Associated Banc-corp · NYSE:ASB
Associated Banc-corp — Q1 2019 Earnings Presentation
20 slides from Associated Banc-corp's earnings presentation, Apr 30, 2019
Slide 1: Associated Banc-Corp Investor Presentation Second Quarter 2019
Exhibit 99.1 Associated Banc-Corp Investor Presentation 2019 Brookfield Office (Milwaukee MSA) – Opened October 2017 SECOND QUARTER
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: Our Franchise
OUR FRANCHISE First Quarter 2019 Highlights and Accomplishments of assets of loans $34 billion $23 billion . Largest bank headquartered in Wisconsin2 $4 billion of equity $26 billion of deposits . Approximately 4,700 employees, servicing 1.3 million customer accounts in 8 states and 1Q 2019 Average
Slide 4: Attractive Midwest Markets
ATTRACTIVE MIDWEST MARKETS Large Population Base With a Manufacturing and Wholesale Trade-Centric Economy Midwest holds ~20% of the U.S. population1 and Manufacturing Focus Well-Suited for Our Midwest Location nearly 30% of all U.S. manufacturing jobs2 ASB C&BL Loans by Industry Total ASB Loans by G
Slide 5: Loan Growth Trends
LOAN GROWTH TRENDS Average Quarterly Loans1 Average Loan Growth2 ($ in billions) 1Q15 – 1Q19 ($ in millions) $23.1 CAGR $22.1 General commercial $264 $20.1 $18.9 Power & utilities $108 $17.8 $7.3 $8.4 5% Residential mortgage $52 Total $7.2 Commercial & $7.1 REIT $28 business loans: $7.0 + $357 milli
Slide 6: Deposit Growth Trends
DEPOSIT GROWTH TRENDS Average Quarterly Deposits1 Quarter-end Loan to Deposit Ratio ($ in billions) 1Q15 – 1Q19 98% $24.6 CAGR 96% $23.7 94% 94% $21.5 $5.0 4% 95% $20.6 $5.1 $19.1 $5.0 91% $5.0 90% $4.3 $4.7 12% 89% $4.5 1Q 2Q 3Q 4Q $3.8 $3.0 $2.2 Historical Quarter-end Range 2014-2019 2019 $3.0 $2.
Slide 7: Net Interest Income and Yields — Quarterly Trends
NET INTEREST INCOME AND YIELDS — QUARTERLY TRENDS Net Interest Income Average Yields ($ in millions) 5.19% $226 $224 $5 4.62% $219 $5 $5 $1 $216 4.86% $2 $4 $2 $1 $210 $1 $3 $1 $1 $2 3.60% 3.66% 4.14% $2 $2 3.51% $4 $1 3.54% 3.24% 3.23% 3.25% 3.32% 2.78% 2.45% 2.43% 2.39% 2.44% $214 1.51% $210 $211
Slide 8: Net Interest Margin — Quarterly Trends
NET INTEREST MARGIN — QUARTERLY TRENDS Quarterly NIM Trends 3Q18 to 4Q18 Walkdown Loan and funding Fed mix, other Funds – changes Other LIBOR BKMU Prepymts spread Day count Accrn & 0.06% –% 3.02% 3.02% Prepymts 0.03% 0.03% (0.02%) 2.92% 0.13% 2.92% 0.10% 3.02% 2.90% 0.05% 0.09% 0.03% 0.07% 0.02% 2.9
Slide 9: Noninterest Income - Quarterly Trends
NONINTEREST INCOME - QUARTERLY TRENDS 2 ($Noninterest IN MILLIONS Income) Wealth Management ($ in millions) ($ in millions) $21 $20 $16 $90 $91 $16 $15 $83 $80 $80 $6 $5 $5 $7 $4 1Q 2015 1Q 2016 1Q 2017 1Q 2018 1Q 2019 Strong Insurance Commissions Growth Driven by Acquisitions ($ in millions) $73 $7
Slide 10: Overall Expense Efficiency
OVERALL EXPENSE EFFICIENCY AUTOMATION AND CONSOLIDATIONS ARE DRIVING BETTER EFFICIENCY OVER TIME Efficiency Enhanced Automation Branch Consolidations Operational Efficiencies Drivers Noninterest Expense Efficiency Ratio2 Branches and FTEs ($ in millions) $213 4,792 $211 70% 71% 4,707 69% $7 $204 4,6
Slide 11: Investing in Customer Technology
INVESTING IN CUSTOMER TECHNOLOGY Retail Customer Focused Enhancements . New mobile app received 4.7-star rating with >7,500 reviews1 . Zelle P2P implemented March 2019 – Provides intuitive, real-time payment capability via Associated’s mobile app and online banking platforms – Strong and growing net
Slide 12: Capital Priorities
CAPITAL PRIORITIES 1 Funding Organic Growth 2 Paying a Competitive Dividend Quarterly Average Loans; ($ in billions) Quarterly Dividends 7% $23.1 14% $0.17 CAGR1 $22.1 CAGR1 $0.15 $20.1 $0.12 $18.9 $0.11 $17.8 $0.10 1Q 2015 1Q 2016 1Q 2017 1Q 2018 1Q 2019 1Q 2015 1Q 2016 1Q 2017 1Q 2018 1Q 2019 3 No
Slide 13: 2019 Outlook
2019 OUTLOOK . This outlook reflects a stable to improving economy and no Fed Funds rate changes. We may adjust our outlook if, and when, we have more clarity on these factors. . We received regulatory approval for the acquisition of the Wisconsin branch banking operations of Huntington Bank and con
Slide 14: Appendix
APPENDIX
Slide 15: Huntington Branch Transaction Summary
HUNTINGTON BRANCH TRANSACTION SUMMARY Seller: The Huntington National Bank Existing ASB Branches Acquired Branches Assets Purchased: . 32 branches and ~$134 million of WI related loans Deposits Assumed: ~$850 million Consideration: 100% Cash Transaction Value: . ~4% net blended premium on deposits a
Slide 16: Credit Quality – Quarterly Trends
CREDIT QUALITY – QUARTERLY TRENDS ($ IN MILLIONS) Potential Problem Loans Nonaccrual Loans $282 $242 $236 $250 $241 $209 $204 $154 $156 $128 1Q 2018 2Q 2018 3Q 2018 4Q 2018 1Q 2019 1Q 2018 2Q 2018 3Q 2018 4Q 2018 1Q 2019 Net Charge Offs Allowance for Loan Losses to Loans 1.1% 1.1% $12 1.0% 1.0% 1.0%
Slide 17: Loans Stratification
LOANS STRATIFICATION OUTSTANDINGS AS OF MARCH 31, 2019 C&BL by Geography Total Loans1 CRE by Geography $8.5 billion $5.1 billion Minnesota 6% Illinois Illinois Minnesota Texas3 14% 13% Illinois 12% 11% 24% Other Minnesota 2 10% Midwest Wisconsin Wisconsin Other 2 Wisconsin 11% 32% 30% Midwest 27% Ot
Slide 18: High Quality Securities
HIGH QUALITY SECURITIES ($ IN BILLIONS) Portfolio Detail as of March 31, 2019 Strategic Portfolio Average Balance and Yield Trends Amortized Fair Duration Investment Type Cost Value (Yrs) $8 $6.89 $6.82 5.00% $7$8 $7 $6.08 $5.97 GNMA CMBS $1.78 $1.73 2.76 $6$7 $5.75 $6 4.00% GNMA MBS & CMOs 2.40 2.3
Slide 19: Reconciliation and Definitions of Non-GAAP Items
RECONCILIATION AND DEFINITIONS OF NON-GAAP ITEMS Efficiency Ratio 1Q15 1Q16 1Q17 1Q18 1Q19 Federal Reserve efficiency ratio 70.26% 69.01% 66.39% 70.76% 63.32% Fully tax-equivalent adjustment (1.42)% (1.37)% (1.30)% (0.66)% (0.77)% Other intangible amortization (0.32)% (0.20)% (0.20)% (0.51)% (0.73)%
Slide 20: Reconciliation and Definitions of Non-GAAP Items (Cont.)
RECONCILIATION AND DEFINITIONS OF NON-GAAP ITEMS (CONT.) Net Interest Income 1Q18 2Q18 3Q18 4Q18 1Q19 Net interest income $210 $226 $219 $224 $216 Bank Mutual prepayments and other adjustments (2) (5) (1) (5) — Bank Mutual acquisition related purchase loan accretion (4) (5) (4) (2) (1) Other prepaym