Associated Banc-corp · NYSE:ASB
Associated Banc-corp — Q3 2011 Earnings Presentation
30 slides from Associated Banc-corp's earnings presentation, Nov 2, 2011
Slide 1: Associated Banc-Corp Investor Presentation Third Quarter 2011
Exhibit 99.1 Associated Banc-Corp Investor Presentation Third Quarter 2011
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: Leading Midwest Banking Franchise
Leading Midwest Banking Franchise • $22 billion in assets • Approximately 270 banking offices MN • Top 50 U.S. bank holding company WI • Largest bank headquartered in Wisconsin 1 2 Hudson Wausau • #1 mortgage originator and #1 SBA lender in Wisconsin Minneapolis Stevens Point Green Bay • Known for i
Slide 4: Attractive Midwest Markets
Attractive Midwest Markets Wisconsin Employment • Population: 5.6 million • Wisconsin and Minnesota posted job gains in September and continue to show above average employment levels 1 • GSP : $248 billion • Gains in Wisconsin are wide-spread, with 67 of 72 counties showing an 2 improvement in unemp
Slide 5: ASBC Vision Statement
ASBC Vision Statement Associated Banc-Corp will be the most admired Midwestern financial services company, distinguished by sound, value-added financial solutions with personal service for our customers, built upon a strong commitment to our colleagues and the communities we serve, resulting in exce
Slide 6: Execution of Strategic Plan Well Under Way
Execution of Strategic Plan Well Under Way • Aggressively reduced legacy problem credits Management Team • Realigned credit policies for profitable future originations Has Driven Results • Improved core profitability by restructuring existing business portfolio • The OCC Memorandum of Understanding
Slide 7: Management Team – Driving Results
Management Team – Driving Results Key Recent Hires (2010 – Present) • Oliver Buechse, Chief Strategy Officer Reduced Problem Credits • John Utz, Head of Specialized Industries • Donna Smith, Head of Regional Commercial Banking • Christopher Del Moral-Niles, Deputy Chief Financial Officer • Breck Han
Slide 8: Growing Commercial Relationships
Growing Commercial Relationships • Focus on commercial growth in key markets – Net production and line draws of $198 million for 3Q11 • Portfolio of specialty niches with dedicated resources Commercial & – Mortgage warehouse growth of $70 million in 3Q11 Business Lending – Oil & Gas segment growth o
Slide 9: Growing Household Relationships
Growing Household Relationships • Focusing on core Wealth disciplines and business development activities • Leveraging Private Banking as center of client relationship • Build out of specialized segments Wealth • Deepening the bench strength with the addition of new talent • Product and service enha
Slide 10: Differentiating Associated in Retail Banking
Differentiating Associated in Retail Banking • We are differentiating ourselves with our retail bank through investments in our Premier Banking program and leveraging our relationship with the Green Bay Packers & Aaron Rodgers Premier Banking Packers Banking Top 7% of Retail Households Further promo
Slide 11: Our New In-Store Branch Look
Our New In-Store Branch Look • We are differentiating ourselves through investments in our Footprint project. Pictured below is our new in-store location in Oak Creek, WI, our first in-store in the Milwaukee area 10
Slide 12: Third Quarter Highlights
Third Quarter Highlights Quarterly Results Reflect Positive Trends • Net income to common shareholders of $34 million or $0.20 per share • Pre-tax income improved 33%, or $15 million, and net income to common shareholders improved 33%, or $8 million, from the prior quarter Net Income and ROAA $50 1.
Slide 13: Third Quarter Highlights
Third Quarter Highlights Quarterly Results Reflect Positive Trends • Total loans of $13.5 billion were up 3% from the end of the second quarter – Commercial and business lending (C&I, leasing, and owner-occupied CRE loans) grew by a net $198 million on a linked-quarter basis – Commercial real estate
Slide 14: Positioned for Growth in Key Loan Categories
Positioned for Growth in Key Loan Categories Total Loans of $13.5 billion at September 30, 2011 Total Loans ($ in billions) Loan Mix – 4Q 2008 vs 3Q 2011 4Q 2008 Consumer $16.5 5% Peak Loans (4Q 2008) $16.3 billion CRE Investor Home Equity 14% 18% Construction 14% $15.0 +3% QoQ Res Mtg 14% Commercia
Slide 15: Significant Improvements in Credit Quality Indicators
Significant Improvements in Credit Quality Indicators ($ in millions) 3Q 2010 4Q 2010 1Q 2011 2Q 2011 3Q 2011 Provision for loan losses $ 64.0 $ 63.0 $ 31.0 $ 16.0 $ 4.0 Net charge offs $ 109.9 $ 108.2 $ 53.4 $ 44.5 $ 30.2 ALLL/Total loans 4.22% 3.78% 3.59% 3.25% 2.96% ALLL/Nonaccruals 71.72% 83.02%
Slide 16: Maintaining a Strong Capital Profile
Maintaining a Strong Capital Profile 3Q 2010 4Q 2010 1Q 2011 2Q 2011 3Q 2011 ASBC Capital Ratios Stockholders’ equity / assets 14.21% 14.50% 14.88% 13.60% 13.01% Tangible common equity / tangible assets 8.03% 8.12% 8.42% 8.49% 8.77% Tangible equity / tangible assets 10.41% 10.59% 10.93% 9.71% 9.07%
Slide 17: TARP Repayment
TARP Repayment TARP Repayment in a Shareholder-friendly Manner • Completed the repurchase of remaining TARP funds primarily through senior note and preferred stock offerings • OCC Memorandum of Understanding terminated – Bank-level capital and dividend constraints removed Relative Shareholder Friend
Slide 18: Summary
Summary 2011 – Poised for Revenue Growth and Earnings Expansion – Strong, stable Midwestern franchise; well positioned for growth – Execution of our strategic initiatives and continued loan growth – Strong balance sheet with ample liquidity – Solid long-term strategy to reduce and manage risk – Impr
Slide 19: Appendix
Appendix • Deposit Portfolio • Investment Securities Portfolio • Loan Portfolio – Residential Mortgages – Home Equity – Investor Commercial Real Estate – Construction Loans – Commercial & Business Lending Loans • Credit Details – See attached press release financial tables 18
Slide 20: Strong and Low Cost Funding Profile
Strong and Low Cost Funding Profile ($ in thousands) Period End Deposit and Customer Funding Composition Jun 11 vs Sep 11 Cost of Funds Jun 30, 2011 Sep 30, 2011 $ Change % Change 3Q 2011 Demand $ 3,218,722 $ 3,711,570 492,848 15% Savings 1,007,337 1,013,195 5,858 1% 0.11 % Interest-bearing demand 1
Slide 21: Managing the Cost of Funds and Customer Funding Levels
Managing the Cost of Funds and Customer Funding Levels Cost of Money Market Deposits Net Customer Deposits and Funding 0.54% ($ in billions) 0.47% 0.37% $15.7 0.33% 0.30% $6.8b $6.0b $5.1b $5.0b $5.1b $15.0 3Q 2010 4Q 2010 1Q 2011 2Q 2011 3Q 2011 $14.7 $14.6 Cost of Interest-Bearing Liabilities 1.03
Slide 22: Appendix
Appendix • Deposit Portfolio • Investment Securities Portfolio • Loan Portfolio – Residential Mortgages – Home Equity – Investor Commercial Real Estate – Construction Loans – Commercial & Business Lending Loans • Credit Details – See attached press release financial tables 21
Slide 23: High Quality Investment Securities Portfolio
High Quality Investment Securities Portfolio Investment Portfolio – September 30, 2011 Market Value Composition – September 30, 2011 ABS All Other Govt & Type Bk Value Mkt Value TEY Duration 4% 1% Agencies (000’s) (000’s) (%) (Yrs) 1% Govt & $ 26,290 $ 26,318 0.68 0.53 Municipals Agencies 15% MBS 1,
Slide 24: Appendix
Appendix • Deposit Portfolio • Investment Securities Portfolio • Loan Portfolio – Residential Mortgages – Home Equity – Investor Commercial Real Estate – Construction Loans – Commercial & Business Lending Loans • Credit Details – See attached press release financial tables 23
Slide 25: Loan Portfolio Trends
Loan Portfolio Trends ($ in thousands) Period End Loan Composition Jun 11 vs Sep 11 Cost of Funds Jun 30, 2011 Sep 30, 2011 $ Change % Change 3Q 2011 Commercial and industrial $ 3,202,301 $ 3,360,502 158,201 5% Lease financing 54,001 54,849 848 2% Commercial real estate - owner occupied 1,030,060 1,
Slide 26: Residential Mortgage and Home Equity
Residential Mortgage and Home Equity Residential Mortgage portfolio of $2.8 billion Home Equity portfolio of $2.6 billion 21% of Total Loans, at Sept. 30, 2011 19% of Total Loans, at Sept. 30, 2011 Portfolio Mortgage Balance by State Home Equity Balance by State Other Other 8% 2% Minnesota Minnesota
Slide 27: Investor Commercial Real Estate and Construction
Investor Commercial Real Estate and Construction Investor CRE portfolio of $2.5 billion Construction portfolio of $554 million 18.4% of Total Loans, at Sept. 30, 2011 4% of Total Loans, at Sept. 30, 2011 Investor CRE Loans by State Construction Loans by State Missouri Florida Other Missouri 3% 2% 6%
Slide 28: Commercial & Business Lending Loans
Commercial & Business Lending Loans Commercial & Business Lending portfolio of $4.4 billion, or 33% of Total Loans, at Sept. 30, 2011 Commercial & Business Lending Loans by State Commercial & Business Lending Loans by Collateral Professional, Scientific , & Technical Transportation & Services, 5% Wa
Slide 29: Appendix
Appendix • Deposit Portfolio • Investment Securities Portfolio • Loan Portfolio – Residential Mortgages – Home Equity – Investor Commercial Real Estate – Construction Loans – Commercial & Business Lending Loans • Credit Details – See attached press release financial tables 28
Slide 30: Continuing Decline in Potential Problem Loans
Continuing Decline in Potential Problem Loans ($ in millions) YoY 3Q 2010 4Q 2010 1Q 2011 2Q 2011 3Q 2011 Change Commercial and industrial $ 373,955 $ 354,284 $ 348,949 $ 229,407 $ 207,351 (45%) Commercial real estate 553,126 492,778 465,376 382,056 392,737 (29%) Real estate - construction 175,817 9