Associated Banc-corp · NYSE:ASB
Associated Banc-corp — Debt Investor Presentation (May 2023)
30 slides from Associated Banc-corp's debt investor presentation, May 2, 2023
Slide 1: 2Q 2023 Fixed Income Investor Presentation
May 2, 2023 2Q 2023 Fixed Income 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: Franchise Profile and Key Highlights
2 Corporate & Commercial Specialty 32% Community, Consumer & Business 61% Risk Mgmt & Shared Services 7% Commercial & Business Lending 37% Commercial Real Estate 25% Consumer 38% Associated Banc-Corp (NYSE: ASB) is the largest bank holding company based in Wisconsin2 Franchise Profile1 Key Highlight
Slide 4: Deep Roots in Strong Communities: Building on our Strong Foundation
3 Deep Roots in Strong Communities Building on our Strong Foundation Our growth focused, digital forward plan has already added to the bottom line and is proving to be sustainable 1 Strong Foundation 1 2 3 4 5 Diversified & De-Risked Balance Sheet Enhanced Core Funding Profile Well-Positioned in a C
Slide 5: Diversified & De-Risked Balance Sheet
4 4% 0% 1Q 2017 1Q 2023 7% 1% 1Q 2009 1Q 2023 Diversified & De-Risked Balance Sheet1 Since 2009, ASB has largely exited several high-risk portfolios while growing historically low-risk asset types 1 $9.8 $9.7 $2.2 $8.6$4.3 $10.9 $15.9 $29.2 1Q 2009 1Q 2023 Land & For-Sale Housing Loans / Total Loans
Slide 6: Quarterly Loan Trends
5 Total loans continued to grow in 1Q, but growth decelerated vs. 2H 2022 as expected Commercial & Business Lending Commercial Real Estate Consumer Lending $1.2 $1.6 $1.9 $2.2 $2.4 $7.7 $7.9 $8.2 $8.4 $8.6 $6.2 $6.4 $6.8 $7.1 $7.3 $9.1 $9.6 $10.2 $10.5 $10.6 $24.1 $25.4 $27.1 $28.2 $28.8 1Q 2022 2Q
Slide 7: Credit Quality Trends
6 Net Charge Offs (Recoveries) and ProvisionDelinquent Loans / EoP Total Loans Nonaccrual LoansTotal Nonperforming Assets $61 $60 $63 $68 $68 $81 $47 $38 $29 $25 $0 $1 $16 $14 $24 $143 $108 $116 $111 $118 1Q 2022 2Q 2022 3Q 2022 4Q 2022 1Q 2023 0.05% 0.07% 0.07% 0.12% 0.10% 1Q 2022 2Q 2022 3Q 2022 4
Slide 8: 1Q 2023 ACLL Update
7 ACLL / Total Loans (%)1Q 2023 ACLL1 Update ▪ ACLL ($) increased $15 million from the prior quarter to $366 million, largely driven by a mix of portfolio loan growth and nominal credit movement coupled with general macroeconomic trends ▪ CECL forward-looking assumptions based on Moody’s February 20
Slide 9: Diversified Portfolios and Balanced Geography
8 1 Based on outstanding loan balances as of March 31, 2023. Loans by geography excludes Other Consumer portfolio. 2 Other Midwest includes Missouri, Indiana, Ohio, Michigan and Iowa. 3 FICOs reflect weighted average portfolio scores. 4 Based on annual averages. 2023 reflects YTD figure through 1Q 2
Slide 10: High-Quality Commercial Real Estate Portfolio
9 Wisconsin 22% Illinois 15% Minnesota 10% Other Midwest2 23% Texas 7% Other 24% Multi- Family 35% Retail 10% Office / Mixed Use 17% Industrial 23% 1-4 Family Construction 6% Hotel / Motel 3% Other 6% Consumer 38% Commercial & Business Lending 37% CRE 25% 1 All updates as of or for the period ended
Slide 11: Quarterly Deposit Trends
10 Average Quarterly Deposits $0.7 $0.8 $0.9 $0.9 $1.1 $1.3 $1.3 $1.2 $1.5 $2.4 $7.0 $6.9 $7.3 $7.4 $7.5 $4.5 $4.7 $4.7 $4.7 $4.7 $6.7 $6.4 $6.6 $6.8 $6.8 $8.3 $8.1 $8.1 $8.1 $7.3 $28.6 $28.2 $28.9 $29.3 $29.9 1Q 2022 2Q 2022 3Q 2022 4Q 2022 1Q 2023 EoP core customer deposits1 decreased by less than
Slide 12: Stable, Granular Deposit Portfolio
11 Stable, Granular Deposit Portfolio1 Uninsured, uncollateralized deposits are only 24% of total deposits; ASB has 103% liquidity coverage2 ▪ After removing deposits collateralized by investments and FHLB letters of credit, uninsured and uncollateralized deposits represented only 24% of our total d
Slide 13: Liquidity Sources
12 Liquidity Sources As of 4/19/2023, ASB’s total liquidity sources cover 177% of uninsured, uncollateralized deposits Liquidity Sources 3/31/2023 4/19/2023 Federal Reserve Balance $504.2 $503.3 Available FHLB Chicago Capacity $3,453.8 $4,740.6 Available Fed Discount Window Capacity $1,799.5 $1,806.
Slide 14: Relationship-focused initiatives to build deposit growth momentum
13 Full-year impact expected in 2023 Several relationship-focused initiatives are underway to build on our deposit growth momentum 21% increase in commercial RMs vs. 2021, with a 57% increase in new customer names Sharpened focus on TM, HSA and other deposit- centric businesses October: Launched new
Slide 15: Net Interest Income & Net Interest Margin Trends
14 Net Interest Income & Net Interest Margin Trends ASB continues to benefit from rising rates, but we are taking gradual steps to reduce asset sensitivity Asset & Liability Yield / Rate Trends (%) 3 Well-Positioned in a Changing Rate Environment $188 $216 $264 $289 $274 1Q 2022 2Q 2022 3Q 2022 4Q 2
Slide 16: 1Q 2023 Capital Ratios and Targets
15 1Q 2023 Capital Ratios (%) 7.03 9.45 10.05 12.22 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. Our c
Slide 17: Investing in Digital Transformation
16 We are leveraging agile frameworks and customer feedback to more quickly deliver custom digital solutions Investing in Digital Transformation5 Launch of Associated Bank Digital Debit Card Controls AI-led Financial Wellness and Personal Insights Digital Account Opening Upgrades ▪ Cloud-based platf
Slide 18: Appendix
Appendix
Slide 19: First Quarter 2023 Results
18 $131 million Income Before Income Taxes (+41% vs. 3/31/2022) $29.2 billion Total Period End Loans (+19% vs. 3/31/2022) $30.3 billion Total Period End Deposits (+7% vs. 3/31/2022) 20% YoY Operating Leverage (3/31/2022 to 3/31/2023) $100 million Net Income Available to Common Equity (+41% vs. 3/31/
Slide 20: Additional Loan Trends
19 Additional Loan Trends ($ in billions) Commercial & Business Lending Commercial Real Estate Residential Mortgage Auto Finance, Home Equity & Other Consumer ($ in millions) Commercial & Business Lending Commercial Real Estate Consumer Lending Average Loan Change (4Q 2022 to 1Q 2023)EoP Quarterly L
Slide 21: Pre-Tax Pre-Provision Income Trends
20 Pre-Tax Pre-Provision Income1 Trends PTPP income was up 67% vs. 1Q 2022, driven by strong revenue growth and disciplined expense management ($ in millions) 1 This is a non-GAAP financial measure. Please refer to the appendix for a reconciliation of pre-tax pre-provision income to income before in
Slide 22: Interest Rate Risk Management
21 ▪ Over the past three quarters, we’ve executed $2.85 billion of received fixed swaps ▪ We’ve also added high-quality liquid asset securities to our balance sheet while managing our deposit betas (cumulative interest-bearing deposit beta of ~43% through 1Q 20231) ▪ Taken together, these actions ha
Slide 23: Cash and Investment Securities Portfolio
22 Cash and Investment Securities Portfolio We continue to target investments to total assets of 18% to 20% in 2023 20% 18% 18% 18% 19% 1% 2% 1% 2% 2% 21% 21% 19% 19% 21% 1Q 2022 2Q 2022 3Q 2022 4Q 2022 1Q 2023 Securities EoP Securities + Cash / Total Assets Cash $2.8 $2.7 $2.5 $2.7 $3.4 $3.9 $3.9 $
Slide 24: Noninterest Income Trends
23 Noninterest Income Trends ($ in millions) ($ in millions) Noninterest income increased slightly from 4Q 2022, with modest growth in mortgage banking income 1 This is a non-GAAP financial measure. Please refer to the appendix for a reconciliation of fee-based revenue to noninterest income. 2 Other
Slide 25: Noninterest Expense Trends
24 $105 $113 $118 $118 $116 $21 $21 $23 $25 $24 $47 $48 $49 $53 $46 $6 $1 $173 $181 $196 $197 $187 1Q 2022 2Q 2022 3Q 2022 4Q 2022 1Q 2023 Noninterest Expense / Average Assets (%) Fully Tax-Equivalent Efficiency Ratio2 (%)Noninterest Expense Trends Noninterest Expense Trends 1 Other expenses are pri
Slide 26: Total Loans Outstanding
25 Total Loans Outstanding Balances as of March 31, 2023 Well-diversified $29.2 billion loan portfolio ($ in millions) 1 All values as of period end. 2 North American Industry Classification System. 3/31/2023 1 % of Total Loans 3/31/2023 1 % of Total Loans C&BL (by NAICS 2 ) CRE (by property type) U
Slide 27: Loan Stratification
26 Multi-Family 35% Retail 10% Office / Mixed Use 17% Industrial 23% 1-4 Family Construction 6% Hotel / Motel 3% Other 6% Wisconsin 27% Illinois 23% Minnesota 10% Other Midwest 14% Texas 4%Other 22% Manufacturing & Wholesale Trade 20% Real Estate 17% Power & Utilities 20% Mortgage Warehouse 7% 1 Exc
Slide 28: Credit Ratings
27 Credit Ratings Moody’s S&P Bank short-term deposits P-1 - Bank long-term deposits/issuer A2 BBB+ Corporation commercial paper P-2 - Corporation long-term senior debt/issuer Baa2 BBB Outlook Stable Stable
Slide 29: Reconciliation and Definitions of Non-GAAP Items
28 Reconciliation and Definitions of Non-GAAP Items ($ in millions) 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 financ
Slide 30: Reconciliation and Definitions of Non-GAAP Items
29 Reconciliation and Definitions of Non-GAAP Items ($ in millions) 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. 2 These financial measures have been included as they provide meanin
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