Associated Banc-Corp Investor Presentation 2016 SECOND QUARTER
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 plans, objectives, or goals for future operations, products or services, and forecasts of its revenues, earnings, or other measures of performance. Such forward-looking statements may be identified by the use of words such as “believe,” “expect,” “anticipate,” “plan,” “estimate,” “should,” “will,” “intend,” “outlook” or similar expressions. Forward-looking statements are based on current management expectations and, by their nature, are subject to risks and uncertainties. Actual results may differ materially from those contained in the forward-looking statements. Factors which may cause actual results to differ materially from those contained in such forward-looking statements include those identified in the Company’s most recent Form 10 -K and subsequent SEC filings. Such factors are incorporated herein by reference. 1
ASSOCIATED BANK FRANCHISE Headquarters: Green Bay, Wisconsin Company 1Q 2016 Employees: ~4,400 Loans 1 Branches: 215 IL 24% Largest bank headquartered in Wisconsin MN WI 11% 35% Assets: $28 billion Financials Other 1Q 2016 Loans: $19 billion Midwest 2 1861 12% Deposits: $21 billion Other 18% LTM Revenue: $1 billion Deposits 1 Full range of banking services, Business insurance, and other financial IL solutions 25% Serving over 1 million customers in WI over 100 communities 68% Extensive affinity programs featuring MN the Green Bay Packers, Milwaukee 7% Brewers, and Minnesota Wild 1 – Period end as of March 31, 2016; loan chart excludes $0.4 billion in other consumer loans 2 – Other Midwest includes Missouri, Indiana, Ohio, Michigan and Iowa 2
ATTRACTIVE MIDWEST MARKETS Large Demographic Base Manufacturing Centric Midwest holds Midwest holds ~20% of the ~30% of all U.S. U.S. population 1 manufacturing jobs 2 Low Unemployment Rates 4 Strong Consumer Credit 6.5% ASB 3.7% 3.8% 4.2% 4.5% 4.8% 5.0% 5.1% 771 Mortgage Portfolio FICO Score 3 MN IA MO WI MI IN OH IL 1 – U.S. Census Bureau, Annual Estimates of the Resident Population, 2015 2 – U.S. Bureau of Labor Statistics, Manufacturing Industry Employees, March 2016 (preliminary) 3 – Weighted average of the March 31, 2016 principal balance and borrowers’ FICO score retrieved in January 2016 4 – U.S. Bureau of Labor Statistics, Total Nonfarm Employees, March 2016 3
2016 MANAGEMENT PRIORITIES We are committed to providing We have robust internal portfolio 1 4 efficient solutions that improve each management controls, ensuring we customer’s experience and which grow loan exposures in a balanced Enhanced Disciplined help them better manage their and diversified manner over time Customer Credit finances across multiple platforms Experience Approach 2 We are focused on organically 5 We continue to invest in our expanding our relationships, with businesses while containing and existing and new customers, across controlling expenses Organic Expense our Upper Midwest footprint and in Balance Sheet select national businesses Control Growth We have a diverse set of loan and 6 We prudently and efficiently deploy 3 capital fee-based businesses, which should produce balanced revenue streams Diverse Prudent through the cycle Capital Business Management Lines Driving Long-Term Shareholder Value Creation 4
FIRST QUARTER UPDATE Improving branch customer Increased the allowance related to satisfaction trends the oil and gas portfolio to 6.5% Enhanced Disciplined 90% of consumer customers Customer Credit were completely satisfied with their Solid credit quality trends outside of Experience Approach branch experience in the first quarter the oil and gas portfolio Average loans were Costs were down $2 million from the fourth quarter and up $380 million , flat year over year Organic or 2% in the first quarter Expense Balance Sheet Efficiency ratio Control Total commercial lending accounted Growth improved to 67% for 85% of average loan growth in the first quarter Recognized record insurance Returned 90% commissions of of first quarter’s net income to Diverse $21 million Prudent shareholders through share Capital Business in the first quarter repurchases and dividends Management Lines Expanded REIT lending Net income available to common equity of $40 million, or $0.27 per common share 5
EVOLVING DELIVERY MODEL Changing customer behavior has driven our continued investment in digital platforms Branch – Deposit ATM – Deposit and ACH and Wire and Withdrawal Check Processing Withdrawal Activity Activity Activity Jan 12 Mar 16 Jan 12 Mar 16 Jan 12 Mar 16 Jan 12 Mar 16 6
ENHANCED CUSTOMER EXPERIENCE SUPPORTS GROWTH IN AN EVOLVING INDUSTRY We believe that providing extraordinary service leads to customer satisfaction and loyalty We deliver financial products and services through efficient, seamless, multi-channel experiences We are constantly evolving our delivery model to meet the changing preferences of our customers Our evolving branch optimization strategy combines efficiency initiatives with investments in technology and the customer experience Branch Enhanced Branch Investments in Revitalization & Customer Consolidations Technology Modernization Service BRANCHES DEPOSITS, $ billions $21 215 1Q 2007 1Q 2011 1Q 2016 1Q 2007 1Q 2011 1Q 2016 7
ORGANIC LOAN GROWTH (AVERAGE BALANCES, $ IN BILLIONS) $18.9 Cumulative Change $17.8 +$4.6 billion, 32% $16.2 $15.4 $7.1 $14.3 $7.0 +$2.3 billion, +47% $6.1 $5.6 $4.8 $4.5 +$1.3 billion, +40% $4.1 $3.9 $3.6 $3.2 +$1.6 billion, +36% $5.9 $4.4 $5.2 $4.6 $4.7 $1.9 ($0.5 billion), (27%) $1.6 $1.5 $1.5 $1.4 1Q 2012 1Q 2013 1Q 2014 1Q 2015 1Q 2016 Home Equity & Other Consumer Residential Mortgage Commercial Real Estate Commercial & Business 8
ORGANIC DEPOSIT GROWTH (AVERAGE BALANCES, $ IN BILLIONS) $20.6 Cumulative Change $19.1 +$5.6 billion, 37% $17.1 $17.0 $15.0 $9.4 $3.7 billion, +66% $8.7 $7.0 $7.2 $5.7 +$1.3 billion, +36% $5.0 $4.3 $4.2 $4.2 $3.7 +$1.1 billion, +52% $2.1 $2.8 $3.2 $3.2 $2.8 +$0.3 billion, +33% $1.0 $1.1 $1.2 $1.4 $1.3 $2.5 $2.0 ($0.9 billion), (37%) $1.7 $1.6 $1.6 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 9
DIVERSE BUSINESS LINES Community, Consumer, and Business (48% of Average Loans) Consumer and Commercial Payments and Branch Banking Residential Lending Commercial Banking Banking Direct Channels Eau Claire, La Crosse, Central Rockford, Peoria, Southern Rochester, Community Markets WI WI Wisconsin IL IL Illinois MN Retirement Associated Associated Private Client and Private Personal Asset Plan Financial Investment Institutional Services Banking Trust Management Services Group Services Corporate and Commercial Specialty (51% of Average Loans) Commercial Deposits Specialized Lending Corporate Banking Corporate Lending Capital Markets and Treasury Verticals Management Real Estate Commercial Real Estate CRE Lending CRE Syndications CRE Tax Credits Investment Trusts 10
BALANCED REVENUE STREAMS FIRST QUARTER 2016 Interest Income Composition 1 Noninterest Income Composition $199 million $83 million 71% 29% Service Retail charges on 8% deposit accounts Card-based Commercial 20% and other and business nondeposit Investments lending Insurance and other fees 29% commissions 14% 19% 26% Trust service fees 14% Commercial Residential real estate mortgage Other 2 lending 24% 20% 13% Mortgage banking, net 5% Capital market Brokerage and fees, net annuity 4% commissions 4% 1 – Interest income on a fully tax-equivalent basis 11 2 – Other includes Bank owned life insurance income; Asset gains, net; Investment securities gains, net; and Other
DISCIPLINED CREDIT APPROACH INTERNAL PORTFOLIO MANAGEMENT LEADS TO PURPOSEFUL DIVERSIFICATION Balanced portfolio of 1Q 2016 38% 24% 38% average Commercial and Business, Commercial Real Estate and Asset Class Target 30-40% 25-35% 30-40% Consumer credit Commercial & Business CRE Consumer Focused on growth within 1 Consumer 1% 42% 36% 14% 7% our Upper Midwest footprint, and select national specialty Geography businesses and markets Total Commercial 31% 17% 9% 14% 8% 21% 2 WI IL MN Other Midwest Texas Other Industry and property type Home equity Residential mortgage caps ensure granular Industry / Consumer 81% 13% 6% diversification Property Multi-Family Retail Total Commercial 8% 7% 7% 3% 1% 12% Manufacturing Utilities Health Care Transportation/warehouse 1 – Excludes $0.4 billion in other consumer loans See slide 23 for complete industry and property detail. 2 – Other Midwest includes Missouri, Indiana, Ohio, Michigan and Iowa 12
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