ASB - Earnings call transcript Q3 2021

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Operator

Good afternoon, everyone, and welcome to Associated Banc-Corp's Third Quarter 2021 Earnings Conference Call. My name is Shemali, 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.

Andy Harmening

afternoon, continue quarter, by update we Officer. things Chris want kick then Well, will for you by month, internally quarter Chris and where footprint. is Chief the Harmening, have signs today Pat thank expanding, joined rates Ahern, you, On both or Shemali. on an presented and in a credit. in through Financial manufacturing X%. and I'm to give Pat off I'm everyone, to highlights and macro you in the the I strategic that we're on update and earnings the Officer; fees an covering initiatives externally call. last positive with XXXX our to our at Andy economy Chief will third we Niles, Credit finally our remained welcome Good momentum which of macro the walk has Midwestern in below been are out seeing markets. Wisconsin and And then Unemployment see level, strengthening Minnesota a consistently reflected margin, us expenses. and we close And on our

surging this Delta do about next. year is third quarter of cycle the we supply While growth and new latter optimistic variant over of in part the and into chain concerns challenges, dominated by remain

Our customers are doing well.

continues credit and in Associate expansion. participate coming the well-positioned be is to performance Sound foundational, to

let third outlined quarter on me Now, Slide touch X. as on highlights

top-line, grew, business. across revenue and the income On we expansion key gains all quarter. of saw additional during realized fee our areas the businesses we our grew, Interest

also see second up activity, We transactions of and all deposit the signs capital spending from with customer market increasing confidence levels, quarter.

moderate have also funding On the costs. our deposit further to allowed rising liability levels us side,

to from way as Now continue we benefit shifting credit, to improving our XXXX. backdrop we credit through work

provision markets quarter negative Our to continued proven the to another throughout posting quarter and the releases two, in reserve and and be we year. have posted each customers net further of have After one quarter resilient, recover third release. reserve in

QX, expenses CECL embark Our an of levels. And we be multiple incurred one flat. exit were $X day reserves million we our disciplined, from CECL the in on aside as facility From to initiatives. are we perspective, operating even our continue now costs below fairly expense

Taken together, equity average year-to-date drive helped over these to on our factors us returns have tangible XX%. common

commercial is portfolios. led over by lending carried X% see quarter. And Moving the business our by commercial over announce deeper shared in loans, excluding I'm that to utilization I increased trend General and little PPP Average We back Slide line a signs into pleased want third and in starting loans. dive activity to into we're X, quarter-over-quarter Commercial. QX grew lending that to to this of

Additionally, CRE we lending continue as see to growth several categories specialized in Construction.

pipelines. line, resurgence and we having conversations the encouraged the the due by on economy to XX our the continue we're of September We're loans to in officially across unexpected While the starting activity, during faced are and funded vertical quarter launch XX, certain finance front by also on already activity. emerge customer states. our headwinds be have encouraged that We of auto consumer COVID, the aspects to numbers

returns to to early further the quarter-over-quarter, our finally, was slightly and in origination to card run stronger and auto balances quarter. our in about allows off the excited spending consumer gas oil significant retail suggesting and portfolios uptick expected. confidence the than This card And us better XX% in set remarkably of addition Outstanding our greater in a our credit PPP product business. increased diversify portfolio, rate, Consumer annualized our lending are continue activities. traditional also spreads mortgage We earn our activity as X% customers.

to the be the to We over QX. the down and in we PPP expect be majority coming portfolio oil largely gas down of paid year. our paid And expect remaining

well historic utilization the be narrowed of averages, contributor Additional rebound quarter momentum lending points business to loan since longer-term our was utilization are utilization points. July highlighted Slide for Commercial experience more a reflecting And continue On seen to below commercial out to a the trends line about on line also trend. during our spot see was our the we've was we X. And coming third percentage the relative Line line April, bright gap numbers September, seems utilization close In pleased in gap historical to we're highest the XXXX. a were our funding levels. first trend, XX.X positive low while our expansion our X.X than quarter. still levels. below lending establishing August commercial and had the By for a our quarter, September of pre-COVID rebound. to Construction quarters. this to percentage the remain customers five monthly

to both XXXX. Our And commitments estate given construction outstandings year-over-year and substantial continue book well a proactive will outstandings we're grow basis. into team and on to real commercial late continue grow our confident back commitments,

out headwinds the we As expectation we loan around in played to our quarter. the response remain are that fourth growth, the to look adjusting optimistic but quarter, third in economic

flat C&I full X%. approximately PPP of CRE X, our Specifically, masked in pre-provision And On the that leverage. positive pre-tax year income excluding we've pre-tax combined to our for now operating of our Slide while forward quarter a expect walk our we improvement essentially income commercial provided This and and was is growth second the from pre-tax pre-provision million $X quarterly results quarter. quarter. third the the

over our QX. announced past we expansion the Looking XXXX, in expected the remain initiatives. interest targets were income and into second-half head $XX to pre-tax million drop quarter-over-quarter contributors items our committed that more pre-provision We last as provisioning, income than quarter I fee newly incremental for contemplated these of to mentioned both we to significant costs income cover the in improvement.

we plan. Slide four that September. Slide vision some of strategic announced start to We highlight to key I'd strategies turning steps our X, like our we'd the Now of strategic we've shows against immediately, our to pillars and said we on X the make taken progress back have. executing real in

We continue expand to capabilities. our lending

up and up. in Our business our as our activity been volumes to-date up originating broader states We're rollout running auto mode across through pilot and loans expectations, in program currently finance book XX has and move with with dealer dealer ramp loans to be looking to we network. is we'll XX partners our QX line our dealers. a and signed nearly XXX Origination

team initiatives. rounded out equipment In lending our leadership both asset-based the addition, finance, executive our we've for and

of core we footprint. to markets relationship our commercial add to business better and experience new targeting needs and our specialists customers. areas, increased opportunities focus wealth lending into continued our across the to managers management brought serve We small And while our

ways integrate increased experience digital track we're towards a efforts, the that transform over a our to digital we FinTech front, ahead finally, of repurchased our common banking doing capital and always XX%. we optimize put, building head million preferred customization looking common and third more of launch partners our first increased the $XX digital to stock, the the with consumer transition for spending into platform, as on several this that balance improve And in the to forward on bringing are easily This look customer in on our us new by and channels and million And we our we steam is architecture on first step were quarter momentum to next quarter will On the allow sheet. years. of big and a we're alone, plan dividend experience. technology stock, full XXXX. $XXX our to Simply

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

Chris Niles

Andy. Thanks,

quarter increased million and $X Turning our prior interest the higher X%, and from the net board income to driven costs. or time deposit across lower by interest funding Slide income X,

in and which seen liability has increased pressured quarterly expanding slightly Our by loan quarter-over-quarter. compressed refinance a steady NIM yields. and liquidity interest decline mortgage one levels to margin slowing continued our commercial deals high stabilized activity be We've basis costs. net point

average levels. Slide X, to to Moving we see record deposit continue

$X.X deposits our billion average have This a accounted from were for quarter-end year or cost year-over-year basis. approximately low on quarter categories. deposits growth $X to a and of grown cost our concentrated be Third deposit in continues ago, over at XX% up total X% Low billion deposits.

year-over-year. and third quarter decreased decreased over past wholesale we balances. high to from have quarters, the levels cost REIT by to and time funding the and During the our steadily our deposits nearly of have Meanwhile, continued billion $X $X.X work [ph] network continued down approximately quarter, by billion ag XXXX. decrease five

deposit and forward actions XXXX. the anticipated margins and help into to QX pricing funding are Looking our taken have we in improve

additional levels the given are late better, over to X, anticipate be deploying approximately in accretive or of X% investment liquidity, to in and cash QX. current nine months. Slide earnings. investing began portfolio our high balances into Reinvestment We to yields securities securities the expected next Turning we

XX% north XXXX, by the total to year-end assets XX% XXXX. investment for and portfolio to rebuild of of target investment ratio to continue somewhere We between XX% and of expect and assets

to our year margin for expect Looking we full year year. at the X.XX% forward, approximately full this end

grew XX, MSR assisted banking our $X where by turning comment on grew income saw Slide Now non-interest including we will categories key prior income. nicely net growth Fee the during quarter. recoveries. the from several income mortgage We unit, million across to quarter,

Card saw fee up base fees growth solid X%. and service XX% also account deposits were X% year-over-year. also up revenues, charges were our fees based where the in and We for up quarter, on

pandemic. as view together, confidence we growing Taken from encouraging consumer emerge the indicators as these we of trends growth,

gains X% the we strength But for our fee businesses, asset quarter. XX, expenses. quarter includes from expect continued impact, income our Slide of On new distributions. private most $X grew by we the at our range. in Reflecting guidance to the even in highlight income excluding million also this to finish non-interest tied Our XXXX core now upper-end equity recent previous the nearly

$XXX in quarter, million million from a million, quarter facilities at costs. came $X $X increase prior including third of The exit the

about up million. were expenses $X Excluding costs, these exit

strategic consistent expense continue new we committed to management to our Taking into total actions, initiative discipline. continue expect to non-interest consideration As with maintain expense rollout come pending our in our we initiatives, XXXX to range. we guidance the prior our remain all

Lastly, let on me comment capital.

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

capital levels Associated's regulatory strong. all remained

Our common the quarter XXXX, equity preferred grown shares, repurchased of the we redeemed third from has ratio X and as increased Tier even dividend.

at our CETX the target With it update Chief above We levels you on above to turn Credit at over credit an X.X%. give or Pat will Officer, let TCE to Ahern that, to and continue me X.X%, portfolio. or

Pat Ahern

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

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

levels total declined We One X.XX% quarter. to of guided of ACLL drop our down million, below XX, the million dropped expected we to $XXX by Day during the down quarters to three loans way the the loans back that ratio X.XX% September through of $XXX prior CECL quarter. year, XXXX. end previously the we've our of from that to In mark. comfortably was in Furthermore, to had reserves As from ACLL

trends metrics the continue course quarter. credit of over quarterly our presented on improve key credit to Slide Turning our of XX, the most to

retailer continue declines and increases charge-offs to XX% center problem to COVID were quarter, loans in and commercial the the in tied loans only by were one exposures. year-over-year. some in also quarter, also led down continued shopping pressure select slightly key our Non-accrual Potential QX industries. to decline for decreased exposures Our increased, Net from increased with the COVID-related tied and credit.

normalize trends as we into these to expect XXXX. We get

we ratings, back will to look to to share economic changes the fourth that, adjust round thoughts, quarter, credit some risk provision loan now the to expect indications With quality out and it For pass of as conditions, final reflect to Andy, closing volume. other XXXX. we to I quarter of

Andy Harmening

are faced we recap in expecting PPP to approximately updated year XX, back-half Slide XXXX. we come commercial excluding headwinds the growth X%. in On loan our full of the guidance for year, Pat. the we Amid Thanks, at economic

we full net our back margin and reflect income at commercial core happy lastly, expect $XXX remainder over levels, And take We X.X% And million other loan to experience year. September, we'd due questions. changes quality be interest the gave to with finish $XXX range, as economic continue economic that, upper-end conditions, strength million grade in to your And and of mentioned, the positive continued for to non-interest expect land to reflecting due of to fee at trends be as and elevated in and such, indications we year of to I our to any the of loan we businesses to expect we conditions liquidity volume. adjusted yields. provision compressed quarter credit risk fourth approximately to XXXX the credit

Operator

first [Operator Instructions] Sandler. your is from Piper Scott questions. question with Siefers Please our And with proceed

Scott Siefers

preference start talk $X for Definitely, the or your Can plan of with maybe just so. Chris, guys. taking sort for liquidity billion on what wanted And to of be sort what of current questions. to the hit the the bit little plus or over able of be rate environment the to the what are, about will relative sort to you to portfolio? rates? excess you'd targeted like assumptions months the buy to those of Thanks you composition I interest nine rate kind deploy necessary of reinvestment next a

Chris Niles

Sure.

fundamental we like adding in for with range, what won't perspective, we and in mix the in what be will a a little the last reinvestment see Scott, think more volume. years, current change will a consistent our And which overall, from from So September. doing that purchased yields yield X% just we've plus couple we've called the look I you lot portfolio, is think be been out that portfolio what a

Scott Siefers

Excellent. Okay.

great. and on doesn't things just So that static in long further depend of the that, that sort like would end the curve be of environment increases

Chris Niles

if Static plan, move environment where and even you better. rates investment on that can achieve this higher, will be and deliver

Scott Siefers

Wonderful.

remaining PPP fees that - the us what then, know pardon PPP And and flow through are, NII will let margin? good. Okay, you can me,

Chris Niles

Sure.

we half Slide materials again, meant, sorry X what million the on think - That mean detailed probably come that more for will the of and I something press those is the than but clarity, of at release I of majority think we table off. The it. sorry. in doesn't So just all it, $X

Scott Siefers

Yeah, sorry, I missed Okay, perfect. that.

well. me. as quarter, missed last I Appreciate think I that you humoring

right. good. much. Thank So you All very

Chris Niles

Sure.

Operator

Michael Young Truist with questions. with Our next question from is proceed Please Securities. your

Michael Young

good Hey, afternoon.

Andy Harmening

Good Michael. afternoon,

Michael Young

on just wanted the I commercial loan to touch growth. base

end the rates demand or maybe month flip you've of moving of the et fundings highlighted on in to from moving range kind forward, moving then, lot a of But good of positives a and targeted utilization two lower think down side, ago. I the terms cetera. construction higher,

talk what's just any or would you driving payoffs could market that competition So, that? about helpful? color Is or demand, the in be

Andy Harmening

that take I'll Andy, is this Yeah, one.

driver. at part been you to which the gas, we at fourth When and will have quarter, rates mortgage portfolio. fourth a a of and had be then running look have the very not increase far, the expect major utilization and oil down. we we look And things, warehouse look modest is we quarter, what of to to line has down impact As so we've run the on you at few have that

So, believe lull is that you bit a when and time, together, the quarter, remain at at pieces down say see that But our range. strong. little pipelines drives you the look we commercial would to in what third those of all I the same us of end lower the

feel fundamental feel the new up they're already taking we as about and before. in get first quarter, and deals, relationship looks about And we state field the of our have quarter. into business very folks So we running the heading heading the good initiatives the didn't in good at managers fourth we

So, that's the down primary for the fourth quarter. driver

Michael Young

then that's Okay, long just as you're curve. end as rates that, And estate at that like anything started up curious at that have bringing helpful. allocation my especially kind longer any how capital you're to especially great, follow-up, the the that Does kind you're of move loan to duration, pertains looking change of of differently, mainly residential, real the it like bear? model to categories, or looking on as

Andy Harmening

and over general to time. don't customers going C&I hold repricing, but applications So, balances less our shifting as of begun from time, to volume such static will, as and still benefit it would going finance, had we over expect looking in continue ourselves what online are said, to equipment repricing mortgage, the as the poised at in forward, such auto, already and we've fixed which shorter CRE away participate the from reposition and would come are what what And think duration, strategically we've differently. say towards I we're We changes to the rising on. I less repricing and which to is, rates more expectation there seen gently assets, we rate

Michael Young

Okay, great.

Andy Harmening

So, that's unchanged.

Michael Young

Right.

I Okay. was Yeah, about. what that's curious

the color. I Thanks. So appreciate

Andy Harmening

question have Shemali, next queue? a in we do

Pat Ahern

we have Shemali, lost you?

Michael Young

I'm not if open, but still helps. can sure line my you still guys, that if is I hear

Andy Harmening

moderator as your question. is open. helpful next That have skills I'd happy still a as is be some line the take and And I to well.

happy If answer. for got us, on it you've to

Michael Young

stall. nothing it out and to throw else there I'll

when funding. rate on guys factor of a Just you of been kind higher into needed a for kind pull as the a the deposits buffer you nice forward moving environment, on that's historically network you But can rates I think potentially in But, the long again, on scarcity. a basis. And, we're just from you rising going maybe a as that, context forward about go forward. just talk of that about to way liquidity think

Andy Harmening

been our core We've maintain able nicely deposits. to

a As at you maintained low can level. that see pretty we've

Our key is coming retention. driver remain a which satisfaction last year, of customer off scores also satisfaction those strong, pretty of

markets. we networks positive community that in that's whether factor markets, the a key for So, are major believe a big metropolitan play our us, very in they

Chris Niles

so support And good so would in them, will remaining funding, articulated. 'XX, to there. funding, to active large say when those their just with outstanding, large access incremental dynamics access directly to been tried manage on manage same our or those all positive to those providers the the active we open largest you'll the on hope we we've the we to But remain we'll that a levels should starts a to liquidity of down. with that cost, be dealers, deposits, still current that working we've very And keep we Andy the to those in down XXXX the as we're market that relationships and so easy manage and in so see each ready market necessitates how of we've may us to need those access endeavored perhaps providers the components when grow have core have with the reflected back large require come the balances that dealers, complexes to X, same Slide The us we're mutual take and from way deposits we And would page, network and flow. that largest broker come low fund have funding providers has turn. us incremental balances and

Pat Ahern

still from a that the taking strength that perspective, deposits is deposits which have but network we optionality, also outside was network I have are of different think available. I we of branch additional

Chris Niles

take happy to as I'd Andy this question. be Harmening next

Michael Young

I'll get Let continue. just me but operator guess back, know you if the I

a been see Just share on strong to XQ. some it's higher utilization quarter. bit probably than little obviously buyback, good not where throughout this It's

there's you at point So strong How allocation or some M&A? escalating more pretty just walking look there to lean still you at on are capital you heavily through do appetite the start or bucket? dividend,

Andy Harmening

would take to company. way is growth. first what of focus our We that. This the most part is best I'll the And Andy, say is I think profitable advance on the that's

really able an there's in we're And up our position so have where we're give back of ramped felt core XXXX, growth. priority as small remain, that and position, our good there where a a businesses one initiatives trajectory slowdown we commercial ourselves feel head and we makers. into is our some opportunity to towards the getting business to and will we But situation that we've add the We Chris? If had we'll number optionality. in about like that maximize the bankers we to and stock. year-end is as been capital short-term buy

Chris Niles

well. it said You

And think our competitive took we the in dividend third First we growth, dividend. competitive positioning. second, the actions with we maintain enhanced organic quarter,

internal opportunities, Third, the looking at is the but key there. inorganic focus organic

the So we incremental case downplayed with use a have deploy share always moment. towards will use But And good in at those those we plans all we capital the capital. look initiatives. for our growth, for frankly, near-term are the of purchases organic as to have

Andy Harmening

there's another Again, out you. Thank there. question if

Michael Young

Are to lines? we just… other connected? you people Are able open other Are guys

Andy Harmening

has moderator our the have line. so been momentarily, Yeah, he Shemali reposition I think can't disconnected that we

[indiscernible] right can besides you be hear are So the good to us, I now others think already

Michael Young

back I'll if ask they're others so questions, able. step Well, can

Andy Harmening

Yeah.

your analysts that our send for feel online, that's to ben.mccarville@associatedbank.com. So questions Ben directly free McCarville, are email into

we order answer come them information we'll you sure of have queue to be as along. his most in think And I handy.

Pat Ahern

series operating but really bank a events moderators, I serving at as that heck to hope do of this are than you we're like we better it. from we're trying hear

Ben McCarville

couple say, through came additional So questions came we first I'll a from And here. questions that Siefers, Scott. through I one that the recite will the have from Scott

So, XQ million think $X but quarter, amount in be charges in million you charges been strategic 'XX? full had of the $X for year what 'XX. third saying took initiatives I in will the

So $X remaining full million in is embedded guide? the year 'XX

Andy Harmening

think articulated right obviously about think total properly. We're that and full disciplined those way that changing leads there that's guide those you've guide, about through as a likely amount I the it, as our diligent that to not Scott. us our so range But is be We're we'll working of and unchanged. managing expense outcomes.

Ben McCarville

from quarter? increase this Scott, problem linked one in potential was the XX% loans Next quarter what

Andy Harmening

Pat?

Pat Ahern

So credits. like, exposure, theater et cetera. select see portfolio, handful over of is mentioned, select to movie those call don't systemic I hospitality, were COVID-related really very It's the deals tied transportation, which industries, really that we what really we as a some a as increase

Ben McCarville

within existing are type Also seeing, inflation what initiatives? from your absorb wage it of and Scott, efficiency you you can

Andy Harmening

great Yeah, question. It's seeing. we're all something

footprint, been increase As appropriate for November That we probably we believe XXXX. for. in entire week, noticed, effective announced our XX. plans you wage we across have increase place wage a budgeted And has last already

success we going relative a as to hearing marketplace. the we've pretty we're what So is absorb we turnover forward the nice very what effectively. good can year-over-year had see news increases other on And in

Ben McCarville

than less is specific Last the provision Scott, usual. guidance question from

done Day that provisions the a we'll we reserve we keep was CECL that. negative with energy is keep changes, economic Are the And portion X.XX% of now One X.X% pace assume with X.XX%. below meaningful provisions? of growth? will loan without and the Your Should

Chris Niles

is Niles, a this let give to that. me response Chris first So,

at if we significant is pressure won't we be of also we some over forward near-term. good be more we broad been necessarily our expecting economic and think comfortable portfolio we've overall the are reserve appropriate. the we That So guidance more where think because factor very negative having see will the going dynamics and said, given provision the the we driven. feel quarter, end But with

Ben McCarville

right. All

Our next your Chris What items? better to the of with QX, question McGratty one-time is of for comes expense from a prior KBW. guidance get idea impact trying

Chris Niles

full our guidance quarter a guidance. basis, the that'll and quarters, total take guidance, expense year for total our So, fourth be subtract you on is can the first so the three

Andy Harmening

as that to thing I We to in there that in to committed multiple QX that, what and do think again, did operating second quarter. the QX. above we've expect is having is state the we launched we other leverage clearly positive initiatives,

Chris Niles

pre-provision $XX above we the pre-tax that Positive million outlined.

Ben McCarville

And have Arfstrom RBC from Markets. then Jon we a few here Capital with

the do is, when first yields bottom loan can So question out? think commercial you

Andy Harmening

Jon, they already think like Well, I'd to have.

the behind that may will a where yield absolutely we're bottoms, while continue is, market build syndicated we've SOFR generally the not factors, over And if adjustments the reality expand, we've driven that out beginning us for we us. my rise. spreads that's rise see and But that's Now as yields skis. some yield to have spreads hope been experiencing, levels and absolute bit market take bank come seen other to that of they've rise. started what this in compression perhaps transactions we to comfort larger the to in And

Pat Ahern

tailwind a comes the is see typically as that well. think we potentially slow, there steady increase this an is other utilization in margin improved thing as I with

So it's looks on say impossible but bottom what forward-looking to to the exactly like, come. more

Ben McCarville

you Alright, XXXX? in $X of on so next the are outstandings up by billion from still Jon, planning end auto

Andy Harmening

track to achieve we're able on that. very much be believing to We're

like raised afternoon, We yesterday this of looks in then to and I it. Since dealers had the the a are pilot. XX it At we've three presentation, we that weeks XXX dealers. writing call at were into

and that really hit January. in So, are running for that and track the ground increases we number. November on And we will expect in very well December incremental

Ben McCarville

exclude you for XXXX? more if Also Jon, from you bullish energy, lending on warehouse and commercial are

Andy Harmening

pretty of mean, I We've Wisconsin brought period and short Yes, is managers time. Chicago far across so in talented relationship simple a answer some yes. over the

about In that markets that, and you asset addition we're the in, made tailor think for when lending they're to finance. based equipment

We we're Equipment in in quickly. us third that lending at the join having already in deals leader are finance, ramping the based had quarter. asset looking up

our as comes around a of his with afternoon Scott day Capital. bring about met us Denise, ramping office possible. to Equipment the to from I in that it's veteran how In up Head as who we talk seasoned Finance fact, a team on GE and And Fargo, this first Wells quickly

pieces heading even So see We there. really we have. increase to saw of we and in X% we the maintained into today quarter in are in third nice our very that quarter, have that, nice we commercial, will a that had expect in in spite those first with And continue pipeline quarter we've a we don't numbers of pipeline. commercial that the the closings third

XXXX. feeling business very into on quarter first our and bullish commercial heading So,

Ben McCarville

Alright.

So a Jon, hope I willing be okay. of things to your might the about It outlook when that's overall? should in nicely more like XXXX you seems for broadly, talk up so XXXX, couple blend margin that are together,

Andy Harmening

XXXX can be historically you will so update you conference call, given we've more Jon, Well, we our this initiatives expect from to on 'XX time. in little perhaps presenting guidance obviously But at will our give hear a and a strategic quarter, us our then. January later that at

Ben McCarville

All right.

Terry next couple McEvoy Stephens. we of with a have up So questions from

[ph]? you're the conditions from all, the day the of how hurting first comp So dumping FTE day that change until Andy joined will the

Andy Harmening

raise will work second changed XXX, But need all Sure. the tables. backfill to now, the We're our by quarter, counts, the we're much. to they new XXXX overall in some that we staff at the X,XXX you initiatives of think the open so in positions release really When over on about overall and count couple well. a roughly additional X,XXX FTE just haven't including the as hires support press

overall the to So go expect XXX. several you up by can count

Ben McCarville

are and still what what on Next bankers hired you have from markets board? the markets commercial drawing Terry,

Pat Ahern

Well, Wisconsin, which lenders we've a Chicago, couple hired we've in thought in Northeast very we've hired strong. in Milwaukee, hired lenders we were

so in and then that the opportunity to forward primarily moving Wisconsin, in So, Milwaukee, far keep and we Chicago, front. front, think Northeast is still we the there intend on Minneapolis Wisconsin and on Central hiring

Ben McCarville

provide of growth our me, overall income James. a is ago? sheet Daniel the interest have we details do offset Can offset from growth, growth net sheet the think With NIM reduction you balance question next The balance guidance in balance to NIM by excuse from how with quarter in improvement? you - more by relative the now Raymond Tamayo

Andy Harmening

Sure.

think within slide but we only also at especially where fee presentation to of that previously Barclays had provided not revenue the at the the that guidance refer I range total we expect our we So you we do be conference. to range, highlighted the upper-end

And so guidance fee is the the revenue the obviously, interest difference, the between income. net and total

think So find it's rise. easy number, you'll fairly a pretty I to it robust

Ben McCarville

build investment basis Also, Jonathan duration you're what Our would duration on Fargo. a next Walz points in as is the with question plus [ph] from to the portfolio? you What Wells XXX go the securities purchasing comes raise?

Andy Harmening

new mix as duration our So, Jonathan, the on longer similar lease. we're mentioned, the the new portfolio. I current but very bit It'll of that securities the the purchasing book, to of mortgages obviously, than a similar purchase duration is mix be little on existing

I'm not you've what from view. to say, much. with that'll an seen be in seeing Having is profile, consensus and XX hands. point five suffice it a number lengthening historically, within at so say, about five do year shock rate would anything XX have XXX not I my indicate or XXX the that with And immediate year in points year don't of duration value. forwards but that a But to little And said, bit sort the the up that would shock, little yield basis the regard a at mathematically beyond us

Ben McCarville

have more have in others, any here here. you a feel to my I if send Alright, few along free questions but inbox, them

According have yields. McEvoy less But Stephens. up you would other respond auto follow than to Moving with Terry to a that? how auto are is yields on, non-relationship banks, business, mortgage we a from

Pat Ahern

of right would mortgage originated our book consists is now both say originations. third-party and I What

origination third-party us. that on And had not so, the better than opportunity of portion And to is expansion the that's indirect before. auto what a we necessary for yield get an there's

very But was massive commercial customer believe those deposit pretty banking, businesses business in expectations standpoint, I'd mortgage So Associated the across small significant we that. that is industry engines. point good it transpose out us origination market quickly friendly that a are purpose. in from in of seeing relationship to downturn, really probably an and in in a Bank XXXX on have and puts a We position that

XX% much and bank to a addition talked we massive XX% that In deposit have provides typically of base. about fluid that's retail as an we to haven't that initiative a which initiative,

in So, well. as we gathering customers deposits have an upside those from

deposit it's banking. of business terms small mix in a So, around on for and and a and bit what us, trend on of means a entering fluids of plan a it switch massive commercial industries simultaneously very out mortgage, while heavy having deposits

Ben McCarville

Alright, have questions. and we remaining two then

Scott Piper Next one Sandler. from with Siefers

X.XX% how still NIM Do plus initiative of So three that your excess state in you a expectation September had you with years steady light suggested liquidity comfortable announcement. of around? with sticking feel strategic long over

Andy Harmening

excess on spend the you some that's we're a be fee typically in a some when you that. something may some leading and increases, indications see Well, that over there indicator look, I that account time, there's think seeing deposits see liquidity, decrease typically question that

have absent entire three been have through being for quarters heading through for those signs I that some into been and industry, there's decrease. a think So whole stimulus sticky XXXX, of us the

now, right overall, we the would to laid plan. that committed mid-term are margin out we So our that say I in still

Ben McCarville

that that we question actually had final was queue. the And in

to are questions if it I'll pass further back to So, I you Andy, no up. think wrap there

Andy Harmening

us one I'll And two for your Well, for and perseverance moderators, things. different say and you through being thank including probably one. good Shemali, with three Thank different four you getting - today.

given great excited here. attention Associated a the happening you We're thank for you evening. about So, what's Have Bank.

Ben McCarville

lines. disconnect you. your that With Thank you can

Operator

concludes conference call. today's This

your disconnect lines. pleasant may day. you You for Thank have and participating, a

Associated Banc-Corp (ASB) 22 Oct 212021 Q3 Earnings call transcript