Associated Banc-corp · NYSE:ASB
Associated Banc-corp — Q1 2021 Earnings Presentation
26 slides from Associated Banc-corp's earnings presentation, May 6, 2021
Slide 1: Associated Banc-Corp Second Quarter 2021 Investor Presentation
May 6, 2021 Associated Banc-Corp Second Quarter 2021 Investor Presentation 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: Our Franchise
2 Our Franchise Consumer 36% Commercial Real Estate 25% Commercial and Business Lending 39% $35 billion of assets $24 billion of loans $4 billion of equity $28 billion of deposits 1 As of March 31, 2021. 2 Excludes loans held for sale. 3 Based on deposits by segment; Risk Management deposits reflect
Slide 4: Attractive Midwest Markets
3 Midwest ~30% All other regions ~70% U.S. Manufacturing Jobs Attractive Midwest Markets Manufacturing-Centric Economy with Robust Employment Trends Midwest holds 19% of the U.S. population1 and nearly 30% of all U.S. manufacturing jobs2 Employment Trends Suggest Resilient Consumer and Potential Com
Slide 5: Positioned for Growth
4 Positioned for Growth ...and have proactively managed costs... ▪ Further rationalized our branch network by 9%1 ▪ Reduced staffing levels by 14%1 ▪ Back office streamlining drove additional savings ...while putting the pandemic behind us in 1Q... ▪ Potential problem loans, nonaccrual loans and net
Slide 6: New Leadership, New Perspective
5 New Leadership, New Perspective New President & CEO Andrew J. Harmening joined Associated Banc-Corp on April 28, 2021 Leaning into expected recovery Adding new verticals Positioned to capitalize on market resurgence • Businesses reopening • Rapidly improving credit dynamics • Expanding consumer le
Slide 7: Growth in Digital
6 377 395 391 387 398 1Q 20 2Q 20 3Q 20 4Q 20 1Q 21 Customer-Originated Digital Mortgage Applications 26% 33% 31% 33% 31% 1Q 20 2Q 20 3Q 20 4Q 20 1Q 21 Growth in Digital Digital Engagement Customers have continued to leverage our digital offerings as the economy reopens Active Digital Banking Users
Slide 8: 2021 Outlook
7 Balance Sheet Management ▪ Commercial loan growth, excluding PPP, of 2-4% ▪ Full year margin of 2.45% to 2.55% ▪ Target investments / total assets ratio of 15% Fee Businesses ▪ Noninterest income of $310 million to $330 million, reflecting positive fee income trends which we expect will outpace ma
Slide 9: Financial Trends
Financial Trends
Slide 10: Quarterly Loan Trends
9 $1.2 $1.2 $1.1 $1.1 $1.0 $8.4 $8.3 $8.1 $8.0 $8.0 $5.3 $5.7 $6.0 $6.2 $6.2 $8.4 $9.2 $8.8 $8.5 $8.5 $0.8 $1.0 $0.9 $0.8 $23.3 $25.2 $25.0 $24.7 $24.5 1Q 2020 2Q 2020 3Q 2020 4Q 2020 1Q 2021 $(82) $(71) $(33) $42 $69 $71 $72 $84 Quarterly Loan Trends CRE investor Residential mortgage Home equity &
Slide 11: Quarterly Deposit Portfolio Trends
10 $1.4 $1.5 $1.5 $1.3 $1.1 $2.6 $2.5 $2.1 $1.9 $1.7 $6.5 $6.5 $6.5 $6.5 $6.9 $2.9 $3.3 $3.5 $3.6 $3.8 $5.3 $5.4 $5.8 $5.7 $5.7 $5.5 $6.9 $7.4 $7.7 $7.7 $24.3 $26.1 $26.8 $26.7 $26.8 1Q 2020 2Q 2020 3Q 2020 4Q 2020 1Q 2021 Quarterly Deposit Portfolio Trends ($ in billions) Average Quarterly Deposits
Slide 12: Net Interest Income and Yield Trends
11 Net Interest Income and Yield Trends Quarterly NII and Monthly NIM 4.34% 3.24% 2.93% 2.88% 2.91% 3.85% 2.80% 2.59% 2.69% 2.57% 3.33% 3.04% 3.06% 3.00% 2.79% 2.86% 2.41% 1.90% 1.94% 1.81% 1.06% 0.60% 0.52% 0.43% 0.40% 0.65% 0.10% 0.08% 0.07% 0.07% 1.63% 1.44% 1.21% 0.97% 0.74% 1Q 2020 2Q 2020 3Q 2
Slide 13: Net Interest Income Walkforward
12 Net Interest Income Walkforward Elevated mortgage refinance activity, LIBOR compression and a shortened day count pressured 1Q NII 1 Principally composed of residential mortgage related securities. • Mortgage refinance-driven impacts • These costs were offset by increases in mortgage banking inco
Slide 14: Noninterest Income Trends
13 $10 $21 $15 $15 $15 $6 $12 $13 $15 $24 1Q 2020 2Q 2020 3Q 2020 4Q 2020 1Q 2021 $50 $46 $51 $52 $52 $6 $12 $13 $15 $24 $8 $7 $7 $6 $8 $11 $3 $5 $13 $12 $23 $186 1Q 2020 2Q 2020 3Q 2020 4Q 2020 1Q 2021 $254 $98 $76 $86 $95 Noninterest Income Trends Net Mortgage Banking IncomeNoninterest Income Tren
Slide 15: Noninterest Expense Trends
14 $114 $111 $109 $98 $104 $76 $72 $69 $75 $71 $2 $1 $50 $192 $183 $228 $173 $175 1Q 2020 2Q 2020 3Q 2020 4Q 2020 1Q 2021 Noninterest Expense Trends Adjusted Efficiency Ratio3Noninterest Expense 1 Annualized. 2 Personnel expense includes $10 million of severance. 3 A non-GAAP financial measure. Plea
Slide 16: First Quarter ACLL
15 First Quarter ACLL ▪ Allowance for credit losses on loans (ACLL) decreased $28 million at the end of 1Q 2021 from 4Q 2020 ▪ 1Q 2021 provision of negative $23 million, down $40 million from 4Q 2020 ▪ CECL forward looking assumptions based on Moody’s March 2021 Baseline forecast 1 Includes funded a
Slide 17: Credit Quality – Quarterly Trends
16 Credit Quality – Quarterly Trends $107 $110 $145 $97 $72 $29 $50 $8 $37 $32 $1 $11 $79 $77 $59 $137 $172 $232 $211 $163 1Q 2020 2Q 2020 3Q 2020 4Q 2020 1Q 2021 $150 $186 $162 $141 $114 $67 $63 $60 $41 $46 $17 $58 $72 $100 $104 $234 $307 $293 $282 $264 1Q 2020 2Q 2020 3Q 2020 4Q 2020 1Q 2021 Credi
Slide 18: Strong Capital Position
17 6.90% 9.36% 10.35% 12.56% 7.80% 10.76% 12.14% 14.36% TCE Ratio Common Equity Tier 1 Capital Tier 1 Capital Total Capital 1 Tangible common equity / tangible assets. This is a non-GAAP financial measure. See Appendix for a reconciliation of non-GAAP financial measures to GAAP financial measures. C
Slide 19: Appendix
Appendix
Slide 20: Balanced Business Segments
19 Balanced Business Segments1 15.2% 16.0% Corporate and Commercial Specialty Community, Consumer, and Business Return on Average Allocated Capital Community, Consumer, and Business Corporate and Commercial Specialty $136 $114 Corporate and Commercial Specialty Community, Consumer, and Business Net
Slide 21: Branch Optimization Trend
20 Branch Optimization Trend We have consistently optimized our branch network over the last decade Pro Forma Branch Count Trend1 205 202 185 31 26 19 20 17 7 279 270 238 237 226 215 217 213 236 248 228 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 ASB BKMU (58) HBAN (32) FNB (9) 2 1 Branch
Slide 22: Total Loans Outstanding
21 Total Loans Outstanding Balances as of March 31, 2021 1 All values as of period end. 2 North American Industry Classification System. 3 Includes oil and gas loans. Well-diversified $24 billion loan portfolio ($ in millions) 3/31/2021 1 % of Total Loans 3/31/2021 1 % of Total Loans C&BL (by NAICS
Slide 23: Key COVID Commercial Loan Exposures
22 1 As of 3/31/2021. Excludes $258 million Oil & Gas portfolio. 2 C&BL excludes grocers, convenience stores, vehicle dealers, auto parts and tire dealers, direct and mail order retailers, and building material dealers; CRE excludes properties primarily anchored by grocers, self-storage facilities,
Slide 24: Loan Stratification
23 Manufacturing & Wholesale Trade 17% Real Estate 12% Power & Utilities 18% Mortgage Warehouse 15% 1 Excludes $298 million Other consumer portfolio. 2 Other Midwest includes Missouri, Indiana, Ohio, Michigan and Iowa. 3 Principally reflects the oil and gas portfolio. C&BL by Geography $9.4 billion
Slide 25: Community, Diversity & Sustainability
24 Community, Diversity & Sustainability We remain committed to initiatives that improve our communities, promote diversity and enhance sustainability Over $1.7 billion1 in credit commitments to support wind, hydroelectric and solar projects since 2012 Annual Diversity & Inclusion training for all c
Slide 26: Reconciliation and Definitions of Non-GAAP Items
25 Reconciliation and Definitions of Non-GAAP Items 1 The ratio tangible common equity to tangible assets excludes goodwill and other intangible assets, net. This financial measure has been included as it is considered to be a critical metric with which to analyze and evaluate financial condition an