Associated Banc-corp · NYSE:ASB
Associated Banc-corp — Investor Presentation (November 2014)
35 slides from Associated Banc-corp's investor presentation, Nov 3, 2014
Slide 1: Associated Banc-Corp Investor Presentation Fourth Quarter 2014
Exhibit 99.1 ASSOCIATED BANC-CORP INVESTOR PRESENTATION 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 manageme
Slide 3: Investment Highlights
INVESTMENT HIGHLIGHTS Midwestern financial services company built upon a strong commitment to our colleagues and the communities we serve Franchise $26 billion in assets (Top 50 bank holding company in the U.S.) 225 banking offices serving approximately one million customers Largest bank headquarter
Slide 4: Our Footprint and Franchise
* * OUR FOOTPRINT AND FRANCHISE 1 >$1bn deposits ASBC >$500mm deposits1 2 Deposits ASBC ($ in Branches billions) 2 WI $12.0 160 IL $4.8 43 MN $1.4 22 Total $18.2 225 Total Loan Distribution ($17.2 billion – Sept 2014 – Period End) Other Wisconsin In Footprint 1 FDIC market share data 6/30/14 3 2 As
Slide 5: Attractive Midwest Markets
* * ATTRACTIVE MIDWEST MARKETS • Serve a Large Market Place: 2 Manufacturing Share of Non-Farm Employment 1 (Footprint is ~ 20% of USA) • Manufacturing Concentrated: Top 3 states (Indiana, Wisconsin, and Iowa) 4 of Top 5 for concentration of manufacturing jobs and two other states in the top 10 • Fa
Slide 6: 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 5
Slide 7: Diversified Portfolio of Value-Added Businesses
* DIVERSIFIED PORTFOLIO OF VALUE-ADDED BUSINESSES Private Client and Specialized Specialized Institutional Financial Services Lending Private Banking Services Group Verticals Commercial Deposits and Personal Trust Treasury Management Community Corporate Banking Markets Asset Capital Markets Manageme
Slide 8: Diversified Loan Portfolio
* DIVERSIFIED LOAN PORTFOLIO • We are building a diversified loan portfolio that we believe will perform well through the next downturn in the credit cycle. Internal Portfolio Management Goals Current (Q3-2014) • Retail – 30-40% • Retail – 37% Asset Mix • C&I – 30-40% • C&I – 39% • CRE – 25-35% • CR
Slide 9: Reshaping & Rebuilding the Loan Portfolio
* * RESHAPING & REBUILDING THE LOAN PORTFOLIO1 $16.6 $17.1 $16.3 2% $15.7 2% 6% Installment 5% $15.2 6% $14.9 3% 6% HELOCs & 5% 3% 7% 6% 13% 2 nd Liens $13.4 9% 5% 13% $12.9 4% 18% 4% 18% Construction 14% 7% 11% 19% 11% 13% 4% 19% CRE 14% 7% Investor 17% 18% 29% 29% Residential 19% 29% Mortgage & 19
Slide 10: Loan Portfolio Growth
* * LOAN PORTFOLIO GROWTH AVERAGE LOAN GROWTH OF $1.4 BILLION OR 9% GROWTH FROM 4Q 13 3Q 2014 vs. 4Q 2013 Change in Average Net Loan Balances by Category ($ in millions) % Change Residential Mortgage +12% Commercial Real Estate +8% General Commercial Loans +6% Total Oil & Gas Commercial & +47% Busin
Slide 11: Commercial Loan Detail
* * COMMERCIAL LOAN DETAIL C&BL Loans by Industry CRE Loans by Industry ($6.7 billion – Sept 2014 – Period End) ($4.0 billion – Sept 2014 – Period End) C&BL Loans by State CRE Loans by State ($6.7 billion – Sept 2014 – Period End) ($4.0 billion – Sept 2014 – Period End) 1 Includes Missouri, Indiana,
Slide 12: Retail Loans by State
* * RETAIL LOANS BY STATE Residential Mortgage Loans Home Equity Loans 2 ($4.3 billion – Sept 2014 – Period End) ($1.7 billion – Sept 2014 – Period End) 1 Includes Missouri, Indiana, Ohio, Michigan, & Iowa 2 Approximately 40% is in first lien position 11
Slide 13: Growing Net Interest Income While Margin Compresses
* * GROWING NET INTEREST INCOME WHILE MARGIN COMPRESSES Yield on Interest-earning Assets Net Interest Income & Net Interest Margin ($ in millions) Total Interest-earning Yield Total Loan Yield Cost of Interest-bearing Liabilities Net Interest Margin 12
Slide 14: Stable Deposit and Liquidity Profile
* * STABLE DEPOSIT AND LIQUIDITY PROFILE Loans / Deposits Strong Holding Company Liquidity • Bank holding company cash and liquid investments of $117mm Deposits and Customer Funding Mix • $18.7 billion at 9/30/2014 • ~990k deposit accounts with over $10 billion of granular deposits (under $250k) Sec
Slide 15: Low-Cost, Core Deposit Funding
* * LOW-COST, CORE DEPOSIT FUNDING Funding Composition Over Time • Stable funding composition with 80% deposits and 20% from other low-cost sources $ 22,784 $ 21,336 $ 1,048 $ 20,551 $ 430 $ 783 $ 19,058 $ 1,101 $ 585 $ 3,105 $ 18,627 $ 585 $ 2,700 $ 1,401 $ 2,037 $ 1,925 0.89 % $ 430 $ 2,001 $ 1,50
Slide 16: Investment Securities Portfolio
* * INVESTMENT SECURITIES PORTFOLIO Investment Portfolio – September 30, 2014 Amortized Cost Composition – September 30, 2014 Type Amortized Fair Value TEY Duration Cost (000’s) (%) (Yrs) (000’s) Govt & Agencies $999 $996 0.67 2.36 Agency MBS 2,767,630 2,783,892 2.61 3.21 CMOs 960,063 959,630 2.36 2
Slide 17: Credit Quality Trends
* * CREDIT QUALITY TRENDS ($ IN MILLIONS) 16
Slide 18: Noninterest Income and Expense Composition
* * NONINTEREST INCOME AND EXPENSE COMPOSITION YTD SEPTEMBER 2014 Noninterest Income by Category Noninterest Expense by Category ($221 million) ($507 million) 17
Slide 19: Pursuing Efficiency Gains
* * PURSUING EFFICIENCY GAINS Areas of Focus Efficiency Ratio¹ Goal = at 3Q 2014 = Peer Average Back Office Initiatives: 69% or Better Implementing technology solutions in labor intensive processes Real Estate Initiatives: Actions to optimize our real estate holdings and capacity Distribution Initia
Slide 20: Branch Evolution
* * BRANCH EVOLUTION Branches coming in 2014: Lower construction costs, higher visibility profile • Eagle River, Wisconsin • Milwaukee, Wisconsin Express Branch: Demonstration Kiosk – “Hands On” & Automated Teller Machine • Madison, Wisconsin (UW Campus) 19
Slide 21: Rationalizing the Footprint
* * RATIONALIZING THE FOOTPRINT 1 Consolidated or sold 29% of branches since 2007 1 Branch counts are as of period end. 20
Slide 22: Capital Management Priorities
* * CAPITAL MANAGEMENT PRIORITIES 2012 2013 2014 Funding • Fund Loan Growth and other Capital Investments Organic Growth Paying a • Increased • Increased • Increased quarterly dividend quarterly dividend quarterly dividend Competitive in Q4 2012 in Q4 2013 in Q4 2014 Dividend • Paid $0.23/ • Paid $0
Slide 23: Strong Capital Position
* * STRONG CAPITAL POSITION ($ IN MILLIONS) Tier 1 Common Tier 1 Risk Based Capital ($ mm) $ 1,904 $ 1,913 $ 1,912 $ 1,920 $ 1,873 ($ mm) $ 1,966 $ 1,975 $ 1,974 $ 1,981 $ 1,935 Total Risk Based Capital Tier 1 Leverage ($ mm) $ 2,199 $ 2,185 $ 2,187 $ 2,205 $ 2,160 ($ mm) $ 1,966 $ 1,975 $ 1,974 $ 1
Slide 24: Ratings Agency Perspective
* * RATINGS AGENGY PERSPECTIVE Associated Banc-Corp Associated Bank NA September 30, 2014 S&P Moody’s S&P Moody’s Senior unsecured BBB Baa1 BBB+ A3 Subordinated debt BBB- Baa2 NR NR Outlook Stable Stable Stable Stable Franchise turnaround reflected in improved ratings approaching pre-crisis levels S
Slide 25: Experienced Management Team
* * EXPERIENCED MANAGEMENT TEAM Phil Flynn Joined Associated • 30+ Years Banking Experience CEO in 2009 • Union Bank of California (Vice Chairman and Chief Operating Officer) Oliver Bueschse Joined Associated • 10+ Years Banking Experience Chief Strategy Officer in 2010 • Union Bank of California (H
Slide 26: Why Associated
* * WHY ASSOCIATED 1 EPS and Dividends Paid & ROT1CE Reasons to Invest Return on Tier 1 Common Equity • Leading Midwest Bank Operating in Attractive Markets $0.31 • Core Organic Growth Opportunity $0.27 • Disciplined Loan and Deposit Pricing $0.26 • Committed to Efficiency Ratio Improvement • Strong
Slide 27: 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
Slide 28: Appendix
************** ************** ************** ************** ************** ************** ************** ************** ************** ************** ************** APPENDIX 27
Slide 29: Reconciliation and Definitions of Non-GAAP Items
* * RECONCILIATION AND DEFINITIONS OF NON-GAAP ITEMS 3Q 2013 4Q 2013 1Q 2014 2Q 2014 3Q 2014 Efficiency Ratio Reconciliation: Efficiency ratio (1) 71.45% 73.70% 70.41% 69.70% 69.44% Taxable equivalent adjustment (1.50) (1.49) (1.35) (1.32) (1.36) Asset gains, net 0.59 0.80 0.22 0.26 1.36 Other intan
Slide 30: YTD 3Q 2014 Highlights and Outlook
* * YTD 3Q 2014 HIGHLIGHTS AND OUTLOOK 2014 Highlights: Outlook – Growing the • Loan Growth of ~ $1.4 bn YoY Franchise & Creating Long- Total average loans of Term Shareholder Value $17.1 bn, up 9% YoY • Continued focus on organic growth • Deposit Growth of ~ $300 mm YoY – Total average deposits of
Slide 31: Segment Profitability
* * SEGMENT PROFITABILITY YTD SEPTEMBER 2014 ASBC – Consolidated Total Earning Assets* = $22.5 bn Total Revenue = $727.0 mm Net Income = $141.8 mm ROT1CE: 9.8% Community and Risk Management & Corporate and Consumer Banking Shared Services Commercial Banking Earning Assets* = $8.0 bn Earning Assets*
Slide 32: Commercial Line Utilization Trends
* * COMMERCIAL LINE UTILIZATION TRENDS Line utilization increased in Commercial & Business Lending Change from 2Q 14 Commercial Real Estate (including construction) - 320 bps Commercial & Business Lending + 170 bps 31
Slide 33: Noninterest Income Trends
* * NONINTEREST INCOME TRENDS ($ IN MILLIONS) Core Fee-based 1 Revenue Total Noninterest Income Mortgage Banking (net) Income Other Noninterest Income 2 1 – Core Fee-based Revenue = Trust service fees plus Service charges on deposit accounts plus Card-based and other nondeposit fees plus Insurance c
Slide 34: Noninterest Expense Trends
* * NONINTEREST EXPENSE TRENDS ($ IN MILLIONS) 2 Personnel Spend / FTE Trend Total Noninterest Expense Technology 3 Spend Other Non-Personnel Spend 4 Efficiency Ratio 1 1 – Efficiency ratio = Noninterest expense, excluding other intangible amortization, divided by sum of taxable equivalent net inter
Slide 35: Disciplined Capital Deployment
* * DISCIPLINED CAPITAL DEPLOYMENT Recent Transactions 2013-2014 Jan –Jun 2013 Jul –Dec 2013 Jan –Sep 2014 Oct 2014 YTD Totals $329 mm $ Repurchased $60 mm $60 mm $159 mm $50 mm Repurchased Shares Outstanding, end of period 19.4 mm 3 (in Millions) Shares Repurchased Tier 1 Common 1 Ratio 2 11.49% 11
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