ASB,ASB.PD,ASB.PE,ASB.PF - Earnings call transcript Q2 2021

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Operator

Good afternoon, everyone, and welcome to Associated Banc-Corp's Second Quarter 2021 Earnings Conference Call. My name is Hector, and I will be your operator today. At this time, all participants are in a listen only mode.

We will be conducting a question-and-answer session at the end of this conference. Copies of the slides that will be referenced during today's call are available on the company's website at investor.associatedbank.com.

conference being this reminder, a call recorded. is As

during of statements the outlined forward-looking constitute on today, course X, Slide statements. similar or make As discussion the management expectations, beliefs, projections, that may

materially differ such any could results statements. actual from results projected forward-looking anticipated the in or Associated's

recent results today and information detailed most is factors SEC of on SEC website actual readily Risk subsequent important materially Factors from Associated's could cause factors by available XX-K Additional differ that the the filings. section incorporated the are Associated's reference. concerning and to Form information discussed the These herein

For Page a conference GAAP call, non-GAAP of financial release XX slide and measures this financial to refer to the Pages XX the press reconciliation the of the please XX tables. in to measures and mentioned of financial presentation

Following go sir. and be instructions time, Andy would for like session. over question-and-answer for turn CEO will opening Harmening, I the ahead, to At the Please conference this to President today's presentation, given remarks.

Andrew Harmening

welcome Well, good afternoon, everyone, to our quarter call. earnings second and

today Chris Pat Officer. Chief our our Ahern, are Niles, Financial Credit and Officer; Chief me Joining

to Flynn's and Associated. Philip the operational why I on capital, management. and Under job, think expense and going late I'd moment, presentation, based approach Associated my I've what moment on strong a like taking results start earnings to in is last in Associated's, credit, learned bright first future months to on with in this we're Now being our disciplined build but very as over risk taking by reputation for few my since CEO official get back President financial a to the a April, to reflect guidance,

deepen position, both qualities I what growth since a franchise saw as balance spoken build sheet, external and XXX listening validate and we've for We from with tour. process, this a customers for shared. and And foundational upon and company, customer drive our attractive to spoken arrival. qualities largest are all a personally our Associated, do over this our participating already directly started mind, and priorities XXX my of with held was the our of listen in, colleagues with working footprint. a organization. also As listening ideas great must to able feedback largely to an well as over been Throughout several some first in-person of joining to we days in many engagement. much opportunities, strong looking stakeholders, These actions I satisfaction. a Upon and taken community what's I've we my have outsider colleagues with very could known and And clean more investors. learn hundreds our internal of are customers I of win have one of across thousands across what to I've with sessions and XXX, key capital performance

a comprehensive bank. and First, Director build across competing knowing entire who lead strategies ever. digital promoted digitally our Peacock, is roadmap Channels was previously our We going forward consumer digital to important than of business more Doug Strategic that and our

And that will we management wealth of wealth bring FP&A business centralizing finally, Thayer, John integrated our lead Officer, Investment business additional our line and team leadership management Secondly, have has are of previously, the our vision already CFA, many a refocused teams to we strategic under activities. professional, to our the a for Chief discipline of seasoned execution who our strengths.

we formally the growth importantly and quarter. announce later initiatives activities cross-group intend Our this to

leverage. growth We are on strategies and to actively lead positive and additional working operating initiatives, expect these we and to

later than those to will strategies no communicate September We XXth.

the our quarter on second and environment highlights Slide markets on as touch outlined business me our X. let Now, in

an by marked been has XXXX new of normal. half transition a first The encouraging to

the strengthening, of signs the many markets. see full Midwest at in strengthening capacity. businesses to our are economy continue in running Many We

minted our during are of their seeing [ph]. Milwaukee large Encouraged as by championship World period such we to today we fact, these Gatherings those gatherings. really In Bucks, Champion outside door working got back which see recovery. our of newly been optimistic frontline our for in We're trends, front about and have participate of teams our clients to in with directly well is Associated growth the feel and year. the customers much ongoing positioned just

reflected X%. in in period In utilization fact, of end lending by portfolios, XX% loan which continue the increasing PPP see CRE excluding encouraging. as commercial trends end business quarter-over-quarter, signs of portfolio down nearly to in balances. grew these of PPP our Commercial loans, loan balances line while to and our activity segment nearly quarter. we started period by grew from X% in We pay our first find down the loan And PPP our further all with book expected over is

first signs customer and and We million the and increasing with also began confidence quarter-over-quarter, card quarter up XX% card of credit XX% $X and see to spend from spending fees up year-over-year. activity deposit

credit. to shifting Now

in million quarter-over-quarter, first XXXX, We resiliency customers After provision Non-accrual speaks over our second we negative and for another our at net continue $XX million. XXXX, the just of core quarter. loans down charge-offs $XX were and pleased XX% improving flat environment the posted quarter of half a which very remained the provision million to posted to with negative the of the $X of markets. first be credit of the of resiliency

book Taken our together the $XX reserve $XX period. share. for repurchased to a $X.XX the provision we've value quarter negative release of million common also net per charge-offs a million for stock and drive of finally, to And tangible combined added

Now trends. of few decreased quarter second average loan X%. Compared me XXXX, turning quarterly a quarter first let the loans highlight to to Slide X,

saw growth commercial lines. as lending a draw quarter end and sequential customers and several commercial, of general CRE period began we modestly utilities basis, our our solid on power portfolios, However, in on specialty to including REITs, and their

processing. their XX%, than the we've million accelerate PPP more As decrease, declining seen forgiveness expected, loan as or SBA continued to and down balances $XXX by pay

strong to After this sheet. over the They reluctant during HELOC to seeing quarter. originate driving and activity remain significant originations second carried continue refinance billion balance enjoy mortgage low mortgage quarter. $X into the in over modestly but balances activity QX, our year-to-date, We residential rate lower QX, our we add during to a mortgages

back the looking towards remain year, around the forward, half optimistic we of Looking growth. loan

like Specifically, to lending CRE update we X% year growth, excluding and provide are PPP on I is full optimistic C&I commercial of our would loan still indirect demand that combined, an initiative. expect about commercial approximately loan also auto to X%. and

to consumer As mentioned back our expanding add auto our lending are April, platform in to lending indirect product we set.

the to loans infrastructure of during the XXXX. begin booking fourth expect quarter out build to continue We and

us and allows our auto, adding add While better consumer spreads. to diversify to portfolio slightly

our expectations. CRE roughly basis, commercial XXth, by June Slide our year other period-end as are We we are on X.X% PPP commercial X, growth. full the grew track X.X% to with continuing our evaluate around and trends provides X% also with loan and a by the business which color in period two quarter while good excluding segment it's grew more on well. bit year meet that are confidence end lending to commercial during for characteristics. quarter, guidance the represented At segments verticals full line a is giving that these consumer lending us Combined for

Moving to X. Slide

trust began deposits of our increasing period see signs are We growth continued X% were which at the business this which or is in includes $X.X the to approximately positive year-over-year. and see up deposit DDA quarter the standpoint, however, nearly commercial confidence. their and ago. year from from we XX% first balances quarter-over-quarter see to a our for down billion deposit end a Associated cost sign, the This from strong continue From $XXX billion $X.X historic category We million were same customers economy. grew levels our corporate record lowest trends by or work is reflected and specialty average averages, money of period in their second to businesses putting segment, Combined quarter. highs a

During XXXX, the time by a over of and our which average higher from quarter in billion funding down past deposit wholesale at decreased $X and note, on billion approximately the network have the $X.X the five to second related second decreased work cost our also the to quarter, of quarter levels balances, steadily we quarters. decreased approximately aggregate continue end

on million going in forward. margin last early an point beginning option recognized net MSR we exercised has the one-time steady, for In have quarterly we our income - interest medium Adjusting a redemption have quarter write-ups and an we interest or reached the higher. Slide believe X.X% pre-provision PTPP, second $XXX our gains to term run increasing, can to our help X, week, of on rate we see On provide QX, pre-tax in addition, move will the first our of you and net quarter. also income inflection which held With our income down is you PTPP. banknotes, walk

and we believe of expand the will position in to strategies, PTPP second initiatives several the will deck. for strengths do on growth later quarters. PTPP initiatives XXXX cost the rolling We on cover the drive efficiency and the addition, expansion be next to quarter operating intended market over than positive this the and are half us over more incremental contemplated our capitalize leverage In out

quarter. and me Chris for our provide So income further detail pause to to Financial over and there, little a let trends margin hand our Chief Officer the it Niles, on statement

Chris Niles

Andy. Thanks,

at income we and to net these continue Turning the in saw be activity, uptick breakdown XXXX, X.XX%, factors that started interest the finishing Slide on had liability to to whilst indicated we refinance provides from net NIM to of slowing the encouraging margin quarterly expand In June steady Similarly, growth. lifted up loan Slide quarter, interest based income would with net three and decline that in month-to-month interest over QX. X, costs benefits we a realize start for net the income expected nicely last second factors NIM interest the specific pressured, X, quarters of an March. with from rising. gradually previously a

refinance slower and higher prepayment contributed side, mortgage and activity investment to securities. mortgages the declining rates on were income was On driven margins by mortgage-backed

the to over continue yields half continue mortgage refinance taper. to rise back of expect the We as wave to year, the

On that back realized income of expect fees we the unrecognized the relative to quarter, end of half recognition remain commercial and the the PPP million had year. the uptick of over side, at deferred most in an We be will of that saw approximately $XX QX.

by have yields with that's finished just the of liability X%, time the continue rates cost, momentum XX still to in continued deposit about quarter. deposits above end at points, basis mature side, yields is quarter-over-quarter. million the we especially over and average the XX period On have second true time deposit decline the where This in see consumer Average to overall quarter we CDs period. third downward for

to continue and we the our net Given trends, finish expect current margin, and second between CD rate to X.XX%. X.XX% margin full quarter's year market interest

Turning up offsetting second to income income, excluding ABRC-related in same income, Slide year-over-year. Partially first non-interest decline period the million, XX, expand the continue was a account amid million by decrease tapering the from charges, quarter-over-quarter this, from in $XX increased and primarily quarter year, by X% wave. quarter. Fee-based but fee-based down $XX XX% refinance service in $XX overall deposit in revenues the revenues at fees and The card-based came driven last mortgage million banking led by fee. quarter-over-quarter, to

strength are we slight As in $X management, million first the under assets have through business. Xst to in continue of our year, to of pleased strong range year income sale we due fee increase halfway year, up gross our tightening over Despite XX% saw quarter mortgage ended fees $XXX see QX, we're quarter-over-quarter, billion of March this $XX million margin shown sale after right, $XXX our closed million. management year-over-year. on down compression. Wealth And to the upper with gain Wealth outlook we to which Management quarter. the Even Whitnell, the of to of in banking full a are the were

on Slide Turning to XX. expenses,

for other first came a lower same decrease from core the expense than year. continue in rose quarter, X% total occupancy offsetting Personnel we last including and the the trend The quarter in personnel to from decrease first slight however quarter, million period at the expenses, saw. additional a more $XXX expenses, expenses

value per to Turning increased to capital, grow book continues on quarter-over-quarter and year-over-year $XX.XX. our Slide tangible X% share to has XX,

levels also strong. regulatory capital Associated's remains

the has as basis we capital of last XXXX, Tier Equity economic grown points over the X ratio second in from XX of Common we conserved uncertainty light quarter year. saw Our

target Credit level above Officer. to at turn We and continue a X.X%, With that, to Chief our above CETX or level TCE or Pat Ahern, let X.X%. it at me over

Patrick Ahern

baseline prices shown on fiscal by baseline recent Moody's assumptions. a CECL rate our localized low forward-looking off a COVID allowance, update assumes continuing start consumer Moody's XX. additional transitory in We to as support, be XXXX cases. for Slide to the The providing Wanted June interest Chris. on Thanks, forecast relatively a an forecast acceleration our and environment, utilized

reserve release in million core reserve net the units business allowance reduction gross and a quarter and $XX $X reduction million for commercial of oil million allowance, further our our release gross and net related This in a allowance a a second an in with of Following million by retail additional all portfolio, posted reductions CRE million and reduction a in general $XX $XX reduction first million in business-lending to our in our of the $XX $XX lending. release we XXXX, our driven quarter. was in of net gas,

had drop $XXX the CECL X the we loans down declined We ratio we're levels those in reserves halfway $XXX million, quarter. to previously X.XX% Day from with year, from expected and X.XX% to to ACLL line that of Similar back of was June to XXXX, down through quarter. prior guided that, the to expectations. end total to by XXth, our ACLL in during the loans As million our of

to and charge-offs net quarterly first Slide trends on presented from XX, with loans flat quarter. problem credit the the loans during our declined both Turning potential quarter non-accrual

to have COVID of decline all end. additional loans active also during restaurant a continued have Most Notably, quarter of key make decline. and total Our the deferrals exposures quarter quarterly needed all loan commercial in core now just second units and who across Total million have continued XXXX. at the assistance payments. to normal at X customers just business quarter. peaking quarter billion able the making of deferrals to points and $XX to in our gas, After fell second not each oil and $X.X XXXX, total deferrals retail exposures receive been up of quarter resume declined basis

that, our Going risk to other forward, and the half thoughts closing adjust With credit to of will second we pass to now to of I to we some quality, rates, with changes provision expect XXXX. as back Andy volume. indications it share look loan

Andrew Harmening

we recap XX, updated Slide On Pat. Thanks, XXXX. our guidance for

the and to guidance the strengthen income the activity to the half year of non-interest our Management in million tightening course million, year. $XXX of strong mortgage are we Wealth and come the the over see expect now We to $XXX between our in full to first reflecting business year continue

are a As guidance. growth result planning prior withdrawing ongoing expense of for our our total and efficiency initiatives, we XXXX

of impact XXXX accruals expense initiatives, the to Before incentive we approximately expense. business expected total and additional million, development $XXX reflecting be for will such million $XXX

QX. QX expenses reiterate. initiatives, each the will PTPP to we total the announce second will deliver to Now in reflect ultimately in later Even quarter with of our and but for XXXX still above impact baseline of expenses initiatives expect that me let QX, growth our our we're the support contemplating we

mentioned, risk your provision due adjusted be economic continue expect to trends that, future be With rate to as volume. we loan to accordingly, as questions. and such we'd conditions, credit inclusive we Lastly, to happy experience take and positive

Operator

we Thank proceed session. you. At Piper first question. this from line be of with Instructions] will a Scott comes [Operator conducting time, Please Your Siefers the question Sandler. with your question-and-answer

Scott Siefers

the question. Good for taking afternoon guys. Thanks

Andrew Harmening

Good afternoon, Scott.

Scott Siefers

you. Hey, for Chris, one maybe first

of imagine you've looks would made some part million, year in year-to-date maybe And extent but margin. sort it mind the fees the But maybe big just could, that you've bit [ph] and off on you so for of this thoughts around takes, of margins sort are the a the please. you PPP $XXX puts please, that. know rolling give the ex-PPP tailwind, that, to acceleration little thoughts of some CDs of second half. So I you on the I later should refreshing good ex-PPP got

Chris Niles

Absolutely.

expect So of growth. be to seeing last four above which of the We're have which And to restated anticipating stated, levels, of will now together and even meaningfully benefit off anticipating as sort medium to banknotes, they CDs anticipating the where see will we factors our paid June. We're you I us. year, the we're week. a what the hopefully, paid stabilization fully term benefits to come off having of in to the slightly at move we're higher half margins drive those and today's all the as we LIBOR expecting of back were loan towards we from see repricing,

Scott Siefers

you'll Perfect. middle high-end need get a acceleration to And right. All the fee towards side on similarly, so the that of range. or then little

but going you, thing puts would Just the into curious and drivers. a of as second area we you like [ph] time look fees? of about the on key be see the sort Wealth main takes for of year same is sounds Management It growth maybe to half

Chris Niles

expect this certainly on was the given for a subsequent good We fees quarter end the based a pretty quarter, for levels XXth quarter have set typically Management, Wealth markets. to which point June good that

We expect in deposit nicely, half also through we've a the seen back year. move that card on continue and we what be to to also fees, as of in based come fees see the can positive

Scott Siefers

All All much. it. right, Thank guys appreciate right. Perfect. you Chris. I very

Andrew Harmening

Thanks, Scott.

Operator

question. Please of with the question with comes from your next Young Your Truist line Securities. Michael proceed

Michael Young

taking thanks question this Hey, afternoon. for my

Andrew Harmening

Michael. Afternoon,

Chris Niles

Michael. Hi,

Michael Young

know take Green can And was Bay, you win. the that congrats what the on but Milwaukee hope get, you I right?

Andrew Harmening

it's Maybe one many. of

Michael Young

right the direction. in step go, you Here

So just the on bow maybe follow wanted commentary. to and put expense up, of a kind

you increased the by the in would be think PPP would half. said expenses covered expect the you of - I incremental So second it fees kind

people of hired, the be on dollar of ongoing And expenses to in could going then and an run or expense that in put sort rate? those lot get longer-term one-time is of you just a maybe So kind on kind to a put basis, that. are of place amount things

Andrew Harmening

Andy. is this Well, Yeah.

opposed will as that, PPP. that interest that we clarify We PTPP, clearly believe it increase an Let me in net cover are seeing to is income. just

increase interest increases expect we so additionally we the that margin net income, in third even that And in gets by avoid believe quarter.

So, the right the and We do initiatives. the that making any and QX after quarter. we now our exceed finalizing individually as quarter, third new fourth even fourth come we we're PTPP to investments through each that in do current environment our investment are pandemic. the company recognizing or we're quarter growth anticipate quarter in But the in, third the of made in expect the

Michael Young

clarification. the and Okay. thanks That's for helpful,

my, the didn't I then front. more that sort Sorry, capital question on And correctly. of hear was other guess I my

guys the sort deploying but of of kind also been that buyback, looking at these growth you as as you've are well. is initiatives capital, Just investing in there active lot with share a of you're

how across just understand are and to the weighing allocation? that of trying kind of to how future pertain about of of capital kind investments payback various period will or kind you So think guys the the platform,

Andrew Harmening

start I'll one. have out, Chris, that Yeah, one on and piggyback this maybe

course, as growth number is at So our growth priority. funding we and of initiatives, look our growth one

believe our So in when box. to operating risk credit obviously a step have think fashion, leverage, out of we prudent we of we don't

and away be bit the the expect use will maybe from shift a initiatives repurchase little finalize of capital, as as probably on We much the a we the much on in will not quite share growth.

combined. invest you strategy dividend you at will that then we positive of prudent also course growth leverage look strategy operating as we in is one. And do the a think have your framework, the - and will between share drive in risk buyback and So that be number margin, what businesses you

numbers, pull we that the to we'll finalize So well. capital plan those as through as

Michael Young

side. maybe, financial going more kind Yeah, little a ask add could Okay. I of bit metrics on to the was Chris,

or platforms, or back you value like recoup hiring tangible at adding new earn origination timelines investment that, of cetera? are you're as et book looking certain a So teams, like periods anything

Chris Niles

and those look rate we for The at the metrics news pay incremental a variety to and measures. good don't of on significant themselves return are, of tend people, other is, have lines than very addition costs, quickly. of typically We internal adjacent other people

we later the news of we look and that encouraged be measures quarter. by will early forward announcing have, we to this that So more

Michael Young

Okay, thank you.

Andrew Harmening

Michael. Thanks,

Operator

with comes McEvoy the question. Stephens line Please your Inc. of proceed Your next question from with Terry

Terry McEvoy

afternoon, everyone. Good

Andrew Harmening

afternoon, Good Terry.

Chris Niles

Terry. Hi,

Terry McEvoy

A Andy. for question

run the expense and road, - they As last them presenting, of the I'm platform the heard kind colleagues, the promotion What days XXX curious you individual comments called the revenue you'd the where digital could were competitors? listening to internally into and bucket on that the your line you out strategy. bucket, just then kind the your ideas given just would digital technology to up, are maybe well relative you bucket you on were to those of the as put your the to

Andrew Harmening

Well, digital reason we Doug I'm the a fact, encouraged would be looking we And the maybe questions, thing what great but to talk afraid him first is, in, for we're promoted we that lot legacy And attack we will Terry. And bold. the don't be more. strategy be a in today, I to said have say have I yeah, about I serviceable by living on when think what when I guess a the world is you fintechs, in advantage. is, Peacock, trust

job, I when believe it my prior in I this And believe so I position. in firmly on digital and omnichannel, took this

will want amount we that is, a in, The at combination certainly, will product have heard digital participate strategy spend we I'd what want right small local and that finalizing well of we're what in is, of the what delivery colleagues grow. to as in still. business we our to digital. from inherently is, now. businesses commercial, money to our What is, strategy exact in we're We our So look our markets

expect as be small commercial, as well. We and to we're will well business compete trying focus our to finalize in those very and a plans

time when one deliver September said, and expect we I before that that's follow in to and heard come things be reason on plan. I you or for want to I, the they investment the fact and you, it a And heard I have there as XXth and from community to well. why we we So, think our bold,

that and The the we've far and colleagues, find interestingly, folks wasn't listening it on evenly team. of as me with you and that that, our that's as encouraging, When you you many about listening we entire and So get investment have, when understand buy-in strategies our forward what typically the and nuance I on is and the you wasn't done thing just you people's start to to apart. customers mind exactly deliver our get talked when community, as that feedback what execution. executive leadership bring we

So having it's know a getting talk them them our been to really in-person, days to colleagues they good want to XX reason know also personally, a to but what getting to know from our company.

Terry McEvoy

Great Reading then maybe missed follow-up against run-off as color, one. that on there oil I guess is it was higher the And much portfolio, Andy. day gas my of that's portfolio, my question. now that here but $XX a the I million quarter though reserve and and not which question. last

then we ACLL X that Day move level goes down, that should X.XX%? to the of expect ratio As below

Andrew Harmening

Pat, one? why take you that don't

Patrick Ahern

to less and we with Yes, we continue specific oil that do X, right to X% to wind gas, decrease in expect and continue as total down oil CECL than gas Day ACLL balances to below of now.

So we that trend X terms ACLL. to does effect, to big a back CECL Day in looking would continue that of and the have expect

Terry McEvoy

Great. that. Thanks for

Andrew Harmening

Terry. Thanks,

Operator

next KBW. question. Please of proceed Your the McGratty with comes from with your Chris line question

Chris McGratty

you're a is point just I $XX want sure, to And using? guidance - the guess low like the rate mid to starting I've mid-XXs, that QX, for run million on great. here. what Okay, that like is PPNR right got from make

Andrew Harmening

Chris. We up, pull that

Chris Niles

it. X, We're Slide the starting the which PTPP has on with

Chris McGratty

at Okay. that. look Yes. I can

Chris Niles

Yeah.

Chris McGratty

run kind maybe of a And -

Chris Niles

Yeah.

Chris McGratty

out the ROE, maybe September. Andy, up, comment high-level profitability wait I that targets digging to efficiency. you're of to the longer laying for broader, we while have just - kind term envision Maybe ROA Do you on appreciate expense medium

be things was that in the looking that's we going one I wondering, think if I we will included that of was that. be for. to would,

Andrew Harmening

Yeah.

efficiency to key right to walking it's that investments we're are operating our is what and our externally. plan need want does period we Our is, categories [ph], show are, all and what that whether company through that, drivers, the ratio, those whether what that expect make to now TCE going leverage, that to we you're our whether and sure the for see that's payback that's and the the to what know that's

we're we with what our ratios. very what our are, heard, and how that to much key align trying hits So, strategies

Chris McGratty

be that would X you going again, to And provide Day you're then Chris? bogey to. percentage that just, that CECL Can That can that lastly, referenced, get the great. you I Great. missed you ultimately

Chris Niles

CECL equal We're we at started where Yeah. X about Day XXX. currently to

we to that we see where that it are that. problem expect it given without XXX float non-accrual can to decreased, to, So down get to are to could oil loans but have continue trend get going, that where watch down - down gas, and loans back potential we'll will XXX, range, we

Chris McGratty

Thank you.

Operator

question question. with the next line your from comes Capital Your Please with Markets. Jon Arfstrom proceed of RBC

Jon Arfstrom

Thanks, good afternoon.

Andrew Harmening

Jon. afternoon, Good

Chris Niles

Hi, Jon.

Jon Arfstrom

Talk about a and on FP&A? And what's A couple that? initiatives, the about, that follow-up Andy, of detail more bit aligns your us help little picture. understand questions, bigger can talk behind with how you give growth little it us a that. centralized

Andrew Harmening

culture, your product. when But approach talk can things as in only talk are about good are the do all Absolutely. driving those and about you Look, in good execution. disciplined as about to you things fun things you about. they talk revenue, When think you to change

that We with each come piece. of we We to additional to into rolls as the sure reviews. all understanding place. business once, our make make that to tracking are our timing initiatives make clearly sure out to so sure to at that And want we we is want our in metrics. that key We know into sure our financial how We forecast. want monthly that, want make to rolls want rolls up that

the really or emphasize. a see best you what in need my practice. so I've we it and my expect, get know as stop. past it, mind, And to and that And experienced of I correct what pieces a granular quickly know having we team down to in we to

incredibly bring we still CFO, that of business. when our tied into it's the line so And under essentially

we're all However, time. view doing want thing when budgeting have a that and our I performance forecasting, that to me, really the tracking to was initiatives a important on of

promises and think make that best either both to is we the so the line to want our side let to And don't as point. down, getting to community, this investment I get to I that colleagues and in way

Jon Arfstrom

listening helpful. maybe or quarter it can maybe terms bullishness from ago? the not on but That's of level Pat on commercial And Pat in growth hear outlook? Associated, Chris, was reputation their in tour, customers, than a On of of but on it add what of Chris, optimism necessarily is and or your different much to did this, you

Andrew Harmening

and activity, then of me I that with of I'll our thinking increased is just what about buyout week. whether to general someone, And to purchases. XX seems be I of Let mean that's that's out, beginning There one start something. I'm equipment customers thinking defer was is about level well. whether M&A, hearing of the be last as that a a whether Pat it

slight increases in So I increases our we see in our believe slight pipelines. we that see - do

We there line demand on is than that I as is is tell in to are utilization, pent-up slight almost, but it that see a starting you if seeing increase business a can slight We that drawdown deposits. move. more anecdotally,

have some going right heard. are on can those talk had, There's chain, that of and handle. now supply as but saying, course as So the they them are we conversations anecdotally, gosh, we of that about we've much

to not Now me we be Pat? additive, that the improve, but will to that will want that recovery. and stop

Patrick Ahern

agree Yeah, that. would I with

a going is - they clients Obviously, on overarching of themes and think that, liquidity, starting is, et country with that think as to still back. have we're from it'd investment - really them last like dealing lot the of the only deploy the hearing supply. catch-up are outpacing whether are constraints in some is demand our many and holding I lot chain of the technology, things mentioned of There's equipment, again Andy they're supply labor cetera. new I And be a year.

Jon Arfstrom

I'm Thank And ring and perimeter you of kind curious markets the those about then they're just thinking which Louis, St. share, big Thanks smaller have And where and markets? for you. then one you, the maybe Chicago that. about And bigger markets for Twin the here, how about the think of do geography picture I'm you Andy, your - Cities, just how you're franchise? like thinking but more company. of

Andrew Harmening

absolutely. Yeah,

do but hold, and of you move we That's the without get relationships. between overview. to population have those. to on and footprint. Bay, time me, those why So, those discipline and make time, side roots scale value clearly we have the that, really very and are office long-term I'm I'll massive Wisconsin, with Milwaukee to you Milwaukee, to a in quick small Associated commercial business you strong sure side and businesses do a as can Green want of splitting I well in look meeting feel But just a and a we concentration. Milwaukee. having presence We deep customers we maintain the Northeast the expect

compete So well small the we to Chicago, in expect in on business commercial side the quite side, on would Minneapolis.

large, urban, to We market every as you we is mid-term do you Louis in markets. and yet, that rural, haven't but intend you what build St. show focused your that major the attractive digital we much in out strategy, on small. can compete makes look Then and

mid-term. emphasis And point the of so will for that us be on a

So right that's about now. thinking how we're it

we both merger initiatives will up second get on into I in standpoint and the market. As step a open and optionality scale us, from from believe potentially execute then for and growth and market that acquisition those, ultimately our standpoint, a

Jon Arfstrom

a Thanks lot. Okay.

Operator

[Operator from Instructions] James. line of proceed Daniel with the your next question. Please comes Tamayo Raymond Your question with

Daniel Tamayo

my guys. afternoon for taking Thanks good questions. Hi,

Andrew Harmening

Daniel. afternoon, Good

Daniel Tamayo

to And pre-pandemic lines you're levels for sense Just give to a the line increase able referred maybe far that below in those modest quantify that of are? couple us you wondering, a utilization times. how if

Andrew Harmening

in I'll trough the up was and end. bottom on it We is quarter utilization, line low take in X% at this and we XX% a are very a think we that, Andy. April, Daniel, had

look speaking what at about we are. numbers historic that, that's historically our as below XX% Now,

is So room. we there think

We are a forecasting not that, to a that. massive to increase increase modest

So capacity and of we're our see room, customers drawdown. have to seeing that, billion evidence that over will, from we clearly that we $X

to growth X% So that CRE and there. be enough growth second will out steady, commercial will have in slow we target to we that the X% believe but that the that be meet half,

Daniel Tamayo

on All on second quarters? you the like in quarter - have growth to - also right, prior the just guess relative terrific. And commercial I the paydowns side, loan any sticking what on if look commentary

Patrick Ahern

books, core had fairly activity, a we in healthy increase. our saw obviously, certainly Right but here. net We a Sure. commercial

transactions and due loans. the obviously, exceeded a down, fairly bank, of new the of all rollover shorter-term for pay So overall nice net we had

it positive a So net was quarter.

Daniel Tamayo

that's All right. guys. Well, I Terrific. all Thanks had.

Andrew Harmening

Thanks. Daniel.

Operator

the no to there I'd gentlemen, turn time. and are Ladies for this like at Andy Harmening further questions over to call back remarks. closing

Andrew Harmening

again Well, this We for quarter. you forward look us to later in closing, today. I to thank to just want you joining talking

please Banc. meantime, in thank us, your for any Associated for have the hesitate call. you interest in And questions don't you to If

Operator

conclude Ladies and conference. gentlemen, does this today's

all participation. You your your Thank lines for you at may disconnect time. this

Associated Banc-Corp (ASB) 23 Jul 212021 Q2 Earnings call transcript