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Associated Banc-Corp. (ASBC
Q3 2011 Investor Presentation Call
November 16, 2011 09:50 a.m. ET
Philip B. Flynn – President & CEO
Joseph B. Selner – CFO
Christopher Del Moral-Niles – Deputy CFO
Erika Penala – Bank of America Merrill Lynch
Previous Statements by ASBC
» Associated Banc-Corp CEO Discusses Q3 2011 Results - Earnings Call Transcript
» Associated Banc-Corp CEO Discusses Q2 2011 Results - Earnings Call Transcript
» Associated Banc-Corp Q2 2010 Earnings Call Transcript
Today, we have President and Chief Executive Officer, Phil Flynn, also CFO, Joe Selner and Deputy CFO, Chris Niles. And with that, I will turn the mike over to the company.
Thanks, Erika. There is more to Green Bay than the Packers. There is Associated Banc, so I am here to tell you little bit about us. I know many of you know about the company, so I will just do a brief introduction and talk a little bit about where we are? Some of the progress we have made of late. I will go into little bit more detail on business lines, hit some of the numbers from the third quarter and then talk a little bit about why we think Associated is something that you all consider as you think about investing in a financial space to the extent anyone thinks to stop that any more.
So, first of all, we are a Upper Midwestern bank. We have as Erika said about $22 billion in assets, about 270 banking offices were amongst the top 50 US banks. We are the largest bank headquartered in the State of Wisconsin now after the BMO, M&I transcation closed and we have been up in Wisconsin for a very long time. We just celebrated the 150th anniversary of the company just this past month or so.
We have extremely strong capital ratios dating back to a large secondary offering that we did in January of 2010. We have done that of course at a time of great stress so that we were extremely well capitalized and able to clean up our loan book as it turned out. We really didn’t use much of that capital as we did clean up the loan book in 2010. So, we find ourselves well positioned from the capital point of view.
When I first got to the company two years ago, we spent quite a bit of time thinking about what’s the vision for Associated Banc that’s translated all the way now to thinking about what our brand image should be.
But, our goal is to be the most admired Midwestern financial services company and there is different components of this vision statement that are important for us that talks about our (inaudible), serving them properly and then ultimately giving exceptional value to our shareholders.
So, this is a synopsis of what’s gone on over this last couple of years. So, I joined the company in December 2009, in fact, almost exactly two years ago. At that time, the company was under great stress, we had amongst the very worst portfolios in the country for regional bank. And so, we aggressively moved to fix those problems. So, we raised significant amount of equity, as I said in January of ‘10. In the fourth quarter of ‘09 in the best December after I got there, we took a huge charge mark-to-book quite dramatically and then throughout the course of 2010 particularly in the first two quarters sold almost $600 million of non-performing assets.
While the company was somewhat late into recognizing problems in the cycle, we did aggressively move against our problems, we turned the company to profitability down halfway through 2010 and we’ve had growing profitability since then.
We repaid our TARP monies in two chunks in April and September of this year. We were very patient and deliberate about that given the capital ratio as we had the last thing we wanted to do was repay TARP with another common stock issuance. And so, we allowed this company’s performance to improve, we’ve had very good constructive dialogue with both the OCC and Fed along the way and we are happy to be able to ultimately repay TARP with about $430 million of senior notes, $65 million of preferred stock and the rest cash on hand.
So, we got that accomplished in September, at the same time, the OCC, MOU was terminated that had been given to the company in November of 2009, it was mostly credit related issue. So, both getting the OCC’s permission to repay TARP as well as having MOU signed from the regulators point of view, we’ve got those kinds of problems behind us.
Since that time, we’ve been executing against the plan to grow our loan book and you’ve seen us now with very healthy growth throughout the course of this year and we continue to have that growth.
The Upper Midwest believe it or not is actually a pretty decent place to be in the banking place, I moved to Los Angeles, I had absolutely no idea that Wisconsin was going to be a good economy to be a banker in, but in fact, unemployment is lower there, manufacturing activity is strong and has been strong, various indexes that you look at would support that so, our customers are doing pretty well up there and particularly with the M&I BMO transaction, we are quite well positioned to take advantage of what is a reasonably good economy.