ASB 8-K
Associated Banc-Corp (ASB)
8-K
2023-07-20
For: 2023-07-20
View Original
Added on
April 06, 2026
| UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 | |||||
| FORM | |||||
| CURRENT REPORT | |||||
| Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934 | |||||
| Date of Report (Date of earliest event reported) | |||||
| | ||
| (Exact name of registrant as specified in its chapter) | ||
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) | ||||||
| (Address of principal executive offices) | (Zip code) | ||||||||||
| Registrant’s telephone number, including area code | ||||||||
| (Former name or former address, if changed since last report) | |||||
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): | |||||
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |||||
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |||||
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |||||
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | |||||
Securities Registered Pursuant to Section 12(b) of the act:
| Title of each class | Trading symbol | Name of each exchange on which registered | ||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). | |||||
Emerging growth company | |||||
☐ | If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. | ||||
| Item 2.02 Results of Operations and Financial Condition. | ||
| On July 20, 2023, Associated Banc-Corp announced its earnings for the quarter ended June 30, 2023. A copy of the registrant’s press release containing this information and the slide presentation discussed on the conference call for investors and analysts on July 20, 2023, are being furnished as Exhibit 99.1 and Exhibit 99.2, respectively, to this Report on Form 8-K and are incorporated herein by reference. | ||
| Item 9.01 Financial Statements and Exhibits. | ||
(d) Exhibits. | ||
The following exhibits are furnished as part of this Report on Form 8-K: | ||
| SIGNATURES | ||||||||
| Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. | ||||||||
| Associated Banc-Corp | ||||||||
| (Registrant) | ||||||||
| Date: July 20, 2023 | By: /s/ Derek S. Meyer | |||||||
| Derek S. Meyer | ||||||||
| Chief Financial Officer | ||||||||
Exhibit 99.1
 | NEWS RELEASE Investor Contact: Ben McCarville, Vice President, Director of Investor Relations 920-491-7059 Media Contact: Jennifer Kaminski, Vice President, Public Relations Senior Manager 920-491-7576 | ||||
Associated Banc-Corp Reports Second Quarter 2023 Net Income Available to Common Equity of $84 Million, or $0.56 per Common Share
Results driven by balance sheet expansion, stable credit trends, and progress against the Company's strategic initiatives
GREEN BAY, Wis. -- July 20, 2023 -- Associated Banc-Corp (NYSE: ASB) ("Associated" or "Company") today reported net income available to common equity ("earnings") of $84 million, or $0.56 per common share, for the quarter ended June 30, 2023. These amounts compare to earnings of $100 million, or $0.66 per common share, for the quarter ended March 31, 2023 and earnings of $84 million, or $0.56 per common share, for the quarter ended June 30, 2022.
"Our second quarter results were marked by the resilience and stability of our Midwestern markets and continued execution against our strategic plan," said President and CEO Andy Harmening. "Unemployment remains well below the national average in most of our footprint and economic activity has continued at a healthy pace. With these trends as a backdrop, our diversified company loan portfolio, with a prime/super prime concentration of consumer loans, has delivered strong credit performance again this quarter. This stability enabled us to add another $642 million in high-quality loans and build momentum with our customer acquisition strategies during the quarter. As a result of these efforts, we're already seeing customer checking acquisition rates 11% higher than a year ago, our attrition is down, and our digital customer satisfaction scores are at a multi-year high."
"While we're pleased with the initial results of these efforts, we've yet to realize the full impact of our customer acquisition strategies," Harmening continued. "We look forward to building on this momentum and delivering enhanced capabilities for our customers in the coming quarters. Along the way, our disciplined approach to credit, expenses and risk management will be our foundation."
Second Quarter 2023 Highlights (all comparisons to the first quarter of 2023)
•Total period end commercial loans increased $274 million to $18.4 billion
•Total period end consumer loans increased $367 million to $11.4 billion
•Total period end deposits increased $1.7 billion to $32.0 billion
•Quarterly net interest margin decreased 27 basis points to 2.80%
•Noninterest income increased $3 million to $66 million
•Noninterest expense increased $3 million to $191 million
•Provision for credit losses on loans increased $4 million to $22 million
•Net income available to common equity decreased $16 million to $84 million
Loans
Second quarter 2023 average total loans of $29.4 billion were up 2%, or $592 million, from the prior quarter and were up 16%, or $4.0 billion, from the same period last year. With respect to second quarter 2023 average balances by loan category:
•Commercial and business lending increased $283 million from the prior quarter and increased $1.3 billion from the same period last year to $10.9 billion.
•Commercial real estate lending increased $44 million from the prior quarter and increased $932 million from the same period last year to $7.3 billion.
•Consumer lending increased $265 million from the prior quarter and increased $1.8 billion from the same period last year to $11.2 billion.
Second quarter 2023 period end total loans of $29.8 billion were up 2%, or $642 million, from the prior quarter and were up 13%, or $3.4 billion, from the same period last year. With respect to second quarter 2023 period end balances by loan category:
•Commercial and business lending increased $194 million from the prior quarter and increased $929 million from the same period last year to $11.1 billion.
•Commercial real estate lending increased $81 million from the prior quarter and increased $756 million from the same period last year to $7.3 billion.
•Consumer lending increased $367 million from the prior quarter and increased $1.7 billion from the same period last year to $11.4 billion.
In 2023, we continue to expect full-year total loan growth of 6% to 8%.
Deposits
Second quarter 2023 average deposits of $31.3 billion were up 5%, or $1.4 billion, from the prior quarter and were up 11%, or $3.1 billion, from the same period last year. With respect to second quarter 2023 average balances by deposit category:
•Noninterest-bearing demand deposits decreased $670 million from the prior quarter and decreased $1.5 billion from the same period last year to $6.7 billion.
•Savings increased $85 million from the prior quarter and increased $67 million from the same period last year to $4.7 billion.
•Interest-bearing demand deposits decreased $151 million from the prior quarter and increased $251 million from the same period last year to $6.7 billion.
•Money market deposits decreased $793 million from the prior quarter and decreased $167 million from the same period last year to $6.7 billion.
•Total time deposits increased $2.6 billion from the prior quarter and increased $3.7 billion from the same period last year to $5.0 billion.
•Network transaction deposits increased $321 million from the prior quarter and increased $692 million from the same period last year to $1.5 billion.
Second quarter 2023 period end deposits of $32.0 billion were up 6%, or $1.7 billion, from the prior quarter and were up 12%, or $3.4 billion, from the same period last year. With respect to second quarter 2023 period end balances by deposit category:
•Noninterest-bearing demand deposits decreased $763 million from the prior quarter and decreased $1.5 billion from the same period last year to $6.6 billion.
•Savings increased $47 million from the prior quarter and increased $69 million from the same period last year to $4.8 billion.
•Interest-bearing demand deposits increased $61 million from the prior quarter and increased $248 million from the same period last year to $7.0 billion.
•Money market deposits decreased $836 million from the prior quarter and decreased $247 million from the same period last year to $7.5 billion.
•Total time deposits increased $3.2 billion from the prior quarter and increased $4.9 billion from the same period last year to $6.1 billion.
•Network transaction deposits (included in money market and interest-bearing deposits) increased $327 million from the prior quarter and increased $709 million from the same period last year to $1.6 billion.
We now expect total core customer deposits (which excludes network transaction deposits and brokered CDs) to decrease by 3% in 2023 on a period end basis, with 2% growth in the second half of the year.
Net Interest Income and Net Interest Margin
Second quarter 2023 net interest income of $258 million decreased $16 million, or 6%, from the prior quarter and increased $42 million, or 19%, from the same period last year. The net interest margin decreased to 2.80%, reflecting a 27 basis point decrease from the prior quarter and a nine basis point increase from the same period last year.
•The average yield on total loans for the second quarter of 2023 increased 28 basis points from the prior quarter and increased 261 basis points from the same period last year to 5.77%.
•The average cost of total interest-bearing liabilities for the second quarter of 2023 increased 58 basis points from the prior quarter and increased 270 basis points from the same period last year to 3.06%.
•The net free funds benefit for the second quarter of 2023 increased seven basis points from the prior quarter and increased 58 basis points compared to the same period last year to 0.68%.
We now expect total net interest income growth of 10% to 12% in 2023.
Noninterest Income
Second quarter 2023 total noninterest income of $66 million increased $3 million, or 6% from the prior quarter and decreased $10 million, or 13%, from the same period last year. With respect to second quarter 2023 noninterest income line items:
•Mortgage banking, net was $8 million for the second quarter, up $4 million from the prior quarter and up $2 million from the same period last year.
•Service charges and deposit account fees decreased $1 million from the prior quarter and decreased $4 million from the same period last year.
•Card-based fees increased $1 million from the prior quarter and were flat from the same period last year.
We continue to expect total noninterest income to compress by 8% to 10% in 2023.
Noninterest Expense
Second quarter 2023 total noninterest expense of $191 million increased $3 million, or 2%, from the prior quarter and increased $9 million, or 5%, from the same period last year as we continued to invest in our strategic initiatives. With respect to second quarter 2023 noninterest expense line items:
•Personnel expense decreased $2 million from the prior quarter and increased $1 million from the same period last year.
•FDIC assessment expense increased $3 million from the prior quarter and increased $4 million from the same period last year.
•Occupancy expense decreased $1 million from the prior quarter and decreased $1 million from the same period last year.
•Business development and advertising expense increased $1 million from the prior quarter and increased $1 million from the same period last year.
We now expect total noninterest expense growth of 3% to 4% in 2023.
Taxes
The second quarter 2023 tax expense was $24 million compared to $27 million of tax expense in the prior quarter and $23 million of tax expense in the same period last year. The effective tax rate for the second quarter of 2023 was 21.3% compared to an effective tax rate of 20.9% in the prior quarter and an effective tax rate of 21.2% in the same period last year.
We continue to expect the 2023 effective tax rate to be between 20% and 21%, assuming no change in the statutory corporate tax rate.
Credit
The second quarter 2023 provision for credit losses on loans was $22 million, compared to a provision of $18 million in the prior quarter and a provision of zero in the same period last year. Provision build in the second quarter was largely a function of loan growth, limited credit movement and macro trends. With respect to second quarter 2023 credit quality:
•Nonaccrual loans of $131 million were up $14 million from the prior quarter and up $23 million from the same period last year. The nonaccrual loans to total loans ratio was 0.44% in the second quarter, up from 0.40% in the prior quarter and up from 0.41% in the same period last year.
•Second quarter 2023 net charge offs of $11 million were up compared to net charge offs of $3 million in the prior quarter and were up compared to net charge offs of less than $1 million in the same period last year.
•The allowance for credit losses on loans (ACLL) of $377 million was up $11 million compared to the prior quarter and up $59 million compared to the same period last year. The ACLL to total loans ratio was 1.26% in the second quarter, up from 1.25% in the prior quarter and up from 1.20% in the same period last year.
In 2023, we expect to adjust provision to reflect changes to risk grades, economic conditions, loan volumes, and other indications of credit quality.
Capital
The Company’s capital position remains strong, with a CET1 capital ratio of 9.48% at June 30, 2023. The Company’s capital ratios continue to be in excess of the Basel III “well-capitalized” regulatory benchmarks on a fully phased in basis.
SECOND QUARTER 2023 EARNINGS RELEASE CONFERENCE CALL
The Company will host a conference call for investors and analysts at 4:00 p.m. Central Time (CT) today, July 20, 2023. Interested parties can access the live webcast of the call through the Investor Relations section of the Company's website, http://investor.associatedbank.com. Parties may also dial into the call at 877-407-8037 (domestic) or 201-689-8037 (international) and request the Associated Banc-Corp second quarter 2023 earnings call. The second quarter 2023 financial tables with an accompanying slide presentation will be available on the Company's website just prior to the call. An audio archive of the webcast will be available on the Company's website approximately fifteen minutes after the call is over.
ABOUT ASSOCIATED BANC-CORP
Associated Banc-Corp (NYSE: ASB) has total assets of $41 billion and is the largest bank holding company based in Wisconsin. Headquartered in Green Bay, Wisconsin, Associated is a leading Midwest banking franchise, offering a full range of financial products and services from more than 200 banking locations serving more than 100 communities throughout Wisconsin, Illinois and Minnesota. The Company also operates loan production offices in Indiana, Michigan, Missouri, New York, Ohio and Texas. Associated Bank, N.A. is an Equal Housing Lender, Equal Opportunity Lender and Member FDIC. More information about Associated Banc-Corp is available at www.associatedbank.com.
FORWARD-LOOKING STATEMENTS
Statements made in this document 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 SEC filings. Such factors are incorporated herein by reference.
NON-GAAP FINANCIAL MEASURES
This press release and related materials may contain references to measures which are not defined in generally accepted accounting principles (“GAAP”). Information concerning these non-GAAP financial measures can be found in the financial tables. Management believes these measures are meaningful because they reflect adjustments commonly made by management, investors, regulators, and analysts to evaluate the adequacy of earnings per common share, provide a greater understanding of ongoing operations and enhance comparability of results with prior periods.
# # #
| Associated Banc-Corp Consolidated Balance Sheets (Unaudited) | |||||||||||||||||||||||
| ($ in thousands) | June 30, 2023 | March 31, 2023 | Seql Qtr $ Change | December 31, 2022 | September 30, 2022 | June 30, 2022 | Comp Qtr $ Change | ||||||||||||||||
| Assets | |||||||||||||||||||||||
| Cash and due from banks | $ | 407,620 | $ | 311,269 | $ | 96,351 | $ | 436,952 | $ | 386,231 | $ | 397,364 | $ | 10,256 | |||||||||
| Interest-bearing deposits in other financial institutions | 190,881 | 511,116 | (320,235) | 156,693 | 112,173 | 436,887 | (246,006) | ||||||||||||||||
| Federal funds sold and securities purchased under agreements to resell | 31,160 | 455 | 30,705 | 27,810 | 4,015 | 32,820 | (1,660) | ||||||||||||||||
| Investment securities available for sale, at fair value | 3,504,777 | 3,381,607 | 123,170 | 2,742,025 | 2,487,312 | 2,677,511 | 827,266 | ||||||||||||||||
| Investment securities held to maturity, net, at amortized cost | 3,938,877 | 3,967,058 | (28,181) | 3,960,398 | 3,951,491 | 3,945,206 | (6,329) | ||||||||||||||||
| Equity securities | 30,883 | 30,514 | 369 | 25,216 | 24,879 | 19,039 | 11,844 | ||||||||||||||||
| Federal Home Loan Bank and Federal Reserve Bank stocks, at cost | 271,637 | 331,420 | (59,783) | 295,496 | 279,334 | 237,616 | 34,021 | ||||||||||||||||
| Residential loans held for sale | 38,083 | 35,742 | 2,341 | 20,383 | 51,134 | 42,676 | (4,593) | ||||||||||||||||
| Commercial loans held for sale | 15,000 | 33,490 | (18,490) | — | — | 44,721 | (29,721) | ||||||||||||||||
| Loans | 29,848,904 | 29,207,072 | 641,832 | 28,799,569 | 27,817,280 | 26,494,698 | 3,354,206 | ||||||||||||||||
| Allowance for loan losses | (338,750) | (326,432) | (12,318) | (312,720) | (292,904) | (280,771) | (57,979) | ||||||||||||||||
| Loans, net | 29,510,153 | 28,880,640 | 629,513 | 28,486,849 | 27,524,376 | 26,213,927 | 3,296,226 | ||||||||||||||||
| Tax credit and other investments | 263,583 | 269,269 | (5,686) | 276,773 | 275,247 | 275,165 | (11,582) | ||||||||||||||||
| Premises and equipment, net | 374,866 | 375,540 | (674) | 376,906 | 379,462 | 387,633 | (12,767) | ||||||||||||||||
| Bank and corporate owned life insurance | 678,578 | 677,328 | 1,250 | 676,530 | 677,129 | 675,347 | 3,231 | ||||||||||||||||
| Goodwill | 1,104,992 | 1,104,992 | — | 1,104,992 | 1,104,992 | 1,104,992 | — | ||||||||||||||||
| Other intangible assets, net | 44,877 | 47,079 | (2,202) | 49,282 | 51,485 | 53,687 | (8,810) | ||||||||||||||||
| Mortgage servicing rights, net | 80,449 | 74,479 | 5,970 | 77,351 | 78,352 | 76,570 | 3,879 | ||||||||||||||||
| Interest receivable | 159,185 | 152,404 | 6,781 | 144,449 | 115,782 | 95,426 | 63,759 | ||||||||||||||||
| Other assets | 573,870 | 518,115 | 55,755 | 547,621 | 546,214 | 519,403 | 54,467 | ||||||||||||||||
| Total assets | $ | 41,219,473 | $ | 40,702,519 | $ | 516,954 | $ | 39,405,727 | $ | 38,049,607 | $ | 37,235,990 | $ | 3,983,483 | |||||||||
| Liabilities and stockholders’ equity | |||||||||||||||||||||||
| Noninterest-bearing demand deposits | $ | 6,565,666 | $ | 7,328,689 | $ | (763,023) | $ | 7,760,811 | $ | 8,224,579 | $ | 8,085,702 | $ | (1,520,036) | |||||||||
| Interest-bearing deposits | 25,448,743 | 23,003,134 | 2,445,609 | 21,875,343 | 20,974,003 | 20,490,874 | 4,957,869 | ||||||||||||||||
| Total deposits | 32,014,409 | 30,331,824 | 1,682,585 | 29,636,154 | 29,198,581 | 28,576,577 | 3,437,832 | ||||||||||||||||
| Federal funds purchased and securities sold under agreements to repurchase | 325,927 | 208,398 | 117,529 | 585,139 | 276,674 | 682,839 | (356,912) | ||||||||||||||||
| Commercial paper | 15,327 | 18,210 | (2,883) | 20,798 | 7,687 | 22,781 | (7,454) | ||||||||||||||||
| FHLB advances | 3,630,747 | 4,986,138 | (1,355,391) | 4,319,861 | 3,777,478 | 3,258,039 | 372,708 | ||||||||||||||||
| Other long-term funding | 534,273 | 544,103 | (9,830) | 248,071 | 249,484 | 249,820 | 284,453 | ||||||||||||||||
| Allowance for unfunded commitments | 38,276 | 39,776 | (1,500) | 38,776 | 39,776 | 36,776 | 1,500 | ||||||||||||||||
| Accrued expenses and other liabilities | 537,640 | 448,407 | 89,233 | 541,438 | 545,976 | 449,776 | 87,864 | ||||||||||||||||
| Total liabilities | 37,096,599 | 36,576,856 | 519,743 | 35,390,237 | 34,095,656 | 33,276,608 | 3,819,991 | ||||||||||||||||
| Stockholders’ equity | |||||||||||||||||||||||
| Preferred equity | 194,112 | 194,112 | — | 194,112 | 194,112 | 193,195 | 917 | ||||||||||||||||
| Common equity | 3,928,762 | 3,931,551 | (2,789) | 3,821,378 | 3,759,840 | 3,766,187 | 162,575 | ||||||||||||||||
| Total stockholders’ equity | 4,122,874 | 4,125,663 | (2,789) | 4,015,490 | 3,953,952 | 3,959,382 | 163,492 | ||||||||||||||||
| Total liabilities and stockholders’ equity | $ | 41,219,473 | $ | 40,702,519 | $ | 516,954 | $ | 39,405,727 | $ | 38,049,607 | $ | 37,235,990 | $ | 3,983,483 | |||||||||
Numbers may not sum due to rounding.
1
| Associated Banc-Corp Consolidated Statements of Income (Unaudited) | Comp Qtr | YTD | YTD | Comp YTD | ||||||||||||||||||||||
| ($ in thousands, except per share data) | 2Q23 | 2Q22 | $ Change | % Change | Jun 2023 | Jun 2022 | $ Change | % Change | ||||||||||||||||||
| Interest income | ||||||||||||||||||||||||||
| Interest and fees on loans | $ | 423,307 | $ | 199,876 | $ | 223,431 | 112 | % | $ | 814,626 | $ | 367,573 | $ | 447,053 | 122 | % | ||||||||||
| Interest and dividends on investment securities | ||||||||||||||||||||||||||
| Taxable | 35,845 | 18,317 | 17,528 | 96 | % | 65,987 | 34,789 | 31,198 | 90 | % | ||||||||||||||||
| Tax-exempt | 15,994 | 16,379 | (385) | (2) | % | 32,019 | 32,487 | (468) | (1) | % | ||||||||||||||||
| Other interest | 6,086 | 2,420 | 3,666 | 151 | % | 11,415 | 4,413 | 7,002 | 159 | % | ||||||||||||||||
| Total interest income | 481,231 | 236,991 | 244,240 | 103 | % | 924,048 | 439,261 | 484,787 | 110 | % | ||||||||||||||||
| Interest expense | ||||||||||||||||||||||||||
| Interest on deposits | 162,196 | 8,019 | 154,177 | N/M | 271,618 | 11,591 | 260,027 | N/M | ||||||||||||||||||
| Interest on federal funds purchased and securities sold under agreements to repurchase | 2,261 | 406 | 1,855 | N/M | 5,404 | 444 | 4,960 | N/M | ||||||||||||||||||
| Interest on other short-term funding | — | 1 | (1) | (100) | % | 1 | 2 | (1) | (50) | % | ||||||||||||||||
| Interest on FHLB Advances | 49,261 | 9,689 | 39,572 | N/M | 99,222 | 17,871 | 81,351 | N/M | ||||||||||||||||||
| Interest on long-term funding | 9,596 | 2,730 | 6,866 | N/M | 15,876 | 5,460 | 10,416 | 191 | % | |||||||||||||||||
| Total interest expense | 223,314 | 20,845 | 202,469 | N/M | 392,121 | 35,367 | 356,754 | N/M | ||||||||||||||||||
| Net interest income | 257,917 | 216,146 | 41,771 | 19 | % | 531,927 | 403,893 | 128,034 | 32 | % | ||||||||||||||||
| Provision for credit losses | 22,100 | (2) | 22,102 | N/M | 40,071 | (3,992) | 44,063 | N/M | ||||||||||||||||||
| Net interest income after provision for credit losses | 235,817 | 216,148 | 19,669 | 9 | % | 491,856 | 407,886 | 83,970 | 21 | % | ||||||||||||||||
| Noninterest income | ||||||||||||||||||||||||||
| Wealth management fees | 20,483 | 21,332 | (849) | (4) | % | 40,672 | 43,735 | (3,063) | (7) | % | ||||||||||||||||
| Service charges and deposit account fees | 12,372 | 16,506 | (4,134) | (25) | % | 25,366 | 33,363 | (7,997) | (24) | % | ||||||||||||||||
| Card-based fees | 11,396 | 11,442 | (46) | — | % | 21,982 | 21,368 | 614 | 3 | % | ||||||||||||||||
| Other fee-based revenue | 4,465 | 4,360 | 105 | 2 | % | 8,740 | 8,126 | 614 | 8 | % | ||||||||||||||||
Capital markets, net | 5,093 | 8,010 | (2,917) | (36) | % | 10,176 | 16,656 | (6,480) | (39) | % | ||||||||||||||||
| Mortgage banking, net | 7,768 | 6,145 | 1,623 | 26 | % | 11,313 | 14,536 | (3,223) | (22) | % | ||||||||||||||||
| Bank and corporate owned life insurance | 2,172 | 4,106 | (1,934) | (47) | % | 4,835 | 6,177 | (1,342) | (22) | % | ||||||||||||||||
| Asset gains (losses), net | (299) | 1,677 | (1,976) | N/M | (35) | 1,865 | (1,900) | N/M | ||||||||||||||||||
| Investment securities gains (losses), net | 14 | (8) | 22 | N/M | 66 | 12 | 54 | N/M | ||||||||||||||||||
Other | 2,080 | 1,888 | 192 | 10 | % | 4,501 | 4,086 | 415 | 10 | % | ||||||||||||||||
| Total noninterest income | 65,543 | 75,458 | (9,915) | (13) | % | 127,616 | 149,925 | (22,309) | (15) | % | ||||||||||||||||
| Noninterest expense | ||||||||||||||||||||||||||
| Personnel | 114,089 | 112,666 | 1,423 | 1 | % | 230,510 | 217,477 | 13,033 | 6 | % | ||||||||||||||||
| Technology | 24,220 | 21,223 | 2,997 | 14 | % | 47,818 | 42,707 | 5,111 | 12 | % | ||||||||||||||||
| Occupancy | 13,587 | 14,151 | (564) | (4) | % | 28,650 | 30,231 | (1,581) | (5) | % | ||||||||||||||||
| Business development and advertising | 7,106 | 5,655 | 1,451 | 26 | % | 12,955 | 10,610 | 2,345 | 22 | % | ||||||||||||||||
| Equipment | 4,975 | 4,960 | 15 | — | % | 9,906 | 9,920 | (14) | — | % | ||||||||||||||||
| Legal and professional | 4,831 | 4,873 | (42) | (1) | % | 8,688 | 9,960 | (1,272) | (13) | % | ||||||||||||||||
| Loan and foreclosure costs | 1,635 | 1,476 | 159 | 11 | % | 2,773 | 3,490 | (717) | (21) | % | ||||||||||||||||
| FDIC assessment | 9,550 | 5,400 | 4,150 | 77 | % | 16,425 | 10,500 | 5,925 | 56 | % | ||||||||||||||||
| Other intangible amortization | 2,203 | 2,203 | — | — | % | 4,405 | 4,405 | — | — | % | ||||||||||||||||
| Other | 8,476 | 8,815 | (339) | (4) | % | 15,955 | 15,412 | 543 | 4 | % | ||||||||||||||||
| Total noninterest expense | 190,673 | 181,420 | 9,253 | 5 | % | 378,086 | 354,712 | 23,374 | 7 | % | ||||||||||||||||
| Income before income taxes | 110,687 | 110,187 | 500 | — | % | 241,386 | 203,099 | 38,287 | 19 | % | ||||||||||||||||
| Income tax expense | 23,533 | 23,363 | 170 | 1 | % | 50,873 | 42,013 | 8,860 | 21 | % | ||||||||||||||||
| Net income | 87,154 | 86,824 | 330 | — | % | 190,514 | 161,086 | 29,428 | 18 | % | ||||||||||||||||
| Preferred stock dividends | 2,875 | 2,875 | — | — | % | 5,750 | 5,750 | — | — | % | ||||||||||||||||
| Net income available to common equity | $ | 84,279 | $ | 83,949 | $ | 330 | — | % | $ | 184,764 | $ | 155,336 | $ | 29,428 | 19 | % | ||||||||||
| Earnings per common share | ||||||||||||||||||||||||||
| Basic | $ | 0.56 | $ | 0.56 | $ | — | — | % | $ | 1.23 | $ | 1.04 | $ | 0.19 | 18 | % | ||||||||||
| Diluted | $ | 0.56 | $ | 0.56 | $ | — | — | % | $ | 1.22 | $ | 1.03 | $ | 0.19 | 18 | % | ||||||||||
| Average common shares outstanding | ||||||||||||||||||||||||||
| Basic | 149,986 | 149,083 | 903 | 1 | % | 149,875 | 148,933 | 942 | 1 | % | ||||||||||||||||
| Diluted | 150,870 | 150,203 | 667 | — | % | 150,903 | 150,265 | 638 | — | % | ||||||||||||||||
N/M = Not meaningful
Numbers may not sum due to rounding.
2
| Associated Banc-Corp Consolidated Statements of Income (Unaudited) - Quarterly Trend | |||||||||||||||||||||||||||||
| ($ in thousands, except per share data) | Seql Qtr | Comp Qtr | |||||||||||||||||||||||||||
| 2Q23 | 1Q23 | $ Change | % Change | 4Q22 | 3Q22 | 2Q22 | $ Change | % Change | |||||||||||||||||||||
| Interest income | |||||||||||||||||||||||||||||
| Interest and fees on loans | $ | 423,307 | $ | 391,320 | $ | 31,987 | 8 | % | $ | 349,403 | $ | 275,666 | $ | 199,876 | $ | 223,431 | 112 | % | |||||||||||
| Interest and dividends on investment securities | |||||||||||||||||||||||||||||
| Taxable | 35,845 | 30,142 | 5,703 | 19 | % | 21,435 | 19,221 | 18,317 | 17,528 | 96 | % | ||||||||||||||||||
| Tax-exempt | 15,994 | 16,025 | (31) | — | % | 16,666 | 16,538 | 16,379 | (385) | (2) | % | ||||||||||||||||||
| Other interest | 6,086 | 5,329 | 757 | 14 | % | 3,779 | 3,284 | 2,420 | 3,666 | 151 | % | ||||||||||||||||||
| Total interest income | 481,231 | 442,817 | 38,414 | 9 | % | 391,283 | 314,708 | 236,991 | 244,240 | 103 | % | ||||||||||||||||||
| Interest expense | |||||||||||||||||||||||||||||
| Interest on deposits | 162,196 | 109,422 | 52,774 | 48 | % | 60,719 | 26,000 | 8,019 | 154,177 | N/M | |||||||||||||||||||
| Interest on federal funds purchased and securities sold under agreements to repurchase | 2,261 | 3,143 | (882) | (28) | % | 2,280 | 756 | 406 | 1,855 | N/M | |||||||||||||||||||
| Interest on other short-term funding | — | — | — | N/M | — | 1 | 1 | (1) | (100) | % | |||||||||||||||||||
| Interest on FHLB advances | 49,261 | 49,960 | (699) | (1) | % | 36,824 | 20,792 | 9,689 | 39,572 | N/M | |||||||||||||||||||
| Interest on long-term funding | 9,596 | 6,281 | 3,315 | 53 | % | 2,470 | 2,722 | 2,730 | 6,866 | N/M | |||||||||||||||||||
| Total interest expense | 223,314 | 168,807 | 54,507 | 32 | % | 102,294 | 50,270 | 20,845 | 202,469 | N/M | |||||||||||||||||||
| Net interest income | 257,917 | 274,010 | (16,093) | (6) | % | 288,989 | 264,439 | 216,146 | 41,771 | 19 | % | ||||||||||||||||||
| Provision for credit losses | 22,100 | 17,971 | 4,129 | 23 | % | 19,992 | 16,998 | (2) | 22,102 | N/M | |||||||||||||||||||
| Net interest income after provision for credit losses | 235,817 | 256,039 | (20,222) | (8) | % | 268,997 | 247,440 | 216,148 | 19,669 | 9 | % | ||||||||||||||||||
| Noninterest income | |||||||||||||||||||||||||||||
| Wealth management fees | 20,483 | 20,189 | 294 | 1 | % | 20,403 | 19,984 | 21,332 | (849) | (4) | % | ||||||||||||||||||
| Service charges and deposit account fees | 12,372 | 12,994 | (622) | (5) | % | 13,918 | 15,029 | 16,506 | (4,134) | (25) | % | ||||||||||||||||||
| Card-based fees | 11,396 | 10,586 | 810 | 8 | % | 11,167 | 11,479 | 11,442 | (46) | — | % | ||||||||||||||||||
| Other fee-based revenue | 4,465 | 4,276 | 189 | 4 | % | 3,290 | 4,487 | 4,360 | 105 | 2 | % | ||||||||||||||||||
| Capital markets, net | 5,093 | 5,083 | 10 | — | % | 5,586 | 7,675 | 8,010 | (2,917) | (36) | % | ||||||||||||||||||
| Mortgage banking, net | 7,768 | 3,545 | 4,223 | 119 | % | 2,238 | 2,098 | 6,145 | 1,623 | 26 | % | ||||||||||||||||||
| Bank and corporate owned life insurance | 2,172 | 2,664 | (492) | (18) | % | 3,427 | 1,827 | 4,106 | (1,934) | (47) | % | ||||||||||||||||||
| Asset gains (losses), net | (299) | 263 | (562) | N/M | (545) | 18 | 1,677 | (1,976) | N/M | ||||||||||||||||||||
| Investment securities gains (losses), net | 14 | 51 | (37) | (73) | % | (1,930) | 5,664 | (8) | 22 | N/M | |||||||||||||||||||
| Other | 2,080 | 2,422 | (342) | (14) | % | 4,102 | 2,527 | 1,888 | 192 | 10 | % | ||||||||||||||||||
| Total noninterest income | 65,543 | 62,073 | 3,470 | 6 | % | 61,657 | 70,788 | 75,458 | (9,915) | (13) | % | ||||||||||||||||||
| Noninterest expense | |||||||||||||||||||||||||||||
| Personnel | 114,089 | 116,420 | (2,331) | (2) | % | 118,381 | 118,243 | 112,666 | 1,423 | 1 | % | ||||||||||||||||||
| Technology | 24,220 | 23,598 | 622 | 3 | % | 25,299 | 22,694 | 21,223 | 2,997 | 14 | % | ||||||||||||||||||
| Occupancy | 13,587 | 15,063 | (1,476) | (10) | % | 15,846 | 13,717 | 14,151 | (564) | (4) | % | ||||||||||||||||||
| Business development and advertising | 7,106 | 5,849 | 1,257 | 21 | % | 8,136 | 6,778 | 5,655 | 1,451 | 26 | % | ||||||||||||||||||
| Equipment | 4,975 | 4,930 | 45 | 1 | % | 4,791 | 4,921 | 4,960 | 15 | — | % | ||||||||||||||||||
| Legal and professional | 4,831 | 3,857 | 974 | 25 | % | 4,132 | 4,159 | 4,873 | (42) | (1) | % | ||||||||||||||||||
| Loan and foreclosure costs | 1,635 | 1,138 | 497 | 44 | % | 804 | 1,631 | 1,476 | 159 | 11 | % | ||||||||||||||||||
| FDIC assessment | 9,550 | 6,875 | 2,675 | 39 | % | 6,350 | 5,800 | 5,400 | 4,150 | 77 | % | ||||||||||||||||||
| Other intangible amortization | 2,203 | 2,203 | — | — | % | 2,203 | 2,203 | 2,203 | — | — | % | ||||||||||||||||||
| Other | 8,476 | 7,479 | 997 | 13 | % | 10,618 | 15,645 | 8,815 | (339) | (4) | % | ||||||||||||||||||
| Total noninterest expense | 190,673 | 187,412 | 3,261 | 2 | % | 196,560 | 195,791 | 181,420 | 9,253 | 5 | % | ||||||||||||||||||
| Income before income taxes | 110,687 | 130,700 | (20,013) | (15) | % | 134,094 | 122,438 | 110,187 | 500 | — | % | ||||||||||||||||||
| Income tax expense | 23,533 | 27,340 | (3,807) | (14) | % | 25,332 | 26,163 | 23,363 | 170 | 1 | % | ||||||||||||||||||
| Net income | 87,154 | 103,360 | (16,206) | (16) | % | 108,762 | 96,275 | 86,824 | 330 | — | % | ||||||||||||||||||
| Preferred stock dividends | 2,875 | 2,875 | — | — | % | 2,875 | 2,875 | 2,875 | — | — | % | ||||||||||||||||||
| Net income available to common equity | $ | 84,279 | $ | 100,485 | $ | (16,206) | (16) | % | $ | 105,887 | $ | 93,400 | $ | 83,949 | $ | 330 | — | % | |||||||||||
| Earnings per common share | |||||||||||||||||||||||||||||
| Basic | $ | 0.56 | $ | 0.67 | $ | (0.11) | (16) | % | $ | 0.70 | $ | 0.62 | $ | 0.56 | $ | — | — | % | |||||||||||
| Diluted | $ | 0.56 | $ | 0.66 | $ | (0.10) | (15) | % | $ | 0.70 | $ | 0.62 | $ | 0.56 | $ | — | — | % | |||||||||||
| Average common shares outstanding | |||||||||||||||||||||||||||||
| Basic | 149,986 | 149,763 | 223 | — | % | 149,454 | 149,321 | 149,083 | 903 | 1 | % | ||||||||||||||||||
| Diluted | 150,870 | 151,128 | (258) | — | % | 150,886 | 150,262 | 150,203 | 667 | — | % | ||||||||||||||||||
N/M = Not meaningful
Numbers may not sum due to rounding.
3
| Associated Banc-Corp Selected Quarterly Information | |||||||||||||||||||||||
| ($ in millions except per share data; shares repurchased and outstanding in thousands) | YTD Jun 2023 | YTD Jun 2022 | 2Q23 | 1Q23 | 4Q22 | 3Q22 | 2Q22 | ||||||||||||||||
| Per common share data | |||||||||||||||||||||||
| Dividends | $ | 0.42 | $ | 0.40 | $ | 0.21 | $ | 0.21 | $ | 0.21 | $ | 0.20 | $ | 0.20 | |||||||||
| Market value: | |||||||||||||||||||||||
| High | 24.18 | 25.71 | 18.45 | 24.18 | 25.13 | 21.87 | 22.48 | ||||||||||||||||
| Low | 14.48 | 18.01 | 14.48 | 17.66 | 20.54 | 17.63 | 18.01 | ||||||||||||||||
| Close | 16.23 | 17.98 | 23.09 | 20.08 | 18.26 | ||||||||||||||||||
| Book value / share | 26.03 | 26.06 | 25.40 | 25.01 | 25.09 | ||||||||||||||||||
| Tangible book value / share | 18.41 | 18.42 | 17.73 | 17.32 | 17.37 | ||||||||||||||||||
| Performance ratios (annualized) | |||||||||||||||||||||||
| Return on average assets | 0.96 | % | 0.92 | % | 0.86 | % | 1.06 | % | 1.12 | % | 1.02 | % | 0.97 | % | |||||||||
| Noninterest expense / average assets | 1.90 | % | 2.02 | % | 1.89 | % | 1.92 | % | 2.03 | % | 2.08 | % | 2.04 | % | |||||||||
| Effective tax rate | 21.08 | % | 20.69 | % | 21.26 | % | 20.92 | % | 18.89 | % | 21.37 | % | 21.20 | % | |||||||||
Dividend payout ratio(a) | 34.15 | % | 38.46 | % | 37.50 | % | 31.34 | % | 30.00 | % | 32.26 | % | 35.71 | % | |||||||||
| Net interest margin | 2.93 | % | 2.57 | % | 2.80 | % | 3.07 | % | 3.31 | % | 3.13 | % | 2.71 | % | |||||||||
| Selected trend information | |||||||||||||||||||||||
Average full time equivalent employees(b) | 4,223 | 4,060 | 4,227 | 4,219 | 4,169 | 4,182 | 4,101 | ||||||||||||||||
| Branch count | 202 | 202 | 202 | 215 | 215 | ||||||||||||||||||
Assets under management, at market value(c) | $ | 12,995 | $ | 12,412 | $ | 11,843 | $ | 11,142 | $ | 11,561 | |||||||||||||
| Mortgage loans originated for sale during period | $ | 168 | $ | 404 | $ | 99 | $ | 69 | $ | 64 | $ | 132 | $ | 152 | |||||||||
| Mortgage loan settlements during period | $ | 151 | $ | 500 | $ | 97 | $ | 55 | $ | 95 | $ | 120 | $ | 204 | |||||||||
| Mortgage portfolio serviced for others | $ | 6,525 | $ | 6,612 | $ | 6,712 | $ | 6,800 | $ | 6,910 | |||||||||||||
| Mortgage servicing rights, net / mortgage portfolio serviced for others | 1.23 | % | 1.13 | % | 1.15 | % | 1.15 | % | 1.11 | % | |||||||||||||
| Shares outstanding, end of period | 150,919 | 150,886 | 150,444 | 150,328 | 150,126 | ||||||||||||||||||
| Selected quarterly ratios | |||||||||||||||||||||||
| Loans / deposits | 93.24 | % | 96.29 | % | 97.18 | % | 95.27 | % | 92.71 | % | |||||||||||||
| Stockholders’ equity / assets | 10.00 | % | 10.14 | % | 10.19 | % | 10.39 | % | 10.63 | % | |||||||||||||
Risk-based capital(d)(e) | |||||||||||||||||||||||
| Total risk-weighted assets | $ | 33,146 | $ | 32,648 | $ | 32,472 | $ | 31,406 | $ | 29,864 | |||||||||||||
| Common equity Tier 1 | $ | 3,143 | $ | 3,086 | $ | 3,036 | $ | 2,956 | $ | 2,897 | |||||||||||||
| Common equity Tier 1 capital ratio | 9.48 | % | 9.45 | % | 9.35 | % | 9.41 | % | 9.70 | % | |||||||||||||
| Tier 1 capital ratio | 10.07 | % | 10.05 | % | 9.95 | % | 10.03 | % | 10.35 | % | |||||||||||||
| Total capital ratio | 12.22 | % | 12.22 | % | 11.33 | % | 11.41 | % | 11.74 | % | |||||||||||||
| Tier 1 leverage ratio | 8.40 | % | 8.46 | % | 8.59 | % | 8.66 | % | 8.87 | % | |||||||||||||
N/M = Not meaningful
Numbers may not sum due to rounding.
(a)Ratio is based upon basic earnings per common share.
(b)Average full time equivalent employees without overtime.
(c)Excludes assets held in brokerage accounts.
(d)The Federal Reserve establishes regulatory capital requirements, including well-capitalized standards for the Corporation. The regulatory capital requirements effective for the Corporation follow Basel III, subject to certain transition provisions.
(e)June 30, 2023 data is estimated.
4
| Associated Banc-Corp Selected Asset Quality Information | |||||||||||||||||||||||
| ($ in thousands) | Jun 30, 2023 | Mar 31, 2023 | Seql Qtr % Change | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Comp Qtr % Change | ||||||||||||||||
| Allowance for loan losses | |||||||||||||||||||||||
| Balance at beginning of period | $ | 326,432 | $ | 312,720 | 4 | % | $ | 292,904 | $ | 280,771 | $ | 279,058 | 17 | % | |||||||||
| Provision for loan losses | 23,500 | 17,000 | 38 | % | 21,000 | 14,000 | 2,000 | N/M | |||||||||||||||
| Charge offs | (14,855) | (5,501) | 170 | % | (2,982) | (3,346) | (1,791) | N/M | |||||||||||||||
| Recoveries | 3,674 | 2,212 | 66 | % | 1,798 | 1,478 | 1,504 | 144 | % | ||||||||||||||
| Net (charge offs) recoveries | (11,181) | (3,289) | N/M | (1,183) | (1,867) | (287) | N/M | ||||||||||||||||
| Balance at end of period | $ | 338,750 | $ | 326,432 | 4 | % | $ | 312,720 | $ | 292,904 | $ | 280,771 | 21 | % | |||||||||
| Allowance for unfunded commitments | |||||||||||||||||||||||
| Balance at beginning of period | $ | 39,776 | $ | 38,776 | 3 | % | $ | 39,776 | $ | 36,776 | $ | 38,776 | 3 | % | |||||||||
| Provision for unfunded commitments | (1,500) | 1,000 | N/M | (1,000) | 3,000 | (2,000) | (25) | % | |||||||||||||||
| Balance at end of period | $ | 38,276 | $ | 39,776 | (4) | % | $ | 38,776 | $ | 39,776 | $ | 36,776 | 4 | % | |||||||||
| Allowance for credit losses on loans (ACLL) | $ | 377,027 | $ | 366,208 | 3 | % | $ | 351,496 | $ | 332,680 | $ | 317,547 | 19 | % | |||||||||
| Provision for credit losses on loans | $ | 22,000 | $ | 18,000 | 22 | % | $ | 20,000 | $ | 17,000 | $ | — | N/M | ||||||||||
| ($ in thousands) | Jun 30, 2023 | Mar 31, 2023 | Seql Qtr % Change | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Comp Qtr % Change | ||||||||||||||||
| Net (charge offs) recoveries | |||||||||||||||||||||||
| Commercial and industrial | $ | (11,177) | $ | (1,759) | N/M | $ | 278 | $ | (897) | $ | (444) | N/M | |||||||||||
| Commercial real estate—owner occupied | 3 | 3 | — | % | 3 | 3 | 4 | (25) | % | ||||||||||||||
| Commercial and business lending | (11,174) | (1,756) | N/M | 281 | (894) | (440) | N/M | ||||||||||||||||
| Commercial real estate—investor | 2,276 | — | N/M | — | — | — | N/M | ||||||||||||||||
| Real estate construction | (18) | 18 | N/M | 16 | 9 | 2 | N/M | ||||||||||||||||
| Commercial real estate lending | 2,257 | 18 | N/M | 16 | 9 | 2 | N/M | ||||||||||||||||
| Total commercial | (8,917) | (1,738) | N/M | 297 | (885) | (439) | N/M | ||||||||||||||||
| Residential mortgage | (283) | (53) | N/M | (125) | (42) | 220 | N/M | ||||||||||||||||
| Auto finance | (1,048) | (957) | 10 | % | (768) | (165) | (14) | N/M | |||||||||||||||
| Home equity | 183 | 340 | (46) | % | 123 | (101) | 461 | (60) | % | ||||||||||||||
| Other consumer | (1,117) | (881) | 27 | % | (711) | (675) | (516) | 116 | % | ||||||||||||||
| Total consumer | (2,264) | (1,550) | 46 | % | (1,480) | (983) | 151 | N/M | |||||||||||||||
| Total net (charge offs) recoveries | $ | (11,181) | $ | (3,289) | N/M | $ | (1,183) | $ | (1,867) | $ | (287) | N/M | |||||||||||
| (In basis points) | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | ||||||||||||||||||
| Net (charge offs) recoveries to average loans (annualized) | |||||||||||||||||||||||
| Commercial and industrial | (46) | (7) | 1 | (4) | (2) | ||||||||||||||||||
| Commercial real estate—owner occupied | — | — | — | — | — | ||||||||||||||||||
| Commercial and business lending | (41) | (7) | 1 | (3) | (2) | ||||||||||||||||||
| Commercial real estate—investor | 18 | — | — | — | — | ||||||||||||||||||
| Real estate construction | — | — | — | — | — | ||||||||||||||||||
| Commercial real estate lending | 12 | — | — | — | — | ||||||||||||||||||
| Total commercial | (20) | (4) | 1 | (2) | (1) | ||||||||||||||||||
| Residential mortgage | (1) | — | (1) | — | 1 | ||||||||||||||||||
| Auto finance | (25) | (26) | (24) | (7) | (1) | ||||||||||||||||||
| Home equity | 12 | 22 | 8 | (7) | 32 | ||||||||||||||||||
| Other consumer | (163) | (125) | (95) | (89) | (70) | ||||||||||||||||||
| Total consumer | (8) | (6) | (6) | (4) | 1 | ||||||||||||||||||
| Total net (charge offs) recoveries | (15) | (5) | (2) | (3) | — | ||||||||||||||||||
| ($ in thousands) | Jun 30, 2023 | Mar 31, 2023 | Seql Qtr % Change | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Comp Qtr % Change | ||||||||||||||||
| Credit quality | |||||||||||||||||||||||
| Nonaccrual loans | $ | 131,278 | $ | 117,569 | 12 | % | $ | 111,467 | $ | 116,406 | $ | 108,345 | 21 | % | |||||||||
| Other real estate owned (OREO) | 7,575 | 15,184 | (50) | % | 14,784 | 16,373 | 17,879 | (58) | % | ||||||||||||||
| Repossessed assets | $ | 348 | $ | 92 | N/M | $ | 215 | $ | 299 | $ | 102 | N/M | |||||||||||
| Total nonperforming assets | $ | 139,201 | $ | 132,845 | 5 | % | $ | 126,466 | $ | 133,078 | $ | 126,327 | 10 | % | |||||||||
| Loans 90 or more days past due and still accruing | $ | 1,726 | $ | 1,703 | 1 | % | $ | 1,728 | $ | 1,417 | $ | 1,555 | 11 | % | |||||||||
| Allowance for credit losses on loans to total loans | 1.26 | % | 1.25 | % | 1.22 | % | 1.20 | % | 1.20 | % | |||||||||||||
| Allowance for credit losses on loans to nonaccrual loans | 287.20 | % | 311.48 | % | 315.34 | % | 285.79 | % | 293.09 | % | |||||||||||||
| Nonaccrual loans to total loans | 0.44 | % | 0.40 | % | 0.39 | % | 0.42 | % | 0.41 | % | |||||||||||||
| Nonperforming assets to total loans plus OREO and repossessed assets | 0.47 | % | 0.45 | % | 0.44 | % | 0.48 | % | 0.48 | % | |||||||||||||
| Nonperforming assets to total assets | 0.34 | % | 0.33 | % | 0.32 | % | 0.35 | % | 0.34 | % | |||||||||||||
| Annualized year-to-date net charge offs (recoveries) to year-to-date average loans | 0.10 | % | 0.05 | % | — | % | — | % | (0.01) | % | |||||||||||||
N/M = Not meaningful
5
| Associated Banc-Corp Selected Asset Quality Information (continued) | |||||||||||||||||||||||
| (In thousands) | Jun 30, 2023 | Mar 31, 2023 | Seql Qtr % Change | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Comp Qtr % Change | ||||||||||||||||
| Nonaccrual loans | |||||||||||||||||||||||
| Commercial and industrial | $ | 34,907 | $ | 22,735 | 54 | % | $ | 14,329 | $ | 15,576 | $ | 843 | N/M | ||||||||||
| Commercial real estate—owner occupied | 1,444 | 1,478 | (2) | % | — | — | — | N/M | |||||||||||||||
| Commercial and business lending | 36,352 | 24,213 | 50 | % | 14,329 | 15,576 | 843 | N/M | |||||||||||||||
| Commercial real estate—investor | 22,068 | 25,122 | (12) | % | 29,380 | 37,479 | 46,823 | (53) | % | ||||||||||||||
| Real estate construction | 125 | 178 | (30) | % | 105 | 141 | 604 | (79) | % | ||||||||||||||
| Commercial real estate lending | 22,193 | 25,300 | (12) | % | 29,485 | 37,620 | 47,427 | (53) | % | ||||||||||||||
| Total commercial | 58,544 | 49,513 | 18 | % | 43,814 | 53,196 | 48,270 | 21 | % | ||||||||||||||
| Residential mortgage | 61,718 | 58,274 | 6 | % | 58,480 | 55,485 | 52,840 | 17 | % | ||||||||||||||
| Auto finance | 3,065 | 2,436 | 26 | % | 1,490 | 302 | 53 | N/M | |||||||||||||||
| Home equity | 7,788 | 7,246 | 7 | % | 7,487 | 7,325 | 7,100 | 10 | % | ||||||||||||||
| Other consumer | 163 | 100 | 63 | % | 197 | 98 | 83 | 96 | % | ||||||||||||||
| Total consumer | 72,733 | 68,056 | 7 | % | 67,654 | 63,210 | 60,075 | 21 | % | ||||||||||||||
| Total nonaccrual loans | $ | 131,278 | $ | 117,569 | 12 | % | $ | 111,467 | $ | 116,406 | $ | 108,345 | 21 | % | |||||||||
| Jun 30, 2023 | Mar 31, 2023 | Seql Qtr % Change | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Comp Qtr % Change | |||||||||||||||||
Restructured loans (accruing)(a) | |||||||||||||||||||||||
| Commercial and industrial | $ | 168 | $ | 47 | N/M | $ | 12,453 | $ | 14,829 | $ | 13,882 | N/A | |||||||||||
| Commercial real estate—owner occupied | — | — | N/M | 316 | 369 | 421 | N/A | ||||||||||||||||
| Commercial and business lending | 168 | 47 | N/M | 12,769 | 15,198 | 14,303 | N/A | ||||||||||||||||
| Commercial real estate—investor | — | — | N/M | 128 | 733 | 943 | N/A | ||||||||||||||||
| Real estate construction | — | — | N/M | 195 | 165 | 179 | N/A | ||||||||||||||||
| Commercial real estate lending | — | — | N/M | 324 | 898 | 1,122 | N/A | ||||||||||||||||
| Total commercial | 168 | 47 | N/M | 13,093 | 16,097 | 15,425 | N/A | ||||||||||||||||
| Residential mortgage | 126 | 126 | — | % | 16,829 | 16,169 | 15,829 | N/A | |||||||||||||||
| Auto finance | 80 | 61 | 31 | % | — | — | — | N/A | |||||||||||||||
| Home equity | 78 | 31 | 152 | % | 2,148 | 2,103 | 2,246 | N/A | |||||||||||||||
| Other consumer | 988 | 498 | 98 | % | 798 | 764 | 753 | N/A | |||||||||||||||
| Total consumer | 1,271 | 716 | 78 | % | 19,775 | 19,036 | 18,828 | N/A | |||||||||||||||
| Total restructured loans (accruing) | $ | 1,439 | $ | 763 | 89 | % | $ | 32,868 | $ | 35,132 | $ | 34,253 | N/A | ||||||||||
| Nonaccrual restructured loans (included in nonaccrual loans) | $ | 796 | $ | 341 | 133 | % | $ | 20,127 | $ | 21,650 | $ | 22,172 | N/A | ||||||||||
| Jun 30, 2023 | Mar 31, 2023 | Seql Qtr % Change | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Comp Qtr % Change | |||||||||||||||||
| Accruing loans 30-89 days past due | |||||||||||||||||||||||
| Commercial and industrial | $ | 12,005 | $ | 4,239 | 183 | % | $ | 6,283 | $ | 1,861 | $ | 1,642 | N/M | ||||||||||
| Commercial real estate—owner occupied | 1,484 | 2,955 | (50) | % | 230 | — | — | N/M | |||||||||||||||
| Commercial and business lending | 13,489 | 7,195 | 87 | % | 6,512 | 1,861 | 1,642 | N/M | |||||||||||||||
| Commercial real estate—investor | — | — | N/M | 1,067 | — | 5,484 | (100) | % | |||||||||||||||
| Real estate construction | 76 | — | N/M | 39 | 43 | — | N/M | ||||||||||||||||
| Commercial real estate lending | 76 | — | N/M | 1,105 | 43 | 5,484 | (99) | % | |||||||||||||||
| Total commercial | 13,565 | 7,195 | 89 | % | 7,618 | 1,904 | 7,126 | 90 | % | ||||||||||||||
| Residential mortgage | 8,961 | 7,626 | 18 | % | 9,874 | 6,517 | 5,315 | 69 | % | ||||||||||||||
| Auto finance | 11,429 | 8,640 | 32 | % | 9,408 | 6,206 | 2,906 | N/M | |||||||||||||||
| Home equity | 4,030 | 4,113 | (2) | % | 5,607 | 4,234 | 2,961 | 36 | % | ||||||||||||||
| Other consumer | 2,025 | 1,723 | 18 | % | 1,610 | 1,592 | 1,365 | 48 | % | ||||||||||||||
| Total consumer | 26,444 | 22,102 | 20 | % | 26,499 | 18,549 | 12,547 | 111 | % | ||||||||||||||
| Total accruing loans 30-89 days past due | $ | 40,008 | $ | 29,297 | 37 | % | $ | 34,117 | $ | 20,452 | $ | 19,673 | 103 | % | |||||||||
| Jun 30, 2023 | Mar 31, 2023 | Seql Qtr % Change | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Comp Qtr % Change | |||||||||||||||||
| Potential problem loans | |||||||||||||||||||||||
| Commercial and industrial | $ | 205,228 | $ | 135,047 | 52 | % | $ | 136,549 | $ | 108,556 | $ | 104,645 | 96 | % | |||||||||
| Commercial real estate—owner occupied | 29,396 | 32,077 | (8) | % | 34,422 | 28,287 | 38,628 | (24) | % | ||||||||||||||
| Commercial and business lending | 234,624 | 167,124 | 40 | % | 170,971 | 136,843 | 143,273 | 64 | % | ||||||||||||||
| Commercial real estate—investor | 106,662 | 89,653 | 19 | % | 92,535 | 117,982 | 132,635 | (20) | % | ||||||||||||||
| Real estate construction | — | — | N/M | 970 | — | 82 | (100) | % | |||||||||||||||
| Commercial real estate lending | 106,662 | 89,653 | 19 | % | 93,505 | 117,982 | 132,717 | (20) | % | ||||||||||||||
| Total commercial | 341,286 | 256,776 | 33 | % | 264,476 | 254,825 | 275,990 | 24 | % | ||||||||||||||
| Residential mortgage | 1,646 | 1,684 | (2) | % | 1,978 | 2,845 | 3,297 | (50) | % | ||||||||||||||
| Home equity | 240 | 244 | (2) | % | 197 | 185 | 188 | 28 | % | ||||||||||||||
| Total consumer | 1,886 | 1,928 | (2) | % | 2,175 | 3,030 | 3,486 | (46) | % | ||||||||||||||
| Total potential problem loans | $ | 343,173 | $ | 258,704 | 33 | % | $ | 266,651 | $ | 257,855 | $ | 279,475 | 23 | % | |||||||||
N/M = Not meaningful
Numbers may not sum due to rounding.
(a) On January 1, 2023, the Corporation adopted ASU 2022-02. Under this update, troubled debt restructurings were eliminated and replaced with a modified loan classification. As a result, amounts reported for 2023 periods will not be comparable to amounts reported for 2022 periods.
6
| Associated Banc-Corp Net Interest Income Analysis - Fully Tax-Equivalent Basis - Sequential and Comparable Quarter | |||||||||||||||||||||||||||||
| Three Months Ended | |||||||||||||||||||||||||||||
| June 30, 2023 | March 31, 2023 | June 30, 2022 | |||||||||||||||||||||||||||
| ($ in thousands) | Average Balance | Interest Income /Expense | Average Yield /Rate | Average Balance | Interest Income /Expense | Average Yield /Rate | Average Balance | Interest Income /Expense | Average Yield /Rate | ||||||||||||||||||||
| Assets | |||||||||||||||||||||||||||||
| Earning assets | |||||||||||||||||||||||||||||
Loans (a) (b) (c) | |||||||||||||||||||||||||||||
| Commercial and business lending | $ | 10,899,337 | $ | 184,080 | 6.77 | % | $ | 10,616,026 | $ | 167,174 | 6.39 | % | $ | 9,604,612 | $ | 71,276 | 2.98 | % | |||||||||||
| Commercial real estate lending | 7,295,367 | 127,967 | 7.04 | % | 7,251,193 | 119,087 | 6.66 | % | 6,363,395 | 53,233 | 3.36 | % | |||||||||||||||||
| Total commercial | 18,194,703 | 312,047 | 6.88 | % | 17,867,219 | 286,262 | 6.50 | % | 15,968,007 | 124,509 | 3.13 | % | |||||||||||||||||
| Residential mortgage | 8,701,496 | 72,056 | 3.31 | % | 8,584,528 | 70,711 | 3.30 | % | 7,860,220 | 58,434 | 2.97 | % | |||||||||||||||||
| Auto finance | 1,654,523 | 19,701 | 4.78 | % | 1,490,115 | 16,458 | 4.48 | % | 689,027 | 6,017 | 3.50 | % | |||||||||||||||||
| Other retail | 887,574 | 20,135 | 9.08 | % | 903,956 | 18,494 | 8.23 | % | 880,910 | 11,370 | 5.17 | % | |||||||||||||||||
| Total loans | 29,438,297 | 423,939 | 5.77 | % | 28,845,818 | 391,925 | 5.49 | % | 25,398,163 | 200,331 | 3.16 | % | |||||||||||||||||
| Investment securities | |||||||||||||||||||||||||||||
| Taxable | 5,304,381 | 35,845 | 2.70 | % | 4,912,416 | 30,142 | 2.45 | % | 4,435,273 | 18,317 | 1.65 | % | |||||||||||||||||
Tax-exempt(a) | 2,314,825 | 20,152 | 3.48 | % | 2,329,519 | 20,192 | 3.47 | % | 2,427,068 | 20,637 | 3.40 | % | |||||||||||||||||
| Other short-term investments | 511,487 | 6,086 | 4.77 | % | 493,061 | 5,329 | 4.37 | % | 352,310 | 2,420 | 2.75 | % | |||||||||||||||||
| Investments and other | 8,130,693 | 62,083 | 3.05 | % | 7,734,996 | 55,664 | 2.88 | % | 7,214,651 | 41,374 | 2.29 | % | |||||||||||||||||
| Total earning assets | 37,568,991 | $ | 486,022 | 5.18 | % | 36,580,814 | $ | 447,589 | 4.94 | % | 32,612,813 | $ | 241,705 | 2.97 | % | ||||||||||||||
| Other assets, net | 2,989,321 | 3,026,251 | 3,119,770 | ||||||||||||||||||||||||||
| Total assets | $ | 40,558,311 | $ | 39,607,065 | $ | 35,732,583 | |||||||||||||||||||||||
| Liabilities and stockholders' equity | |||||||||||||||||||||||||||||
| Interest-bearing liabilities | |||||||||||||||||||||||||||||
| Interest-bearing deposits | |||||||||||||||||||||||||||||
| Savings | $ | 4,749,808 | $ | 15,160 | 1.28 | % | $ | 4,664,624 | $ | 9,859 | 0.86 | % | $ | 4,682,783 | $ | 530 | 0.05 | % | |||||||||||
| Interest-bearing demand | 6,663,775 | 34,961 | 2.10 | % | 6,814,487 | 29,918 | 1.78 | % | 6,413,077 | 2,977 | 0.19 | % | |||||||||||||||||
| Money market | 6,743,810 | 43,529 | 2.59 | % | 7,536,393 | 41,637 | 2.24 | % | 6,910,505 | 2,203 | 0.13 | % | |||||||||||||||||
| Network transaction deposits | 1,468,006 | 18,426 | 5.03 | % | 1,147,089 | 12,825 | 4.53 | % | 775,593 | 1,480 | 0.77 | % | |||||||||||||||||
| Time deposits | 4,985,949 | 50,119 | 4.03 | % | 2,362,260 | 15,182 | 2.61 | % | 1,255,292 | 829 | 0.26 | % | |||||||||||||||||
| Total interest-bearing deposits | 24,611,348 | 162,196 | 2.64 | % | 22,524,853 | 109,422 | 1.97 | % | 20,037,250 | 8,019 | 0.16 | % | |||||||||||||||||
| Federal funds purchased and securities sold under agreements to repurchase | 285,754 | 2,261 | 3.17 | % | 429,780 | 3,143 | 2.97 | % | 454,519 | 406 | 0.36 | % | |||||||||||||||||
| Commercial paper | 12,179 | — | 0.01 | % | 17,339 | — | 0.01 | % | 23,154 | 1 | 0.01 | % | |||||||||||||||||
| FHLB advances | 3,796,106 | 49,261 | 5.20 | % | 4,254,532 | 49,960 | 4.76 | % | 2,423,771 | 9,689 | 1.60 | % | |||||||||||||||||
| Long-term funding | 543,003 | 9,596 | 7.07 | % | 408,175 | 6,281 | 6.16 | % | 249,805 | 2,730 | 4.37 | % | |||||||||||||||||
| Total short and long-term funding | 4,637,042 | 61,118 | 5.28 | % | 5,109,826 | 59,384 | 4.71 | % | 3,151,249 | 12,826 | 1.63 | % | |||||||||||||||||
| Total interest-bearing liabilities | 29,248,389 | $ | 223,314 | 3.06 | % | 27,634,679 | $ | 168,807 | 2.48 | % | 23,188,499 | $ | 20,845 | 0.36 | % | ||||||||||||||
| Noninterest-bearing demand deposits | 6,669,787 | 7,340,219 | 8,133,492 | ||||||||||||||||||||||||||
| Other liabilities | 511,074 | 570,166 | 473,478 | ||||||||||||||||||||||||||
| Stockholders’ equity | 4,129,061 | 4,062,001 | 3,937,114 | ||||||||||||||||||||||||||
| Total liabilities and stockholders’ equity | $ | 40,558,311 | $ | 39,607,065 | $ | 35,732,583 | |||||||||||||||||||||||
| Interest rate spread | 2.12 | % | 2.46 | % | 2.61 | % | |||||||||||||||||||||||
| Net free funds | 0.68 | % | 0.61 | % | 0.10 | % | |||||||||||||||||||||||
| Fully tax-equivalent net interest income and net interest margin ("NIM") | $ | 262,708 | 2.80 | % | $ | 278,782 | 3.07 | % | $ | 220,860 | 2.71 | % | |||||||||||||||||
| Fully tax-equivalent adjustment | 4,791 | 4,772 | 4,713 | ||||||||||||||||||||||||||
| Net interest income | $ | 257,917 | $ | 274,010 | $ | 216,146 | |||||||||||||||||||||||
Numbers may not sum due to rounding.
(a)The yield on tax-exempt loans and securities is computed on a fully tax-equivalent basis using a tax rate of 21% and is net of the effects of certain disallowed interest deductions.
(b)Nonaccrual loans and loans held for sale have been included in the average balances.
(c)Interest income includes amortization of net deferred loan origination costs and net accreted purchase loan discount.
7
| Associated Banc-Corp Net Interest Income Analysis - Fully Tax-Equivalent Basis - Year Over Year | ||||||||||||||||||||
| Six Months Ended June 30, | ||||||||||||||||||||
| 2023 | 2022 | |||||||||||||||||||
| ($ in thousands) | Average Balance | Interest Income /Expense | Average Yield / Rate | Average Balance | Interest Income /Expense | Average Yield / Rate | ||||||||||||||
| Assets | ||||||||||||||||||||
| Earning assets | ||||||||||||||||||||
Loans (a) (b) (c) | ||||||||||||||||||||
| Commercial and business lending | $ | 10,758,464 | $ | 351,254 | 6.58 | % | $ | 9,334,947 | $ | 126,756 | 2.74 | % | ||||||||
| Commercial real estate lending | 7,273,402 | 247,054 | 6.85 | % | 6,270,743 | 97,119 | 3.12 | % | ||||||||||||
| Total commercial | 18,031,866 | 598,308 | 6.69 | % | 15,605,690 | 223,876 | 2.89 | % | ||||||||||||
Residential mortgage | 8,643,335 | 142,767 | 3.30 | % | 7,766,296 | 113,837 | 2.93 | % | ||||||||||||
| Auto finance | 1,572,773 | 36,159 | 4.64 | % | 498,175 | 8,667 | 3.51 | % | ||||||||||||
| Other retail | 895,720 | 38,629 | 8.65 | % | 881,382 | 22,032 | 5.02 | % | ||||||||||||
| Total loans | 29,143,694 | 815,864 | 5.64 | % | 24,751,542 | 368,412 | 2.99 | % | ||||||||||||
| Investment securities | ||||||||||||||||||||
| Taxable | 5,109,481 | 65,987 | 2.58 | % | 4,392,926 | 34,789 | 1.58 | % | ||||||||||||
Tax-exempt (a) | 2,322,132 | 40,344 | 3.47 | % | 2,405,952 | 40,933 | 3.40 | % | ||||||||||||
| Other short-term investments | 502,325 | 11,415 | 4.58 | % | 751,407 | 4,413 | 1.18 | % | ||||||||||||
| Investments and other | 7,933,938 | 117,746 | 2.97 | % | 7,550,285 | 80,135 | 2.12 | % | ||||||||||||
| Total earning assets | 37,077,632 | $ | 933,610 | 5.06 | % | 32,301,828 | $ | 448,547 | 2.79 | % | ||||||||||
| Other assets, net | 3,007,684 | 3,166,026 | ||||||||||||||||||
| Total assets | $ | 40,085,316 | $ | 35,467,853 | ||||||||||||||||
| Liabilities and stockholders' equity | ||||||||||||||||||||
| Interest-bearing liabilities | ||||||||||||||||||||
| Interest-bearing deposits | ||||||||||||||||||||
| Savings | $ | 4,707,451 | $ | 25,019 | 1.07 | % | $ | 4,606,809 | $ | 910 | 0.04 | % | ||||||||
| Interest-bearing demand | 6,738,715 | 64,880 | 1.94 | % | 6,566,704 | 4,002 | 0.12 | % | ||||||||||||
| Money market | 7,137,912 | 85,167 | 2.41 | % | 6,970,392 | 3,168 | 0.09 | % | ||||||||||||
| Network transaction deposits | 1,308,434 | 31,252 | 4.82 | % | 755,357 | 1,745 | 0.47 | % | ||||||||||||
| Time deposits | 3,681,352 | 65,301 | 3.58 | % | 1,284,037 | 1,766 | 0.28 | % | ||||||||||||
| Total interest-bearing deposits | 23,573,864 | 271,618 | 2.32 | % | 20,183,299 | 11,591 | 0.12 | % | ||||||||||||
| Federal funds purchased and securities sold under agreements to repurchase | 357,369 | 5,404 | 3.05 | % | 374,661 | 444 | 0.24 | % | ||||||||||||
| Commercial paper | 14,745 | 1 | 0.01 | % | 25,545 | 2 | 0.01 | % | ||||||||||||
| FHLB advances | 4,024,052 | 99,222 | 4.97 | % | 2,019,622 | 17,871 | 1.78 | % | ||||||||||||
| Long-term funding | 475,961 | 15,876 | 6.67 | % | 249,719 | 5,460 | 4.37 | % | ||||||||||||
| Total short and long-term funding | 4,872,128 | 120,503 | 4.98 | % | 2,669,547 | 23,776 | 1.79 | % | ||||||||||||
| Total interest-bearing liabilities | 28,445,992 | $ | 392,121 | 2.78 | % | 22,852,845 | $ | 35,367 | 0.31 | % | ||||||||||
| Noninterest-bearing demand deposits | 7,003,151 | 8,224,440 | ||||||||||||||||||
| Other liabilities | 540,457 | 428,752 | ||||||||||||||||||
| Stockholders’ equity | 4,095,717 | 3,961,816 | ||||||||||||||||||
| Total liabilities and stockholders’ equity | $ | 40,085,316 | $ | 35,467,853 | ||||||||||||||||
| Interest rate spread | 2.28 | % | 2.48 | % | ||||||||||||||||
| Net free funds | 0.65 | % | 0.09 | % | ||||||||||||||||
| Fully tax-equivalent net interest income and net interest margin ("NIM") | $ | 541,490 | 2.93 | % | $ | 413,179 | 2.57 | % | ||||||||||||
| Fully tax-equivalent adjustment | 9,563 | 9,286 | ||||||||||||||||||
| Net interest income | $ | 531,927 | $ | 403,893 | ||||||||||||||||
Numbers may not sum due to rounding.
(a)The yield on tax-exempt loans and securities is computed on a fully tax-equivalent basis using a tax rate of 21% and is net of the effects of certain disallowed interest deductions.
(b)Nonaccrual loans and loans held for sale have been included in the average balances.
(c)Interest income includes amortization of net deferred loan origination costs and net accreted purchase loan discount.
8
| Associated Banc-Corp Loan and Deposit Composition | |||||||||||||||||||||||
| ($ in thousands) | |||||||||||||||||||||||
| Period end loan composition | Jun 30, 2023 | Mar 31, 2023 | Seql Qtr % Change | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Comp Qtr % Change | ||||||||||||||||
| Commercial and industrial | $ | 10,055,487 | $ | 9,869,781 | 2 | % | $ | 9,759,454 | $ | 9,571,925 | $ | 9,256,685 | 9 | % | |||||||||
| Commercial real estate—owner occupied | 1,058,237 | 1,050,236 | 1 | % | 991,722 | 999,786 | 928,152 | 14 | % | ||||||||||||||
| Commercial and business lending | 11,113,724 | 10,920,017 | 2 | % | 10,751,176 | 10,571,711 | 10,184,836 | 9 | % | ||||||||||||||
| Commercial real estate—investor | 5,312,928 | 5,094,249 | 4 | % | 5,080,344 | 5,064,289 | 4,790,241 | 11 | % | ||||||||||||||
| Real estate construction | 2,009,060 | 2,147,070 | (6) | % | 2,155,222 | 1,835,159 | 1,775,648 | 13 | % | ||||||||||||||
| Commercial real estate lending | 7,321,988 | 7,241,318 | 1 | % | 7,235,565 | 6,899,449 | 6,565,889 | 12 | % | ||||||||||||||
| Total commercial | 18,435,711 | 18,161,335 | 2 | % | 17,986,742 | 17,471,159 | 16,750,726 | 10 | % | ||||||||||||||
| Residential mortgage | 8,746,345 | 8,605,164 | 2 | % | 8,511,550 | 8,314,902 | 8,002,943 | 9 | % | ||||||||||||||
| Auto finance | 1,777,974 | 1,551,538 | 15 | % | 1,382,073 | 1,117,136 | 847,969 | 110 | % | ||||||||||||||
| Home equity | 615,506 | 609,787 | 1 | % | 624,353 | 612,608 | 592,843 | 4 | % | ||||||||||||||
| Other consumer | 273,367 | 279,248 | (2) | % | 294,851 | 301,475 | 300,217 | (9) | % | ||||||||||||||
| Total consumer | 11,413,193 | 11,045,737 | 3 | % | 10,812,828 | 10,346,121 | 9,743,972 | 17 | % | ||||||||||||||
| Total loans | $ | 29,848,904 | $ | 29,207,072 | 2 | % | $ | 28,799,569 | $ | 27,817,280 | $ | 26,494,698 | 13 | % | |||||||||
| Period end deposit and customer funding composition | Jun 30, 2023 | Mar 31, 2023 | Seql Qtr % Change | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Comp Qtr % Change | ||||||||||||||||
| Noninterest-bearing demand | $ | 6,565,666 | $ | 7,328,689 | (10) | % | $ | 7,760,811 | $ | 8,224,579 | $ | 8,085,702 | (19) | % | |||||||||
| Savings | 4,777,415 | 4,730,472 | 1 | % | 4,604,848 | 4,708,720 | 4,708,156 | 1 | % | ||||||||||||||
| Interest-bearing demand | 7,037,959 | 6,977,121 | 1 | % | 7,100,727 | 7,122,218 | 6,789,722 | 4 | % | ||||||||||||||
| Money market | 7,521,930 | 8,357,625 | (10) | % | 8,239,610 | 7,909,232 | 7,769,415 | (3) | % | ||||||||||||||
| Brokered CDs | 3,818,325 | 1,185,565 | N/M | 541,916 | — | 2,121 | N/M | ||||||||||||||||
| Other time deposits | 2,293,114 | 1,752,351 | 31 | % | 1,388,242 | 1,233,833 | 1,221,460 | 88 | % | ||||||||||||||
| Total deposits | 32,014,409 | 30,331,824 | 6 | % | 29,636,154 | 29,198,581 | 28,576,577 | 12 | % | ||||||||||||||
Other customer funding(a) | 170,873 | 226,258 | (24) | % | 261,767 | 283,856 | 296,440 | (42) | % | ||||||||||||||
| Total deposits and other customer funding | $ | 32,185,282 | $ | 30,558,081 | 5 | % | $ | 29,897,921 | $ | 29,482,437 | $ | 28,873,017 | 11 | % | |||||||||
Network transaction deposits(b) | $ | 1,600,619 | $ | 1,273,420 | 26 | % | $ | 979,003 | $ | 864,086 | $ | 891,902 | 79 | % | |||||||||
Net deposits and other customer funding(c) | $ | 26,766,338 | $ | 28,099,096 | (5) | % | $ | 28,377,001 | $ | 28,618,351 | $ | 27,978,993 | (4) | % | |||||||||
| Quarter average loan composition | Jun 30, 2023 | Mar 31, 2023 | Seql Qtr % Change | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Comp Qtr % Change | ||||||||||||||||
| Commercial and industrial | $ | 9,831,956 | $ | 9,600,838 | 2 | % | $ | 9,528,180 | $ | 9,221,970 | $ | 8,651,810 | 14 | % | |||||||||
| Commercial real estate—owner occupied | 1,067,381 | 1,015,187 | 5 | % | 1,001,805 | 970,493 | 952,802 | 12 | % | ||||||||||||||
| Commercial and business lending | 10,899,337 | 10,616,026 | 3 | % | 10,529,984 | 10,192,463 | 9,604,612 | 13 | % | ||||||||||||||
| Commercial real estate—investor | 5,206,430 | 5,093,122 | 2 | % | 5,048,419 | 4,891,530 | 4,570,300 | 14 | % | ||||||||||||||
| Real estate construction | 2,088,937 | 2,158,072 | (3) | % | 2,013,986 | 1,876,524 | 1,793,095 | 16 | % | ||||||||||||||
| Commercial real estate lending | 7,295,367 | 7,251,193 | 1 | % | 7,062,405 | 6,768,054 | 6,363,395 | 15 | % | ||||||||||||||
| Total commercial | 18,194,703 | 17,867,219 | 2 | % | 17,592,389 | 16,960,517 | 15,968,007 | 14 | % | ||||||||||||||
| Residential mortgage | 8,701,496 | 8,584,528 | 1 | % | 8,443,661 | 8,223,531 | 7,860,220 | 11 | % | ||||||||||||||
| Auto finance | 1,654,523 | 1,490,115 | 11 | % | 1,244,436 | 969,918 | 689,027 | 140 | % | ||||||||||||||
| Home equity | 612,045 | 618,724 | (1) | % | 619,044 | 601,821 | 586,072 | 4 | % | ||||||||||||||
| Other consumer | 275,530 | 285,232 | (3) | % | 295,804 | 299,917 | 294,837 | (7) | % | ||||||||||||||
| Total consumer | 11,243,594 | 10,978,599 | 2 | % | 10,602,945 | 10,095,186 | 9,430,156 | 19 | % | ||||||||||||||
Total loans(d) | $ | 29,438,297 | $ | 28,845,818 | 2 | % | $ | 28,195,334 | $ | 27,055,703 | $ | 25,398,163 | 16 | % | |||||||||
| Quarter average deposit composition | Jun 30, 2023 | Mar 31, 2023 | Seql Qtr % Change | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Comp Qtr % Change | ||||||||||||||||
| Noninterest-bearing demand | $ | 6,669,787 | $ | 7,340,219 | (9) | % | $ | 8,088,435 | $ | 8,119,475 | $ | 8,133,492 | (18) | % | |||||||||
| Savings | 4,749,808 | 4,664,624 | 2 | % | 4,660,696 | 4,735,285 | 4,682,783 | 1 | % | ||||||||||||||
| Interest-bearing demand | 6,663,775 | 6,814,487 | (2) | % | 6,831,213 | 6,587,404 | 6,413,077 | 4 | % | ||||||||||||||
| Money market | 6,743,810 | 7,536,393 | (11) | % | 7,382,793 | 7,328,165 | 6,910,505 | (2) | % | ||||||||||||||
| Network transaction deposits | 1,468,006 | 1,147,089 | 28 | % | 901,168 | 873,168 | 775,593 | 89 | % | ||||||||||||||
| Brokered CDs | 3,001,775 | 810,889 | N/M | 190,406 | 734 | 978 | N/M | ||||||||||||||||
| Other time deposits | 1,984,174 | 1,551,371 | 28 | % | 1,272,797 | 1,230,126 | 1,254,314 | 58 | % | ||||||||||||||
| Total deposits | 31,281,134 | 29,865,072 | 5 | % | 29,327,509 | 28,874,357 | 28,170,742 | 11 | % | ||||||||||||||
Other customer funding(a) | 196,051 | 245,349 | (20) | % | 306,122 | 326,324 | 315,639 | (38) | % | ||||||||||||||
| Total deposits and other customer funding | $ | 31,477,186 | $ | 30,110,421 | 5 | % | $ | 29,633,631 | $ | 29,200,680 | $ | 28,486,381 | 10 | % | |||||||||
Net deposits and other customer funding(c) | $ | 27,007,405 | $ | 28,152,443 | (4) | % | $ | 28,542,056 | $ | 28,326,779 | $ | 27,709,810 | (3) | % | |||||||||
N/M = Not meaningful
Numbers may not sum due to rounding.
(a) Includes repurchase agreements and commercial paper.
(b) Included above in interest-bearing demand and money market.
(c) Total deposits and other customer funding, excluding brokered CDs and network transaction deposits
(d) Nonaccrual loans and loans held for sale have been included in the average balances.
9
| Associated Banc-Corp Non-GAAP Financial Measures Reconciliation | YTD | YTD | |||||||||||||||||||||
| ($ in millions, except per share data) | Jun 2023 | Jun 2022 | 2Q23 | 1Q23 | 4Q22 | 3Q22 | 2Q22 | ||||||||||||||||
Selected equity and performance ratios(a)(b)(c) | |||||||||||||||||||||||
| Tangible common equity / tangible assets | 6.94 | % | 7.03 | % | 6.97 | % | 7.06 | % | 7.23 | % | |||||||||||||
| Return on average equity | 9.38 | % | 8.20 | % | 8.47 | % | 10.32 | % | 10.81 | % | 9.59 | % | 8.85 | % | |||||||||
| Return on average tangible common equity | 13.79 | % | 12.27 | % | 12.38 | % | 15.26 | % | 16.15 | % | 14.32 | % | 13.29 | % | |||||||||
| Return on average common equity Tier 1 | 12.11 | % | 11.03 | % | 10.88 | % | 13.38 | % | 14.04 | % | 12.69 | % | 11.77 | % | |||||||||
| Return on average tangible assets | 1.00 | % | 0.97 | % | 0.90 | % | 1.11 | % | 1.18 | % | 1.08 | % | 1.03 | % | |||||||||
| Average stockholders' equity / average assets | 10.22 | % | 11.17 | % | 10.18 | % | 10.26 | % | 10.40 | % | 10.69 | % | 11.02 | % | |||||||||
Tangible common equity reconciliation(a) | |||||||||||||||||||||||
| Common equity | $ | 3,929 | $ | 3,932 | $ | 3,821 | $ | 3,760 | $ | 3,766 | |||||||||||||
| Goodwill and other intangible assets, net | (1,150) | (1,152) | (1,154) | (1,156) | (1,159) | ||||||||||||||||||
| Tangible common equity | $ | 2,779 | $ | 2,779 | $ | 2,667 | $ | 2,603 | $ | 2,608 | |||||||||||||
Tangible assets reconciliation(a) | |||||||||||||||||||||||
| Total assets | $ | 41,219 | $ | 40,703 | $ | 39,406 | $ | 38,050 | $ | 37,236 | |||||||||||||
| Goodwill and other intangible assets, net | (1,150) | (1,152) | (1,154) | (1,156) | (1,159) | ||||||||||||||||||
| Tangible assets | $ | 40,070 | $ | 39,550 | $ | 38,251 | $ | 36,893 | $ | 36,077 | |||||||||||||
Average tangible common equity and average common equity Tier 1 reconciliation(a) | |||||||||||||||||||||||
| Common equity | $ | 3,902 | $ | 3,769 | $ | 3,935 | $ | 3,868 | $ | 3,798 | $ | 3,791 | $ | 3,744 | |||||||||
| Goodwill and other intangible assets, net | (1,152) | (1,161) | (1,151) | (1,153) | (1,155) | (1,158) | (1,160) | ||||||||||||||||
| Tangible common equity | 2,750 | 2,608 | 2,784 | 2,715 | 2,642 | 2,634 | 2,584 | ||||||||||||||||
| Modified CECL transitional amount | 45 | 67 | 45 | 45 | 67 | 67 | 67 | ||||||||||||||||
| Accumulated other comprehensive loss | 255 | 126 | 252 | 259 | 254 | 190 | 170 | ||||||||||||||||
| Deferred tax assets, net | 28 | 39 | 28 | 28 | 29 | 30 | 39 | ||||||||||||||||
| Average common equity Tier 1 | $ | 3,077 | $ | 2,840 | $ | 3,108 | $ | 3,047 | $ | 2,993 | $ | 2,921 | $ | 2,860 | |||||||||
Average tangible assets reconciliation(a) | |||||||||||||||||||||||
| Total assets | $ | 40,085 | $ | 35,468 | $ | 40,558 | $ | 39,607 | $ | 38,385 | $ | 37,272 | $ | 35,733 | |||||||||
| Goodwill and other intangible assets, net | (1,152) | (1,161) | (1,151) | (1,153) | (1,155) | (1,158) | (1,160) | ||||||||||||||||
| Tangible assets | $ | 38,933 | $ | 34,307 | $ | 39,407 | $ | 38,454 | $ | 37,230 | $ | 36,114 | $ | 34,573 | |||||||||
Adjusted net income reconciliation(b) | |||||||||||||||||||||||
| Net income | $ | 191 | $ | 161 | $ | 87 | $ | 103 | $ | 109 | $ | 96 | $ | 87 | |||||||||
| Other intangible amortization, net of tax | 3 | 3 | 2 | 2 | 2 | 2 | 2 | ||||||||||||||||
| Adjusted net income | $ | 194 | $ | 164 | $ | 89 | $ | 105 | $ | 110 | $ | 98 | $ | 88 | |||||||||
Adjusted net income available to common equity reconciliation(b) | |||||||||||||||||||||||
| Net income available to common equity | $ | 185 | $ | 155 | $ | 84 | $ | 100 | $ | 106 | $ | 93 | $ | 84 | |||||||||
| Other intangible amortization, net of tax | 3 | 3 | 2 | 2 | 2 | 2 | 2 | ||||||||||||||||
| Adjusted net income available to common equity | $ | 188 | $ | 159 | $ | 86 | $ | 102 | $ | 108 | $ | 95 | $ | 86 | |||||||||
Selected trend information(d) | |||||||||||||||||||||||
| Wealth management fees | $ | 41 | $ | 44 | $ | 20 | $ | 20 | $ | 20 | $ | 20 | $ | 21 | |||||||||
| Service charges and deposit account fees | 25 | 33 | 12 | 13 | 14 | 15 | 17 | ||||||||||||||||
| Card-based fees | 22 | 21 | 11 | 11 | 11 | 11 | 11 | ||||||||||||||||
| Other fee-based revenue | 9 | 8 | 4 | 4 | 3 | 4 | 4 | ||||||||||||||||
| Fee-based revenue | 97 | 107 | 49 | 48 | 49 | 51 | 54 | ||||||||||||||||
| Other | 31 | 43 | 17 | 14 | 13 | 20 | 22 | ||||||||||||||||
| Total noninterest income | $ | 128 | $ | 150 | $ | 66 | $ | 62 | $ | 62 | $ | 71 | $ | 75 | |||||||||
Pre-tax pre-provision income(e) | |||||||||||||||||||||||
| Income before income taxes | $ | 241 | $ | 203 | $ | 111 | $ | 131 | $ | 134 | $ | 122 | $ | 110 | |||||||||
| Provision for credit losses | 40 | (4) | 22 | 18 | 20 | 17 | — | ||||||||||||||||
| Pre-tax pre-provision income | $ | 281 | $ | 199 | $ | 133 | $ | 149 | $ | 154 | $ | 139 | $ | 110 | |||||||||
Efficiency ratio reconciliation(f) | |||||||||||||||||||||||
| Federal Reserve efficiency ratio | 57.26 | % | 63.51 | % | 58.49 | % | 56.07 | % | 55.47 | % | 60.32 | % | 61.53 | % | |||||||||
| Fully tax-equivalent adjustment | (0.82) | % | (1.05) | % | (0.85) | % | (0.79) | % | (0.77) | % | (0.87) | % | (0.98) | % | |||||||||
| Other intangible amortization | (0.67) | % | (0.80) | % | (0.68) | % | (0.66) | % | (0.62) | % | (0.67) | % | (0.76) | % | |||||||||
| Fully tax-equivalent efficiency ratio | 55.78 | % | 61.68 | % | 56.96 | % | 54.64 | % | 54.08 | % | 58.79 | % | 59.80 | % | |||||||||
Numbers may not sum due to rounding.
(a)Tangible common equity and tangible assets exclude goodwill and other intangible assets, net.
(b)Adjusted net income and adjusted net income available to common equity, which are used in the calculation of return on average tangible assets and return on average tangible common equity, respectively, add back other intangible amortization, net of tax.
(c)These capital measurements are used by management, regulators, investors, and analysts to assess, monitor and compare the quality and composition of our capital with the capital of other financial services companies.
(d)These financial measures have been included as they provide meaningful supplemental information to assess trends in the Corporation’s results of operations.
(e)Management believes this measure is meaningful because it reflects adjustments commonly made by management, investors, regulators, and analysts to evaluate the adequacy of earnings per common share, provide greater understanding of ongoing operations, and enhance comparability of results with prior periods.
(f)The efficiency ratio as defined by the Federal Reserve guidance is noninterest expense (which includes the provision for unfunded commitments) divided by the sum of net interest income plus noninterest income, excluding investment securities gains (losses), net. The fully tax-equivalent efficiency ratio is noninterest expense (which includes the provision for unfunded commitments), excluding other intangible amortization, divided by the sum of fully tax-equivalent net interest income plus noninterest income, excluding investment securities gains (losses), net.
10
Second Quarter 2023 Earnings Presentation JULY 20, 2023 Exhibit 99.2
1 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.
2 $111 million Income Before Income Taxes (up slightly vs. 6/30/2022) $29.8 billion Total Period End Loans (+13% vs. 6/30/2022) $32.0 billion Total Period End Deposits (+12% vs. 6/30/2022) 6% YoY Operating Leverage (6/30/2022 to 6/30/2023) $84 million Net Income Available to Common Equity (up slightly vs. 6/30/2022) $133 million Pre-Tax Pre-Provision Income2 (+21% vs. 6/30/2022) Second Quarter 2023 Results 1 All figures shown on an end of period basis with comparisons to the first quarter of 2023 unless otherwise noted. 2 This is a non-GAAP financial measure. See appendix for a reconciliation of non-GAAP financial measures to GAAP financial measures. ▪ Total period end loan growth of $642 million (+2%) ▪ Total period end deposit growth of $1.7 billion (+6%) ▪ Net interest income of $258 million (-6%) ▪ Net interest margin of 2.80% (-27 bps) ▪ Pre-tax income of $111 million; pre-tax pre-provision income2 of $133 million ▪ Return on average equity of 8.47%; return on average tangible common equity2 of 12.38% ▪ CET1 ratio of 9.48% ▪ NCOs / average loans (annualized) of 0.15% ▪ Provision for credit losses on loans of $22 million ▪ ACLL / loans increased 1 basis point to 1.26% ▪ Tangible book value / share of $18.41 2Q 2023 Highlights1 ASB reports 2Q 2023 net income available to common equity of $84 million, or $0.56 per common share | 2
3 Strong Credit Risk Profile We’ve significantly de-risked our portfolio since 2009 Prime/super prime consumer portfolios Geographically anchored in stable Midwest markets Replaced high-risk portfolios with lower-risk asset classes Diversified CRE portfolio with limited urban office exposure
4 We continued to add high-quality loans in select segments during 2Q Quarterly Loan Trends Commercial & Business Lending Commercial Real Estate Consumer Lending $1.6 $1.9 $2.2 $2.4 $2.5 $7.9 $8.2 $8.4 $8.6 $8.7 $6.4 $6.8 $7.1 $7.3 $7.3 $9.6 $10.2 $10.5 $10.6 $10.9 $25.4 $27.1 $28.2 $28.8 $29.4 2Q 2022 3Q 2022 4Q 2022 1Q 2023 2Q 2023 ($ in billions) Commercial & Business Lending Commercial Real Estate Residential Mortgage Auto Finance, Home Equity & Other Consumer Average Quarterly Loans ($ in millions) $(163) $(138) $(95) $(5) $5 $58 $123 $141 $219 $226 $272 All Other Specialized CRE Investor REIT Residential Mortgage General Commercial Auto Finance EoP Loan Change (3/31/2023 to 6/30/2023) CRE Construction Mortgage Warehouse Home Equity & Other Cons. Power & Utilities Credit Cards
5 Average Quarterly Deposits $0.8 $0.9 $0.9 $1.1 $1.5 $1.3 $1.2 $1.5 $2.4 $5.0 $6.9 $7.3 $7.4 $7.5 $6.7 $4.7 $4.7 $4.7 $4.7 $4.7 $6.4 $6.6 $6.8 $6.8 $6.7 $8.1 $8.1 $8.1 $7.3 $6.7 $28.2 $28.9 $29.3 $29.9 $31.3 2Q 2022 3Q 2022 4Q 2022 1Q 2023 2Q 2023 Quarterly Deposit & Funding Trends We flexed into brokered & network deposits during 2Q to fund growth, build liquidity & pay down FHLB ($ in billions) EoP Funding Change (3/31/2023 to 6/30/2023) ($ in millions) Time Deposits Savings Money Market Network Transaction Deposits Noninterest-Bearing Demand Interest-Bearing Demand $(926) $(763) $(176) $47 $541 Customer CDs Money Market Savings $(1,345) $94 $327 $2,633 Network Transaction Deposits Brokered CDs Noninterest-Bearing Demand Interest-Bearing Demand Other Wholesale Funding FHLB Short-Term Advances
6 Despite recent industry-wide volatility, our efforts to grow and deepen customer relationships remain on track Expanded Deposit Capabilities Modernized Digital Banking Experience Upgraded Product & Service Offerings 2Q 2023 Net Growth1 in both Consumer and Business Checking Households 11% Consumer Checking Household Acquisition 2Q 2022 to 2Q 2023 13% Consumer Checking Household Attrition 2Q 2022 to 2Q 2023 3-Year High in Digital Banking Customer Satisfaction Scores2 2Q 2023 $300M+ Net New Deposits Added Through Mass Affluent Strategy3 Launched Mass Affluent Strategy Introduced “Champion of You” Brand Strategy Expanded Commercial Capabilities 1 As compared to 1Q 2023. 2 Based on quarterly top box customer satisfaction scores from internal transactional surveys. 3 Since December 2022 inception.
7 Pre-Tax Pre-Provision Income1 Trends PTPP income was up 21% vs. 2Q 2022, driven by revenue growth and disciplined expense management ($ in millions) 1 This is a non-GAAP financial measure. Please refer to the appendix for a reconciliation of pre-tax pre-provision income to income before income taxes. 2Q23 Pre- Tax Income 2Q23 Provision 2Q23 PTPP Income 2Q22 Pre- Tax Income 2Q22 Provision 2Q22 PTPP Income 3Q22 Pre- Tax Income 3Q22 Provision 3Q22 PTPP Income $(0) 4Q22 Pre- Tax Income 4Q22 Provision 4Q22 PTPP Income 1Q23 Pre- Tax Income 1Q23 Provision 1Q23 PTPP Income
8 Average Yields (%) Average Yield Trends 4.62 5.93 6.66 7.04 4.29 5.55 6.39 6.77 3.75 4.12 4.48 4.78 3.12 3.22 3.30 3.31 2.42 2.57 2.88 3.05 0.81 1.58 2.48 3.06 0.50 1.13 1.97 2.64 3Q 2022 4Q 2022 1Q 2023 2Q 2023 ASB continues to benefit from rising asset yields, while funding costs have risen throughout 1H 2023 Residential Mortgage Loans Commercial & Business Lending Loans Commercial Real Estate Loans Total Interest-Bearing Liabilities Total Interest-Bearing Deposits Auto Finance Loans Asset & Liability Yield / Rate Trends (%) Rate on Total Interest- Bearing Liabilities Yield on Total Earning Assets 2.97 3.72 4.46 4.94 5.18 0.36 0.81 1.58 2.48 3.06 2Q 2022 3Q 2022 4Q 2022 1Q 2023 2Q 2023 Investments and Other
9 Net Interest Income & Net Interest Margin Trends NII increased 19% year-over-year despite recent funding cost pressures facing the industry Estimated NII Sensitivity Profile (%) (12-Month Ramp) Maintained receive fixed swaps of $2.85 billion in 2Q 2023 Net Interest Income & Net Interest Margin $216 $264 $289 $274 $258 2Q 2022 3Q 2022 4Q 2022 1Q 2023 2Q 2023 3.07% 3.31% 3.13% 2.71% 2.80% Quarterly Net Interest Income Quarterly Net Interest Margin ($ in millions) 10.8 9.2 7.8 6.8 4.05.4 4.6 3.9 3.4 1.9 -5.0 -4.3 -3.4 -2.3 -1.2 2Q 2022 3Q 2022 4Q 2022 1Q 2023 2Q 2023 Up 200bps Up 100bps Down 100bps
10 Cash & Investment Securities Portfolio We continue to target investments to total assets of 18% to 20% in 2023 18% 18% 18% 19% 19% 2% 1% 2% 2% 2% 21% 19% 19% 21% 20% 2Q 2022 3Q 2022 4Q 2022 1Q 2023 2Q 2023 Securities EoP Securities + Cash / Total Assets Cash $2.7 $2.5 $2.7 $3.4 $3.5 $3.9 $4.0 $4.0 $4.0 $3.9 $0.3 $0.3 $0.3 $0.4 $0.3 $6.9 $6.7 $7.0 $7.7 $7.7 2Q 2022 3Q 2022 4Q 2022 1Q 2023 2Q 2023 Held to MaturityAvailable for Sale ($ in billions) EoP Securities Book Composition Other Securities CET1 Including AOCI1 (%) CET1 Ratio Incl. AOCICET1 Ratio 9.35 9.45 9.48 8.51 8.74 8.60 4Q 2022 1Q 2023 2Q 2023 1 This is a non-GAAP financial measure. See appendix for a reconciliation of non-GAAP financial measures to GAAP financial measures.
11 Noninterest Income Trends ($ in millions) ($ in millions) Noninterest income increased slightly from 1Q 2023, with mortgage banking boosted by MSR valuations 1 This is a non-GAAP financial measure. Please refer to the appendix for a reconciliation of fee-based revenue to noninterest income. 2 Other noninterest income is primarily comprised of bank and corporate owned life insurance, asset gains (losses), net and investment securities gains (losses), net. Service Charges & Deposit Account FeesNoninterest Income Trends Card-Based Fees & Other Fee-Based Revenue ($ in millions) $11 $11 $11 $11 $11 $4 $4 $3 $4 $4 $16 $16 $14 $15 $16 2Q 2022 3Q 2022 4Q 2022 1Q 2023 2Q 2023 Other Fee-Based RevenueCard-Based Fees $17 $15 $14 $13 $12 2Q 2022 3Q 2022 4Q 2022 1Q 2023 2Q 2023 $54 $51 $49 $48 $49 $6 $2 $2 $4 $8 $8 $8 $6 $5 $5 $8 $10 $5 $5 $4 $75 $71 $62 $62 $66 2Q 2022 3Q 2022 4Q 2022 1Q 2023 2Q 2023 Fee-Based Revenue1 Capital Markets, net Mortgage Banking, net Other2
12 $113 $118 $118 $116 $114 $21 $23 $25 $24 $24 $48 $49 $53 $46 $52 $6 $1 $181 $196 $197 $187 $191 2Q 2022 3Q 2022 4Q 2022 1Q 2023 2Q 2023 Noninterest Expense / Average Assets (%) Fully Tax-Equivalent Efficiency Ratio2 (%)Noninterest Expense Trends Noninterest Expense Trends 1 Other expenses are primarily comprised of occupancy, business development & advertising, equipment, legal & professional, and FDIC assessment costs. 2 This is a non-GAAP financial measure. Please refer to the appendix for a reconciliation of the fully tax-equivalent efficiency ratio to the Federal Reserve efficiency ratio. ($ in millions) Our noninterest expense to average assets ratio decreased for the third consecutive quarter to 1.89% 2.04 2.08 2.03 1.92 1.89 2Q 2022 3Q 2022 4Q 2022 1Q 2023 2Q 2023 Fully Tax-Equivalent Efficiency Ratio Federal Reserve Efficiency Ratio 61.5 60.3 55.5 56.1 58.5 59.8 58.8 54.1 54.6 57.0 2Q 2022 3Q 2022 4Q 2022 1Q 2023 2Q 2023 Personnel Expense Other1 Technology Expense Charitable Contributions
13 2Q 2023 Capital Ratios (%) 6.94 9.48 10.07 12.22 TCE Ratio Common Equity Tier 1 Capital Tier 1 Capital Total Capital 1 Tangible common equity / tangible assets. This is a non-GAAP financial measure. See appendix for a reconciliation of non-GAAP financial measures to GAAP financial measures. We continued to manage capital within our target ranges during 2Q Capital Profile 1 Year-End 2023 Capital Targets (%) $17.37 $17.32 $17.73 $18.42 $18.41 2Q 2022 3Q 2022 4Q 2022 1Q 2023 2Q 2023 Tangible Book Value / Share 6.94 2Q 2023 TCE Ratio YE2023 Target Range 9.48 2Q 2023 CET1 Ratio YE2023 Target Range 7.25 9.50 6.75 9.00 1
14 ACLL / Total Loans (%)2Q 2023 ACLL1 Update ▪ ACLL increased $11 million from the prior quarter to $377 million, driven by a mix of portfolio loan growth and nominal credit movement coupled with general macroeconomic trends ▪ CECL forward-looking assumptions based on Moody’s May 2023 Baseline forecast 1 Includes funded and unfunded reserve for loans, excludes reserve for HTM securities. ($ in thousands) Our ACLL percentage increased slightly to 1.26% as of June 30 Allowance for Credit Losses on Loans (ACLL) Update 1.20 1.20 1.22 1.25 1.26 2Q 2022 3Q 2022 4Q 2022 1Q 2023 2Q 2023 Loan Category ACLL ACLL / Loans ACLL ACLL / Loans ACLL ACLL / Loans C&BL 122,595$ 1.20% 147,533$ 1.35% 146,335$ 1.32% CRE - Investor 65,040 1.36% 55,678 1.09% 67,434 1.27% CRE - Construction 52,627 2.96% 71,098 3.31% 69,970 3.48% Residential Mortgage 38,851 0.49% 39,096 0.45% 41,189 0.47% Other Consumer 38,433 2.21% 52,803 2.16% 52,098 1.95% Total 317,547$ 1.20% 366,208$ 1.25% 377,027$ 1.26% 6/30/20233/31/20236/30/2022
15 Net Charge Offs (Recoveries) and ProvisionDelinquent Loans / EoP Total Loans Nonaccrual LoansTotal Nonperforming Assets Credit Quality Trends $60 $63 $68 $68 $73 $47 $38 $29 $25 $22 $1 $16 $14 $24 $36 $108 $116 $111 $118 $131 2Q 2022 3Q 2022 4Q 2022 1Q 2023 2Q 2023 0.07% 0.07% 0.12% 0.10% 0.13% 2Q 2022 3Q 2022 4Q 2022 1Q 2023 2Q 2023 Key credit metrics remain stable despite volatility in the macro outlook ($ in millions) ($ in millions) Accruing Loans 30-89 Days Past Due CREConsumer $108 $116 $111 $118 $131 $18 $17 $15 $15 $8 $126 $133 $127 $133 $140 2Q 2022 3Q 2022 4Q 2022 1Q 2023 2Q 2023 ($ in millions) $0 $2 $1 $3 $11 $(0) $17 $20 $18 $22 2Q 2022 3Q 2022 4Q 2022 1Q 2023 2Q 2023 Total Net Charge Offs (Recoveries) Provision for Credit Losses on Loans Commercial & Business LendingNonaccrual Loans OREO + Repossessed Assets
16 Wisconsin 21% Illinois 15% Minnesota 9% Other Midwest2 22% Texas 7% Other 25% Multi-Family 35% Retail 9% Office 14% Industrial 24%1-4 Family Construction 6% Warehouse 4% Hotel / Motel 3% Other 6% Consumer 38% Commercial & Business Lending 37% CRE 25% 1 All updates as of or for the period ended June 30, 2023 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. High-Quality Commercial Real Estate Portfolio1 ASB has built a diversified CRE portfolio by partnering with well-known developers in stable Midwest markets 2Q 22 3Q 22 4Q 22 1Q 23 2Q 23 Portfolio LTV 60% 60% 60% 60% 60% Delinquencies/Loans 0.08% 0.00% 0.02% 0.00% 0.00% NALs/Loans 0.72% 0.55% 0.41% 0.35% 0.30% ACLL/Loans 1.79% 1.65% 1.68% 1.75% 1.88% NCOs/Avg. Loans3 0.00% 0.00% 0.00% 0.00% (0.12%) CRE Credit Quality CRE Loan Portfolio Granularity % of Total Loans Largest Single CRE Borrower 0.16% Top 10 Largest CRE Borrowers 1.35% Largest CRE Property Type (Multi-Fam) 8.56% CRE Office Loans 3.55% CRE by Geography CRE by Property Type Total Loans by Segment CRE Office Highlights WAvg. Debt Service Coverage Ratio4 1.20x 2023 Remaining Maturities $181 million Urban vs. Suburban ~78% Suburban Property Class Mix ~51% Class A
17 Balance Sheet Management Net Interest Income & Noninterest Income ▪ Total net interest income & noninterest income growth of 8% to 10% ▪ Net interest income (GAAP) growth of 13% to 15% ▪ Noninterest income compression of 8% to 10% Expense Management ▪ Noninterest expense growth of approximately 4% ▪ Effective tax rate of 20% to 21% Capital Targets ▪ Target TCE ratio range of 6.75% to 7.25% ▪ Target CET1 ratio range of 9.00% to 9.50% 1 Projections are on an end of period basis as of and for the year ended 12/31/2023 as compared to 12/31/2022 unless otherwise noted. 2 Updated guidance assumes one additional 25bp Fed Funds increase in September. 3 This is a non-GAAP financial measure. Please refer to the appendix for a reconciliation of average and end of period core customer deposits to total deposits. ▪ Total loan growth of 6% to 8% ▪ Average core customer deposit3 growth of 1% to 3% ▪ Target investments/total assets ratio of 18% to 20% 2023 Full-Year Outlook Updates1 Updated Guidance2Previous Guidance (5/11/2023) ▪ Total net interest income & noninterest income growth of 6% to 8% ▪ Net interest income (GAAP) growth of 10% to 12% ▪ Noninterest income compression of 8% to 10% ▪ Noninterest expense growth of 3% to 4% ▪ Effective tax rate of 20% to 21% ▪ Target TCE ratio range of 6.75% to 7.25% ▪ Target CET1 ratio range of 9.00% to 9.50% ▪ Total loan growth of 6% to 8% ▪ End of period core customer deposit3 compression of 3% (growth of 2% in 2H 2023) ▪ Target investments/total assets ratio of 18% to 20%
Appendix
19 Stable, Granular Deposit Portfolio Uninsured, uncollateralized deposits were only 21% of total deposits as of 6/30/2023 1 Liquidity coverage based on current levels of readily available (within one business day) funding. See slide 20 for additional details. 26% 27% 26% 24% 21% 74% 73% 74% 76% 79% $28.6 $29.3 $29.7 $30.4 $32.1 6/30/2022 9/30/2022 12/31/2022 3/31/2023 6/30/2023 EoP Total Deposit Trends (Associated Bank, N.A.) ($ in billions) Total of Insured and Collateralized Deposits Total of Uninsured and Uncollateralized Deposits 21% Percentage of total deposits that were uninsured and uncollateralized as of 6/30/2023 114% Readily available liquidity coverage1 for uninsured and uncollateralized deposits as of 6/30/2023 179% Total liquidity coverage for uninsured and uncollateralized deposits as of 6/30/2023
20 Liquidity Sources As of 6/30/2023, ASB’s total liquidity sources covered 179% of uninsured, uncollateralized deposits Liquidity Sources 3/31/2023 6/30/2023 Federal Reserve Balance $504.2 $179.0 Available FHLB Chicago Capacity $3,453.8 $5,148.4 Available Fed Discount Window Capacity $1,799.5 $1,635.1 Available Bank Term Funding Program Capacity $644.9 $633.8 Funding Available Within One Business Day1 $6,402.4 $7,596.3 Available Fed Funds Lines $2,773.0 $2,623.0 Available Brokered Deposit Capacity2 $3,646.4 $761.3 Unsecured Debt Capacity3 $1,000.0 $1,000.0 Total Liquidity $13,821.7 $11,980.6 ($ in millions) 114% of uninsured, uncollateralized deposits 179% of uninsured, uncollateralized deposits 1 Estimated based on normal course of operations with the indicated institution. 2 Availability based on internal policy limitations. The Corporation includes outstanding deposits that have received a primary purpose exemption in the brokered deposit classification as they have similar funding characteristics and risk as brokered deposits. 3 Availability based on internal policy limitations.
21 $1.7 $2.0 $2.3 $2.4 $2.7 $8.0 $8.3 $8.5 $8.6 $8.7 $6.6 $6.9 $7.2 $7.2 $7.3 $10.2 $10.6 $10.8 $10.9 $11.1 $26.5 $27.8 $28.8 $29.2 $29.8 2Q 2022 3Q 2022 4Q 2022 1Q 2023 2Q 2023 Additional Loan Trends ($ in billions) Commercial & Business Lending Commercial Real Estate Residential Mortgage Auto Finance, Home Equity & Other Consumer ($ in millions) Commercial & Business Lending Commercial Real Estate Consumer Lending Average Loan Change (1Q 2023 to 2Q 2023)EoP Quarterly Loan Trends $(69) $(17) $(10) $1 $21 $58 $99 $113 $116 $117 $164 CRE Construction CRE Investor Credit Cards Mortgage Warehouse All Other Specialized Auto Finance Power & Utilities Residential Mortgage Home Equity & Other Cons. REIT General Commercial
22 Total Loans Outstanding Balances as of June 30, 2023 ($ in millions) 1 All values as of period end. 2 North American Industry Classification System. 6/30/2023 1 % of Total Loans 6/30/2023 1 % of Total Loans C&BL (by NAICS 2 ) CRE (by property type) Utilities 2,324$ 7.8% Multi-Family 2,554$ 8.6% Manufacturing & Wholesale Trade 2,286 7.7% Industrial 1,744 5.8% Real Estate (includes REITs) 1,938 6.5% Office 1,059 3.5% Mortgage Warehouse 723 2.4% Retail 652 2.2% Finance & Insurance 548 1.8% Single Family Construction 405 1.4% Construction 500 1.7% Warehouse 268 0.9% Retail Trade 456 1.5% Hotel/Motel 190 0.6% Health Care and Social Assistance 386 1.3% Medical 157 0.5% Rental and Leasing Services 344 1.2% Land 119 0.4% Professional, Scientific, and Tech. Serv. 318 1.1% Self Storage 37 0.1% Transportation and Warehousing 314 1.1% Other 136 0.5% Waste Management 222 0.7% Total CRE 7,322$ 24.5% Arts, Entertainment, and Recreation 97 0.3% Financial Investments & Related Activities 89 0.3% Consumer Information 88 0.3% Residential Mortgage 8,746$ 29.3% Accommodation and Food Services 83 0.3% Auto Finance 1,778 6.0% Management of Companies & Enterprises 82 0.3% Home Equity 616 2.1% Mining 37 0.1% Credit Cards 132 0.4% Public Administration 25 0.1% Student Loans 69 0.2% Educational Services 18 0.1% Other Consumer 72 0.2% Agriculture, Forestry, Fishing and Hunting 0 0.0% Total Consumer 11,413$ 38.2% Other 236 0.8% Total C&BL 11,114$ 37.2% Total Loans 29,849$ 100.0%
23 Wisconsin 27% Illinois 23% Minnesota 9% Other Midwest 14% Texas 5%Other 22% Manufacturing & Wholesale Trade 21% Real Estate 17% Power & Utilities 21% Mortgage Warehouse 6% 1 Excludes Other Consumer portfolio. 2 Other Midwest includes Missouri, Indiana, Ohio, Michigan and Iowa. Wind 35% Natural Gas 34% Solar 20% Transmission, Control and Distribution 3% Geothermal 2% Other 7% Wisconsin 24% Illinois 15% Minnesota 7% Texas 6% Other Midwest 11% Other 38% Wisconsin 21% Illinois 15% Minnesota 9% Other Midwest2 22% Texas 7% Other 25% 2 2 Loan Stratification Outstanding Balances as of June 30, 2023 C&BL by Geography $11.1 billion Power & Utilities Lending $2.3 billion C&BL by Industry $11.1 billion Total Loans1 CRE by Geography $7.3 billion CRE by Property Type $7.3 billion Multi-Family 35% Retail 9% Office 14% Industrial 24% 1-4 Family Construction 6% Warehouse 4% Hotel / Motel 3% Other 6%
24 Reconciliation and Definitions of Non-GAAP Items 1 Management believes this measure is meaningful because it reflects adjustments commonly made by management, investors, regulators, and analysts to evaluate the adequacy of earnings per common share, provides greater understanding of ongoing operations, and enhances comparability of results with prior periods. 2 This financial measure has been included as it is considered to be a critical metric with which to analyze and evaluate financial condition and capital strength. 3 These financial measures have been included as they provide meaningful supplemental information to assess trends in the Corporation’s results of operations. Average Tangible Common Equity Reconciliation2 ($ in millions) 2Q 2023 Common equity $3,935 Goodwill and other intangible assets, net (1,151) Tangible common equity $2,784 Common Equity Tier 1 Capital Ratio Reconciliation 4Q 2022 1Q 2023 2Q 2023 Common equity Tier 1 capital ratio 9.35% 9.45% 9.48% Accumulated other comprehensive loss adjustment (0.84)% (0.72)% (0.88)% Common equity Tier 1 capital ratio including accumulated other comprehensive loss 8.51% 8.74% 8.60% Pre-Tax Pre-Provision Income Reconciliation1 ($ in millions) 2Q 2022 3Q 2022 4Q 2022 1Q 2023 2Q 2023 Income before income taxes $110 $122 $134 $131 $111 Provision for credit losses - $17 20 18 22 Pre-tax pre-provision income $110 $139 $154 $149 $133 Selected Trend Information3 ($ in millions) 2Q 2022 3Q 2022 4Q 2022 1Q 2023 2Q 2023 Wealth management fees $21 $20 $20 $20 $20 Service charges and deposit account fees 17 15 14 13 12 Card-based fees 11 11 11 11 11 Other fee-based revenue 4 4 3 4 4 Fee-based revenue 54 51 49 48 49 Other 22 20 13 14 17 Total noninterest income $75 $71 $62 $62 $66
25 Reconciliation and Definitions of Non-GAAP Items 1 Management believes this measure is meaningful because it reflects adjustments commonly made by management, investors, regulators, and analysts to evaluate the adequacy of earnings per common share, provides greater understanding of ongoing operations, and enhances comparability of results with prior periods. 2 The ratio tangible common equity to tangible assets excludes goodwill and other intangible assets, net. This financial measure has been included as it is considered to be a critical metric with which to analyze and evaluate financial condition and capital strength. Tangible Common Equity and Tangible Assets Reconciliation2 ($ in millions) 2Q 2022 3Q 2022 4Q 2022 1Q 2023 2Q 2023 Common equity $3,766 $3,760 $3,821 $3,932 $3,929 Goodwill and other intangible assets, net (1,159) (1,156) (1,154) (1,152) (1,150) Tangible common equity $2,608 $2,603 $2,667 $2,779 $2,779 Total assets $37,236 $38,050 $39,406 $40,703 $41,219 Goodwill and other intangible assets, net (1,159) (1,156) (1,154) (1,152) (1,150) Tangible assets $36,077 $36,893 $38,251 $39,550 $40,070 Efficiency Ratio Reconciliation 2Q 2022 3Q 2022 4Q 2022 1Q 2023 2Q 2023 Federal Reserve efficiency ratio 61.53% 60.32% 55.47% 56.07% 58.49% Fully tax-equivalent adjustment (0.98)% (0.87)% (0.77)% (0.79)% (0.85)% Other intangible amortization (0.76)% (0.67)% (0.62)% (0.66)% (0.68)% Fully tax-equivalent efficiency ratio1 59.80% 58.79% 54.08% 54.64% 56.96% The efficiency ratio as defined by the Federal Reserve guidance is noninterest expense (which includes the provision for unfunded commitments) divided by the sum of net interest income plus noninterest income, excluding investment securities gains (losses), net. The fully tax-equivalent efficiency ratio is noninterest expense (which includes the provision for unfunded commitments), excluding other intangible amortization, divided by the sum of fully tax-equivalent net interest income plus noninterest income, excluding investment securities gains (losses), net. End of Period Core Customer Deposits Reconciliation ($ in millions) 12/31/2022 6/30/2023 Total deposits $29,636 $32,014 Brokered CDs (542) (3,818) Network transaction deposits (979) (1,601) Core customer deposits $28,115 $26,595 Average Core Customer Deposits Reconciliation ($ in millions) 4Q 2022 2Q 2023 Total deposits $29,328 $31,281 Brokered CDs (190) (3,002) Network transaction deposits (901) (1,468) Core customer deposits $28,236 $26,811