Associated Banc-corp · NYSE:ASB

Associated Banc-corp — Investor Presentation (May 2016)

28 slides from Associated Banc-corp's investor presentation, May 3, 2016

  1. Slide 1: Associated Banc-Corp Investor Presentation Second Quarter 2016

    Associated Banc-Corp Investor Presentation SECOND QUARTER 2016 Exhibit 99.1

  2. 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

  3. Slide 3: Associated Bank Franchise

    WI 35% IL 24% MN 11% Other Midwest2 12% Other 18% Loans1 ASSOCIATED BANK FRANCHISE Company 1Q 2016  Headquarters: Green Bay, Wisconsin  Employees: ~4,400  Branches: 215  Largest bank headquartered in Wisconsin Financials 1Q 2016  Assets: $28 billion  Loans: $19 billion  Deposits: $21 billion

  4. Slide 4: Attractive Midwest Markets

    ASB Mortgage Portfolio FICO Score3 ATTRACTIVE MIDWEST MARKETS 3.7% 3.8% 4.2% 4.5% 4.8% 5.0% 5.1% 6.5% MN IA MO WI MI IN OH IL Midwest holds ~30% of all U.S. manufacturing jobs2 1 – U.S. Census Bureau, Annual Estimates of the Resident Population, 2015 2 – U.S. Bureau of Labor Statistics, Manufacturin

  5. Slide 5: 2016 Management Priorities

    2016 MANAGEMENT PRIORITIES 4 Driving Long-Term Shareholder Value Creation Enhanced Customer Experience We are committed to providing efficient solutions that improve each customer’s experience and which help them better manage their finances across multiple platforms Organic Balance Sheet Growth We

  6. Slide 6: First Quarter Update

    FIRST QUARTER UPDATE 5 Net income available to common equity of $40 million, or $0.27 per common share Enhanced Customer Experience Improving branch customer satisfaction trends 90% of consumer customers were completely satisfied with their branch experience in the first quarter Organic Balance Shee

  7. Slide 7: Evolving Delivery Model

    Changing customer behavior has driven our continued investment in digital platforms EVOLVING DELIVERY MODEL 6 Jan 12 Mar 16 Jan 12 Mar 16 Jan 12 Mar 16 Jan 12 Mar 16 Branch – Deposit and Withdrawal Activity Check Processing ATM – Deposit and Withdrawal Activity ACH and Wire Activity

  8. Slide 8: Enhanced Customer Experience Supports Growth in an Evolving Industry

    ENHANCED CUSTOMER EXPERIENCE SUPPORTS GROWTH IN AN EVOLVING INDUSTRY 7 Branch Consolidations Branch Revitalization & Modernization Investments in Technology Enhanced Customer Service 215 1Q 2007 1Q 2011 1Q 2016 $21 1Q 2007 1Q 2011 1Q 2016 BRANCHES DEPOSITS, $ billions  We believe that providing ext

  9. Slide 9: Organic Loan Growth

    $1.9 $1.6 $1.5 $1.5 $1.4 $4.4 $4.6 $4.7 $5.2 $5.9 $3.2 $3.6 $3.9 $4.1 $4.5 $4.8 $5.6 $6.1 $7.0 $7.1 1Q 2012 1Q 2013 1Q 2014 1Q 2015 1Q 2016 Home Equity & Other Consumer Residential Mortgage Commercial Real Estate Commercial & Business $15.4 $14.3 $16.2 $17.8 $18.9 8 Cumulative Change +$4.6 billion,

  10. Slide 10: Organic Deposit Growth

    $2.5 $2.0 $1.7 $1.6 $1.6 $1.0 $1.1 $1.2 $1.3 $1.4 $2.1 $2.8 $2.8 $3.2 $3.2 $3.7 $4.2 $4.2 $4.3 $5.0 $5.7 $7.0 $7.2 $8.7 $9.4 1Q 2012 1Q 2013 1Q 2014 1Q 2015 1Q 2016 Time deposits Savings deposits Interest-bearing demand deposits Noninterest-bearing demand deposits Money market deposits ORGANIC DEPOS

  11. Slide 11: Diverse Business Lines

    Community, Consumer, and Business (48% of Average Loans) Corporate and Commercial Specialty (51% of Average Loans) Consumer and Commercial Banking Branch Banking Commercial Banking Residential Lending Payments and Direct Channels Community Markets Eau Claire, WI La Crosse, WI Central Wisconsin Rockf

  12. Slide 12: Balanced Revenue Streams First Quarter 2016

    Insurance commissions 26% Service charges on deposit accounts 20% Card-based and other nondeposit fees 14% Trust service fees 14% Mortgage banking, net 5% Brokerage and annuity commissions 4% Capital market fees, net 4% Other2 13% Commercial and business lending 29% Commercial real estate lending 20

  13. Slide 13: Disciplined Credit Approach

    DISCIPLINED CREDIT APPROACH INTERNAL PORTFOLIO MANAGEMENT LEADS TO PURPOSEFUL DIVERSIFICATION 12 Asset Class Geography Industry / Property 30-40% 38% 25-35% 24% 30-40% 38% Target 1Q 2016 average Commercial & Business CRE Consumer  Focused on growth within our Upper Midwest footprint, and select nat

  14. Slide 14: Credit Quality Trends

    CREDIT QUALITY TRENDS ($ IN MILLIONS) $180 $140 $180 $178 $251 $39 $60 $84 $124 $150 1Q 2015 2Q 2015 3Q 2015 4Q 2015 1Q 2016 Potential Problem Loans - Oil and Gas $174 $149 $134 $158 $157 $11 $13 $20 $129 1Q 2015 2Q 2015 3Q 2015 4Q 2015 1Q 2016 Nonaccrual Loans - Oil and Gas Potential Problem Loans

  15. Slide 15: Oil and Gas Lending Update

    OIL AND GAS LENDING UPDATE $780 $757 $758 $752 $756 3.5% 3.4% 3.8% 5.6% 6.5% 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0% 9.0% 10.0% $500 $550 $600 $650 $700 $750 $800 1Q 2015 2Q 2015 3Q 2015 4Q 2015 1Q 2016 Period End Oil & Gas Loans Related Reserves % ($ in millions)  Borrowing base redeterminati

  16. Slide 16: Expense Control and Efficiency Ratio

     Branch Closures & Staffing Initiatives  Enhanced Automation  Operational Efficiencies  Technology Investments  Compliance  Branch Upgrades  Marketing Investments  Talent Acquisition 71% 69% 69% 68% 67% $381 $397 $390 $405 $101 $67 $75 $80 $84 $20 $237 $212 $210 $209 $53 2012 2013 2014 2015

  17. Slide 17: Prudent Capital Management

    PRUDENT CAPITAL MANAGEMENT 16 Funding Organic Growth Paying a Competitive Dividend Non-organic Growth Opportunities Share Buybacks and Redemptions 174 168 162 151 149 1Q 2012 1Q 2013 1Q 2014 1Q 2015 1Q 2016 Common Shares Outstanding Diluted (average, in millions) $0.05 $0.08 $0.09 $0.10 $0.11 1Q 201

  18. Slide 18: Delivering Long Term Value

    Earnings Per Share 25% 5 Year CAGR Dividends 62% 5 Year CAGR Annualized Shareholder Returns 9.4% December 1, 2009 – March 31, 2016 ROATCE 9.6% Last Twelve Months DELIVERING LONG TERM VALUE 17 1.3% 9.6% March 31, 2011 March 31, 2016 $0.01 $0.11 1Q 2011 1Q 2016 Earnings Per Share Dividends $0.09 $0.27

  19. Slide 19: 2016 Outlook

    2016 OUTLOOK 18  High single digit annual average loan growth  Maintain Loan to Deposit ratio under 100%  In the absence of Federal Reserve action to raise rates, NIM to dip into the 2.75% to 2.80% range  Approximately flat to prior year, excluding investment securities gains NONINTEREST EXPENSE

  20. Slide 20: Appendix

    APPENDIX

  21. Slide 21: Net Interest Income and Margin Trends

    2.89% 2.83% 2.82% 2.82% 2.81% 0.00% 0.50% 1.00% 1.50% 2.00% 2.50% 3.00% 3.50% 4.00% $- $4 $8 $12 $16 $20 $24 $28 $32 $36 $40 $44 $48 $52 $56 $60 $64 $68 $72 $76 $80 $84 $88 $92 $96 $100 $104 $108 $112 $116 $120 $124 $128 $132 $136 $140 $144 $148 $152 $156 $160 $164 $168 $172 $176 $180 3.20% 3.15% 3.

  22. Slide 22: Noninterest Income Trends

    $7 $10 $7 $8 $4 1Q 2015 2Q 2015 3Q 2015 4Q 2015 1Q 2016 NONINTEREST INCOME TRENDS ($ IN MILLIONS) $9 $10 $9 $12 $14 1Q 2015 2Q 2015 3Q 2015 4Q 2015 1Q 2016 Mortgage Banking (net) Income $64 $66 $64 $63 $65 $16 $20 $16 $20 $18 1Q 2015 2Q 2015 3Q 2015 4Q 2015 1Q 2016 Mortgage Banking (net) and Other N

  23. Slide 23: Noninterest Expense Trends

    $21 $22 $21 $20 $20 1Q 2015 2Q 2015 3Q 2015 4Q 2015 1Q 2016 NONINTEREST EXPENSE TRENDS ($ IN MILLIONS) $53 $52 $50 $56 $53 1Q 2015 2Q 2015 3Q 2015 4Q 2015 1Q 2016 Technology and Equipment Spend Other Non-Personnel Spend2 1 – The fully tax-equivalent efficiency ratio is a non-GAAP financial measure,

  24. Slide 24: Loans by Industry and Geography

    C&BL by Geography CRE by Geography Home Equity by Geography ($7.4 billion) ($4.5 billion) ($1.0 billion) C&BL by Industry CRE by Industry Residential Mortgage by Geography ($7.4 billion) ($4.5 billion) ($5.9 billion) Manufacturing 20% Other 13% Power & Utilities 12% Oil & Gas 10% Finance & Insurance

  25. Slide 25: Oil and Gas Portfolio by Geography

    Permian 20% East Texas North Louisiana Arkansas 16% Mid-Continent (primarily OK & KS) 15% South Texas & EagleFord 13% Rockies 8% Marcellus Utica Appalachia 8% Gulf Coast 7% Gulf Shallow 5% Bakken 2% Other (Onshore Lower 48) 6% OIL AND GAS PORTFOLIO BY GEOGRAPHY MARCH 2016 PERIOD END ESTIMATED EXPOSU

  26. Slide 26: Oil and Gas Credit Profile

    OIL AND GAS CREDIT PROFILE ($ IN MILLIONS) Oil and Gas Loans Outstanding 1Q 2015 2Q 2015 3Q 2015 4Q 2015 1Q 2016 Pass $706 $658 $587 $522 $402 Criticized / Classified 74 88 158 210 225 Nonaccrual - 11 13 20 129 Total Oil and Gas Loans $780 $757 $758 $752 $756 Potential Problem Loans (PPLs) 1Q 2015 2

  27. Slide 27: High Quality Securities

    75% 38% 2% 1% 23% 61% March 2015 March 2016 20% RWA Other RWA 0% RWA HIGH QUALITY SECURITIES ($ IN BILLIONS) 26 $4.7 $5.0 $5.5 $5.8 $6.1 3.01% 2.68% 2.71% 2.58% 2.47% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% $- $0.01 0.$ 20.0. $ 3 0.0. 4$0. 0.5 0.$ 0.6 0.$0.7 $0.8 0.$ 9 0.$1.0 1. 1.1$ 1.1.2 $1. 31. $1.4

  28. Slide 28: Reconciliation and Definitions of Non-GAAP Items

    RECONCILIATION AND DEFINITIONS OF NON-GAAP ITEMS 27 Tangible Common Equity and Common Equity Tier 1 Reconciliation, ($ in millions) 1Q 2012 1Q 2013 1Q 2014 1Q 2015 1Q 2016 Common equity $2,838 $2,873 $2,840 $2,823 $2,862 Goodwill and other intangible assets (948) (944) (939) (987) (989) Tangible com

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