Slide 1: Second Quarter 2024 Earnings Presentation
Second Quarter 2024 Earnings Presentation JULY 25, 2024
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: Second Quarter 2024 Results
Second Quarter 2024 Results1 2Q 2024 Operating Results ▪ GAAP diluted EPS of $0.74 $0.74 $0.52 GAAP Diluted EPS Adjusted Diluted EPS2 ▪ Adjusted diluted EPS2 of $0.52 ▪ Total quarterly avg. loan growth of $211 million 0.7% (4) bps ▪ Total quarterly avg. core customer deposit2 decrease Net Interest M
Slide 4: 2Q 2024 EPS Adjustment
2Q 2024 EPS Adjustment Our 2Q 2024 GAAP EPS was impacted by a one time tax benefit recognized during the quarter One time deferred tax benefit of approximately $33 million recognized in 2Q 20241 $0.52 2Q 2024 2Q 2024 Tax Benefit GAAP EPS Adjusted EPS2 1 Tax benefit resulted from a strategic realloca
Slide 5: Phase 1 Strategic Plan: Foundational to Growth
Phase 1 Strategic Plan: Foundational to Growth Launched in 2021, Phase 1 of our strategic plan established ASB’s ability to execute Enhanced Lending Foundational Outcomes1 from Phase 1 Capabilities ▪ Nearly $800 million in Asset-Based Lending & Equipment Finance loans Upgraded Product & ▪ Over $2.5
Slide 6: Advancing our Growth Strategy in Phase 2
Advancing our Growth Strategy in Phase 2 Phase 2 is designed to accelerate our momentum through an infusion of talent in key areas & targeted initiatives Recent Key Leadership Hires Phase 2 Progress1 Jul Bryan Carson 2022 EVP, Chief Product & Marketing Officer ▪ Progressing on our plan to hire 26+ A
Slide 7: Improving our Return Profile Over Time
Improving our Return Profile Over Time1 Our efforts to remix the balance sheet & drive toward improved profitability are on track Assets Liabilities Growing diversified asset classes to decrease Attracting and deepening customer relationships reliance on legacy low-yielding, low-relationship to decr
Slide 8: Quarterly Loan Trends
Quarterly Loan Trends Average loans grew by $211 million vs. the prior quarter, led by growth in C&I & Auto Period End Quarterly Loan Trends Average Loan Change (1Q 2024 to 2Q 2024) ($ in billions) ($ in millions) $29.8 $30.2 $29.5 $29.6 $29.2 Commercial & Industrial $186 $11.1 $11.2 $11.0 $11.1 Aut
Slide 9: Quarterly Deposit & Funding Trends
Quarterly Deposit & Funding Trends Our quarterly deposit trends were impacted by the timing of seasonal balance flows in 1Q & 2Q Period End Quarterly Deposits Average Funding Change (1Q 2024 to 2Q 2024) ($ in billions) ($ in millions) $33.4 $33.7 $32.0 $32.1 $32.7 Total Deposits $(638) (-2%) $6.1 $6
Slide 10: YTD Deposit Performance & Outlook
YTD Deposit Performance & Outlook We remain well-positioned to deliver core customer deposit1 growth in 2H 2024 ▪ 1Q deposit growth was stronger than Quarterly Average Deposit Trends anticipated due to seasonal customer inflows ($ in millions) retained on the balance sheet longer than +0% expected $
Slide 11: Average Yield Trends
Average Yield Trends Earning asset yields were up 1 bp during 2Q, while the rate on total interest-bearing liabilities was up 5 bps Quarterly Average Yields (%) Asset & Liability Yield / Rate Trends (%) 7.56 7.45 7.42 7.29 7.04 7.11 7.22 7.24 5.64 5.65 7.04 5.36 5.51 6.77 5.18 5.52 5.58 5.42 5.07 4.
Slide 12: Net Interest Income & Net Interest Margin Trends
Net Interest Income & Net Interest Margin Trends Net interest income decreased by only $1 million despite funding cost pressure in 2Q ($ in millions) $258 $258 $257 $254 $253 2.80% 2.79% 2.75% 2.71% 2.69% 2Q 2023 3Q 2023 4Q 2023 1Q 2024 2Q 2024 Quarterly Net Interest Income Quarterly Net Interest Ma
Slide 13: Cash & Investment Securities Portfolio
Cash & Investment Securities Portfolio We continue to target investments to total assets of 18% to 20% in 2024 Period End Securities Book Composition CET1 Including AOCI1 (%) ($ in billions) 9.48 9.55 9.68 9.39 9.43 $7.9 8.87 9.01 $7.7 $7.7 $7.7 $7.8 8.60 8.53 8.79 $0.2 $0.3 $0.3 $0.3 $0.2 2Q 2023 3
Slide 14: Noninterest Income Trends
Noninterest Income Trends Our 2Q 2024 noninterest income increased modestly vs. the prior quarter Quarterly Noninterest Income Trends ($ in millions) $70 $66 $67 $65 $65 $4 $5 $12 $6 $5 $5 $8 $4 $5 $8 $7 $9 $3 $3 $2 $49 $50 $47 $50 $52 1 2Q 2023 3Q 2023 4Q 2023 Adjusted 1Q 2024 2Q 2024 4Q 2023 GAAP
Slide 15: Noninterest Expense Trends
Noninterest Expense Trends Total noninterest expense decreased 1%, or $2 million, vs. prior quarter Noninterest Expense Trends Efficiency Ratio (%) ($ in millions) 132.0 $239 $31 64.1 60.1 58.5 61.0 61.5 60.9 $196 $198 $196 58.5 57.0 57.2 $191 $8 $60 $53 $44 $47 $52 2Q 2023 3Q 2023 4Q 2023 1Q 2024 2
Slide 16: Capital Profile
Capital Profile Our capital ratios increased across the board in the second quarter Capital Ratios (%) 2024 Capital Target Ranges (%) 10.00 7.75 12.34 9.68 12.08 7.18 6.75 9.00 10.27 10.02 9.68 9.43 2Q 2024 2024 2Q 2024 2024 TCE Ratio1 Target CET1 Ratio Target Range Range 7.08 7.18 Tangible Book Val
Slide 17: Allowance for Credit Losses on Loans (ACLL) Update
Allowance for Credit Losses on Loans (ACLL) Update Our ACLL percentage increased by 1 basis point vs. the prior quarter to 1.32% ACLL1 Update ACLL / Total Loans (%) ▪ ACLL increased $2 million from the prior quarter to $390 million, driven primarily by nominal credit movement coupled with general ma
Slide 18: Credit Quality Trends
Credit Quality Trends 2Q 2024 credit quality remained solid with delinquencies, criticized loans, & NCOs down vs. prior quarter Total Delinquent Loans Nonaccrual Loans ($ in millions) ($ in millions) $169 $178 $149 $154 $131 $79 $74 $23 $84 $36 $63 $48 $22 $11 $0 $19 $42 $50 $51 $37 $62 $73 $79 $86
Slide 19: High-Quality Commercial Real Estate Portfolio
High-Quality Commercial Real Estate Portfolio1 ASB has built a diversified CRE portfolio by partnering with well-known developers in stable Midwest markets CRE Credit Quality 2Q 23 3Q 23 4Q 23 1Q 24 2Q 24 Portfolio LTV 60% 59% 58% 59% 59% Consumer Com'l & Delinquencies/Loans3 0.00% 0.14% 0.52% 0.28%
Slide 20: FY 2024 Outlook
FY 2024 Outlook GAAP Adjusted Previous FY 2024 Updated FY 2024 FY 2023 Result FY 2023 Result1 Guidance2 Guidance2 EoP Total Loans $29.2B $29.2B 4% to 6% Growth Lower end of range (+1.4% vs. 2022) (+1.4% vs. 2022) Core Customer $33.4B Deposits3 3% to 5% Growth EoP Total Deposits Lower end of range (+
Slide 21: Appendix
Appendix
Slide 22: Associated Banc-Corp (NYSE: ASB)
Associated Banc-Corp (NYSE: ASB)1 With origins dating back to 1861, ASB is the largest bank holding company based in Wisconsin2 $42B $30B Assets Loans $4B $33B Equity Deposits Risk Mgmt & Shared Services 17% Corporate & 188 ~4,000 Commercial Commercial Specialty Branches Employees Consumer 38% & Bus
Slide 23: Stable, Granular Deposit Portfolio
Stable, Granular Deposit Portfolio Uninsured, uncollateralized deposits were only 22% of total deposits as of 6/30/2024 Period End Total Deposit Trends (Associated Bank, N.A.) ($ in billions) $32.1 $32.1 $33.5 $33.7 $32.8 22% Percentage of total deposits that were uninsured and uncollateralized as o
Slide 24: Liquidity Sources
Liquidity Sources As of 6/30/2024, ASB’s total liquidity sources covered 158% of uninsured, uncollateralized deposits ($ in millions) Liquidity Sources 3/31/2024 6/30/2024 Federal Reserve Balance $419.6 $482.4 Available FHLB Chicago Capacity $7,035.8 $5,184.3 Available Fed Discount Window Capacity $
Slide 25: Additional Loan Trends
Additional Loan Trends Average Quarterly Loans Period End Loan Change (3/31/2024 to 6/30/2024) ($ in billions) ($ in millions) $29.4 $29.9 $30.0 $29.4 $29.6 Commercial & Industrial $112 Auto Finance $85 $10.9 $11.0 $10.8 $10.8 $11.0 Home Eq. & Other Consumer $14 $7.3 $7.4 CRE-Owner Occupied $6 $7.3
Slide 26: Additional Deposit & Funding Trends
Additional Deposit & Funding Trends Average Quarterly Deposits Period End Funding Change (3/31/2024 to 6/30/2024) ($ in billions) ($ in millions) $33.3 $32.6 $32.0 $32.2 $31.3 Total Deposits $(1,022) (-3%) $5.9 $5.7 $6.3 $6.2 Core Customer Deposits1 $(863) (-3%) $6.7 $7.5 Customer CDs $144 $7.3 $7.0
Slide 27: Total Loans Outstanding Balances as of June 30, 2024
Total Loans Outstanding Balances as of June 30, 2024 ($ in millions) % of Total % of Total 6/30/20241 Loans 6/30/20241 Loans C&BL (by NAICS 2) CRE (by property type) Utilities $ 2,472 8.3% Multi-Family $ 2,859 9.7% Manufacturing & Wholesale Trade 2,315 7.8% Industrial 1,682 5.7% Real Estate (include
Slide 28: Loan Stratification Outstanding Balances as of June 30, 2024
Loan Stratification Outstanding Balances as of June 30, 2024 Illinois Illinois Minnesota 15% Minnesota 21% 9% Illinois 7% Minnesota 16% Other Texas 9% Midwest2 6% 21% Wisconsin C&BL by Other CRE by 24% Geography Midwest 2 Wisconsin Total Other 2 Geography 9% Midwest $11.1 billion 28% Loans1 12% Wisc
Slide 29: Strengthened Balance Sheet
Strengthened Balance Sheet1 We have exited or greatly reduced certain historically volatile portfolios while growing historically stable assets Land & For-Sale Housing Loans / Total Loans Total Loan Portfolio Evolution ($ in billions) ~23% of total NCOs during WAvg. NCO Rates 8% a peak loss period f
Slide 30: Diversified Credit Risk Profile
Diversified Credit Risk Profile1 A company-wide focus on discipline & diversification has enhanced our credit profile Stable Total Loan Portfolio Prime/Super Prime Consumer Portfolio WAvg. Portfolio FICO Scores IL 21% MN Other +1 +3 9% Com'l & 36% +8 Business WI Loans by Other 2 Lending Loans by 28%
Slide 31: Reconciliation & Definitions of Non-GAAP Items
Reconciliation & Definitions of Non-GAAP Items Period End Core Customer Deposits Reconciliation ($ in millions) 2Q 2023 3Q 2023 4Q 2023 1Q 2024 2Q 2024 Total deposits $32,014 $32,123 $33,446 $33,713 $32,691 Brokered CDs (3,818) (3,351) (4,447) (3,931) (4,062) Network transaction deposits (1,601) (1,
Slide 32: Reconciliation & Definitions of Non-GAAP Items
Reconciliation & Definitions of Non-GAAP Items Common Equity Tier 1 Capital Ratio Reconciliation 2Q 2023 3Q 2023 4Q 2023 1Q 2024 2Q 2024 Common equity Tier 1 capital ratio 9.48% 9.55% 9.39% 9.43% 9.68% Accumulated other comprehensive loss adjustment (0.88)% (1.01)% (0.52)% (0.64)% (0.67)% Common equ
Slide 33: Reconciliation & Definitions of Non-GAAP Items
Reconciliation & Definitions of Non-GAAP Items One Time Item Noninterest Income Reconciliation YTD ($ in millions) Dec 2023 4Q 2023 GAAP noninterest income $63 $(131) Loss on mortgage portfolio sale1 136 136 Net loss on sale of investments1 65 65 Noninterest income, excluding one time items $264 $70