Associated Banc-corp · NYSE:ASB
Associated Banc-corp — Q1 2021 Earnings Presentation
20 slides from Associated Banc-corp's earnings presentation, Apr 22, 2021
Slide 1: First Quarter 2021 Earnings Presentation
First Quarter 2021 Earnings Presentation APRIL 22, 2021
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: 2021 First Quarter Update
2021 First Quarter Update First quarter 2021 results reflected positive fee, credit and deposit trends across our business Associated Banc-Corp Reports First Quarter 2021 net income available to common equity of $89 million, or $0.58 per common share ▪ Mortgage banking income up $9 ▪ Nonaccrual loan
Slide 4: Pre-Tax Pre-Provision Income
Pre-Tax Pre-Provision Income1 PTPP income2 has remained relatively flat quarter over quarter ($ in millions) 4Q 2020 PTPP $101 income included $7 $96 1Q 2021 PTPP income million of gains on includes $3 million of the sale of branches branch and subsidiary gains on sale 4Q 2020 1Q 2021 1 Given the ad
Slide 5: Quarterly Loan Trends
Quarterly Loan Trends Growth in Specialized Lending and CRE Construction; offset by low general Commercial loan utilization Average Quarterly Loans EOP Loan Change (4Q 2020 to 1Q 2021) ($ in billions) ($ in millions) $25.2 $25.0 $24.7 $24.5 Mortgage warehouse $84 $23.3 $0.8 $1.0 $0.9 $0.8 REIT $72 $
Slide 6: Quarterly Deposit Portfolio Trends
Quarterly Deposit Portfolio Trends We continue to improve the mix of low-cost, core customer funding Average Quarterly Deposits EOP Deposit Change (4Q 2020 to 1Q 2021) ($ in billions) ($ in millions) $26.8 $26.7 $26.8 $26.1 Noninterest-bearing demand $834 $24.3 Savings $383 $6.9 $7.4 $7.7 $7.7 Money
Slide 7: Net Interest Income and Yield Trends
Net Interest Income and Yield Trends 1Q margin dipped as declining mortgage and C&I spreads outpaced declining liability costs Quarterly NII and Monthly NIM Average Yields ($ in millions) 4.34% 2.71% 3.85% 3.24% 2.56% 3.06% 3.00% 2.91% 2.30% 2.35% 2.36% 3.33% 3.04% 2.93% 2.88% 2.79% 2.86% 2.80% 2.59
Slide 8: Net Interest Income Walkforward
Net Interest Income Walkforward Elevated mortgage refinance activity, LIBOR compression and a shortened day count pressured 1Q NII ($ in millions) < $(1) • Mortgage refinance-driven • C&BL impacted by impacts day count and • These costs were LIBOR offset by increases compression in mortgage • PPP fo
Slide 9: Noninterest Income Trends
Noninterest Income Trends Quarterly noninterest income grew by over 11%, driven by mortgage banking and capital markets income Noninterest Income Trend Net Mortgage Banking Income ($ in millions) ($ in millions) $24 $254 $21 $15 $15 $15 $15 $98 $95 $12 $13 $10 $186 $86 $6 $12 $23 $76 $13 $8 $5 1Q 20
Slide 10: Noninterest Expense Trends
Noninterest Expense Trends Noninterest expense down 9% YoY, 11% YoY improvement in noninterest expense to average assets ratio1 Noninterest Expense Adjusted Efficiency Ratio3 ($ in millions) 85% $228 70% 63% 63% 63% 63% 64% 66% 60% $192 $50 $183 43% $2 $173 $175 $1 $76 $72 1Q 2020 2Q 2020 3Q 2020 4Q
Slide 11: Allowance Update
Allowance Update ACLL1 decreased $28 million and covered 1.67% of loan balances at the end of 1Q 2021 First Quarter ACLL ACLL / Total Loans ▪ Allowance for credit losses on loans (ACLL) decreased $28 million at the end of 1Q 2021 1.73% 1.77% 1.76% 1.62% 1.67% from 4Q 2020 1.55% ▪ 1Q 2021 provision o
Slide 12: Credit Quality – Quarterly Trends
Credit Quality – Quarterly Trends Credit metrics continued to improve during 1Q 2021 Potential Problem Loans Nonaccrual Loans ($ in millions) ($ in millions) $307 $293 $282 $264 $234 $58 $232 $211 $72 $17 $63 $100 $104 $172 $163 $67 $60 $137 $79 $77 $41 $11 $8 $46 $29 $1 $50 $37 $59 $150 $186 $162 $
Slide 13: Strong Capital Position
Strong Capital Position Tangible Book Value has increased 16% from 1Q 2020 through 1Q 2021 Tangible Book Value / Share Capital Ratios 14.36% $16.95 12.56% $16.67 12.14% $16.37 10.76% $16.21 10.35% 9.36% 7.80% 6.90% $14.64 1 TCE Ratio Common Equity Tier 1 Capital Total Capital 1Q 2020 2Q 2020 3Q 2020
Slide 14: Updated 2021 Outlook
Updated 2021 Outlook Outlook as of April 22, 2021 ▪ Commercial loan growth, ▪ We expect 2021 expenses of excluding PPP, of 2-4% approximately $690 million to $695 million, reflecting: ▪ Full year margin of 2.45% to 2.55% ▪ Additional incentive and compensation expense Balance Sheet ▪ Target investme
Slide 15: Appendix
Appendix
Slide 16: Total Loans Outstanding Balances as of March 31, 2021
Total Loans Outstanding Balances as of March 31, 2021 Well-diversified $24 billion loan portfolio ($ in millions) % of Total % of Total 3/31/20211 Loans 3/31/20211 Loans C&BL (by NAICS 2) CRE (by property type) Utilities $ 1,678 6.9% Multi-Family $ 2,006 8.3% Wholesale/Manufacturing 1,558 6.4% Offic
Slide 17: Key COVID Commercial Loan Exposures
Key COVID Commercial Loan Exposures1 Key COVID commercial loan exposures are spread across multiple industries without large concentrations ($ in millions) % of total C&BL Utilization CRE Utilization Total loans 2 Retailers/Shopping Centers Retailers $ 76.8 39% $ 672.9 92% $ 749.7 3.10% Retail REITs
Slide 18: Loan Stratification Outstandings as of 3/31/2021
Loan Stratification Outstandings as of 3/31/2021 C&BL by Geography CRE by Geography Total Loans1 $9.4 billion $6.1 billion Illinois 15% Illinois Illinois Minnesota Minnesota 24% 16% 9% 8% Texas 3 Minnesota Wisconsin 7% 10% Other 26% Midwest2 Wisconsin Wisconsin Other 22% 30% Other 26% Midwest 2 2 Mi
Slide 19: Reconciliation and Definitions of Non-GAAP Items
Reconciliation and Definitions of Non-GAAP Items ($ in millions) Pre-tax Pre-Provision Income Reconciliation1 4Q 2020 1Q 2021 Pre-tax pre-provision income Income (loss) before income taxes $84 $119 Provision for credit losses 17 (23) Pre-tax pre-provision income $101 $96 Tangible Common Equity and T
Slide 20: Reconciliation and Definitions of Non-GAAP Items
Reconciliation and Definitions of Non-GAAP Items Efficiency Ratio Reconciliation 1Q 2020 2Q 2020 3Q 2020 4Q 2020 1Q 2021 Federal Reserve efficiency ratio 70.37% 43.49% 85.41% 59.68% 65.74% Fully tax-equivalent adjustment (0.96)% (0.39)% (1.29)% (0.84)% (0.97)% Other intangible amortization (0.95)% (