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8-K - 8-K - ASSOCIATED BANC-CORP | d467465d8k.htm |
EX-99.1 - EX-99.1 - ASSOCIATED BANC-CORP | d467465dex991.htm |
Associated Banc-Corp
4Q 2012 Earnings Presentation
January 17, 2013
EXHIBIT 99.2 |
Forward-Looking Statements
1
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
managements 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 companys
most
recent
Form
10-K
and
subsequent
SEC
filings.
Such
factors
are
incorporated herein by reference.
Important
note
regarding
forward-looking
statements: |
Fourth Quarter 2012 Highlights
Net income available to common shareholders of $45 million or $0.26 per
share
Return on Tier 1 common equity of 9.6%, compared to 9.0% a year ago
2
Solid Results Driven by Fundamental Strength in Core Businesses
Net Income
&
ROT1CE
Loan Growth
Net Interest Income
&
Net Interest Margin
Total loans of $15.4 billion were up $445 million, or 3% from the third
quarter
Total commercial loan balances grew by $426 million, or 5% from the prior
quarter
Net interest income increased by $6 million from the third quarter to $161
million
Net interest margin of 3.32%
Capital
Increased quarterly dividend to $0.08/share
Repurchased $30 million of stock during the fourth quarter
Capital ratios remain very strong with a Tier 1 common equity ratio of
11.58% Deposit Growth
Average deposits increased by $1.0 billion, or 7% QoQ
Period-end noninterest-bearing deposits grew by $439 million, or 10%
QoQ |
Defended the margin despite interest rate headwinds
Full year NIM of 3.30%
Deposit rates & interest-bearing liability costs managed lower throughout
the year 2012 Full Year Recap
3
Credit quality continued to improve at a steady pace
Nonaccruals down 29% YoY
Total loans up $1.4 billion, or 10% YoY to $15.4 billion
Execution of Growth Initiatives & Delivering Shareholder Value
Redeemed all outstanding Trust Preferred Securities
Increased the dividend twice during 2012 ($0.01 to $0.05 to $0.08)
Repurchased
$60
million
of
stock
during
2012;
$30
million
(2Q12)
&
$30
million
(4Q12)
FY 2012 earnings of $174 million or $1.00/share
Compared to $115 million in FY 2011 or $0.66/share
FY 2012 ROT1CE of 9.5% compared to 6.7% for FY 2011
Net Income
&
ROT1CE
Loan Growth
Credit
Capital
Net Interest Margin |
4
2011
A Year of
Transition
Repaid TARP
OCC MOU terminated
Began executing on
our strategic initiatives
for growth
FY 2012 earnings up
51%
Loan balances up 10%
YoY
Defended the margin
Credit quality continued
to improve
Increased dividend
twice; $.01 -
$.05 -
$.08
$60 million of shares
repurchased
7% increase in
TBV/share
2012
Execution of
Growth Initiatives
2013
Growing the
Franchise &
Creating Long-Term
Shareholder Value
Continued focus on
organic growth
opportunities
Defending NIM
compression in low-
rate environment
Strong focus on
efficiency & expense
management
Disciplined focus on
deploying capital to
drive long-term
shareholder value
Executing on Strategic Plan
Loans +11% YoY
Improving retail
footprint
Investing in
Commercial Deposit
& Treasury
Management
Solutions |
Loan
Portfolio Growth and Composition 5
Total Loans of $15.4 billion at December 31, 2012
4Q 2012 Net Loan Growth of $445 million
Total Loans ($ in billions)
+3% QoQ
Peak Loans (4Q 2008) $16.3 billion
Loan
Mix
4Q
2012
($ balances in millions)
Home Equity & Installment
Commercial Real Estate
Residential Mortgage
Power & Utilities
Oil & Gas
Mortgage Warehouse
General Commercial Loans
$14.0
$14.3
$14.7
$15.0
$15.4
$12.0
$13.0
$14.0
$15.0
$16.0
4Q 2011
1Q 2012
2Q 2012
3Q 2012
4Q 2012
CRE Investor
19%
Construction
4%
Commercial
& Business
Lending
38%
Res Mtg
22%
Home Equity
14%
Installment
3%
($153)
($39)
$50
$77
$164
$172
$174 |
Managing the Cost of Funds & Margin
6
Yield on Interest-earning Assets
Cost of Interest-bearing Liabilities
Average Deposits
FY2012:
3.30%
Net Interest Margin
($ balances in billions)
3.81%
3.85%
3.80%
3.73%
3.70%
4Q 2011
1Q 2012
2Q 2012
3Q 2012
4Q 2012
$14.9
$15.0
$15.1
$15.6
$16.7
4Q 2011
1Q 2012
2Q 2012
3Q 2012
4Q 2012
0.78%
0.70%
0.65%
0.62%
0.51%
4Q 2011
1Q 2012
2Q 2012
3Q 2012
4Q 2012
3.21%
3.31%
3.30%
3.26%
3.32%
4Q 2011
1Q 2012
2Q 2012
3Q 2012
4Q 2012 |
Continued Improvement in Credit Quality Indicators
7
($ in millions)
4Q 2011
1Q 2012
2Q 2012
3Q 2012
4Q 2012
Potential problem loans
$ 566
$ 480
$ 410
$ 404
$ 361
Nonaccruals
$ 357
$ 327
$ 318
$ 278
$ 253
Provision for loan losses
$ 1
$ 0
$ 0
$ 0
$ 3
Net charge offs
$ 23
$ 22
$ 24
$ 18
$ 21
ALLL/Total loans
2.70%
2.50%
2.26%
2.11%
1.93%
ALLL/Nonaccruals
105.99%
108.93%
104.65%
113.29%
117.61%
NPA/Assets
1.82%
1.65%
1.62%
1.38%
1.22%
Nonaccruals/Loans
2.54%
2.29%
2.16%
1.86%
1.64%
NCOs / Avg Loans
0.64%
0.61%
0.65%
0.47%
0.55% |
Strong Capital Profile & Improving Earnings
8
Tier 1 Common Equity Ratio
Net
Income
Available
to
Common
&
ROT1CE
Net Income
($ in millions)
Return on Tier 1
Common Equity
Current capital levels are well in excess of
well-capitalized
regulatory benchmarks
Existing capital levels are already above
proposed Basel III capital levels
12.24%
12.49%
12.04%
12.01%
11.58%
4Q 2011
1Q 2012
2Q 2012
3Q 2012
4Q 2012
$40
$41
$42
$45
$45
9.0%
9.2%
9.3%
9.7%
9.6%
0.00%
2.50%
5.00%
7.50%
10.00%
12.50%
$0
$10
$20
$30
$40
$50
4Q 2011
1Q 2012
2Q 2012
3Q 2012
4Q 2012 |
9
2013 Full Year Outlook
Growing the Franchise & Creating Long-Term Shareholder Value
Loan Growth
Deposit Growth
Fee Income
NIM
High single digit FY loan growth,
with seasonally low 1Q 2013
Continued disciplined deposit
pricing
Sustained focus on treasury
management solutions to drive
growth in commercial deposits
Modest compression over the
course of the year
$500 million of relatively high
cost FHLB advances maturing
during 1H 2013
Modest improvement in core fee-
based revenues with lower net
mortgage banking revenues
Expenses
Footprint
Credit
Capital
Flat year-over-year
Reduced regulatory costs offset by
continued franchise investments
Continuing to invest in our
branches while optimizing our
network
Consolidating in downtown
Green Bay and Chicago loop
Continuing improvement in credit
trends
Provision expense to increase
based on new loan growth in 2013
Disciplined focus on
deploying capital to drive
long-term shareholder value |