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Section 1: 8-K (FORM 8-K)

Document
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM
8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934


Date of Report (Date of earliest event reported)
November 4, 2019

                                                                            Associated Banc-Corp                                                                      
(Exact name of registrant as specified in its chapter)

Wisconsin
001-31343
39-1098068
(State or other jurisdiction of incorporation)

(Commission File Number)

(IRS Employer Identification No.)

433 Main Street
Green Bay
Wisconsin
54301
(Address of principal executive offices)
(Zip code)
Registrant’s telephone number, including area code
920
491-7500
 
(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
Common stock, par value $0.01 per share
ASB
New York Stock Exchange
Depositary Shrs, each representing 1/40th intrst in a shr of 6.125% Non-Cum. Perp Pref Stock, Srs C
ASB PrC
New York Stock Exchange
Depositary Shrs, each representing 1/40th intrst in a shr of 5.375% Non-Cum. Perp Pref Stock, Srs D
ASB PrD
New York Stock Exchange
Depositary Shrs, each representing 1/40th intrst in a shr of 5.875% Non-Cum. Perp Pref Stock, Srs E
ASB PrE
New York Stock Exchange

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 7.01. Regulation FD Disclosure
Associated Banc-Corp is furnishing the investor presentation, included as Exhibit 99.1 to this Report on Form 8-K, which will be used, in whole or in part, from time to time by executives of the Registrant in one or more meetings with investors and analysts.

The information furnished pursuant to this Item 7.01, including Exhibit 99.1, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities under that Section and shall not be deemed to be incorporated by reference into any filing of the Registrant under the Securities Act of 1933 or the Exchange Act.

Item 9.01. Financial Statements and Exhibits.
The following exhibit is furnished as part of this Report on Form 8-K.

(d) Exhibits








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: November 4, 2019
By: /s/ Christopher J. Del Moral-Niles
 
Christopher J. Del Moral-Niles
 
Chief Financial Officer
  
 
 


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Section 2: EX-99.1 (EXHIBIT 99.1)

asb4q19investordeckfinal
Exhibit 99.1 Associated Banc-Corp Investor Presentation 2019 Brookfield Office (Milwaukee MSA) – Opened October 2017 FOURTH QUARTER


 
FORWARD-LOOKING STATEMENTS Important note regarding forward-looking statements: Statements made in this presentation which are not purely historical are forward-looking statements, as defined in the Private Securities Litigation Reform Act of 1995. This includes any statements regarding management’s plans, objectives, or goals for future operations, products or services, and forecasts of its revenues, earnings, or other measures of performance. Such forward-looking statements may be identified by the use of words such as “believe,” “expect,” “anticipate,” “plan,” “estimate,” “should,” “will,” “intend,” "target," “outlook” or similar expressions. Forward-looking statements are based on current management expectations and, by their nature, are subject to risks and uncertainties. Actual results may differ materially from those contained in the forward-looking statements. These forward-looking statements include: management plans relating to the proposed acquisition of First Staunton Bancshares, Inc. (“proposed transaction”); the expected timing of the completion of the proposed transaction; the ability to complete the proposed transaction; the ability to obtain any required regulatory approvals; any statements of the plans and objectives of management for future operations, products or services; any statements of expectation or belief; projections related to certain financial results or other benefits of the proposed transaction; and any statements of assumptions underlying any of the foregoing. 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, and such factors are incorporated herein by reference. Additional factors which may cause actual results of the proposed transaction to differ materially from those contained in forward-looking statements are the possibility that expected benefits of the proposed transaction may not materialize in the timeframe expected or at all, or may be more costly to achieve; the proposed transaction may not be timely completed, if at all; that required regulatory approvals are not obtained or other customary closing conditions are not satisfied in a timely manner or at all; reputational risks and the reaction of shareholders, customers, employees or other constituents to the proposed transaction; and diversion of management time on acquisition-related matters. 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. 1


 
OUR FRANCHISE Third Quarter 20191 Highlights and Accomplishments $33 billion of assets $23 billion of loans . Largest bank headquartered in Wisconsin2 $4 billion of equity $24 billion of deposits . Approximately 4,800 employees, servicing 1.3 million customer accounts in 8 states and 3Q 2019 Average Loans by Business Segment over 120 communities1 Corporate and 53% Commercial Specialty . Wisconsin’s #1 Mortgage Lender3 Community, Consumer, 44% and Business . Top 40 U.S. insurance brokerage firm4 2% Other Affinity Programs ~40% of checking accounts are affinity related5 1As of September 30, 2019. 2Based on assets, as of September 30, 2019. 3The Wisconsin’s #1 Mortgage Lender designation is based on originated, closed-end mortgage loan count, gathered from the Home Mortgage Disclosure Act data compiled annually by the Consumer Financial Protection Bureau. The results of the data were obtained through the Consumer Financial Protection Bureau Mortgage Database (HMDA), August 2019. 2 4Business Insurance magazine, July 2019. Rankings based on 2018 brokerage revenue gathered by U.S. based clients. 5Affinity checking accounts as a percentage of total checking accounts, as of September 30, 2019.


 
ATTRACTIVE MIDWEST MARKETS Large Population Base With a Manufacturing and Wholesale Trade-Centric Economy Midwest holds ~20% of the U.S. population1 and Manufacturing Focus Well-Suited for Our Midwest Location nearly 30% of all U.S. manufacturing jobs2 ASB C&BL Loans by Industry Total ASB Loans by Geography U.S. Manufacturing Jobs Midwest Manufacturing 78% Midwest & Wholesale ~30% Trade All other 21% regions ~70% Other3 22% Supporting Strong Employment Base and Healthy Consumer Credit Several Midwestern states have unemployment rates4 well below the national average: Select ASB Metro Market Unemployment Rates5 3.9% 4.2% 4.2% 3.5% 3.1% 3.2% 3.2% 3.2% Madison, WI………..………….… 2.4% 2.5% Sheboygan, WI…….……….....… 2.5% Appleton, WI…………………...… 2.8% Green Bay, WI…..…………..…... 3.0% Minneapolis – St. Paul, MN….… 3.0% IA MO WI MN IN U.S. IL OH MI Dark green bars denote ASB branch states 1U.S. Census Bureau, Annual Estimates of the Resident Population for the United States, Regions, States, and Puerto Rico: April 1, 2010 to July 1, 2018. 2U.S. Bureau of Labor Statistics, Manufacturing Industry Employees, seasonally adjusted, July 2019 (preliminary). 3Other category includes 5% in TX; the majority of these loans were booked by our Loan Production Office located in Houston. 4U.S. Bureau of Labor Statistics, State Employment and Unemployment, seasonally adjusted, September 2019 (preliminary). 3 5U.S. Bureau of Labor Statistics, Civilian labor force and unemployment by metropolitan area, seasonally adjusted, August 2019.


 
ACTIVELY POSITIONING FOR LOWER RATES With expectations of lower interest rates, we are reducing wholesale funding and liquidity positions to defend net interest margin Second Quarter Actions1 Third Quarter Actions1 Fourth Quarter Actions1 . Reduced network . Reduced network . Reducing network transaction ~$400 million transaction ~$270 million transaction ~$200 million Reducing deposits deposits deposits Higher Cost . Reduced CDs ~$380 million . Reduced CDs ~$450 million . Redeemed Funding 2.750% Senior $250 million . Reduced Notes wholesale ~$250 million borrowing . Reduced . Reduced . Reducing mortgage ~$570 million mortgage ~$310 million mortgage ~$180 million Reducing securities securities securities Prepayment Risk . Reduced resi. . Reduced resi. mortgage ~$50 million mortgage ~$320 million portfolio porfolio2 . Added longer . Replaced short . Adding longer duration duration duration ~$100 million ~$100 million municipal Adding municipal municipal securities3 securities with ~$150 million securities Duration longer duration municipal securities 1Except where noted, figures based on change from period beginning to period end. 2Including impact of the sale of ~$240 million prepayment-sensitive residential mortgages. 3Average balance increase from 1Q19 to 2Q19. 4


 
LOAN TRENDS Approximately $240 million of portfolio mortgages sold in 3Q 2019 for CECL and interest rate risk mitigation Average Quarterly Loans Average Loan Growth (2Q19 to 3Q19) ($ in billions) 3Q15 – 3Q19 ($ in millions) CAGR $23.0 $23.3 Real estate construction $65 $20.9 $20.1 Mortgage warehouse $33 $18.5 $7.9 $8.5 5% Home equity & other consumer $32 $7.3 $7.6 $7.1 REIT $3 General commercial $5.4 $5.2 5% $(14) $5.0 $4.9 $(35) Power & utilities $4.3 $(38) CRE - investor 10% $7.3 $8.3 $8.3 $5.7 $6.3 $(41) Residential mortgage $(106) Oil & gas $1.4 $1.4 $1.3 $1.3 $1.3 3Q 2015 3Q 2016 3Q 2017 3Q 2018 3Q 2019 Commercial & business Commercial real estate Residential mortgage Home equity & other consumer 5


 
COMMERCIAL LOAN MANAGEMENT1 De-risking of the oil & gas portfolio is nearly complete; CRE has rebounded Commercial Loans as a Oil & Gas Loans Commercial Real Estate Percentage of Total Loans ($ in millions) ($ in billions) 60% 58% 58% 59% 59% $6.9 $7.0 $7.1 23% 22% 22% 22% 23% $6.7 $6.7 3.3% 2.8% 2.6% 3.2% 3.3% $731 $747 $754 $657 32% 33% 34% 34% 34% $582 $5.3 $5.1 $5.1 $5.2 $5.2 3Q18 4Q18 1Q19 2Q19 3Q19 3Q18 4Q18 1Q19 2Q19 3Q19 3Q18 4Q18 1Q19 2Q19 3Q19 CB&L (excluding oil & gas loans) CRE unfunded commitments Oil & gas loans CRE total outstanding balance CRE total outstanding balance 1All values as of period end. 6


 
DEPOSIT PORTFOLIO TRENDS Loan to deposit ratio is 93%, within its historical range, giving deposit pricing flexibility Average Quarterly Deposits Average Funding Change (from 2Q 2019) ($ in billions) ($ in millions) $25.2 $24.7 $24.6 $25.1 $24.2 Interest-bearing demand $468 Lower- $5.3 $5.0 $5.1 $5.3 cost $5.4 Savings $299 funding +1.0 billion $4.7 $5.0 $5.5 Noninterest-bearing demand $235 $5.0 $4.8 $2.1 $2.3 $1.9 $2.0 $2.6 $(185) Money market Network transactions Higher- $(260) $7.5 $7.4 $7.1 deposits cost $7.1 $6.9 funding -$1.3 $(437) Time deposits billion $3.0 $3.1 $3.1 $3.5 $3.1 $(454) FHLB Advances $2.0 $1.9 $2.2 $2.0 $1.8 3Q 2018 4Q 2018 1Q 2019 2Q 2019 3Q 2019 Noninterest-bearing demand Savings Time deposits Interest-bearing demand Money market Network transaction deposits 7


 
REPOSITIONING FUNDING1 Reduction of network deposits continues; $250 million of 2.750% Senior Notes called in October 2019 FHLB Advances and Network Quarter-end Low-cost Deposit Mix Transaction Deposits ($ in billions) Checking and Savings represent 55% 27% 23% 21% 11% 6% 12% $3.7 $3.3 Money market Savings $3.2 Noninterest-bearing demand Network transaction deposits $2.9 Interest-bearing demand Time deposits $2.7 $2.6 Quarter-end Low Cost Deposit Mix Trend $1.9 $1.5 55% 51% 52% 50% 49% 3Q 2016 3Q 2017 3Q 2018 3Q 2019 3Q 2018 4Q 2018 1Q 2019 2Q 2019 3Q 2019 FHLB advances Network transaction deposits Noninterest-bearing demand, interest-bearing demand, and savings deposits as a percentage 8 1Period-end values. of total deposits


 
INVESTMENT SECURITIES PORTFOLIO TRENDS Taxable securities portfolio is a source of funds and is expected to continue to shrink through 1Q 2020 Portfolio1 and Yield Trends (Quarterly) Investments / Average Earning Assets ($ in billions) 3.73% 3.74% 3.77% 3.78% 24% 3.68% 23% 23% 22% 20% 2.26% 2.29% 2.34% 2.36% 2.33% $6.9 $6.8 $6.8 $6.5 $6.0 3Q 2015 3Q 2016 3Q 2017 3Q 2018 3Q 2019 $1.6 $1.7 $1.8 $1.9 $1.9 Portfolio Fair Value Composition Agency Agency CMBS MBS $5.3 $5.1 $5.0 32% $4.5 7% $4.0 ABS Municipals 5% 34% Agency CMOs Other <1% 3Q 2018 4Q 2018 1Q 2019 2Q 2019 3Q 2019 21% Tax-exempt securities Taxable securities 9 1Average balances.


 
NET INTEREST INCOME AND YIELDS — QUARTERLY TRENDS Deposit costs have peaked, but we expect near-term margins will continue to compress Net Interest Income and Net Interest Margin Average Yields ($ in millions) 5.51% 3.02% 5.19% 5.19% 2.92% 2.90% 2.87% 4.98% 4.92% 2.81% 4.78% 4.86% 4.79% $224 4.56% 4.49% $219 3.45% 3.52% 3.54% 3.47% $7 $216 $214 3.29% $5 $2 $3 $206 $2 2.78% 2.81% 2.81% 2.61% 2.70% 1.54% 1.39% 1.51% 1.44% $214 $217 $214 $211 1.26% $204 1.30% 1.35% 1.23% 1.03% 1.14% 3Q 2018 4Q 2018 1Q 2019 2Q 2019 3Q 2019 3Q 2018 4Q 2018 1Q 2019 2Q 2019 3Q 2019 Acquisition related prepayments and purchased loan Commercial real estate loans Investments and other accretion, net Commercial and business Total interest-bearing Net interest income, net of acquisition related lending loans liabilities prepayments and purchased loan accretion Net interest margin Total residential mortgage Total interest- loans bearing deposits 10


 
GROWING AND DIVERSIFIED BUSINESS MODEL Mortgage banking and wealth management benefitting from current environment Noninterest Income Mortgage Banking, Net2 ($ in millions) ($ in millions) $27 $24 $25 $101 $16 $17 $95 $86 $88 $80 YTD 15 YTD 16 YTD 17 YTD 18 YTD 19 Wealth Management Fees2,3 ($ in millions) $62 $62 $74 $74 $49 $47 $50 $64 $66 $66 3Q 2015 3Q 2016 3Q 2017 3Q 2018 3Q 2019 YTD 15 YTD 16 YTD 17 YTD 18 YTD 19 Fee-based revenue1 1A non-GAAP financial measure, fee-based revenue is the sum of insurance commissions and fees, wealth management fees, service charges and deposit account fees, card-based fees, and other fee-based revenue. Please refer to the appendix for a reconciliation of fee-based revenue to total noninterest income. 11 2Figures are for the first nine months of the years indicated. 3Wealth management includes trust and asset management fees, and brokerage commissions and fees.


 
OVERALL EXPENSE EFFICIENCY Automation and consolidations are driving better efficiency over time Efficiency Enhanced Automation Branch Consolidations Operational Efficiencies Drivers Noninterest Expense Efficiency Ratio2,3 Restructuring Plan ($ in millions) . Expect 4Q 2019 70% restructuring charges of $204 $201 68% 68% ~$3 million $2 $198 66% 1 $2 64% $193 $192 $4 68% . Anticipate restructuring $1 66% will result in flat to 64% modestly lower 63% 62% noninterest expense in $202 $199 $194 $191 $194 2020, including First Staunton costs 3Q18 4Q18 1Q19 2Q19 3Q19 YTD 15 YTD 16 YTD 17 YTD 18 YTD 19 Acquisition related costs Federal Reserve efficiency ratio All other noninterest expenses Adjusted efficiency ratio 1Includes $1 million of acquisition related cost recovery. 2The 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 adjusted efficiency ratio, which is a non-GAAP financial measure, is noninterest expense (which includes the provision for unfunded commitments), excluding other intangible amortization and acquisition related costs, divided by the sum of fully tax-equivalent net interest income plus noninterest income, excluding investment securities gains / losses, net and acquisition related costs. 12 Refer to the appendix for a reconciliation of the Federal Reserve efficiency ratio to the adjusted efficiency ratio. 3Figures are for the first nine months of the years indicated.


 
INVESTING IN CUSTOMER TECHNOLOGY Digital first strategies remain our highest priority investments Retail Customer Focused Enhancements Commercial Client Focused Upgrades . New mobile app received 4.7-star rating with ~10,000 . Cash management (ACI) upgrade completed reviews1 with full customer base migration in August 2019 . Zelle P2P implemented March 2019 – New core online and mobile banking – Provides intuitive, real-time payment capability via platform provides refreshed portal Associated’s mobile app and online banking platforms experience . Mobile mortgage application and digital appointment – Desktop, mobile and tablet device scheduling capability implemented June 2019 support Digital Adoption and Digital Deposits Digital Adoption2 Digital Deposits3 58% 59% 59% 57% 57% 55% 53% 34% 34% 32% 32% 30% 31% 28% 1Mobile application reviews on a leading platform as of October 30, 2019. 2Online and mobile customers as a percentage of all retail customers with a primary checking account at period end. 13 3SnapDeposits and ATM deposits as a percentage of all consumer deposits at period end.


 
CAPITAL PRIORITIES Committed to a consistent capital management philosophy 2with rigorous capital discipline Quarterly $23.0 $23.3 $20.9 Funding Average Loans $20.1 ($ in billions) 1. Organic Highest Priority $18.5 Growth 3Q15 3Q16 3Q17 3Q18 3Q19 Quarterly $0.17 $0.15 Paying a Commitment Dividends $0.11 $0.12 30%-40% $0.10 2. Competitive dividend payout Dividend ratio 3Q15 3Q16 3Q17 3Q18 3Q19 Opportunistic, . Bank Mutual (45% cost savings) Investing 3. in-market, efficiency . Huntington WI Branch Acq. (45% expected cost savings) Externally driven acquisitions . First Staunton Bancshares1 (35% expected cost savings) Share $259 Disciplined Repurchases $240 Repurchasing maintenance of ($ in millions) $130 4. 2 $93 Shares TCE ratio $20 $37 >7% 2014 2015 2016 2017 2018 20193 1Expected to close in February 2020. 2The ratio tangible common equity to tangible assets excludes goodwill and other intangible assets, net. The TCE ratio is a non-GAAP financial measure and has been included as it is considered to be a critical metric used to analyze and evaluate financial condition and capital strength. 14 3Through 10/24/19. Includes $60 million of shares repurchased in 3Q 2019.


 
CURRENT EXPECTED CREDIT LOSSES (CECL) Our current capital levels and expected earnings should allow us to readily absorb the anticipated CECL impact CECL Adoption in 1Q 2020 Expected Impact to ACL1 in 1Q 2020 . Life-of-loan CECL reserves will be driven by our . 30%-40% increase to ACL from year-end 2019 portfolio characteristics, risk-grading, economic levels outlook, and methodology . Net, after-tax, reduction in expected Tangible . Key Methodology Assumptions Common Equity ratio of ~25 bps – Leverages existing probability of default / loss given default framework and DFAST systems By Portfolio2 By Factor3 – Forecast components include • 1-year reasonable and supportable forecast Economic period uncertainty • 1-year straight-line reversion to historical losses CRE 52% Consumer 44% • Single-path economic forecast 47% Unfunded reserve . Most significant impacts: 22% – Economic uncertainty Other – Longer-maturity portfolio (CRE & Consumer) factors Acqusition impacts Commercial and 12% portfolios business lending 14% – Unfunded commitment exposure 9% 1Allowance for Credit Losses. 2By lending portfolio, excluding acquired portfolios. 3Includes acquired portfolios. 15


 
CREDIT QUALITY – QUARTERLY TRENDS Continued benign credit environment with stable provision outlook in 4Q 2019 Potential Problem Loans1 Nonaccrual Loans1 ($ in millions) ($ in millions) $236 $250 $241 $166 $154 $156 $167 $133 $128 $129 3Q 2018 4Q 2018 1Q 2019 2Q 2019 3Q 2019 3Q 2018 4Q 2018 1Q 2019 2Q 2019 3Q 2019 Net Charge Offs and Provision Allowance for Loan Losses to Loans1 ($ in millions) $20 $12 $13 $8 1.03% 1.04% 1.02% 1.00% $7 $6 0.94% $2 $0 $1 $(5) 3Q 2018 4Q 2018 1Q 2019 2Q 2019 3Q 2019 3Q 2018 4Q 2018 1Q 2019 2Q 2019 3Q 2019 Total net charge offs Provision for credit losses 16 1At period end.


 
APPENDIX


 
FNB STAUNTON TRANSACTION SUMMARY Seller: First Staunton Bancshares Transaction Value: . ~$76 million for franchise Staunton . ~1.30x 1Q 2019 reported tangible book value Alton . ~4% deposit premium Bethalto Consideration: 100% cash Assets Purchased: Edwardsville . Nine branches . ~$350 million of loans Deposits Assumed: . ~$440 million . ~30,000 customer accounts St. Louis Closing and Conversion: . Closing and conversion anticipated in February 2020 Associated Bank Belleville FNB in Staunton Source: S&P Global Market Intelligence 18


 
ACQUISITIONS Huntington completed… …and Staunton up next Was an in-market, cost takeout Is an in-market, cost takeout driven driven depository acquisition depository acquisition Delivering on Filled in network gaps and boosted Fills in network gaps and boosts our Our Strategy our network in key locations network in key locations Further improved branch density Further improves branch density and scale across Wisconsin and scale in St. Louis market Expanded into 13 new communities Expanding into 7 new communities Enhancing Added over 60,000 deposit accounts Expected to add over 30,000 deposit and 33,000 households accounts and 16,000 loans ASB Franchise Value Acquired ~$730 million of granular ~$440 million of granular branch branch deposits with <1% cost of funds deposits with <1% cost of funds Accretive to efficiency metrics and Accretive to efficiency metrics and EPS outlook EPS outlook Financially Expected 45% cost savings run rate Approximately 35% cost savings Attractive expected on conversion Minimal TBV dilution (~1.5%); Minimal TBV dilution (<1%); $34 million net premium less than 3.5 year TBV earnback expected 19


 
COMMUNITY, DIVERSITY & SUSTAINABILITY1 We remain committed to initiatives to improve our communities, promote diversity and enhance sustainability Over $900 million in credit $3.6 million in grants to support commitments to support wind, CRA programing at various nonprofit hydroelectric and solar projects organizations since 2012 Provided Diversity & Inclusion 73,920 volunteer hours logged, training for all colleagues and with a value of $1.7 million specialized unconscious bias and management training to more than 240 leaders in 2018 We expect our LED lighting and $797 million in loans helping low- HVAC testing programs will yield to moderate-income (LMI) and $500,000 in annual savings minority families attain home versus 2015 baseline ownership 43% of employees participate in 2020 Women on Boards 6 Colleague Resource Groups 2014-2018 | Winning “W” Company acting to address the unique needs of Associated’s diverse workforce 1Figures are as of and for the year ended December 31, 2018. 20


 
LOAN STRATIFICATION OUTSTANDINGS AS OF SEPTEMBER 30, 2019 C&BL by Geography Total Loans1 CRE by Geography $8.4 billion $5.2 billion Minnesota 7% Illinois Illinois Illinois 3 Minnesota Texas 25% 16% 10% 14% 9% Other 2 Minnesota Midwest 10% Other 11% 2 Wisconsin Wisconsin Midwest Wisconsin 31% 29% 22% Other 26% Midwest2 13% Other 33% Other Other 17% 17% Texas Texas 7% 5% C&BL by Industry Oil and Gas Lending4 CRE by Property Type $8.4 billion $582 million $5.2 billion Retail Power & Utilities South Texas 18% 16% & Eagle East Texas Real Estate Ford North 13% 16% Louisiana Arkansas Office / Mixed Manufacturing & 15% Use Wholesale Trade Oil & Gas Permian Multi-Family 20% 21% 8% 24% 33% Rockies Finance & 15% Insurance 13% Industrial 14% Bakken 4% Marcellus Utica Appalachia Other 1-4 Family Gulf Shallow Construction Mid- 10% 6% 4% 6% 1Excludes $349 million Other consumer portfolio. Other Continent Hotel / Motel 2 (Onshore (primarily 4% Other Midwest includes Missouri, Indiana, Ohio, Michigan and Iowa. 21 3Principally reflects the oil and gas portfolio. Lower 48) OK & KS) 7% 4Chart based on commitments of $867 million. 5%


 
RECONCILIATION AND DEFINITIONS OF NON-GAAP ITEMS ($ IN MILLIONS) YTD YTD YTD YTD YTD Efficiency Ratio SEP 15 SEP 16 SEP 17 SEP 18 SEP 19 Federal Reserve efficiency ratio 69.78% 67.51% 65.64% 67.50% 64.18% Fully tax-equivalent adjustment (1.38)% (1.32)% (1.27)% (0.69)% (0.83)% Other intangible amortization (0.34)% (0.20)% (0.18)% (0.64)% (0.79)% Fully tax-equivalent efficiency ratio1 68.06% 65.99% 64.19% 66.18% 62.58% Acquisition related costs adjustment —% —% —% (3.33)% (0.65)% Fully tax-equivalent efficiency ratio, excluding acquisition related costs (adjusted efficiency ratio)1 68.06% 65.99% 64.19% 62.85% 61.92% 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. The adjusted efficiency ratio is noninterest expense (which includes the provision for unfunded commitments), excluding other intangible amortization and acquisition related costs, divided by the sum of fully tax-equivalent net interest income plus noninterest income, excluding investment securities gains / losses, net and acquisition related costs. Fee-based Revenue1 3Q15 3Q16 3Q17 3Q18 3Q19 Insurance commissions and fees $18 $19 $20 $22 $21 Wealth management fees 16 16 17 21 21 Service charges and deposit account fees 17 17 16 17 17 Card-based fees and other fee-based revenue 13 13 13 14 16 Fee-based revenue $64 $66 $66 $74 $74 Other 16 30 20 14 27 Total noninterest income $80 $95 $86 $88 $101 1This is a non-GAAP financial measure. 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 greater understanding of ongoing operations and enhance comparability of results with prior periods. 22


 
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