ASB - Earnings call transcript Q1 2024

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Operator

Good afternoon, everyone, and welcome to Associated Banc-Corp's First Quarter 2024 Earnings Conference Call. My name is Paul, and I will be your operator today. [Operator Instructions] Copies of the slides that will be referenced during today's call are available on the company's website at investor.associatedbank.com.

As a reminder, this conference call is being recorded.As outlined on Slide 1, during the course of the discussion today, management may make statements that constitute projections, expectations, beliefs or similar forward-looking statements.

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

SEC the differ that discussed most materially readily on concerning actual cause today, recent information, Risk available to the subsequent results from the Form detailed XX-K important of SEC could factors Associated's is Factors and Additional section in filings. Associated's website the information of measures conference are financial XX measures, GAAP incorporated a slide call, These XX the refer the by factors Pages reconciliation of tables. to and in this and to reference.For herein the please to press non-GAAP Pages financial of X presentation, mentioned release and X financial the

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

Andrew Harmening

everyone, and up -- update Ahern. entered our kick and by our and local a on plans acquiring afternoon joined I'm to the face quarter. macro our will capital the Meyer; an and of few in we Pat Credit welcome Harmening, statement return from continuing X uncertainty; will highlights and strategic enhancing XXXX, then, credit.Now the the as Quarter our our our key Financial customers, Derek profile. had resilience our updates From of and on we've to themes trends; our first, income by cover this Andy I'm deepening the there, Earnings mind: margin, relationships markets drive in provide Officer, I'll good Derek Chief Well, things Pat afternoon, off Call. sharing and some by: on Chief our First Officer,

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continued Given normalization signs have in from been rates, portfolio, has we to but basis. the of pressures elevated the on a see case-by-case

disciplined, geographies. any down see specific emerge on basis a that to portfolios appropriately trends meaningful issues any methodically reviewing and or we're classes ensure said, asset yet have has regular to team may We With ahead concerning that our remained negative road. our of staying the rating

are we've front-footed All leadership driving X factors add upgrades footprint, remain our We've deploying the significant ago, the of continued bank. we our experiences. to have our These our with small and results team the talented executing for elevated experience enabled by across generated Commercial modernizing customer-facing to on significantly our years efforts RMs the customers business the bolstered customer joined company I plan.Since these and key several and have We've momentum. several strategic retail company digital across hires product company. throughout

colleagues, that X right customers while see named and successful for also Excellence. in track. the the we Upper for We company we we continued this have also advanced plans. by levels. retail earlier have to #X of scores we're the recently We improved Energage winning USA can colleague happy starts the Award, Top and a believe named to were were historically who And improve us evidence satisfaction Midwest.Our XXXX a scores Workplaces foundation Power, as happy banking satisfaction awards customer high Cultural month, J.D. the winner engagement of on Our recognized with our in

after to broad-based have which Importantly, loan past QX, we remix and originally strategic With our build in delivered quarter, track growth time.To X core of our that sheet our And growth already we deposit growth we other the launches translated organic and though, in return positive profile several organic balance initiatives enable saw both results again bank with customer the growth trends numbers. in over and our a Phase plans. household at years also remain impact us for across our product direct efforts of momentum, line.Here work on bottom November. hires, several XXX have our on we're days, hard completed key to improve downward the plan this executing on in of announced

of impact to into second actions Phase and half full XXXX. of realized the expect the XXXX in be X We these in

we As as the additional move plan, expect by results but make our encouraged year. early from to we the forward, look we we're throughout progress

and to incremental X. While due Phase initiatives momentum positioned from Tailwinds macro credit remain, question expenses. marks foundation, feel our from growth well we discipline completed and already around

the a for in a X. we challenging per importantly, operating that, of what towards for highlights company; quarter, on posted has through key share We On the GAAP first earnings $X.XX well.With underlying demonstrating of core QX, here basis, providing industry. like our as our Slide some earnings on future environment track been strength the the in walk group diluted profile to of financial stronger stakeholder our are and for I'd beginning a

funding we in remix initiatives asset the deposits And while funding by earning sides adding consecutive third core improve our to on help position improving we're that of our lower We liquidity side, that the the deposit balance focused for driving customer quarter. sheet yields.On QX, accomplished also growth. continue costs here executing us and on both customer by

also during our the somewhat the $X.X deposits another deposits we first seasonally, quarter, results midpoint customer and us C&I reflection has funding the period-end quarter. core core Specifically, by through grew but $XXX growth emerging during we've by generated steady of also the organic to now These led strategy. our prime/super customer billion boosted million, we've a the of sources portfolio were grew prime draw loans growth in Across wholesale by the our growth. bank, also Auto customer was on added momentum enabled XXXX. X% QX.During since This core X% by growth down emphasis funding on of

fully We and asset results to is of what these to income loan strengthen our full continue build repositioning environment and segments our in QX, but in continue our initial statement. point boosted quarter. the to by over not QX a and in diversify slow encouraged back seasonally to our as earning increase X% the the a the as in in yields drive mix increase margin book these income Deposit subsided benefit the abate stabilized. Improving of high-quality net pressures to the and time, were a mix growth has pressures have quarter.Moving balances XX yet we're for by asset slowed typically competitive basis interest shift has cost

of $X replenish the income to million deposit the million focus And was to and income in road, category noninterest expense up about from technology, period year. expense FDIC $XXX noninterest noninterest expect $X a XXXX. insurance special term short for products, included fund. QX million our of people, foundational noninterest process same $XX stability Our slightly last while remains of to invest we ability we income about while our another costs continue million in we the to down in And company.Our discipline to the this our compress and continue in confident assessment the feel grow

continue expense year. the manage will rate execute to we We run growth diligently our our as level strategy throughout

but strategy. in of to in culture also a good continues of and conservative and our our trends these by loans. Taking risk nonaccruals our see portfolio component geography. delinquencies tick credit balanced be and Our higher, risk decreases In disciplined total to and charge-offs foundational loan were consistent we did by both criticized credit QX, reviewing provides rating the a a view approach net segment

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we Workplaces awards. Excellence were named week, and USA also of the Top XXXX winner Cultural won Just X this Award

past trend business several we they're a in profile.Here efforts wealth of awards, the though, consumer growth QX, net our financial Importantly, aren't years. decreases reversing across saw over our net in winning steady the just transforming board households,

As the period consumer same household XX%. was acquisition to compared our ago, year a up

seeing growth with down balance financially challenging We're Our for time. also both the net same environment a X% growth been a on our what growth rate will sides industry. quality has household consumer Customer the attrition translate of in strategy to over the over tailwind sheet time. provide was accounts

growth. Phase organic several X been to in the X, of is a expect over and increase. ] full ramp we of already want of our organic customer see on the some impact, and back of these few having time.As to wave up into a Slide November, of that setting growth but a milestones us across course [ move our the we've in how share efforts to QX, impact broad-based become cases, loan stronger strategy just done company These an core our again in to on we up In Since XXXX. how the second momentum. we're are we examples building are recent stayed offense, work year over achieving growth announcing has saw deposit examples few the more we Here company

success spent talent not with just from to at senior seats in over the team add across trend Wisconsin team Now for leadership we Lebens a and The Mike Fargo, our right fill Midwest.We to recently Division and month. including years made when right hinges Wells states, add talent. looking in places, Minnesota. Mike Executive Associated, he commercial on XX we've continue joins I've next our said to expect we're before, from Portfolio bolstering top we're people as to that of Minnesota Commercial serving in the where any strategy looking the us significant most banking, in strides having X

ensure our goals. We to to on also the front we the help towards need right line drive have us folks

to banking team such, in just in internally relationships. employer the last mass commercial for invest we is that's externally. week, an Madison, our and Chicago.There by business Midwest is enhanced senior As and our a Associated both bankers commercial that X continuing the add of small we're continuing perception Milwaukee in We're handle And choice, branch adding and RMs RMs Bank growing affluent throughout to to training footprint. and

progress page, the to with enhancements of we've growth. continued side right various make digital organic marketing designed product to the support and On

the already attract we've actions new efforts -- and bolster our made, deepen and to these enhancements deliver Taken relationships. with customers

as first continue the each of growth confidence year, I'd X% ramps total these to that, balance core them customer on like the sheet are Slide X% between of beginning and and we initiatives our impact to between loan total and with our impact expect for course to few results. increasing we between of on of we track total for growth plan. net of up gives a trends strategic And highlight over X% us the financial X. X%, with have on As expect This an XXXX.So that the quarter and X% of interest X% deposit growth income such,

deposit customer from As representing core X% a prior in quarter. increase mentioned, we of QX, added $XXX million the growth

flows average expect on trends as incremental and the drive is the On the customer $XXX in QX. a core by we $X.X through however, a our in down On experienced us wholesale settled the such, our decreased X% to by was initiatives loan $XXX confident funding boost reflecting loans continue to which we've competitive, to in growth X% continue by another to reliance past loan several seasonality, we've course were QX. we XXXX.Moving nature, and these end steadily highlight basis, growth X of from over deposit the of and the mix X. for stabilization balances a balance environment of year. While This we our that across shift million on loan mortgage funding boosted enabled remain to December. to year.Over growth core quarterly of here $XXX direct broad-based million to Slide in past by X% in the basis, period-end prospects grew sheet. added decrease subcategories, but wholesale based sale remains sources, now customer reflection quarter. Deposit our between quarters, receive expect we million by the over first QX, towards our be the our We And the total brought core has growth results billion lumpy deposits

low-yielding, impacts over to Taking trends initiatives, and our banking As of credit emphasizes the growth overall our and and selective quality anticipated time help seek these expect reliance continue Across as our while pass lending profile Commercial and loan steady our Derek? enhance our trends. walk of and to diversification to relationships, asset the to balance sheet by we I'll and continued expected, XXXX.With we classes our portfolio, account areas loan that growth to our broader prime led the remix drive relationship Auto that, return continue decrease maintaining way it through statement growth the environment emphasize standards. low deliver to bucket.We've X% to full in prime/super us X% Derek still growth were to improved to the a Industrial current credit solid to returns. total into to profiles on in income capital book

Derek Meyer

and yield on trends Andy. liability X. Slide Thanks, I'll start our with asset

others half has rate since July funds This last loan and higher points our the funding the as primarily year base. of C&I, the back yields Fed target has landed XXXX, seen in our and that sizable CRE of by asset over a year year, and by past Total repriced asset to continued of to XX QX in categories. we've earning this prior and book of our inch time. X.XX% the While Auto continue we over trend costs remained a a has due shift into been and at the basis customer yields remixed stable led here increased quarter in QX.Like rising increase portion is see deposit pressures the trend industry, combination of rates, liquidity mix through over

largely the that function to in QX. total stabilize our However, sheet to our flattened over was the balance we strengthen customer the the the back deposit flattening of liabilities in the efforts X.XX% driven by at But -- out interest-bearing completed pressures of organic growth of after half profile on and quarter repositioning rate from fourth to deposit these it's stabilization FHLB core XXXX, through down quarter. seeing growth.Moving pay X. This environment part Slide our of ongoing as funding also a first

can clearly impact these You our on margin. the net trends interest see income our both and recent of

prior the quarter, increase landed at Here our NII $XXX million $X quarter. from the million a in for QX,

of I both Our plan want we the shifting profile. to of sheet towards to enhanced driving NIM increased on Slide X.XX%.As an our balance to how sides strategic by moment our various XX and the are discuss shift basis profitability to points a mix elements X, us take

loan business, nearly low-yielding, strategies side a other steps And relationship, incentive our business to we've mix still several We've structure to the deposits mortgage at services.We've credit higher and us last past while consumer exited X steadily prime/super the Auto a standards. model. moved the solid enables grown including our asset already in indirect years, in over lending TPO reliance originate-to-sell taken that changing to relationship $X our base an low portfolio grown of lending loans balance prime mortgage to On our we decrease year, sold emphasize our low way on RM relationships, and low-yielding Commercial sheet, holistic billion the diversify diversify also the spreads. to maintaining meaningfully while

X.X%.On the During and added the mortgage C&I in held changes $XXX the these and first a over yield period. the we quarter, that for efforts over and Commercial in same added our balances of way about time where to a you quarters, customer an core balances core can seen X%, X.X%, of attract, with yield as our average below an our And flat to wholesale results balances X in decrease average steps our we've see decrease while book on life Auto over funding. with to funding wholesale growth reliance taking yield you've of we've a the loan figures, of extensively balances customer $XXX million portfolio to talked retain with to come to as side, on Business million liability added deepen straight average relationships significant portfolio deposit

Slide within June.On XXXX. our Fed X on So track this we beginning of makeup that to our rate but manage meet our in book our net We're taking sheet Fed the cuts for to sheet to action, by the X% year make can we throughout company we continue XX% securities changing and expect continue growth, early stay working to expectations X% assumes is the remain for all XX% not XX, to on goals. we're still betas results return purposeful our in profile as of medium-term XX-basis-point growth actions our see, are balance deposit to between you promising, target. of Based to better. and the guidance happening current This sure balance The are of accident. income interest

have With yield the After to largely the now capital include the prior ratio impact would rising the CETX impact our a by versus by impacts securities QX. the to this of rising our benefit basis book spread adjusting on grew repositioning, hit has points this risen our interest The represented basis AOCI, rates. quarter, period of in the a same securities rates slightly from of in XX ago. year CETX driven average point XX

securities and assets, end at the a investment at As percent quarter. firmly held total of cash position roughly of the our XX%

XXXX, to total to XX%.Moving of we assets continue XX% XX, target remainder between our we highlight of Slide through will income investments the QX. and to Over trends noninterest

noninterest number, income QX million $XX a year Our in to million at came which $X same but $X the million relative for was was up quarter, ago. the adjusted from our period down

gain quarter gain were B in results Our fees sale on posting and increase QX. After sale in of we million the B a million banking. account charges first booked $X service $X Visa $X $X million on of on deposit a -- a and B also in driven Visa QX, another increase mortgage by shares in Visa million

XX, These revenues. March from decreases remaining. Visa figures a in by trading quarterly were and $X in shares offset partially fees, B there markets capital no account stemmed of As are decrease which syndications million

challenged our million.Moving XX. we expect environment, durability positioned income While on to to base compress on $XXX our adjusted well in X% XXXX feel continue compared noninterest we as of to to noninterest of Slide to X% the by a income

continues discipline to investments expenses our on be foundational focus initiatives, continue maintaining to a company. to a make We but for the targeted support

QX -- by million an special the $X This the special offset were GAAP other from is of were million costs.On the relative in booking in first ratio XXXX, a landed $X at of expense million quarter, basis, the $XX for QX assessment lowest in we quarter X% Our of additional we was quarter to the assessment QX. refund of QX, our booked XXXX. in but adjusted we've efficiency for After which FDIC XX.X% in number GAAP seen fourth reported down assessment FDIC million FDIC $XXX since XX% XXXX. expenses up partially an

our fell back check ability to our Our we ratio while continue XXXX growth quarter, X% between to growth to special expense expenses X% for in our that expect exclude assets strategy. mind, base investing These below of average the assessment for FDIC expense XXXX and total off keep also X% which of in adjusted noninterest figures QX in With demonstrates in of QX. million. and the $XXX noninterest expense

between basis to We This annual of AOCI operating net TCE in finishing result driven by in also continue decrease We to basis at X% repositioning to X.XX% and sheet of ratio to CETX point negative our rebounded hit in of due XXXX.Shifting leverage X.XX%. balance decrease and X net XX. our was quarter, X.XX%. point well a TCE as ending Slide within higher during X target long-term expect the X% Both a at After from the QX. our our a remain rates. in QX, XXXX ranges falling our CETX as QX, quarter saw

expectation range Given to short-term near X.XX% rates the conditions XXXX. in the elevated in remain remain market to in to for expect term, X.XX% we current of and the TCE

expect CETX on now Officer, I'm provide XX% X% quality. an it the in remain Pat -- over same update Chief the to credit to hand frame.I'll also of Ahern, X% We our Credit time range sorry, to for to to

Patrick Ahern

partially quarter start by The additional credit CRE construction update mortgage. February of and with baseline resi and higher labor Slide in rate during for interest resilient The to XX. offset rates, the on CRE $XXX market increased XXXX inflation.Our a with allowance our a increases decreases the commercial, and positive Thanks, million, rate GDP deceleration ACLL CECL other forward-looking our like consumer forecast $X Moody's slower to by but assumptions. hikes, environment. growth consistent baseline investor remains categories, cooling baseline in continued million despite portion forecast with an utilized I'd the Derek. contains Moody's forecast no the We economy

and in general our allowance loan driven growth nominal macroeconomic select the be Midwest Our trends of reflect credit continues by areas such footprint. to movement stability as that auto,

a ratio decrease loan X.XX% reserves from prior Slide basis basis a point but period XX. to point our increase the landed the such, quarter, QX, versus at year X to a same X ago.Moving in As

pipeline has during the up portfolio came XX-plus in buckets hold XX- funnel, the as first day quarter. continued with At top down meaningfully the credit and by the core the to delinquencies evidenced our migration Our our through quality limited trends. relatively the to well XX-day of both

special which category. to further early As ticked and than down total includes remain at criticized million the This the bucket, million loans, we we nonaccrual business. increases second QX, loans more $XX the line $XX our consistent these provide pending straight improvements look as may and these in of path we in total one accruing stable a takes our criticized credit, classified nonaccruals Netting overall the see We substandard difference, mention quick forward puts of by normal of in for and buckets the decrease credit higher, new sign offset a a total credit actually criticized continue course decreased decrease showing stress.Within nonaccrual have but and credits the slightly resolution. quarter, assets quarter. with recent the see the which and for of remained stability for with another relatively that the would in Outside encouraged were stability. one particular

quarter million Finally, we in $XX the in a net and provision. during million booked charge-offs $XX

rate activity noted remains in coming still in the part prior we've reflect remain resolution quarters. we our road during the seen a increase they expected. charge-offs broader through a stay normalized to comfortable represent charge-offs not in within outlook analysis together, to over the net rose concerns credits of XX months, bank.As the across XX credit and saw net ongoing a the level charge-off to risk tool the had opportunity remain a quarter, done picture of in the of ahead deep sign The QX from earlier. key the focus a bank past issues given While an quarterly uncertain and earlier overall accelerate net Overall, necessarily credit and system confidence that we nonaccrual and dives loans down portfolio rating gives expectations.Taken this migrating XXXX handful future rating us our we've the macro of than

we in reflects economic As we concerns. credit just to year, monitoring to ongoing diligent on labor current inflation the cost few name ensure underwriting look stressors into macroeconomy remain the a pressures,

effects to In including to maintain specific portfolio, interest on addition, sensitivity we bank-wide. of ongoing interest the attention the elevated continue analysis rate rates

Going to risk reflect indications we've forward, provided provision adjustments on of CRE continue changes of to and condition, grades, volumes a Slide loan other credit expect we economic any XX. to quality.Finally, refresh key metrics

our a our has and been commercial we've portfolios. super to prime optimized a approach several loans of conservative portfolio built past the diverse course focus high-quality As prime the of consumer reminder, as years credit over portfolios a across on and

loans developers portfolio, continues and given risk predominantly of Over cited on portfolio a portfolio stable be with we as positioned CRE in partnering While markets. the our approach are with to just we well of CRE Midwest towards is industry, area York of well-known any that A the multifamily not we've feel build in within CRE our a exposure emphasis to bank, the have We based conservative City an in environments. New the an do in as represent weighted nonurban applied across we portfolio, focused X/X bank. In total and building market.Office our and real on estate loans industrial X% properties Midwest rent-controlled properties. Class the

of underwriting extension already take having majority for prevailing qualifying credits standards. refinance, We proactive those for with strategies of to office the remainder loans sale, be approach CRE XXXX, place, maturing continue at that whether or in a to the

I remarks. our closely.With now we closing Andy for that, and positioned feel we will pass model continue and given we While of operate it business our approach the in, markets portfolios well to back to all monitor this

Andrew Harmening

reiterating Thank our couple you. presentation from XX. I'd a points like on to of wrap up Slide by key

been our profitability we've First, next growth. the loan of sheet, yielding, our pleased on we with continue This further to balance total we're X% momentum start and track quarters outlook, full balances over straight the against progress on seen enhances quality, the gives momentum XXXX.On over growth X relationship-focused growth several as Based with confidence and deposit quarters we and the from to our initiatives, plan, of loan profile. have incremental core our current reliance expect we've lower macro the side us other the benefit X% that strategy on expect a customer decreases the between of to non-relationship emphasizes impact. in we right initiatives and recent X expect remainder Phase our of our the year

most deposit As statement. income in environment. core X% and the of We've expect rate betas such, X% to deposit our continue recent to customer growth sheet adjusted we growth, balance forecast XXXX.On for

rate growth in focus latest in net assumes June. a Taking foundational expenses Our into our X% remains disciplined beginning between of expect forecast account, factors to X% lastly, cuts And to and we continue X income interest XXXX. for up approach these the With of to to expense in assessment noninterest growth this and questions. QX.With continue mind, expect open in expense in for our special after QX X% impact the XXXX excluding X% company. we it that, we'll from FDIC Fed

Operator

[Operator Raymond Instructions] Our from James. first Tamayo Daniel question is with

Daniel Tamayo

guidance. starting on first the Maybe margin

you than more the X assumptions. And you X we now that likely but June the get seems later quarter, cut. prior removed guidance So cut from reiterated cuts rate the it the

than Or then be into is pressure range lack quarter of the that the still other the And the should of guidance? -- cut the that was about first think -- anticipated more as kind June end? in we should toward we more does So play middle? thinking how there

Andrew Harmening

-- let this and finish Andy. Well, that, I'll I'll let have I'll Derek I'll that. -- is start

your it's costs, the you -- go I slightly think whether of impact or what is squarely asset be in had go that you CD wouldn't however, we for assuming low high. and on range should an I that But renewals wouldn't before. funding. say I And the that higher funding be longer, because wholesale we're have reason the I thinking sensitive.

benefit look being a and see the have half just X to we and cuts So you or it cut X at there.When or less year, X the second of material us. rate rate less I a get I as towards

cut. fairly X it's I neutral think, between X rate and

we're then think that as still and forecast the them. the bit at we're it pricing, how going had So generating that first But progresses on quarter, a expect us expensive. had loans be continue for we're Derek? with rest of those today, the be asset the the range decent loan with a that and little environment it range yield see look year before.And we we And lands at higher little side, we growth growth in the to we'll on squarely to in the to higher more a remembering bit loan but have a the in will deposit fourth bringing assuming assets that yield. and we we

Derek Meyer

of we and expect Yes, the NIM think up. NII sequentially year, widen to I expect end by the go we to

really think, the the behavior of terribly the that, been is I I completely that's key. settled down. deposits anyone's don't think confident

the we don't just about quarter to want I the felt of quarter. think, really good we think I We good get about ahead last feel So performance, deposit on ourselves.

Daniel Tamayo

Okay. I that. appreciate

other similar nice is of The thing a but progress. kind question, seen we've

that where you the percentage nice or the is could talk range pretty base, you think noninterest-bearing this, for an of progress in time about cycle through as or of good the you from? be get a budgeting deposit if idea deposit the normalized a You've And in of had we as noninterest period quarter. have bearing seen in on new when either kind was would through coming to growth the base? a more what Maybe what normalized the

Derek Meyer

as last that And in I about shared $X.X last deposits we expected noninterest-bearing think. at time This quarter, expected. what think, floor billion, we came $X.X out still we to billion. that's -- So

a of lot the creep We came closer in year, by up came it which in it first to of expect it around seasonality end in It that have and we because about quite expected, billion to as a $X of the makes feel the -- good move the bit. number part year.

on amount trying that So can is most takes of our interest-bearing forward. that, lid a growing funding of we it our so it deposits on nominal our really that we expectation wholesale doesn't, is keep in doesn't going and the -- on make driving then sure our use. focus to puts that's decrease. And the margin optimize dollars, And we and that

Daniel Tamayo

Understood.

Okay.

Operator

Jon question Our next Arfstrom RBC is from with Markets. Capital

Jon Arfstrom

of a Slide X. kind follow-up Just on

drove a a feel you good Can And You what market guys do like in repeatable-type growth. you bit little that? savings about had trend? that's money talk

Andrew Harmening

at we I But Maybe we're our what look take Derek. get vast going when to that's to Yes. what because I'll year, for come we seasonality is -- expect the always one, look It's of growth there's consumers. at full involved. when forecast that deposit year, the the majority in from

number on amount from additional So mass nice dollars a makes consumer household. households of households, That's for growing customer you of a mass getting that affluent, company, segment hundreds of base team we've of the experts.Third, a private and average up consumer we're considered wealth typically gotten base. per to accelerating you segment. millions our growth really of years, people private and have are base, in growing been we're affluent the this fact That start ways. combination.Secondly, X its to a doing XX% the with deposit funds deposit but One, bank. higher affluent have X.X wealth a in is we're have We've expanding good mass that good

Now to those customers up starting are private wealth. expand into

leadership President Head under group doubled. Jayne and Private of within the our in of cases, the internally of private some Private have segments Wealth, different Hladio. Wealth, referrals Secondly, The of the wealth, new

growth question is if from seeing we that that X% simple we we the would the can side.The X% the can private lumpy. be are knew somewhat strong And of at on So be -- to half X%. we'd reason we very forecasting continue We're continue forecasting first rate, growth. wealth

have The then You have receipts. disbursement tax the tax quarter. you bonus have you second receipts largely time and in happened,

second going that second the momentum we fairly in and quarter. the foundational had year, we're a less products, year from last bit we'd of noise the thought enter than more commercial of then trend year, the half saw year second to be increase the we half our we last in little in with And the So marketplace. of digital, flat services,

think period X% the do that come over an market we that outperformed we in extended growth? we Yes. sustainable But it's why that's So to at X%. of time deposit and

Jon Arfstrom

Good. Okay.

So in it core your sounds like it's mind.

Andrew Harmening

is. It

Jon Arfstrom

Yes. good. That's

rate your that what Auto? X. of paper something then but on And expectations And on said you you new missed it, Slide and Derek, growth the Auto kind I I getting? you're about Okay. can have in comments, talk for think you

Derek Meyer

lot still for continue. about the contemplated it's plans or the dollar -- north the It's runoff footprint And rates, we now. other not ] and Yes. $XXX of into think growth roughly the We they we're portfolio guidance as been have of a that slightly the we in talked expanded It little the that but beyond the model of last generally million, several to past and are, same -- [ amount will quarter we we each X%. dollar add we've that to a expect nominal haven't the quarter. quarters, north year our see will decreased don't grows, but and grows and markets our for -- for states it's

Jon Arfstrom

Okay.

So -- but should time? march yield higher that over

Derek Meyer

for X keep Yes, even up marching and resi, both rest for or been what's the the marching a longer bit for stay buckets little or year. higher the continue securities higher. higher go book, we helpful drop, will whether And that's the for it of those book more that even rates

Jon Arfstrom

And in just tonight. the Andy, ask won't step draft right. in needs Okay. about the packers I back I'll queue. the All

Andrew Harmening

short to of going you stop all is saying, I'm And love. need

Operator

is Terry Our from Inc. with Stephens McEvoy question next

Terence McEvoy

I is know you quarter. rate lower? run capital expect A the a I bit core Visa back happened through rebound question income. year? second business fee markets on you in the first the to and QX what gain in that out the about If in the Do talked quarter, half first of the And

Derek Meyer

also. was It do. first We quarter last low year,

you actually. So you right, think got I expect -- it

Terence McEvoy

X year, then Or range? confident that at in still And it rate, looking is the I full a quarter you're run Okay. lower? just bit am in the

Derek Meyer

to I that. still not that do than lower range. expect it be We're in confident

Terence McEvoy

then on And Okay. [ provide could you to if was that on I specialized lending -- it wondering update be used ] X. an Slide

removed equipment think, that a the and it it lending talk is progress ago. business asset-based folded just or into there? quarter you And commercial just was And now? about I X Maybe finance?

Andrew Harmening

mean, Those mean particularly if be equipment with out, you Yes. us. the we really, It it's into envisioned serving is when that businesses same those. we get finance. now. launched into segment, really when that continue we the folded lending good commercial to customer, I on right a similar plan really it, broke we're I for

space manufacturing belt nice growth do So right of they team no was view at look view cleaner our as being progression able and that is provide way, this the finance the was the fashion, just They asset-based And and a as had it commercial.But strong. it to wise. to just they've question, buttoned-up in on we very well. equipment thought lending just that a in a full do in

Operator

question Sandler. Scott Our next from with is Piper Siefers

Robert Siefers

expense Derek, better quarter. would have was trajectory. the hoping quarter's costs a you could first said in figured. bit quite But down I I that to than had number would know this looks previously core you the I speak expected come that nevertheless,

FDIC refund, and all some upwards there of guess if of I is you the will Or to once back I reversion upwards, reversion expenses sort So $X be kind steadily come back going stabilize? then Presumably, won't presumably, million the the discussed repeat.But I year? this throughout think will heard that correctly. build

Derek Meyer

And it's that as RM's continue markets. year about. to it to -- the out technology you'd our products out bit expense talking a that Part expect pop roll marketing $X third we features. year, in will up then, this million and we add key into then hiring you're little really just but we we filling without into slowly and started and as continue as then last Part glides up is of It second of be expense. the it quarter. And it,

Andrew Harmening

reduction you in time we year. At if at the the the a of last same we mean, started I end force remember, hiring. had

swoop there. hiring it as on didn't much force we So well of fell did. in got reduction But we're the track pretty and ahead in one happen the

So producers along. year goes the that as will revenue slowly on build

Robert Siefers

thought And a the a loan overall just heck for Andy, the There's lot customer of industry a whole. side. Perfect. as just Okay. of maybe demand, on or not then, particularly a on commercial demand been X

on markets or the You a just the bit out and customers? and the build X overall out. of hoping appetite other just was maybe animal, generally, sort investment is, or then thought bank of factor you But operate in I all of demand I your given but unique provide rebuild you the guess are -- healthier a could a among

Andrew Harmening

Well, it's impossible But that, they say the have mean, quality macroenvironment. typically quality is of following. and we we're that's I adding, to what there's know not of the certainly I the would have folks a that that awareness true. people of

simply than It So don't before.On we a we really we matter a the on is -- credit. have stretch consumer did to more are have not it's function. side, bankers we commercial that

that customer the the on built On frankly capabilities. commercial function quality. expect within a out of they're and we attracting we the team loan steady side, growth that quality a But it's more side, folks we're hiring, the the

time. onboarded, they and that it, as that pipeline And and book so having, on hire expect, we of have happens, along, loan we they the they track packet, go looking get as a we we're somebody, to then based expect so then And and on they we to for right get because conversations at next a customer, what itself. the that days, building continue.And very to now you closely XX it's takes we're XX talk

we that's pretty so so hit and on. those feel and head next and why year as bullish about first to And second into quarter fourth quarter and deals we head we quarter into of some start

on now. have had really effect quantity, So opposed expect. head as just we of the the half the quantity equality as double We're we going of to this add right we've year, is a to that'll the momentum second portion and into

Operator

Chris from Our McGratty is next KBW. with question

Nicholas Moutafakis

kind like any Chris. ones. Nick in this related stock quick shares is further repurchased employee saw signal of you couple this a for the repurchase to Was This was or grants year? there would just on quarter. XXX,XXX of just Maybe Moutafakis I

Derek Meyer

-- to stock it just related It was grants. equity

signal. No You've got it correct.

Nicholas Moutafakis

some within just maybe gotten more questions trucking exposure to on broadly, book. And we've Great. the the C&I industry

oversupply Just some industry within there. the questions the of given

So for the the the actual freight? I exposure don't to have or trucking, exposure bank -- know if transportation you like

Patrick Ahern

carve -- quarter. We we're happy as is pretty transportation of out call trucking Don't in $XXX on done. doing With actually our a results. Pretty it, just commitments. This small, the part did got see with that basis, It's Yes. within of Pat there. our million quarterly this kind bottom dives industry Ahern. volume But has and We're to just emerging some space. we of out the here some resizing. rates bouncing to clients given lot be the see giving overcapacity changes, spot some Certainly, of the seen seem starting rates, risk a there. the migration back, shipping and deep

at. feel we good So where pretty we're about

Operator

this time, there At further you. Thank are in no questions queue.

Andrew Harmening

story. Well, dynamic I macro marketplace, thank markets interest in. everyone certainly to in marketplace. continued our want a It's for the But we're their we like

those to run Phase We we're able far being seem penetrated. with not markets X. within so have plan we room And because to to strategic on overly X be our build Phase of

offline and can. your questions to you. happy Thank interest forward look we So any to answer continued that

Operator

conference. concludes This today's

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

Associated Banc-Corp (ASB) 25 Apr 242024 Q1 Earnings call transcript