GROWTH AVERAGE LOAN GROWTH OF $921 MILLION OR 6% FROM 2012 2013 YOY Average Net Loan Change ($ in millions) % Change Residential Mortgage $384 +12% Commercial Real Estate $355 +11% General Commercial Loans $304 +7% Total Power & Utilities $289 +151% Commercial & Business Lending =
Slide 9: Growing Net Interest Income While Margin Compresses
GROWING NET INTEREST INCOME WHILE MARGIN COMPRESSES Yield on Interest-earning Assets Net Interest Income & Net Interest Margin ($ in millions) 3.70% 3.32% 3.52% 3.50% 3.16% 3.23% 3.47% 3.42% 3.17% 3.13% $167 -20 bps $4 4Q 2012 1Q 2013 2Q 2013 3Q 2013 4Q 2013 $161 $1 $160 $161 Cost of Interest-bearin
Slide 10: Commercial & Business Lending
COMMERCIAL & BUSINESS LENDING • More than 280 colleagues serving businesses, C&BL Loans by Industry ($6.0 billion – Dec 2013) municipal governments, and entrepreneurs: Rental and Transport. and Leasing Svs Whsing – Includes General Commercial and Specialized Profsnl, Scientific, and 3% 2% Tech Svs L
Slide 11: Commercial Real Estate Lending
COMMERCIAL REAL ESTATE LENDING • More than 90 CRE colleagues: CRE Loans by Industry ($3.8 billion – Dec 2013) – Offices in Chicago, Cincinnati, Columbus, Other Hotel / Motel Detroit, Green Bay, Madison, Milwaukee, 4% 3% Minneapolis, and St. Louis Industrial 7% • Recognized as: Multi-Family – #1 in U
Slide 12: Private Client & Institutional Services
PRIVATE CLIENT & INSTITUTIONAL SERVICES • Over 160 colleagues: – Private banking, personal trust, and portfolio management services for individuals ($500k to $10 million in investible assets) – Corporate trust, asset management and retirement plan services – $19.5 billion of AUM and AUA (Thought Pap
Slide 13: Retail Banking
RETAIL BANKING • Over 2,000 colleagues servicing individuals and Residential Mortgage Loans by State small business owners through five business units: ($3.8 billion – Dec 2013) In-Footprint 1 Other 3% 3% – Consumer Banking, Business Banking, Residential Lending, Retail Payments, and Minnesota 12% R
Slide 14: Updating Our Model
UPDATING OUR MODEL Strategic Channel Evolution Deploying Lower Cost Branch Concepts • Deposit Automation Enhancing Virtual Banking ATM • Online & • Transaction Mobile Delivering Via Digital Channels 1 Express Banking • Digital Selling Person • Financial • Remote Shopping Outlets Deposit to Person •
Slide 15: Rationalizing the Footprint
RATIONALIZING THE FOOTPRINT Consolidated or sold 25% of branches since 2007. 315 291 270 237 < 230* 2Q 2007 2Q 2009 2Q 2011 4Q 2013 2Q 2014 * Projection based on eight branches closing 1Q 2014. 14
Slide 16: Changing Customer Preferences
CHANGING CUSTOMER PREFERENCES (PERCENTAGE OF TOTAL BANK DEPOSIT CUSTOMER BASE) 60% 50% 47% 49% 43% 40% 40% 30% 20% 14% 10% 8% 0% 5% 0% 2010 2011 2012 2013 Active On-line Mobile Banking 15
Slide 17: Branch Evolution
BRANCH EVOLUTION • West Bend, Wisconsin • Being built in 2014 • Lower construction costs, higher visibility profile • Express Branch (Madison) • Demonstration Kiosk – “Hands On” experience • Automated Teller Machine 16
Slide 18: Pursuing Efficiency Gains
PURSUING EFFICIENCY GAINS Areas of Focus Back Office Initiatives: Real Estate Initiatives: Distribution Model Initiatives: • Implementing • Actions to optimize • Optimize the ways technology solutions our real estate that we interact with in labor intensive holdings and capacity our customers proces
Slide 19: Efficiency Through Growing Revenues
EFFICIENCY THROUGH GROWING REVENUES $ IN MILLIONS Net Interest Income Trend Net Revenue Trend $613 $626 $646 $959 $939 $886 2011 2012 2013 Noninterest Income Trend $273 $313 $313 2011 2012 2013 2011 2012 2013 18
Slide 20: Efficiency Through Expense Management
EFFICIENCY THROUGH EXPENSE MANAGEMENT $ IN MILLIONS Other Non-Personnel 1 Spend Trend $238 $233 $209 Total Noninterest Expense Trend 2011 2012 2013 $682 $681 Technology 2 Trend $651 $67 $75 $52 2011 2012 2013 Personnel Spend / FTE 3 Trend 4,915 5,056 4,584 2011 2012 2013 $381 $397 $360 2011 2012 201
Slide 21: Committed to Efficiency Improvements
COMMITTED TO EFFICIENCY IMPROVEMENTS $ IN MILLIONS Total Noninterest Expense Trend Efficiency Ratio 1 Trend $682 $681 $651 70.2 % 70.0 % 69.6 % Opportunity Peer Average 2 2011 2012 2013 64.5% Net Revenue Trend $959 $939 $886 2011 2012 2013 2011 2012 2013 1 – Efficiency ratio = Noninterest expense, e
Slide 22: Capital Management Priorities
CAPITAL MANAGEMENT PRIORITIES 2012 2013 2014 Funding • Fund Loan Growth and other Capital Investments Organic Growth Paying a • Increased • Increased • Declared quarterly quarterly dividend quarterly dividend common dividend Competitive in Q4 2012 in Q4 2013 of $0.09/ share in Dividend Q1 2014 • Pai
Slide 23: Capital Deployment Opportunities
CAPITAL DEPLOYMENT OPPORTUNITIES 3 Basel I ASBC Basel III ASBC Basel III 4Q = 11.5% 4Q ~ ~ 11.0% 8% - 9.5% Organic Asset Growth Potential Capital Excess Capital Non Organic Cash Deployment Acquisition Options 1.5 – 3% 2 Repurchase / +1 – 25% Special Dividend Capacity 1 = 7% 1 Regional and Community
Slide 24: Why Associated
WHY ASSOCIATED Net Income Available to Common & ROT1CE 1 Reasons to Invest Net Income Available Return on Tier 1 • Strong Capital Profile & Opportunities for to Common ($ in millions) Common Equity Capital Deployment $240 10.00% • Committed to Efficiency Ratio Improvement 9.8% 9.5% $210 • Leading Mi
Slide 25: Promoting the Associated Brand
PROMOTING THE ASSOCIATED BRAND 24
Slide 26: Appendix
APPENDIX 25
Slide 27: Improvement in Credit Quality Indicators
IMPROVEMENT IN CREDIT QUALITY INDICATORS ($ IN MILLIONS) $361 $344 $310 $277 $253 $235 $225 $217 $208 1.23% $185 1.12% 1.04% 0.98% 1.64% 0.84% 1.45% 1.38% 1.33% 1.17% 4Q 2012 1Q 2013 2Q 2013 3Q 2013 4Q 2013 4Q 2012 1Q 2013 2Q 2013 3Q 2013 4Q 2013 Potential Problem Loans NPA / Assets Nonaccruals Nona
Slide 28: Investment Securities Portfolio
INVESTMENT SECURITIES PORTFOLIO Investment Portfolio – December 31, 2013 Market Value Composition – December 31, 2013 Type Bk Value Mkt Value TEY Duration (000’s) (000’s) (%) (Yrs) Govt & Agencies $1,001 $ 1,002 0.30 0.63 MBS 2,949,588 2,936,426 2.61 3.84 CMOs 908,914 905,018 2.56 2.57 GNMA CMBS 673
Slide 29: Segment Profitability
SEGMENT PROFITABILITY YTD DECEMBER 2013 ASBC Earning Assets* = $21.0 bln Total Revenue = $958.6 mm Net Income = $188.7 mm ROT1CE: 9.8% Consumer Banking Segment Risk Management & Shared Commercial Banking Services Segment Segment Earning Assets* = $7.2 bn Earning Assets* = $5.3 bn Earning Assets* = $
Slide 30: Noninterest Income and Expense Composition
NONINTEREST INCOME AND EXPENSE COMPOSITION YTD DECEMBER 2013 Noninterest Income by Category Noninterest Expense by Category ($313 million) ($681 million) Legal & FDIC BOLI Professional 3% Brokerage & 4% Annuity 3% Other Equipment 5% 5% 4% Mortgage Capital Market Banking Technology 4% 16% 7% Occupanc
Slide 31: Reconciliation and Definitions of Non-GAAP Items
RECONCILIATION AND DEFINITIONS OF NON-GAAP ITEMS YTD 2013 YTD 2012 YTD 2011 Efficiency Ratio Reconciliation: Efficiency ratio (1) 71.05 72.92% 73.33% Taxable equivalent adjustment (1.46) (1.60) (1.72) Asset gains (losses), net 0.40 (0.90) (0.95) Other intangible amortization (0.42) (0.43) (0.51) Eff
Slide 32: 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
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