Second Quarter 2024
Investor Presentation
May 6, 2024
Associated Banc-Corp
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," "target," "outlook," "project," "guidance," 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 Form 10-Qs and other SEC filings, and such factors are incorporated herein by reference.
Trademarks:
All trademarks, service marks, and trade names referenced in this material are official trademarks and the property of their respective owners.
Presentation:
Within the charts and tables presented, certain segments, columns and rows may not sum to totals shown due to rounding.
Non-GAAP Measures:
This presentation includes certain non-GAAP financial measures. These non-GAAP measures are provided in addition to, and not as substitutes for, measures of our financial performance determined in accordance with GAAP. Our calculation of these non-GAAP measures may not be comparable to similarly titled measures of other companies due to potential differences between companies in the method of calculation. As a result, the use of these non-GAAP measures has limitations and should not be considered superior to, in isolation from, or as a substitute for, related GAAP measures. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures can be found at the end of this presentation.
1
Associated Banc-Corp (NYSE: ASB)1
With origins dating back to 1861, ASB is the largest bank holding company based in Wisconsin2
$41B
Assets
$4B
Equity
Risk Mgmt & | 188 | ||||
Shared Services | Corporate & | ||||
18% | Branches | ||||
Commercial | |||||
Consumer | Commercial | Specialty | |||
38% | Average | & Business | Average | 28% | |
Lending | |||||
Loans | 37% | Deposits | |||
7.08% | |||||
Commercial | Community, Consumer & | ||||
Real Estate | Business | TCE Ratio3 | |||
25% | 54% |
- All figures as of or for the quarter ended March 31, 2024 unless otherwise noted.
- Based on assets as of December 31, 2023.
- This is a non-GAAP financial measure. See appendix for a reconciliation of non-GAAP financial measures to GAAP financial measures.
$29B
Loans
$34B
Deposits
~4,100
Employees
9.43%
CET1 Ratio
2
Key Themes in 2024
We've positioned the company for success by mitigating risks & prioritizing relationships in our markets
Disciplined Credit Approach
- Conservative credit culture refined over the past 15 years
-
Geographically anchored in stable
Midwest markets (no rent-controlled NYC exposure) - Prime/super prime consumer portfolios
- Diversified CRE portfolio with limited central business district office exposure
- Annual capital stress testing & concentration management controls
- Solid credit performance in recent quarters, in line with continued credit normalization
Advancing our Growth Strategy
- Ongoing tailwinds from successful execution of Phase 1 initiatives
- Enhanced profitability profile from balance sheet repositioning completed in 4Q 2023
- Leadership team bolstered by several key hires in 2023-2024
- Continued momentum with commercial RM hiring plan
- Consumer-focusedproduct launches on track
- Champion of You brand strategy supporting acquisition, retention and deepening of customer households
3
Strong Credit Risk Profile1
A company-wide focus on discipline & diversification has strengthened our credit profile
Stable, Low-Risk Total Loan Portfolio
IL
21%
MN | Other | |||
10% | Com'l & | |||
36% | ||||
Loans by Other | Business | Loans by | ||
WI | Lending | |||
State | Midwest2 | 37% | Category | |
28% | 13% | |||
Other | Residential |
Mortgage | |
29% | |
27% | |
Diversified CRE Portfolio
Prime/Super Prime Consumer Portfolio
WAvg. Portfolio FICO Scores
+2
+9 | ||||||||
792 | 792 | 784 | 786 | 759 | 768 | |||
Home Equity | Mortgage | Auto Finance | ||||||
1Q 2023 | 1Q 2024 | |||||||
Total 9.4% Loans by
Multi-family loans are just 9.4% of total loans, primarily located in stable Midwest markets (no rent-controlled NYC exposure)
Class
Office loans are just 3.5% of total loans & are weighted toward suburban/Class A properties3
98%
98% of auto loans booked have had prime/super prime FICO scores4
- All data as of and for the period ended March 31, 2024 unless otherwise noted.
- Other Midwest includes Missouri, Indiana, Ohio, Michigan and Iowa.
- Property class mix determined by third-party vendor partner mapping of portfolio.
- From inception on September 30, 2021 through the period ended March 31, 2024.
4
High-Quality Commercial Real Estate Portfolio1
ASB has built a diversified CRE portfolio by partnering with well-known developers in stable Midwest markets
Consumer | Total | Com'l & | |||||
38% | Business | ||||||
Loans by | Lending | ||||||
37% | |||||||
Segment | |||||||
CRE | |||||||
25% | |||||||
Minnesota | Retail | ||||||
Illinois | 9% | ||||||
Other | 9% | ||||||
15% | Multi-Family | ||||||
Midwest2 | |||||||
38% | |||||||
21% | |||||||
CRE by | CRE by | 14% | |||||
Office | |||||||
Wisconsin Geography | Property | ||||||
20% | Texas | Type | |||||
8% | |||||||
Other | Industrial | ||||||
Other | 25% | ||||||
15% | |||||||
26% | |||||||
CRE Credit Quality
1Q 23 | 2Q 23 | 3Q 23 | 4Q 23 | 1Q 24 | |
Portfolio LTV | 60% | 60% | 59% | 58% | 59% |
Delinquencies/Loans | 0.00% | 0.00% | 0.14% | 0.25% | 0.28% |
NALs/Loans | 0.35% | 0.30% | 0.15% | 0.00% | 0.26% |
ACLL/Loans | 1.75% | 1.88% | 1.90% | 1.88% | 1.87% |
NCOs/Avg. Loans3 | 0.00% | (0.12%) | (0.02%) | (0.01%) | 0.00% |
CRE Loan Portfolio Granularity | |||||
% of Total Loans | |
Largest Single CRE Borrower | 0.16% |
Top 10 Largest CRE Borrowers | 1.38% |
Largest CRE Property Type (Multi-Fam) | 9.43% |
CRE Office Loans | 3.45% |
CRE Office Highlights
1 | All updates as of or for the period ended March 31, 2024 unless otherwise noted. |
2 | Other Midwest includes Missouri, Indiana, Ohio, Michigan and Iowa. |
3 | Calculated on an annualized basis. Negative values indicate a net recovery. |
4 | Calculated based on the 10-year Treasury rate plus 300 basis points/25-year amortization. |
WAvg. Debt Service Coverage Ratio4 2024 Remaining Maturities
Central Business District vs. Suburban
Property Class Mix5
1.19x $306 million ~79% Suburban
~57% Class A
5 Property class mix determined by third-party vendor partner mapping of portfolio. |
5
Momentum is Building Across our Company1
We are combining foundational strengths with targeted investments to drive transformational results
▪ Named #1 for Retail Banking | ||
Customer Satisfaction in the | ||
Upper Midwest Region by | ||
J.D. Power2 | ||
Satisfied | Household | |
Customers | Growth | |
- Net consumer checking HH growth in 1Q24
- Net business checking HH growth in 1Q24
- Consumer checking HH acquisition +26% vs. 1Q23
- Consumer checking HH attrition -9% vs. 1Q23
Satisfied Colleagues
- Winner of the 2024 Top Workplaces USA Award and five Energage Culture Excellence Awards in Spring 20243
Balance Sheet Growth
- Total loan growth of $278 million
- Total deposit growth of $267 million
- Core customer deposit4 growth of $557 million
- All updates as of or for the period ended March 31, 2024 unless otherwise noted. Growth reflects period end results for the quarter ended March 31, 2024 compared to period end results for the quarter ended December 31, 2023 unless otherwise noted.
- For J.D. Power 2024 award information, visit jdpower.com/awards.
- All awards based on July 2023 Workplace Survey results. Energage Culture Excellence Awards received in the categories of Purpose & Values, Innovation, Leadership, Work-Life Balance and Comp & Benefits.
- This is a non-GAAP financial measure. See appendix for a reconciliation of non-GAAP financial measures to GAAP financial measures.
6
Advancing our Growth Strategy
We are building on our momentum through organic investments designed to further enhance our return profile
Phase 1 Initiatives
Phase 2 Updates
- Expanded commercial capabilities & added RMs
- Modernized digital banking experience
- Upgraded product & service offerings
- Launched Mass Affluent strategy
- Introduced "Champion of You" brand strategy
- Added prime/super prime Auto Finance vertical
People
- Bolstered leadership across key lines of business:
- Jayne Hladio (Private Wealth)
- Phillip Trier (Commercial)
- Steven Zandpour (Retail)
- Neil Riegelman (Commercial)
- Michael Lebens expected to join as SVP, Commercial Banking Segment Leader in MN on 5/13
- Trained 13 designated Mass Affluent bankers in April, bringing total to 46
- Progressing on our plan to hire 26+ add'l Commercial RMs
Products, Process & Technology
- Launched automated direct deposit switching in 4Q
- Launched Early Pay in 1Q
- Launched new branch deposit account opening platform in 1Q
- Unveiled new social media campaign in 1Q
- Launched new marketing tactics in 1Q to drive consumer & small business acquisition
4% to 6%
Loan Growth
FY 2024 Outlook Highlights1
3% to 5%
Core Customer Deposit2 Growth
2% to 4%
Net Interest Income Growth
- Projections are on an end of period basis as of and for the year ended 12/31/2024 as compared to 2023 results as of 12/31/2023 unless otherwise noted.
- This is a non-GAAP financial measure. See appendix for a reconciliation of non-GAAP financial measures to GAAP financial measures.
7
Quarterly Deposit & Funding Trends
We grew core customer deposits1 once again in 1Q 2024 while decreasing our reliance on wholesale funding
Average Quarterly Deposits | EoP Funding Change (12/31/2023 to 3/31/2024) | ||||||||||||||||||||||
($ in billions) | ($ in millions) | ||||||||||||||||||||||
$31.3 | $32.0 | $32.2 | $33.3 | ||||||||||||||||||||
Total Deposits +$267mm (+1%) | |||||||||||||||||||||||
$29.9 | |||||||||||||||||||||||
$6.3 | $6.2 | $5.9 | |||||||||||||||||||||
$6.7 | Core Customer Deposits1 +$557mm (+2%) | ||||||||||||||||||||||
$7.3 | $7.5 | Savings | |||||||||||||||||||||
$289 | |||||||||||||||||||||||
$6.7 | $7.0 | $7.2 | Money Market | $149 | |||||||||||||||||||
$6.8 | |||||||||||||||||||||||
$4.7 | $4.8 | $4.9 | $4.9 | Noninterest-Bearing Demand | |||||||||||||||||||
$134 | |||||||||||||||||||||||
$4.7 | $6.1 | Customer CDs | $66 | ||||||||||||||||||||
$6.7 | $6.3 | $6.1 | $(81) | Interest-Bearing Demand | |||||||||||||||||||
$7.5 | $2.5 | $2.8 | $2.9 | ||||||||||||||||||||
$2.0 | Wholesale Funding Sources $(463mm) (-5%) | ||||||||||||||||||||||
$4.3 | |||||||||||||||||||||||
$1.6 | $3.0 | $3.4 | $3.5 | ||||||||||||||||||||
$1.1 $0.8 | $1.5 | $1.6 | $1.6 | $1.7 | Other Wholesale Funding | $434 | |||||||||||||||||
1Q 2023 | 2Q 2023 | 3Q 2023 | 4Q 2023 | 1Q 2024 | Network Transaction Deposits | $227 | |||||||||||||||||
Noninterest-Bearing Demand | Customer CDs | $(516) | Brokered CDs | ||||||||||||||||||||
Interest-Bearing Demand | Brokered CDs | ||||||||||||||||||||||
Savings | Network Transaction | $(607) | FHLB Advances | ||||||||||||||||||||
Money Market | Deposits | ||||||||||||||||||||||
1 This is a non-GAAP financial measure. See appendix for a reconciliation of end of period core customer deposits to total deposits.
8
Quarterly Loan Trends
Period end loans grew by $278 million vs. the prior quarter, led by growth in Auto and C&I
Average Quarterly Loans | EoP Loan Change (12/31/2023 to 3/31/2024) | |
($ in billions) | ($ in millions) |
$28.8 | $29.4 | $29.9 | $30.0 | $29.4 | ||||||||||
Auto Finance | ||||||||||||||
$10.6 | $10.9 | $11.0 | $10.8 | $10.8 | Commercial & Industrial | |||||||||
CRE-Owner Occupied | ||||||||||||||
$7.3 | $7.3 | $7.3 | $7.4 | $7.4 | CRE Construction | |||||||||
$969M | Residential Mortgage | |||||||||||||
mortgage loan | ||||||||||||||
$8.6 | $8.7 | $8.8 | $8.7 | $7.9 | sale settled | |||||||||
12/21/2023 | ||||||||||||||
$(28) | ||||||||||||||
$2.4 | $2.5 | $2.8 | $3.0 | $3.3 | $(89) | |||||||||
1Q 2023 | 2Q 2023 | 3Q 2023 | 4Q 2023 | 1Q 2024 | ||||||||||
Commercial & | Commercial | Residential | Commercial & | |||||||||||
Business Lending | Real Estate | Mortgage | Business Lending |
Auto Finance, Home | Consumer Lending | |
Equity & Other | ||
Consumer |
$215
$127
$34
$16
$3
Home Equity & Other Consumer
CRE Investor
Commercial
Real Estate
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Disclaimer
Associated Banc-Corp published this content on 13 May 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 13 May 2024 23:05:00 UTC.