Associated Banc-corp · NYSE:ASB
Associated Banc-corp — Q3 2022 Earnings Presentation
23 slides from Associated Banc-corp's earnings presentation, Nov 4, 2022
Slide 1: Fourth Quarter Investor Presentation
November 4, 2022 Fourth Quarter Investor Presentation Associated Banc-Corp
Slide 2: Forward-Looking Statements
1 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
Slide 3: Franchise Profile and Key Highlights
2 Associated Banc-Corp (NYSE: ASB) is the largest bank holding company based in Wisconsin2 Franchise Profile1 Key Highlights $38B $28B $4B $29B ~4,200 202 Assets Loans Equity Deposits Employees Branches3 Commercial & Business Lending 38% Commercial Real Estate 25% Consumer 37% Corporate & Commercial
Slide 4: ASB Investment Thesis
3 ASB Investment Thesis Strong Foundation ASB is a deep-rooted franchise built on a strong foundation with increasing momentum Growth Focused, Digital Forward Momentum Deep Roots in Strong Communities Low-Cost Deposit Franchise Effective Risk Management Disciplined Expense Management Expanding Lendi
Slide 5: Franchise Evolution
4 Franchise Evolution The ASB franchise is built for growth, while remaining well-positioned for an economic downturn 1 Diversified & De-Risked Loan Portfolio 2 Improved Core Funding Profile 3 Investing in Digital Transformation 4 Growing & Expanding Lending Capabilities 5 Growing & Expanding Deposi
Slide 6: Diversified & De-Risked Loan Portfolio
5 4% 0% 3Q 2016 3Q 2022 7% 1% 3Q 2008 3Q 2022 Diversified & De-Risked Loan Portfolio1 Since 2008, ASB has largely exited several high-risk portfolios while growing historically low-risk asset types 1 $9.6 $8.9 $2.2 $8.3$4.5 $10.6 $16.3 $27.8 3Q 2008 3Q 2022 Land & For-Sale Housing Loans / Total Loan
Slide 7: Improved Core Funding Profile
6 YTD Cumulative Int-Bearing Deposit Beta1 $7.8 $5.2 $18.0 $28.3 3Q 2016 3Q 2022 Since 2016, we’ve grown low-cost, granular customer deposits while reducing wholesale funding ($ in billions) $25.7 $33.5 Customer Deposits Network Deposits & Other Wholesale Funding 30.2% 15.4% EoP Funding Trends 1 Bet
Slide 8: Investing in Digital Transformation
7 We are leveraging agile frameworks and customer feedback to more quickly deliver custom digital solutions Investing in Digital Transformation3 Launch of Associated Bank Digital AI-led Financial Wellness and Personal Insights Debit Card Controls Digital Account Opening Upgrades (Consumer) ▪ Cloud-b
Slide 9: Growing & Expanding Lending Capabilities
8 Our new lending initiatives have provided additional pathways to drive balanced growth Growing & Expanding Lending Capabilities4 Core Commercial1 New Asset-Based Lending + Equipment Finance2 Auto Finance $15,550 $17,201 $17,000 $18,000 12/31/21 9/30/22 12/31/22 Target 12/31/23 Target $143 $1,117 $
Slide 10: Growing & Expanding Deposit Capabilities
9 30% 15% 3Q 2016 3Q 2022 Our initiatives are designed to grow sustainable core deposits over time…and are already having an impact Growing & Expanding Deposit Capabilities5 Improved Deposit and Funding ProfileRelationship-Focused Deposit Initiatives ▪ Our Commercial initiatives have driven a 33% in
Slide 11: 2022 Full-Year Outlook
10 Balance Sheet Management1 Net Interest Income & Noninterest Income ▪ Net interest income (GAAP) of $935M+ ‒ Assumes a 50bp Fed Funds increase in December; interest-bearing deposit betas of 30% to 40% for this rate cycle; and benefits of additional loan growth ▪ Total net interest income & noninte
Slide 12: Building on our Strong Foundation
11 Building on our Strong Foundation Our growth focused, digital forward plan has already added to the bottom line and is proving to be sustainable Improved Core Funding Profile Diversified & De-Risked Loan Portfolio Investing in Digital Transformation Growing & Expanding Lending Capabilities Growin
Slide 13: Appendix
Appendix
Slide 14: 3Q 2022 Loan Trends
13 EoP Loan Change (6/30/2022 to 9/30/2022) Total average loans grew by 7% vs. the prior quarter, while total period end loans grew by 5% 3Q 2022 Loan Trends $(63) $(8) $5 $6 $7 $16 $60 $118 $119 $209 $269 $274 $312 Mortgage Warehouse Home Equity and Other Cons. CRE Investor Power & Utilities Genera
Slide 15: Poised for Further Margin Expansion
14 Average Yields (%) Poised for Further Margin Expansion 2.91 2.88 3.36 4.62 2.44 2.44 2.97 4.28 2.84 2.89 2.97 3.12 1.76 1.96 2.29 2.42 0.27 0.26 0.36 0.81 0.07 0.07 0.16 0.50 4Q 2021 1Q 2022 2Q 2022 3Q 2022 ASB’s structurally asset sensitive balance sheet continues to benefit from the rising rate
Slide 16: Net Interest Income & Net Interest Margin Trends
15 $184 $187 $188 $216 $264 3Q 2021 4Q 2021 1Q 2022 2Q 2022 3Q 2022 Net Interest Income & Net Interest Margin Trends ($ in millions) NII and NIM continued to grow in 3Q, driven by rising loan yields and controlled deposit costs Quarterly Net Interest Income Quarterly Net Interest Margin 3.13% 2.71%
Slide 17: Well-Positioned for Rising Rates
16 Well-Positioned for Rising Rates Managing Downside Risk Interest Rate Risk Management While ASB remains well-positioned to benefit from higher rates, we are proactively managing the downside risk Estimated NII Sensitivity Profile Δ in interest rates 2Q 2022 3Q 2022 +200 bps ramp over 12 months 10
Slide 18: Diversified & De-Risked Loan Portfolio Summary
17 ▪ Focused on diversified strategies that target high-quality customers, markets and risk metrics ▪ Net charge offs of only $7 million since the end of 3Q 2021, reflecting strong portfolio dynamics ▪ Largest single borrower < 1% of total loans; Top 10 largest borrowers < 4% of total loans Portfoli
Slide 19: Investing in Digital Transformation
18 Investing in Digital Transformation We continue to redirect spend to optimize physical assets and fund customer-centric digital enhancements 202 176 165 26 19 19 20 14 14 6 4 270 237 215 213 248 215 202 2011 2013 2015 2017 2019 2021 2022 ASB BKMU (58) HBAN (32) FNB (9) 1 Branch count at year end.
Slide 20: Total Loans Outstanding
19 Total Loans Outstanding Balances as of September 30, 2022 Well-diversified $28 billion loan portfolio ($ in millions) 1 All values as of period end. 2 North American Industry Classification System. 9/30/2022 1 % of Total Loans 9/30/2022 1 % of Total Loans C&BL (by NAICS 2 ) CRE (by property type)
Slide 21: Loan Stratification
20 Wisconsin 28% Illinois 23% Minnesota 10% Other Midwest 14% Texas 4% Other 22% Manufacturing & Wholesale Trade 20% Real Estate 17% Power & Utilities 20% Mortgage Warehouse 8% 1 Excludes Other Consumer portfolio. 2 Other Midwest includes Missouri, Indiana, Ohio, Michigan and Iowa. Wind 38% Natural
Slide 22: 2021-2023 Community Commitment Plan
21 2021-2023 Community Commitment Plan Associated is working to address economic development and equity issues in each of our markets $3.37 billion Three-year commitment To support minority communities, low-to-moderate income (LMI) communities and small businesses in our three-state branch footprint
Slide 23: Environmental, Social and Governance Highlights
22 Environmental, Social and Governance Highlights1 Associated’s Environmental, Social and Governance Report was released in March 2022 Nearly $2.2 billion in credit commitments to support wind, solar, battery and hydroelectric projects since 2011 Over 36% of our Board is diverse in terms of ethnici