Associated Banc-corp · NYSE:ASB
Associated Banc-corp — Investor Presentation (December 2014)
9 slides from Associated Banc-corp's investor presentation, Dec 15, 2014
Slide 1: Associated Banc-Corp Investor Presentation: Oil and Gas Lending
Exhibit 99.1 ASSOCIATED BANC-CORP INVESTOR PRESENTATION OIL AND GAS LENDING FOURTH 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: Oil & Gas Value Chain
OIL & GAS VALUE CHAIN • From beneath the earth’s surface to the end-user: – Field Services Sector (Associated Bank is not active in this sector) • Supports drilling for oil and gas (offshore and onshore) – Upstream Sector (This is Associated Bank’s Oil & Gas segment’s focus) • Involved in drilling f
Slide 4: Current State of Upstream Sector
CURRENT STATE OF UPSTREAM SECTOR • United States Oil and Gas production is in a renaissance – Continued enhancements in production techniques like horizontal drilling and hydraulic fracturing have reversed a declining trend in oil and gas production – U.S. crude oil production increased from an aver
Slide 5: Players in the Upstream Sector
PLAYERS IN THE UPSTREAM SECTOR • Integrated oil and gas companies – Derive revenue from all phases of the energy value chain (e.g., ExxonMobil, BP, Shell) • Independent oil and gas companies (Associated Bank’s Oil & Gas segment’s focus) – Receive substantially all revenue from the production of oil
Slide 6: Reserve-Based Lending
RESERVE-BASED LENDING • Reserve-based lending is a form of Asset-based lending business • This is a standard lending model for borrowers engaged in the Upstream sector of the oil and gas industry • Associated Bank’s emphasis is on the small to mid-size independent segment, both public and private, c
Slide 7: Typical Loan Structure
TYPICAL LOAN STRUCTURE • Secured by first priority lien on oil and gas reserves • These are syndicated deals with several banks participating in the credit • 3 to 5 year working capital revolver with availability governed by a borrowing base subject to semi-annual determinations • Proceeds used for
Slide 8: Associated's Oil & Gas Portfolio
ASSOCIATED’S OIL & GAS PORTFOLIO • Established in January 2011 as a de novo lending vertical with zero loans outstanding and zero clients, the Oil & Gas group has grown steadily to its current book of approximately forty-seven clients with aggregate commitments of more than $1 billion ($652MM funded
Slide 9: Risks
RISKS • Commodity price risk. Partially mitigated by: – Borrowers usually mitigate prices risk by entering into multi-year commodity hedges with financial counterparties – Risk adjustments are made to proven reserves that are not producing – Commodity price environment is continuously monitored and
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