Associated Banc-corp · NYSE:ASB
Associated Banc-corp — Investor Presentation (May 2014)
31 slides from Associated Banc-corp's investor presentation, May 2, 2014
Slide 1: Associated Banc-Corp Investor Presentation Second Quarter 2014
Exhibit 99.1 ASSOCIATED BANC-CORP INVESTOR PRESENTATION SECOND 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 About Associated >$1bn deposits¹ • Top 50, publicly traded, >$500mm deposits¹ U.S. bank holding company • $25 billion in assets; largest bank 1999 headquartered in 1861 Wisconsin • 227 branches serving approximately one million customers 2012 ASBC Deposits² ASBC ($ in bil
Slide 4: Attractive Midwest Markets
ATTRACTIVE MIDWEST MARKETS • Service a Large Market Manufacturing Share of Non-Farm Employment ² Place: (Footprint is ~ 20% of USA)¹ • Manufacturing Concentrated: Top 3 states 4 of Top 5 (Indiana, Wisconsin, and Iowa) for concentration of manufacturing jobs and two other states in the top 10 • Favor
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: 1Q 2014 Highlights and Outlook
1Q 2014 HIGHLIGHTS AND OUTLOOK 1Q 2014 Highlights: Outlook – Growing the • Record Commercial Loan Franchise & Creating Long- Growth of $420 mm Term Shareholder Value – Total average loans of $16.2 • Continued focus on organic bn, up 3% from 4Q13 growth opportunities • Defending NIM compression in •
Slide 7: Reshaping & Rebuilding the Loan Portfolio
RESHAPING & REBUILDING THE LOAN PORTFOLIO¹ $16.4 $15.7 $16.2 Installment 5% $15.5 2% 3% 3% 7% HELOCs & 12% $14.3 7% nd 2 Liens $13.9 8% 6% 4% 5% 7% 4% $12.7 10% Construction 14% 13% 5% 19% 4% 19% 18% 12% CRE 10% 18% 14% 4% Investor 19% 18% Residential 30% 29% 29% Mortgage & 20% 31% st HE 1 Liens 28%
Slide 8: Loan Portfolio Growth
LOAN PORTFOLIO GROWTH AVERAGE LOAN GROWTH OF $416 MILLION OR 3% FROM FOURTH QUARTER 2013 1Q 2014 From Prior Quarter Average Net Loan Change ($ in millions) % Change Commercial Real Estate $171 +5% General Commercial Loans $157 +3% Oil & Gas $94 +21% Total Commercial & Business +2% Residential Mortga
Slide 9: Commercial Line Utilization Trends
COMMERCIAL LINE UTILIZATION TRENDS Line utilization increased in all Commercial lines of business Increase from 4Q 13 70.0% 64.2% 63.1% CRE + 110 bps 61.1% 60.4% 60.0% 56.5% 55.0% 56.2% 52.1% 52.1% Specialized + 170 bps 50.4% 52.9% 50.0% 51.3% 46.8% 46.6% 44.8% Commercial + 200 bps 48.5% 48.3% 46.7%
Slide 10: Growing Net Interest Income While Margin Compresses
GROWING NET INTEREST INCOME WHILE MARGIN COMPRESSES Yield on Interest-earning Assets Net Interest Income & Net Interest Margin ($ in millions) 3.52% 3.47% 3.50% 3.42% 3.36% 3.17% 3.13% 3.23% 3.16% 3.12% $167 $4 $165 <$1 1Q 2013 2Q 2013 3Q 2013 4Q 2013 1Q 2014 $160 $161 $1 $1 Cost of Interest-bearing
Slide 11: Commercial & Business Lending
COMMERCIAL & BUSINESS LENDING • More than 280 colleagues serving businesses, C&BL Loans by Industry ($6.4 billion – Mar 2014 – Period End) municipal governments, and entrepreneurs: – Includes General Commercial and Specialized Lending efforts – Offers unsecured and customized commercial finance lend
Slide 12: Commercial Real Estate Lending
COMMERCIAL REAL ESTATE LENDING • More than 90 CRE colleagues: CRE Loans by Industry ($4.0 billion – Mar 2014 – Period End) – Offices in Chicago, Cincinnati, Detroit, Green Bay, Indianapolis, Madison, Milwaukee, Minneapolis, and St. Louis • Recognized as: – #1 in US Syndicated CRE facilities under $5
Slide 13: Private Client & Institutional Services
PRIVATE CLIENT & INSTITUTIONAL SERVICES • More than 170 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 – $20.0 billion of AUM and AUA at Marc
Slide 14: Retail Banking
RETAIL BANKING • Over 2,000 colleagues servicing individuals and Residential Mortgage Loans by State small business owners through five business units: ($3.9 billion – Mar 2014 – Period End) Other – Consumer Banking, Business Banking, In- 3% Footprint 1 Residential Lending, Retail Payments, and 3% R
Slide 15: Updating Our Model
UPDATING OUR MODEL Strategic Channel Evolution Deploying Lower Cost Branch Concepts • Deposit Enhancing Virtual Banking Automation ATM • Online & • Transaction Mobile Delivering Via Digital Channels 1 Express Banking • Digital Selling Person • Financial • Remote Shopping to Person Outlets Deposit •
Slide 16: Rationalizing the Footprint
RATIONALIZING THE FOOTPRINT Consolidated or sold 28% of branches1 since 2007 315 291 270 237 227 2Q 2007 2Q 2009 2Q 2011 4Q 2013 1Q 2014 1Branch counts are as of period end. 15
Slide 17: Changing Customer Preferences
CHANGING CUSTOMER PREFERENCES (PERCENTAGE OF TOTAL BANK DEPOSIT CUSTOMER BASE) 60% 50% 47% 49% 50% 43% 40% 40% 30% 20% 14% 15% 10% 8% 0% 5% 0% 2010 2011 2012 2013 Q1 2014 Active On-line Mobile Banking 16
Slide 18: Branch Evolution
BRANCH EVOLUTION Branches coming in 2014: Lower construction costs, higher visibility profile • West Bend, Wisconsin • Green Bay, Wisconsin Express Branch: Demonstration Kiosk – “Hands On” & Automated Teller Machine • Madison, Wisconsin (UW Campus) 17
Slide 19: Pursuing Efficiency Gains
PURSUING EFFICIENCY GAINS Areas of Focus Back Office Initiatives: Real Estate Initiatives: Distribution Model Initiatives: • Implementing • Actions to optimize • Optimize the ways technology solutions our real estate that we interact with in labor intensive holdings and capacity our customers proces
Slide 20: Noninterest Income Trends
NONINTEREST INCOME TRENDS ($ IN MILLIONS) Mortgage Banking Income $18 $19 $8 $6 $4 1Q 20132Q 20133Q 20134Q 20131Q 2014 Total Noninterest Income $84 Core Fee-based ¹ Revenue $82 $76 $74 $58 $57 $57 $71 $55 $55 1Q 2Q 3Q 4Q 1Q 2013 2013 2013 2013 2014 1Q 2Q 3Q 4Q 1Q 2013 2013 2013 2013 2014 Other Non-C
Slide 21: Noninterest Expense Trends
NONINTEREST EXPENSE TRENDS ($ IN MILLIONS) Personnel Spend / FTE ² Trend 4,841 4,790 4,699 4,584 4,517 $98 $100 $98 $101 $98 Total Noninterest Expense 1Q 2Q 3Q 4Q 1Q $179 2013 2013 2013 2013 2014 $168 $169 $165 $168 Personnel Spend FTE Technology Spend ³ Trend $22 $19 $19 $19 $19 $18 $12 1Q 2Q 3Q 4Q
Slide 22: Capital Management Priorities
CAPITAL MANAGEMENT PRIORITIES 2012 2013 2014 Funding Fund Loan Growth and other Capital Investments • Organic Growth • Increased • Increased • Declared quarterly Paying a quarterly dividend quarterly dividend common dividend Competitive in Q4 2012 in Q4 2013 of $0.09/ share in Dividend Q1 2014 • Pai
Slide 23: Capital Deployment Opportunities
CAPITAL DEPLOYMENT OPPORTUNITIES Basel I ASBC Basel III ASBC ³ Basel III 1Q = 11.2% 1Q ~ ~ 10.5% 8% - 9.5% Organic Asset Growth Potential Capital Excess Capital Non Organic Deployment Cash Acquisition 1.0 – 2.5% Options 2 Repurchase / +1 - 2.5% Special Dividend Capacity = 7%¹ 1 Regional and Communit
Slide 24: Why Associated
WHY ASSOCIATED Net Income Available to Common & ROT1CE ¹ Reasons to Invest Net Income Available Return on Tier 1 • Strong Capital Profile & Opportunities for to Common ($ in millions) Common Equity Capital Deployment $240 10.00% • Committed to Efficiency Ratio Improvement 9.8% 9.5% $210 • Leading Mi
Slide 25: Appendix
APPENDIX 24
Slide 26: Improvement in Credit Quality Indicators
IMPROVEMENT IN CREDIT QUALITY INDICATORS ($ IN MILLIONS) $344 3.00% $310 $336 $332 $328 $324 $320 $316 $312 $308 $304 $277 $300 $292 $288 $284 $280 $276 $272 $268 2.50% $235 $264 $256 $252 $248 $225 $217 $220 $244 $240 $236 $232 $228 $208 $224 $220 $216 $212 $185 $178 $204 $200 $196 $192 2.00% $188
Slide 27: Investment Securities Portfolio
INVESTMENT SECURITIES PORTFOLIO Investment Portfolio – March 31, 2014 Fair Value Composition – March 31, 2014 Type Amortized Fair Value TEY Duration Cost (000’s) (%) (Yrs) (000’s) Govt & Agencies Municipals MBS Fixed $1,001 $1,002 0.30 0.38 16% 17% MBS 2,922,287 2,925,249 2.64 3.62 CMOs 848,403 846,
Slide 28: Segment Profitability
SEGMENT PROFITABILITY YTD MARCH 2014 ASBC Earning Assets* = $21.9 bn Total Revenue = $238.5 mm Net Income = $45.2 mm ROT1CE: 9.4% Risk Management & Shared Commercial Banking Consumer Banking Segment Services Segment Segment Earning Assets* = $7.2 bn Earning Assets* = $5.8 bn Earning Assets* = $8.9 b
Slide 29: Noninterest Income and Expense Composition
NONINTEREST INCOME AND EXPENSE COMPOSITION FIRST QUARTER 2014 Noninterest Income by Category Noninterest Expense by Category ($74 million) ($168 million) Legal & FDIC Brokerage & Professional 3% Annuity 2% Other Mortgage Equipment 5% Banking BOLI 5% 4% 6% 9% Capital Market Technology 3% Svc Chg on 8
Slide 30: Reconciliation and Definitions of Non-GAAP Items
RECONCILIATION AND DEFINITIONS OF NON-GAAP ITEMS 1Q 2013 2Q 2013 3Q 2013 4Q 2013 1Q 2014 Efficiency Ratio Reconciliation: Efficiency ratio (1) 70.03% 69.01% 71.45% 73.70% 70.41% Taxable equivalent adjustment (1.46) (1.38) (1.50) (1.49) (1.35) Asset gains (losses), net 0.24 (0.01) 0.59 0.80 0.22 Othe
Slide 31: 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
Associated Banc-Corp — Investor Presentation (May 2014) on 6ix