Associated Banc-corp · NYSE:ASB
Associated Banc-corp — Investor Presentation (November 2023)
25 slides from Associated Banc-corp's investor presentation, Nov 27, 2023
Slide 1: Fourth Quarter 2023 Investor Presentation
November 27, 2023 Fourth Quarter 2023 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: Associated Banc-Corp (NYSE: ASB) at a glance
2 Commercial & Business Lending 37% Commercial Real Estate 24% Consumer 39% Corporate & Commercial Specialty 28% Community, Consumer & Business 57% Risk Mgmt & Shared Services 15% Established in 1861, Associated Banc-Corp is the largest bank holding company based in Wisconsin2 Associated Banc-Corp (
Slide 4: Our Strong Foundation
3 Our Strong Foundation We’ve strengthened our company over time by mitigating risk & prioritizing the customer experience Strengthened Credit Risk Profile Enhanced Liquidity & Interest Rate Risk Management Sharpened Customer Experience Focus ▪ Replaced high-risk portfolios with lower-risk assets ▪
Slide 5: Proactive Expense Management
4 Proactive Expense Management ASB’s year-over-year expense growth has finished below the peer median in nine of the past ten years 1 Data sourced from S&P Capital IQ Pro. Peer median reflects median of ASB’s 2023 proxy peer group. YoY Noninterest Expense Growth Trends1 -0.2% 0.2% 2.2% 0.9% 0.6% 16.
Slide 6: Strategic Plan Phase 1: Track Record of Execution
5 Strategic Plan Phase 1: Track Record of Execution Launched in 2021, our strategic 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
Slide 7: 2024-2025 Strategic Themes
6 2024-2025 Strategic Themes The second phase of our strategic plan pairs organic initiatives with a targeted balance sheet repositioning Identified $25 million to $30 million in expense reductions for 2024 ▪ 3% reduction in workforce completed on November 8, 2023 ▪ Discretionary spending reduced ▪
Slide 8: Diligent Expense Control: 2024 Expense Reductions
7 One-Time Expense from New Initiatives Estimated for 4Q 2023 We’ve identified and executed expense cuts with a $25 million to $30 million impact in 2024 The Enabler: Diligent Expense Control Estimated Noninterest Expense $747 2022 2023E 2024E NIE One-Time Expense NIE is expected to grow by 3%-4% Yo
Slide 9: Targeted investments in people, products and technology
8 The second phase of our strategic plan features targeted investments that build on our momentum organically People Products Technology Key Investments ▪ Multiple key leadership roles in commercial banking, private wealth and business banking already filled in 4Q 2023 ▪ Plan to add 20+ commercial R
Slide 10: Attracting & retaining high-quality talent
9 We are attracting & retaining high-quality talent to drive our strategic plan Private Wealth Commercial Banking Business Banking ▪ Jayne Hladio joined the bank as EVP, President of Private Wealth ▪ Led as National Wealth Management Executive across 26 states for U.S. Bank; most recently served as
Slide 11: Commercial banking RM hiring plans by market
10 ▪ Hired Phillip Trier as commercial banking group leader ▪ Actively recruiting for 6 RMs across core metro markets in 2024 ▪ Planning to add 3 RMs to asset- based lending team in 2024 We expect to hire 20+ commercial RMs across all markets by 2025, with 4 already hired ▪ Hired Neil Riegelman as c
Slide 12: Intentionally moderating residential mortgage growth
11 All Other Loans 71% Residential Mortgage 29% Total Loans We are intentionally moderating growth in our low-yielding residential mortgage business Projected Mortgage Production Trends 2022 ~$2.9 billion 2023 (est.) ~$1.2 billion 2024 (est.) ~$1 billion 2025 (est.) ~$1 billion 2024 (est.) vs. 2022
Slide 13: Digital-forward investments for a better customer experience
12 20% Consumer Checking Household Acquisition 3Q 2022 to 3Q 2023 17% Consumer Checking Household Attrition 3Q 2022 to 3Q 2023 90% Top-Box Satisfaction with Branch Channel1 3Q 2023 3-Year High Top-Box Satisfaction with Digital Channel1 3Q 2023 We are continuing to make digital-forward investments to
Slide 14: Accelerating core customer deposit growth
13 We plan to generate incremental deposits through relationship-focused strategies that grow our customer base Expanding commercial RM base and presence in metro markets Upstreaming customers into mass affluent and private wealth 8 new product enhancements across all LOBs Our relationship-focused i
Slide 15: Expected benefits of the organic plan
14 Our organic plan builds on our momentum while adhering to the foundational strengths that got us here Expected Benefits of Organic Plan Transitions our Balance Sheet into Higher Return Businesses Creates an Earnings Tailwind by Consistently Growing our Customer Base Maintains our Strong Foundatio
Slide 16: Repositioning our Balance Sheet
15 A balance sheet repositioning enhances our ability to drive improved liquidity & profitability ▪ We are currently overweight in low-margin and low-risk assets ▪ The primary asset class that contributes to this is Residential Mortgage with ~$8.8B in assets Assets ▪ Long standing reliance on wholes
Slide 17: Transaction summary: loan and securities sales
16 1 All figures shown are approximations unless otherwise noted. 2 Transaction expected to close before year-end 2023. 3 Reflects transaction pricing as of 11/9/2023. We’ve sold ~$0.8 billion in securities and have agreed to sell ~$1 billion in loans Total Assets $1.8B Total Loan Sales Agreement2 $
Slide 18: Use of proceeds: FHLB paydown and reinvestment
17 We plan to pay down $0.9 billion of FHLB advances & reinvest $0.7 billion in securities at current rates $3.7 $2.8 $0.9 3Q 2023 Actual 3Q 2023 Pro Forma FHLB Advance Reduction Pay Down FHLB Advances Securities & Cash Reinvestment GNMA 86% Cash 14% Total Reinvestment $732M ( ) ($ in billions) Use
Slide 19: Key benefits of the transaction
18 94.0% 90.8% 3.2% 3Q 2023 Actual 3Q 2023 Pro Forma 2.71% 2.71% 0.16% 2.87% 3Q 2023 Actual 3Q 2023 Pro Forma 1 Wholesale Funding includes all wholesale borrowings + brokered and network deposits. 2 Reflects total funding available within one business day. Estimated based on normal course of operati
Slide 20: Net interest income walk-forward
19 ($ in millions) Loans Sold Securities Sold FHLB Advances Paydown Securities & Cash Reinvestment On a 3Q 2023 pro forma basis, this transaction adds ~$9 million to our quarterly net interest income Net +$9mm NII impact $0.8B @ 2.60% $1.0B @ 3.72% $0.9B @ ~5.50% $0.73B @ 6.02% 3 3Q Pro Forma Net In
Slide 21: Repositioning accelerates organic strategy
20 $1.9 $2.9 $2.9 $8.2 $8.8 $7.8 $6.8 $7.3 $7.3 $10.2 $11.2 $11.2 $7.2 $8.4 $8.3 $3.8 $3.1 $3.1 $38.0 $41.6 $40.6 3Q 2022 3Q 2023 3Q 2023 Pro Forma Repositioning enables us to accelerate our organic strategy by disposing of low-yielding, long-duration assets EoP Total Assets Impact ($ in billions) C
Slide 22: Expected Benefits of Balance Sheet Repositioning
21 Expected Benefits of Balance Sheet Repositioning Improves capacity for organic loan growth, unlocking benefits of strategic plan Reduces reliance on wholesale funding, improving overall liquidity position Enhanced capital generation driven by improved earnings profile Efficient use of capital to
Slide 23: Medium-Term Operating Targets
22 Medium-Term Operating Targets 3.00%+ Net Interest Margin Mid-Teens ROATCE 55%-60% Efficiency Ratio <0.35% NCOs / Avg. Loans We are refreshing our operating targets to account for our organic initiatives & balance sheet repositioning Positive Operating Leverage
Slide 24: Appendix
Appendix
Slide 25: Reconciliation and Definitions of Non-GAAP Items
24 Reconciliation and Definitions of Non-GAAP Items 1 This financial measure has been included as it is considered to be a critical metric with which to analyze and evaluate financial condition and capital strength. Average Tangible Common Equity Reconciliation1 ($ in millions) 3Q 2023 Common equity
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