Associated Banc-corp · NYSE:ASB
Associated Banc-corp — Q1 2018 Earnings Presentation
15 slides from Associated Banc-corp's earnings presentation, Apr 19, 2018
Slide 1: First Quarter 2018 Earnings Presentation
FIRST QUARTER 2018 EARNINGS PRESENTATION April 19, 2018 Exhibit 99.2
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: First Quarter 2018 Update
▪ Insurance revenue up $3 million ▪ Mortgage banking revenue up $3 million FIRST QUARTER 2018 UPDATE1 3 Balance Sheet Management Fee Businesses Expense Management ▪ $21 million of acquisition related costs recorded in Q1 ▪ $192 million of total other noninterest expense Capital & Credit Management ▪
Slide 4: Loan Portfolio - Quarterly Trends
($ in billions) LOAN PORTFOLIO - QUARTERLY TRENDS1 $526 $464 $184 $90 $42 $37 $(25) $(103) 4 1Q 2017 2Q 2017 3Q 2017 4Q 2017 1Q 2018 $1.4 $1.3 $1.3 $1.3 $1.4 $6.6 7.0 $7.3 $7.5 $8.0 $5.0 $5.0 $5.0 $4.9 $5.4 $7.2 $7.3 $7.3 $7.2 $7.3 $20.2 $20.6 $20.9 $20.9 $22.1 Average Net Loan Change (from 4Q 2017)
Slide 5: Deposit Portfolio - Quarterly Trends
DEPOSIT PORTFOLIO - QUARTERLY TRENDS1 1Q 2017 2Q 2017 3Q 2017 4Q 2017 1Q 2018 92% 96% 94% 91% 96% 5 ($ in billions) Money market 40% Time Deposits 11% Savings 7% Noninterest -bearing demand 22% Interest- bearing demand 20% 1Q 2017 2Q 2017 3Q 2017 4Q 2017 1Q 2018 $1.6 $1.8 $2.2 $2.4 $2.7 $1.5 $1.5 $1
Slide 6: Net Interest Income and Margin - Quarterly Trends
6 NET INTEREST INCOME AND MARGIN - QUARTERLY TRENDS 1Q 2017 2Q 2017 3Q 2017 4Q 2017 1Q 2018 $179 $184 $188 $186 $203 $1 $180 $2 $190 $1 $187 $1 $6 $210 2.84% 2.83% 2.84% 2.79% 2.92% Average Yields Net Interest Income & Net Interest Margin ($ in millions) Other prepayments and interest recoveries2 Ne
Slide 7: Net Interest Income Walkforward
NET INTEREST INCOME WALKFORWARD 7 4Q 2017 Reported Net Interest Income and Margin $187 million 2.79% + Net loan and deposit growth (including Bank Mutual) + $10 million + Bank Mutual purchase loan related items + $6 million Purchased loan accretion $4 million Prepayments and other adjustments $2 mil
Slide 8: Net Interest Margin Outlook
NET INTEREST MARGIN OUTLOOK 8 1Q 2018 Reported Net Interest Margin 2.92% Expected future margin impacts for 2018: Full quarter effect of Bank Mutual purchase accretion 0 to +1 bp Prepayments, interest recoveries and other adjustments (including Bank Mutual) (-1) to +1 bp LIBOR - Fed Funds spread nor
Slide 9: Noninterest Income - Quarterly Trends
Mortgage banking, net 1Q 2017 2Q 2017 3Q 2017 4Q 2017 1Q 2018 $5 $5 $7 $3 $6 $4 $4 $5 $7 $5 $3 $4 $13 $7 $3 $13 $3 1Q 2017 2Q 2017 3Q 2017 4Q 2017 1Q 2018 $67 $67 $66 $69 $73 $80 $82 $86 $85 $90 NONINTEREST INCOME - QUARTERLY TRENDS ($ IN MILLIONS) 1 – Fee-based revenue, a non-GAAP financial measure
Slide 10: Noninterest Expense - Quarterly Trends
1Q 2017 2Q 2017 3Q 2017 4Q 2017 1Q 2018 66% 67% 64% 67% 71% 65% 65% 63% 65% 70% 63% 1Q 2017 2Q 2017 3Q 2017 4Q 2017 1Q 2018 $107 $107 $108 $107 $118 $67 $174 $69 $176 $69 $177 $75 $182 $74 $21 $213 1Q 2017 2Q 2017 3Q 2017 4Q 2017 1Q 2018 215 214 214 213 271 NONINTEREST EXPENSE - QUARTERLY TRENDS ($
Slide 11: Credit Quality - Quarterly Trends
11 CREDIT QUALITY - QUARTERLY TRENDS ($ IN MILLIONS) Potential Problem Loans Nonaccrual Loans Net Charge Offs (Recoveries) Allowance to Total Loans / Oil and Gas Loans 1Q 2017 2Q 2017 3Q 2017 4Q 2017 1Q 2018 $78 $37 $39 $40 $40 $262 $340 $226 $263 $220 $259 $137 $177 $200 $42 $282 1Q 2017 2Q 2017 3Q
Slide 12: Bank Mutual Update
BANK MUTUAL UPDATE Legal Closing and Expected Conversion Date 12 ▪ Closed February 1, 2018; issued approximately 19.5 million common shares at 0.422 fixed exchange ratio ▪ Expected system conversion and branch consolidation: June 23, 2018 4Q 2018 Expected Combined Expenses Run-Rate Expected Total Ac
Slide 13: 2018 Outlook
2018 OUTLOOK Balance Sheet Management ▪ 1%-2% quarterly loan growth for the remainder of 2018 ▪ Maintain Loan to Deposit ratio under 100% ▪ Improving year over year NIM trend Fee Businesses ▪ Improving year over year fee- based revenues ▪ Approximately $365M - $375M full year noninterest income Expe
Slide 14: Appendix
APPENDIX
Slide 15: Reconciliation and Definitions of Non-GAAP Items
15 RECONCILIATION AND DEFINITONS OF NON-GAAP ITEMS Efficiency Ratio 1Q18 4Q17 3Q17 2Q17 1Q17 Federal Reserve efficiency ratio 70.76 % 66.93 % 63.92 % 66.69 % 66.39 % Fully tax-equivalent adjustment (0.66)% (1.30)% (1.21)% (1.30)% (1.30)% Other intangible amortization (0.51)% (0.18)% (0.16)% (0.18)%