Attached files
| file | filename |
|---|---|
| EX-99.1 - EXHIBIT 99.1 - ASSOCIATED BANC-CORP | asb20160930ex-991.htm |
| 8-K - FORM 8-K - ASSOCIATED BANC-CORP | asb-20160930form8kpr.htm |
THIRD QUARTER 2016
EARNINGS PRESENTATION
OCTOBER 20, 2016
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
THIRD QUARTER UPDATE
Net income available to common equity of $52 million, or $0.34 per common share
2
Enhanced
Customer
Experience
Implemented WiFi and instant
EMV chip card issuance
capabilities in all branches
33% increase in mobile customer
sign-ons year over year
Two new branches in Chicago
Organic
Balance Sheet
Growth
On track to deliver high single digit
annual average loan growth
Average deposits were up $1.1
billion, or 5% from the second
quarter
Diverse
Business
Lines
Strong mortgage banking results
Record capital markets revenues
in the third quarter
Service charges, trust service fees,
card-based fees, and brokerage
and annuity commissions all
increased from the second quarter
Disciplined
Credit
Approach
Balanced loan growth across
commercial, CRE, and mortgage
businesses year over year
Average loan mix by asset class
was unchanged from the second
quarter
Expense
Control
Expenses in-line with prior guidance
$2 million lease termination charge
and $1 million of severance in the
third quarter
Prudent
Capital
Management
Return on average common equity
Tier 1 (CET1) of 10.5%
Dividend payout ratio of 32%
($ in millions)
$1.4 $1.4 $1.4 $1.4 $1.4
$5.7 $5.8 $5.9 $6.1 $6.3
$4.3 $4.4 $4.5
$4.7 $4.9
$7.1 $6.9
$7.1
$7.5 $7.6
3Q 2015 4Q 2015 1Q 2016 2Q 2016 3Q 2016
Home equity & Other consumer Residential mortgage
Commercial real estate Commercial & business
($58)
($19)
($17)
$39
$61
$78
$125
$202
CRE Investor
18%
Construction
6%
Commercial &
business
38%
Residential
mortgage
31%
Home equity
5%
Other
consumer
2%
LOAN PORTFOLIO TRENDS
Average Net Loan Change (from 2Q 2016)
Loan Mix – 3Q 2016 (Average)
Average Quarterly Loans
$18.5
Total
Commercial
& Business
+1%
$18.5
$18.9
$19.6
Home equity & Other consumer
Commercial real estate
Residential mortgage
Power & Utilities
Mortgage warehouse
REIT
($ in billions)
General commercial
3
Oil and Gas
$20.1
$1.6 $1.6 $1.6 $1.5 $1.6
$1.4 $1.4 $1.4 $1.4 $1.4
$9.5 $9.5 $9.4
$8.7 $9.1
$3.2 $3.2 $3.2
$3.6
$4.2
$4.6 $5.0 $5.0 $5.0
$5.2
3Q 2015 4Q 2015 1Q 2016 2Q 2016 3Q 2016
Time deposits Savings
Money market Interest-bearing demand
Noninterest-bearing demand
Money
market
43%
Savings
7%
Time
deposits
7%
Noninterest-
bearing
demand
24%
Interest-
bearing
demand
19%
DEPOSIT PORTFOLIO TRENDS
Loan to Deposit Ratio
Deposit Mix – 3Q 2016 (Average)
Average Quarterly Deposits
$20.3 $20.6 $20.6 $20.3
($ in billions)
4
$21.4
90% 89%
93%
98%
91%
3Q 2015 4Q 2015 1Q 2016 2Q 2016 3Q 2016
CREDIT QUALITY TRENDS
($ IN MILLIONS)
$180 $178
$251 $281 $270
$84 $124
$150
$176 $171
3Q 2015 4Q 2015 1Q 2016 2Q 2016 3Q 2016
Oil and Gas
$134 $158 $157 $154 $163
$13
$20
$129 $129 $127
3Q 2015 4Q 2015 1Q 2016 2Q 2016 3Q 2016
Oil and Gas
Potential Problem Loans Nonaccrual Loans
Net Charge Offs (Recoveries) Allowance to Total Loans / Oil and Gas Loans
1.4% 1.5% 1.4% 1.4% 1.4%
3.8%
5.6%
6.5%
5.6% 5.5%
3Q 2015 4Q 2015 1Q 2016 2Q 2016 3Q 2016
ALLL / Total Loans
Oil and Gas ALLL / Oil and Gas Loans
5
$264
$302
$401
$457 $441
$147
$178
$286 $283 $290
3Q 2015 4Q 2015 1Q 2016 2Q 2016 3Q 2016
Oil and Gas
$4 $2
$(4)
$13
$19
$22
$17
$21
$18
$8 $8
OIL AND GAS UPDATE
Shared National Credit Review: 100% complete and results are fully reflected in 3Q 2016
New business: Since 4Q 2015, we have funded 12 new credits with $253 million of commitments
and $148 million of outstandings, representing 21% of the 9/30/16 outstandings
6
$587
$522
$402 $387 $351
$158
$210
$225
$240
$218
$13 $20
$129 $129
$127
3Q 2015 4Q 2015 1Q 2016 2Q 2016 3Q 2016
Pass Criticized / Classified Nonaccrual
$758 $752 $756 $756
$696
Period End Loans by Credit Quality Oil and Gas Allowance
$29
$42
$49
$42 $38
3.8%
5.6%
6.5%
5.6% 5.5%
3Q 2015 4Q 2015 1Q 2016 2Q 2016 3Q 2016
Oil and Gas Allowance
Oil and Gas Allowance / Oil and Gas Loans
($ in millions) ($ in millions)
$170 $169 $171
$176 $178
$1 $2 $1
$1
$1
3Q 2015 4Q 2015 1Q 2016 2Q 2016 3Q 2016
Interest recoveries, prepayment fees, & deferred fees
Net interest income net of interest recoveries, prepayment fees, &
deferred fees
Net interest margin
2.82% 2.82% 2.81% 2.81% 2.77%
0.00%
0.50%
1.00%
1.50%
2.00%
2.50%
3.00%
3.50%
4.00%
$-
$4
$8
$12
$16
$20
$24
$28
$32
$36
$40
$44
$48
$52
$56
$60
$64
$68
$72
$76
$80
$84
$88
$92
$96
$100
$104
$108
$112
$116
$120
$124
$128
$132
$136
$140
$144
$148
$152
$156
$160
$164
$168
$172
$176
$180
Yield on Interest-earning Assets Net Interest Income & Net Interest Margin
NET INTEREST INCOME AND MARGIN TRENDS
($ in millions)
0.22% 0.22%
0.30% 0.31% 0.32%
3Q 2015 4Q 2015 1Q 2016 2Q 2016 3Q 2016
Interest-bearing deposit costs Other funding costs
0.40% 0.41% 0.39%
$171
$177
0.45%
$172 $171
$179
Cost of Interest-bearing Liabilities
7
0.41%
3.13% 3.14% 3.16% 3.12% 3.09%
3.38% 3.37% 3.41% 3.35% 3.35%
2.42% 2.47% 2.43% 2.38%
2.29%
3Q 2015 4Q 2015 1Q 2016 2Q 2016 3Q 2016
Total interest-earning assets Total loans
Investments and other
$7 $8
$4 $4
$9
$9
3Q 2015 4Q 2015 1Q 2016 2Q 2016 3Q 2016
Portfolio loan sales
NONINTEREST INCOME TRENDS
($ IN MILLIONS)
Mortgage Banking (net) Income
$64 $63 $65 $67 $65
3Q 2015 4Q 2015 1Q 2016 2Q 2016 3Q 2016
Fee-based revenue
1 – Fee-based revenue = A non-GAAP financial measure, is the sum of trust service fees, service charges on deposit accounts, card-based and other nondeposit fees,
insurance commissions, and brokerage and annuity commissions.
Please refer to Noninterest Income as presented on Page 3 of the Financial Tables, Consolidated Statements of Income.
$95
$80
$83 $83
1
Insurance Commissions
$18 $18
$21 $22
$19
3Q 2015 4Q 2015 1Q 2016 2Q 2016 3Q 2016
$82
8
$18
$101 $100 $101 $102 $104
3Q 2015 4Q 2015 1Q 2016 2Q 2016 3Q 2016
Personnel
$21 $20 $20 $20 $19
3Q 2015 4Q 2015 1Q 2016 2Q 2016 3Q 2016
NONINTEREST EXPENSE TRENDS
($ IN MILLIONS)
Technology and Equipment
1 – FTE = Average full time equivalent employee
Please refer to Noninterest Expense as presented on Page 3 of the Financial Tables, Consolidated Statements of Income.
FTE1 Trend
$172
$176 $174 $174
4,421 4,378 4,374 4,415 4,477
3Q 2015 4Q 2015 1Q 2016 2Q 2016 3Q 2016
9
$175