Associated Banc-corp · NYSE:ASB
Associated Banc-corp — Q2 2019 Earnings Presentation
19 slides from Associated Banc-corp's earnings presentation, Jul 25, 2019
Slide 1: Second Quarter 2019 Earnings Presentation
Exhibit 99.2 SECOND QUARTER 2019 EARNINGS PRESENTATION July 25, 2019
Slide 2: Disclaimer
DISCLAIMER 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 plans, objectiv
Slide 3: First Half 2019
FIRST HALF 2019 ($ in billions) $22.5 $23.2 Solid average loan growth trends... $20.3 Solid Loan ▪ First half 2019 total loans annual growth rate of 7% Growth ▪ Total loans since first half 2017 ▪ Growth from 2018 driven by strong commercial and business lending 1H17 1H18 1H19 68.2% ...coupled with
Slide 4: Second Quarter 2019 Update
SECOND QUARTER 2019 UPDATE1 Net income available to common equity of $81 million, or $0.49 per common share, or $0.51 per common share excluding acquisition related costs2 Growing C&I and CRE Repositioning Ongoing Capital Improving Fee Income Lending Funding Mix Optimization ▪ Average commercial and
Slide 5: Loan Portfolio - Quarterly Trends
LOAN PORTFOLIO - QUARTERLY TRENDS Average Quarterly Loans Average Net Loan Change (from 1Q 2019) ($ in billions) ($ in millions) YoY Mortgage warehouse $165 Growth $23.0 $23.0 $22.8 $23.1 $23.4 General commercial $70 Total Commercial & business loans: $7.7 $7.9 $8.0 $8.4 $8.6 12% Power & utilities $
Slide 6: Commercial Loan Management
COMMERCIAL LOAN MANAGEMENT1 Commercial & Business Oil & Gas Loans Commercial Real Estate Lending2 ($ in billions) ($ in millions) ($ in billions) Commercial and Business ...while Oil & Gas portfolio is ...and Commercial Real Lending grows... de-risked... Estate rebounds 34% 34% 32% 32% 33% 24% 23% 2
Slide 7: CRE Trends
CRE TRENDS Total CRE Commitments and Outstanding CRE Unfunded Commitments Balances ($ in billions) ($ in billions) Total commitments have increased faster Unfunded CRE commitments represent a than outstanding balances since 2Q 2017 larger pipeline for future loan growth $7.3 26.1% $6.9 22.3% 21.6% $
Slide 8: Investment Securities Portfolio Trends
INVESTMENT SECURITIES PORTFOLIO TRENDS Portfolio and Yield Trends (Quarterly) Investments / Average Earning Assets ($ in billions) 3.77% 3.63% 3.68% 3.73% 3.74% 24% 23% 23% 22% 21% 2.34% 2.36% 2.22% 2.26% 2.29% 2Q 2015 2Q 2016 2Q 2017 2Q 2018 2Q 2019 $7.0 $6.9 $6.8 $6.8 $6.5 $1.5 Portfolio Fair Valu
Slide 9: Deposit Portfolio Trends
DEPOSIT PORTFOLIO TRENDS Average Quarterly Deposits Period-end Funding Change (from 1Q 2019) ($ in billions) ($ in millions) $24.7 $25.1 $24.2 $24.6 $23.6 Savings $375 $5.1 Lower- $5.3 $5.4 $5.0 $5.1 cost funding Interest-bearing demand $360 +$756 million $5.0 $4.7 $5.0 $4.7 $4.8 Noninterest-bearing
Slide 10: Repositioning Funding
REPOSITIONING FUNDING1 FHLB Advances and Network Quarter-end Loan to Deposit Ratio Transaction Deposits 98% ($ in billions) 96% 94% 94% $4.8 92% 91% 90% 89% $4.3 1Q 2Q 3Q 4Q 2019 $3.5 Historical Quarter-end Range 2014 - 2019 Historical Quarter-end Range 2014 - 2018 $3.1 $3.2 $2.7 Quarter-end Low-cos
Slide 11: Net Interest Income and Margin - Quarterly Trends
NET INTEREST INCOME AND MARGIN- QUARTERLY TRENDS Net Interest Income & Net Interest Margin Average Yields ($ in millions) 5.51% 3.02% 3.02% 2.92% 2.90% 5.19% 5.19% 2.87% 5.06% 4.98% 4.86% $226 $224 4.78% 4.79% 4.52% 4.56% $219 $9 $7 $216 $214 $5 $2 $3 3.52% 3.54% 3.36% 3.45% 3.47% 2.78% 2.81% 2.56%
Slide 12: Noninterest Income Trends
NONINTEREST INCOME TRENDS ($ IN MILLIONS) Mortgage Banking, Net $96 $93 $9 $91 $88 $84 $6 $5 $4 $3 2Q 2018 3Q 2018 4Q 2018 1Q 2019 2Q 2019 $16 $17 $15 $15 $16 Wealth Management Fees1 $20 $20 $21 $41 $41 $21 $20 $33 $32 $31 $25 $24 $22 $21 $23 2Q 2018 3Q 2018 4Q 2018 1Q 2019 2Q 2019 YTD 15 YTD 16 YTD
Slide 13: Noninterest Expense - Quarterly Trends
NONINTEREST EXPENSE - QUARTERLY TRENDS ($ IN MILLIONS) Period End Branch Count and Average FTE 4,792 4,707 4,659 4,660 4,666 $211 $7 $204 $2 $193 $198 $192 $4 $1 237 236 236 233 247 $80 $78 $78 $71 $71 2Q 2018 3Q 2018 4Q 2018 1Q 2019 2Q 2019 Period End Branches Average Full Time Employee Efficiency
Slide 14: Credit Quality - Quarterly Trends
CREDIT QUALITY - QUARTERLY TRENDS ($ IN MILLIONS) Potential Problem Loans Nonaccrual Loans $242 $236 $250 $241 $204 $166 $154 $156 $167 $128 2Q 2018 3Q 2018 4Q 2018 1Q 2019 2Q 2019 2Q 2018 3Q 2018 4Q 2018 1Q 2019 2Q 2019 Net Charge Offs Allowance for Loan Losses to Loans $12 $13 $8 $7 1.1% 1.0% 1.0%
Slide 15: 2019 Outlook
2019 OUTLOOK This outlook reflects a stable to improving economy and two Fed Funds rate decreases. We may adjust our outlook if, and when, we have more clarity on these factors. ▪ 3% - 6% annual average loan growth ▪ Noninterest expense of for 2019 $790M - $795M ▪ Maintain loan to deposit ratio unde
Slide 16: FNB Staunton Transaction Summary
FNB STAUNTON TRANSACTION SUMMARY Seller: First Staunton Bancshares Transaction Value: ▪ ~$76 million for franchise ▪ ~1.30x 1Q 2019 reported tangible Staunton book value ▪ ~4% deposit premium Consideration: 100% cash Bethalto Alton Assets Purchased: ▪ Nine branches ▪ ~$350 million of loans Edwardsvi
Slide 17: Acquisitions
ACQUISITIONS Huntington completed... ...and Staunton up next Was an in-market, cost takeout driven Is an in-market, cost takeout driven depository acquisition depository acquisition Delivering on Filled in network gaps and boosts our Fills in network gaps and boosts our our Strategy network in key l
Slide 18: Appendix
APPENDIX
Slide 19: Reconciliation and Definitions of Non-GAAP Items
RECONCILIATION AND DEFINITIONS OF NON-GAAP ITEMS Efficiency Ratio 2Q19 1Q19 4Q18 3Q18 2Q18 Federal Reserve efficiency ratio 62.71 % 63.32 % 62.39 % 66.12 % 65.77 % Fully tax-equivalent adjustment (0.84)% (0.77)% (0.75)% (0.75)% (0.65)% Other intangible amortization (0.75)% (0.73)% (0.72)% (0.73)% (0