Associated Banc-corp · NYSE:ASB
Associated Banc-corp — Q2 2018 Earnings Presentation
16 slides from Associated Banc-corp's earnings presentation, Jul 19, 2018
Slide 1: Second Quarter 2018 Earnings Presentation
Exhibit 99.2 SECOND QUARTER 2018 EARNINGS PRESENTATION July 19, 2018
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: Second Quarter 2018 Update
SECOND QUARTER 2018 UPDATE1 Net income available to common equity of $87 million, or $0.50 per common share or $0.53 per common share, excluding acquisition related costs2 Bank Mutual Improving Fee Improving Efficiency Increased Bottom Line Conversion Completed Revenue Trends ▪ Average loans were up
Slide 4: Loan Portfolio - Quarterly Trends
LOAN PORTFOLIO - QUARTERLY TRENDS1 Average Quarterly Loans Average Net Loan Change (from 1Q 2018) ($ in billions) ($ in millions) Commercial real estate $306 $23.0 $22.1 $20.6 $20.9 $20.9 Residential mortgage $227 $7.7 $7.3 General commercial $149 $7.3 $7.3 $7.2 Oil and gas $89 Total Commercial & $5
Slide 5: Managing Our Loan Portfolio Exposure
MANAGING OUR LOAN PORTFOLIO EXPOSURE Bank Mutual Additions Period End CRE Multifamily Loans ($ in billions) The addition of Bank Mutual increased our We are moderating our Multifamily exposure... exposure to: Multifamily Loans $2.0 $1.9 $1.5 $1.4 $1.4 $0.6 Residential Mortgages 2Q 2017 3Q 2017 4Q 20
Slide 6: Deposit Portfolio - Quarterly Trends
DEPOSIT PORTFOLIO - QUARTERLY TRENDS1 Average Quarterly Deposits Quarter-end Loan to Deposit Ratio ($ in billions) 98% $23.6 $23.6 96% $22.4 $22.3 96% $21.5 94% 94% 95% $5.1 $5.1 $5.0 $5.1 $4.9 91% 90% 89% $4.5 $4.7 $4.0 1Q 2Q 3Q 4Q $3.8 $4.2 Historical Quarter-end Range 2014 - 2018 2018 $2.4 $2.1 H
Slide 7: Net Interest Income and Margin - Quarterly Trends
NET INTEREST INCOME AND MARGIN - QUARTERLY TRENDS Average Yields Net Interest Income & Net Interest Margin ($ in millions) 3.02% 4.75% 2.92% 4.34% 2.83% 2.84% 2.79% $226 3.93% 3.89% 3.69% $5 $2 $5 $210 3.26% 3.32% 3.35% 3.23% 3.18% $2 $1 $4 2.56% 2.42% 2.40% 2.47% 2.44% $190 $2 $187 $215 $184 $1 1.0
Slide 8: Net Interest Margin Walkforward and Outlook
NET INTEREST MARGIN WALKFORWARD AND OUTLOOK Q1 to Q2 Net Interest Margin Walkforward Net Interest Margin Decomposition 1Q 2018 Reported Net Interest Margin 2.92% + Net loan growth and funding composition ~0.06% 3.02% (including Bank Mutual) 2.92% 0.06% 9 bps + Bank Mutual purchase loan related items
Slide 9: Bank Mutual Conversion Completed
BANK MUTUAL CONVERSION COMPLETED Achieved ~89,000 3,000+ ~36,000 22 New retail New commercial New debit cards Net branches customers and business activated added relationships (36 consolidated) In Progress 45% ~47% ~11% 200+ bps High deposit Wisconsin Y/Y efficiency Cost savings density branches dep
Slide 10: Noninterest Income - Quarterly Trends
NONINTEREST INCOME - QUARTERLY TRENDS ($ IN MILLIONS) Capital market fees, net Bank owned life insurance Mortgage banking, net $93 $90 $19 $86 $85 $15 $82 $13 $7 $13 $15 $3 $4 $4 $3 $5 $5 $5 $4 $7 $7 $6 $6 $5 $3 2Q 2017 3Q 2017 4Q 2017 1Q 2018 2Q 2018 Trust, Insurance, and Brokerage Income $75 $73 $
Slide 11: Noninterest Expense - Quarterly Trends
NONINTEREST EXPENSE - QUARTERLY TRENDS ($ IN MILLIONS) Period End Branch Count and Average FTE $213 $211 4,865 $7 4,693 $21 4,352 4,384 4,367 $182 $176 $177 $80 $74 271 237 $69 $69 $75 214 214 213 2Q 2017 3Q 2017 4Q 2017 1Q 2018 2Q 2018 Period End Branches Average Full Time Employee Efficiency Ratio
Slide 12: Bank Mutual Expense Detail
BANK MUTUAL EXPENSE DETAIL ▪ Account and system conversion, and branch consolidation Conversion Completed completed June 24th, 2018. Expected Total Acquisition Related Costs Announced Recorded Expected Costs ($ in millions) 1Q 2018 2Q 2018 3Q 2018 Total Change of control and severance $10 $7 $(1) Me
Slide 13: Credit Quality - Quarterly Trends
CREDIT QUALITY - QUARTERLY TRENDS ($ IN MILLIONS) Potential Problem Loans Nonaccrual Loans $282 $263 $259 $40 $242 $232 $37 $39 $211 $209 $209 $204 $177 $34 $45 $40 $114 $92 $77 $69 $226 $220 $242 $208 $137 $118 $119 $132 $140 $159 2Q 2017 3Q 2017 4Q 2017 1Q 2018 2Q 2018 2Q 2017 3Q 2017 4Q 2017 1Q 2
Slide 14: 2018 Outlook
2018 OUTLOOK This outlook reflects a stable to improving economy and includes our expectation of additional rate increases in 2018. We may adjust our outlook if, and when, we have more clarity on any one, or more, of these factors. ▪ 1%-2% quarterly loan growth for ▪ Approximately $825M noninterest
Slide 15: Appendix
APPENDIX
Slide 16: Reconciliation and Definitions of Non-GAAP Items
RECONCILIATION AND DEFINITONS OF NON-GAAP ITEMS Efficiency Ratio 2Q18 1Q18 4Q17 3Q17 2Q17 Federal Reserve efficiency ratio 65.77 % 70.76 % 66.93 % 63.92 % 66.69 % Fully tax-equivalent adjustment (0.65)% (0.66)% (1.30)% (1.21)% (1.30)% Other intangible amortization (0.68)% (0.51)% (0.18)% (0.16)% (0.