Associated Banc-corp · NYSE:ASB
Associated Banc-corp — Q3 2015 Earnings Presentation
26 slides from Associated Banc-corp's earnings presentation, Aug 4, 2015
Slide 1: Associated Banc-Corp Investor Presentation Third Quarter 2015
Exhibit 99.1 ASSOCIATED BANC-CORP INVESTOR PRESENTATION THIRD QUARTER 2015
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 • Largest bank headquartered in Wisconsin • $27 billion in assets: Top 50 publicly traded bank holding company in the U.S. • Over 200 banking locations serving over one million customers in over 100 communities • Offering a full range of banking services 1999 and other fi
Slide 4: Attractive Midwest Markets
ATTRACTIVE MIDWEST MARKETS We Serve a Large and Growing Top Concentration of Market Place Manufacturing Jobs • Our footprint covers ~ 20% of the U.S. • Our footprint is home to ~ 30% of all 1 2 population (Est. pop ~ 61 million ) manufacturing jobs in the U.S. • Our footprint is estimated to have •
Slide 5: 2015 Second Quarter Highlights
2015 SECOND QUARTER HIGHLIGHTS Solid Loan and Fee-Revenue Growth Offset Continued Margin Compression • Average loans of $18.2 billion were up $373 million, or 2% QoQ Balance Sheet • Average deposits of $19.6 billion were up $571 million, or 3% QoQ Net Interest Income • Net interest income of $166 mi
Slide 6: Growing the Loan Portfolio
1 GROWING THE LOAN PORTFOLIO ($ IN BILLIONS) Cumulative $18.2 Change $16.6 $2.0 2Q 2011 – 2Q 2015 $15.7 $14.6 $2.1 $2.5 $13.0 $4.9 -$1.2 billion $3.0 $4.1 $3.2 $3.7 +$2.2 billion $3.3 $4.1 $2.7 $4.0 $3.7 $3.3 +$1.2 billion $2.9 $7.2 $5.9 $6.5 +$3.0 billion $5.0 $4.2 2Q 2011 2Q 2012 2Q 2013 2Q 2014 2
Slide 7: Loan Portfolio Growth
LOAN PORTFOLIO GROWTH YTD 2015 AVERAGE LOAN GROWTH OF $801 MILLION, OR 5% FROM 4Q 2014 ($ IN MILLIONS) Residential Mortgage YTD $393 Change General Commercial Loans $203 +9% Mortgage Warehouse $148 +7% Commercial Real Estate $83 Oil & Gas $76 +2% Power & Utilities $19 (6%) ($121) Home Equity & Insta
Slide 8: Diverse Portfolio of Value-Added Businesses
DIVERSE PORTFOLIO OF VALUE-ADDED BUSINESSES Corporate and Commercial Community, Consumer, and Business Specialty Private Client and Consumer and Corporate and Commercial Community Institutional Business Specialized Real Estate Markets Services Banking Lending Lending Rochester, MN Private Banking Br
Slide 9: Net Interest Income and Margin
NET INTEREST INCOME AND MARGIN Yield on Interest-earning Assets Net Interest Income & Net Interest Margin 4.47% ($ in millions) 4.07% 3.77% $169 3.55% 3.38% $166 4.00% 3.80% 3.47% 3.31% $160 3.15% $154 $154 2Q 2011 2Q 2012 2Q 2013 2Q 2014 2Q 2015 Total Interest-earning Yield Total Loan Yield Cost of
Slide 10: Interest Rate Sensitivity
INTEREST RATE SENSITIVITY • Net interest income will benefit from asset Commercial Loan Maturity Distribution re-pricing in a rising rate environment and Interest Rate Sensitivity ($ in billions) • Continued growth in floating rate loans has Within After 5 % of positioned us to benefit from rising r
Slide 11: Branch Optimization
BRANCH OPTIMIZATION Changing customer behavior has driven our focus on branch channel optimization • By year end 2015, we expect to consolidate thirteen additional branches for a total of 100 branch consolidations since mid 2007 • During the same period, we reinvigorated the overall delivery model t
Slide 12: Evolving Delivery Model
EVOLVING DELIVERY MODEL Enhanced multi-channel connections drive customer adoption and efficiency Physical Channels Self Service Channels Direct Channel Targeting • We have integrated digital • Redesigned website to • Leveraging customer solutions into branches enhance eCommerce analytics and a virt
Slide 13: Pursuing Efficiency Gains
PURSUING EFFICIENCY GAINS ($ IN MILLIONS) Areas of Focus Efficiency Ratio1 Goal = at YTD 2015 = Peer Average 69% or Better Back Office Initiatives: Implementing technology solutions in labor intensive 70.4% 69.6% processes 69.3% 69.0% 69.0% 4,985 4,968 $160 4,728 Real Estate Initiatives: $140 Action
Slide 14: Strong Capital Position
STRONG CAPITAL POSITION MANAGED OUR CURRENT CAPITAL INTO OUR TARGET RANGE OF 8 - 9.5% Common Equity Tier 1 Ratio • Proactive capital management has restored capital to normalized levels; Basel I Basel Capital is modestly above pre-crisis III 12.3% 12.2% 11.6% levels 11.5% 9.7% 9.3% • Well positioned
Slide 15: Why Associated
WHY ASSOCIATED Management Team Focused on Creating Long-Term Value $0.31 Attractive Midwest Markets $0.28 $0.28 12.0% Diverse Portfolio of 11.0% Value-Added Businesses $0.24 10.6% 10.0% Modern and Rapidly 9.9% Evolving Delivery Model 9.6% 9.0% 9.3% 8.0% Asset Sensitive Rate Profile 7.0% 6.0% Discipl
Slide 16: Second Half 2015 Outlook
SECOND HALF 2015 OUTLOOK • High single digit annual average loan growth Balance Sheet • Maintain loan / deposit ratio under 100% • Modest continuing compression throughout the second half of Margin the year Noninterest 1 • Seasonally lower insurance commissions Income Noninterest 1 • Full year not t
Slide 17: Appendix
APPENDIX
Slide 18: Loans by Industry and State
LOANS BY INDUSTRY AND STATE JUNE 2015 PERIOD END BALANCES C&BL by Industry CRE by Industry Residential Mortgage by State ($7.2 billion) ($4.2 billion) ($4.9 billion) Rental and Transport. and Other Hotel / Motel Profsnl, Leasing Svs Whsing 4% Scientific, and 3% 3% 1% Tech Svs Industrial In- Other 3%
Slide 19: Noninterest Income Trends
NONINTEREST INCOME TRENDS ($ IN MILLIONS) Total Noninterest Income Mortgage Banking (net) Income $87 $80 $10 $75 $7 $5 $7 $72 $70 $21 $3 $16 $12 $21 $14 2Q 3Q 4Q 1Q 2Q 2014 2014 2014 2015 2015 2 Other Noninterest Income $64 $66 $14 $60 $11 $11 $54 $56 $7 $9 2Q 3Q 4Q 1Q 2Q 2014 2014 2014 2015 2015 2Q
Slide 20: Insurance Business Expansion
INSURANCE BUSINESS EXPANSION KEY DRIVER OF NONINTEREST REVENUE GROWTH • In February 2015, Associated Financial Group (AFG), a leading risk and benefit consulting practice based in WI, acquired Ahmann & Martin Co., a leading property and casualty brokerage based in the Twin Cities • The acquisition c
Slide 21: Noninterest Expense Trends
NONINTEREST EXPENSE TRENDS ($ IN MILLIONS) 2 Technology Spend Total Noninterest Expense $21 $21 $21 $22 $20 $177 $168 $172 $172 $174 2Q 3Q 4Q 1Q 2Q 2014 2014 2014 2015 2015 $74 $75 $74 $74 3 $70 Other Non-Personnel Spend $49 $54 $54 $53 $52 $98 $98 $97 $100 $103 2Q 3Q 4Q 1Q 2Q 2014 2014 2014 2015 20
Slide 22: Credit Quality Indicators
CREDIT QUALITY INDICATORS ($ IN MILLIONS) Potential Problem Loans to Total Loans Nonaccruals to Total Loans $288 $220 $219 $190 $200 $179 $184 $177 $174 1.69% $160 1.28% 1.22% 1.08% 1.09% 1.05% 1.07% 1.01% 0.97% 0.88% 2Q 2014 3Q 2014 4Q 2014 1Q 2015 2Q 2015 2Q 2014 3Q 2014 4Q 2014 1Q 2015 2Q 2015 Po
Slide 23: Oil and Gas Lending Update
OIL AND GAS LENDING UPDATE Portfolio Overview • Exclusively focused on the upstream sector 2015 Second Quarter Loan Composition 49 clients (‘Exploration and Production’ or ‘E&P’ sector) Oil & Gas • Focused on the small to mid-size independent 4% Over $1 billion in segment, both public and private co
Slide 24: High Quality Securities
HIGH QUALITY SECURITIES ($ IN MILLIONS) Amortized Fair Duration Investment Securities & Yield Investment Type Cost Value (Yrs) Agency MBS $2,357.1 $2,393.0 3.11 $5,756 $5,938 6.00% GNMA CMBS 1,794.3 1,774.6 3.88 $4,926 $4,521 5.00% Municipals 984.0 1,000.6 5.90 Agency & Other CMOs 757.9 762.6 3.27 4
Slide 25: Reconciliation and Definitions of Non-GAAP Items (1 of 2)
RECONCILIATION AND DEFINITIONS OF NON-GAAP ITEMS (1 OF 2) 2Q 2014 3Q 2014 4Q 2014 1Q 2015 2Q 2015 Efficiency Ratio Reconciliation: Efficiency ratio, as defined by the Federal Reserve 69.70% 69.44% 70.33% 70.30% 70.23% Taxable equivalent adjustment (1.32) (1.36) (1.40) (1.42) (1.34) Asset gains, net
Slide 26: Reconciliation and Definitions of Non-GAAP Items (2 of 2)
RECONCILIATION AND DEFINITIONS OF NON-GAAP ITEMS (2 OF 2) ($ in thousands) 2Q 2012 2Q 2013 2Q 2014 2Q 2015 Common Equity Tier 1 Reconciliation: Stockholders’ Equity $2,909,621 $2,876,976 $2,929,946 $2,904,391 Accumulated other comprehensive income (loss) (66,579) 25,015 (10,494) (2,594) Preferred eq