Associated Banc-corp · NYSE:ASB
Associated Banc-corp — Bank of America Merrill Lynch Future of Financials Conference 2017
25 slides from Associated Banc-corp's conference presentation, Nov 13, 2017
Slide 1: Associated Banc-Corp – BofA Merrill Lynch Future of Financials Conference
Associated Banc-Corp Bank of America Merrill Lynch Future of Financials Conference FOURTH QUARTER 2017 Exhibit 99.1
Slide 2: Disclaimer
DISCLAIMER 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 plans, objectiv
Slide 3: Our Franchise
Community, Consumer, and Business 33% Corporate and Commercial Specialty 59% RMSS3 8% YTD 3Q 2017 Net Income by Business Segment 24% 8% 7% 2% Affinity Programs4 OUR FRANCHISE 2 $30 billion of assets $21 billion of loans Over $1 billion of revenue2 $22 billion of deposits Third Quarter 20171 1 – As o
Slide 4: Attractive Midwest Markets
Manufacturing & Wholesale Trade 25% ATTRACTIVE MIDWEST MARKETS 3.2% 3.5% 3.7% 3.8% 3.8% 4.2% 4.3% 5.0% 5.3% IA WI MN IN MO U.S. MI IL OH Midwest 30% All other regions 70% U.S. Manufacturing Jobs 1 – U.S. Census Bureau, Annual Estimates of the Resident Population, 2016 2 – U.S. Bureau of Labor Statis
Slide 5: Third Quarter Update
THIRD QUARTER UPDATE 4 Growing Interest Income Improving Credit Dynamics Continued Efficiency Improvement Expanding Bottom Line 3Q17: Net income available to common equity of $63 million, or $0.41 per common share Balance Sheet Management Mid-to-high single digit annual average loan growth Maint
Slide 6: Loan Growth Trends
$1.5 $1.5 $1.4 $1.4 $1.3 $4.5 $4.9 $5.7 $6.3 $7.3 2 $3.8 $4.0 $4.3 $4.9 $5.0 $5.9 $6.7 $7.1 $7.6 $7.3 $15.7 $17.1 $18.5 $20.1 $20.9 3Q 2013 3Q 2014 3Q 2015 3Q 2016 3Q 2017 Commercial & business Commercial real estate ("CRE") Residential mortgage Home equity & Other consumer Net Loan Growth: +$377 mi
Slide 7: Consistent Deposit Growth
$2.2 $2.2 $3.2 $3.7 $2.6 $18.9 $18.7 $21.1 $22.2 $22.6 3Q 2013 3Q 2014 3Q 2015 3Q 2016 3Q 2017 12.1% 12.1% 15.6% 17.2% 11.7% Loan to Deposit Ratio CONSISTENT DEPOSIT GROWTH ($ in billions) Period End Deposits & Customer Funding Average Quarterly Deposits 6% 6% $1.8 $1.5 $1.6 $1.6 $2.2 $1.2 $1.3 $1.4
Slide 8: Acquisition of Bank Mutual
ACQUISITION OF BANK MUTUAL 7 Associated Banc-Corp Acquisition of July 20, 2017 Bank Mutual Profile Third Quarter 2017 Branches1 58 Loans $2.0bn Deposits $1.9bn Revenue2 $99mm Expenses2 $71mm Transaction Pricing 100% stock transaction - 0.422 exchange ratio 1.6x price / tangible book value per sh
Slide 9: Associated's Pro Forma Footprint
ASSOCIATED’S PRO FORMA FOOTPRINT Pro Forma Branch Footprint Strengthens our position as largest bank headquartered in the state of Wisconsin - > $32bn combined total assets - Adds > 120,000 customer accounts to the Associated franchise Significant efficiency opportunities - 50% of Bank Mutual br
Slide 10: Pro Forma Loans & Deposits
Commercial & Business Lending 34% CRE Investor 18% Construction 8% Residential Mortgage 34% Home Equity & Other Consumer 6% Money Market 36% Noninterest- bearing demand 23% Interest- bearing demand 22% Savings 7% Time Deposit 12% Money Market 37% Noninterest- bearing demand 23% Interest- bearing dem
Slide 11: Estimated Pro Forma Financial Metrics
ESTIMATED PRO FORMA FINANCIAL METRICS 1 – Based on ASB and BKMU IBES median EPS estimates as of June 30, 2017 for 2017, 2018, and grown at 7% IBES median long-term growth rate thereafter. EPS accretion is excluding one-time charges. 2 – Estimated pro forma capitalization as of June 30, 2017, net of
Slide 12: Post Announcement Update & Timeline
POST ANNOUNCEMENT UPDATE & TIMELINE Post Announcement Activities and Integration Planning ASB management team has developed a detailed integration plan spanning from transaction announcement through closing, conversion, and post-conversion time periods ASB/BKMU integration team has significant l
Slide 13: Accelerates 2017 Strategic Priorities
ACCELERATES 2017 STRATEGIC PRIORITIES Strengthening Customer Relationships Delivering on our Strategy Expanding our Community Presence Providing Long-term Value to Shareholders A low-risk transaction with significant opportunities for cost savings Expected to produce modest initial dilution to t
Slide 14: Asset Management Expansion
$46 $48 $49 $47 $49 $15 $16 $15 $16 $17 $7 $61 $64 $64 $63 $73 2013 2014 2015 2016 20172 • On October 2, 2017, we completed the acquisition of a wealth management organization, Whitnell & Co., an Oak Brook, Illinois based, $1 billion AUM registered investment advisor, to further complement Associate
Slide 15: Overall Expense Efficiency
70% 70% 70% 68% 66% 68% 68% 68% 66% 64% YTD 3Q13 YTD 3Q14 YTD 3Q15 YTD 3Q16 YTD 3Q17 Federal Reserve Fully tax-equivalent Efficiency Ratio1 Enhanced Automation Operational Efficiencies Branch Consolidations Branch Staffing Initiatives OVERALL EXPENSE EFFICIENCY Efficiency Drivers 1 – The efficiency
Slide 16: Shift to Digital Channels
240 214 ~ 73% 44% September 2013 September 2017 27% 56% September 2013 September 2017 Customers continue to seek more efficient ways to bank. Digital capabilities are key to meeting their rising expectations. Associated is actively enhancing its multichannel approach and will be deploying new mobile
Slide 17: Capital Priorities
Funding Organic Growth Paying a Competitive Dividend Non-Organic Growth Opportunities Share Repurchases $15.7 $17.1 $18.5 $20.1 $20.9 3Q 2013 3Q 2014 3Q 2015 3Q 2016 3Q 2017 CAPITAL PRIORITIES 16 $0.33 $0.37 $0.41 $0.45 $0.50 2013 2014 2015 2016 2017 11% CAGR 7% CAGR Average Quarterly Loans; ($ in b
Slide 18: Expanding Bottom Line
Earnings Per Share Dividends Shareholder Gain Return on Average Common Equity $0.34 $0.41 3Q 2016 3Q 2017 Return on average CET11 $0.12 $0.14 4Q 2016 4Q 2017 15% annualized TSR EXPANDING BOTTOM LINE 17 As of September 30, 2017 Exceptional Value 1 – Refer to the appendix for a reconciliation of avera
Slide 19: Appendix
APPENDIX
Slide 20: Credit Quality
$163 $128 $126 $118 $119 $127 $147 $134 $114 $92 $290 $275 $260 $232 $211 3Q 2016 4Q 2016 1Q 2017 2Q 2017 3Q 2017 1.4% 1.4% 1.4% 1.4% 1.3% 5.5% 5.7% 6.7% 5.4% 5.2% 3Q 2016 4Q 2016 1Q 2017 2Q 2017 3Q 2017 ALLL / Total Loans Oil and Gas ALLL / Oil and Gas Loans CREDIT QUALITY ($ IN MILLIONS) Potential
Slide 21: Loan Portfolio Composition
Manufacturing and Wholesale Trade 25% Power & Utilities 14% Real Estate 12% Oil & Gas 8% Finance & Insurance 12% Health Care and Soc. Assist. 5% 1 – Excludes $0.4 billion Other consumer portfolio 2 – Other Midwest includes Missouri, Indiana, Ohio, Michigan and Iowa 3 – Principally reflects the oil a
Slide 22: Oil and Gas Update
OIL AND GAS UPDATE $398 $446 $413 $450 $446 $171 $75 $78 $37 $39 $127 $147 $134 $114 $92 $696 $668 $625 $601 $577 3Q 2016 4Q 2016 1Q 2017 2Q 2017 3Q 2017 Pass Potential Problem Loans Nonaccrual Period End Loans by Credit Quality Oil and Gas Allowance $38 $38 $42 $33 $30 5.5% 5.7% 6.7% 5.4% 5.2% 3Q 2
Slide 23: Positioned for Higher Interest Rates
$90 $93 $93 $103 $122 $57 $60 $64 $66 $76 $34 $38 $39 $36 $39 $181 $191 $195 $205 $237 3Q 2013 3Q 2014 3Q 2015 3Q 2016 3Q 2017 Commercial Retail Investment and other1 POSITIONED FOR HIGHER INTEREST RATES ASSET SENSITIVE PROFILE ($ in millions) 22 Interest Income & Net Interest Margin Average Deposit
Slide 24: High Quality Securities
Fair Value Composition Risk Weighting Profile $4.96 $5.65 $6.02 $6.13 $6.05 2.59% 2.60% 2.48% 2.37% 2.44% 1.00% 2.00% 3.00% 4.00% 5.00% 3Q 2013 3Q 2014 3Q 2015 3Q 2016 3Q 2017 Average Balance Average Yield 33% 29% 67% 71% <1% <1% September 2016 September 2017 HIGH QUALITY SECURITIES ($ IN BILLIONS)
Slide 25: Efficiency Ratio Reconciliation
Efficiency Ratio YTD 3Q13 YTD 3Q14 YTD 3Q15 YTD 3Q16 YTD 3Q17 Federal Reserve efficiency ratio 70.20% 70.19% 69.79% 67.51% 65.64% Fully tax-equivalent adjustment (1.44)% (1.35)% (1.38)% (1.32)% (1.27)% Other intangible amortization (0.42)% (0.40)% (0.34)% (0.20)% (0.18)% Fully tax-equivalent efficie
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