GREEN
BAY, Wis., Nov. 9, 2023 /PRNewswire/ --
Associated Banc-Corp (NYSE: ASB) today announced plans for the
next phase of the Company's people-led, digitally enabled strategic
plan. These plans include a series of investments in people,
products and technology intended to grow and remix the loan
portfolio, accelerate core customer deposit growth, and deliver a
better banking experience for customers.
"Since launching the first phase of our strategic plan in 2021,
we've steadily executed on our plans to drive high-quality loan
growth, expand our deposit capabilities and transform the digital
experience for our customers," said President and CEO Andy Harmening. "These efforts have resulted in
strong balance sheet expansion, and better positioned us to
attract, deepen and retain customer relationships. While we
continue to benefit from these initial efforts, we also plan to
capitalize on our momentum through the next phase of our strategic
plan. Already underway, this plan accelerates our efforts to
attract and deepen relationships, enhance our return profile and
drive improved shareholder returns over time. We look forward to
sharing updates on our progress in 2024 and beyond."
Bolstering Talent to Foster Relationships and Balance Sheet
Growth
Associated today announced further investments in talent to
sharpen the Company's focus on relationships and drive incremental
loan and deposit growth.
- The Company is expanding its commercial middle
market team with plans to hire over 20 additional relationship
managers in focus markets such as Milwaukee, Madison, Chicago, Twin
Cities and St. Louis.
- Neil Riegelman joined
Associated in October as SVP, commercial banking segment leader.
Riegelman brings more than 20 years of experience to Associated
Bank. Having served in progressive commercial banking roles with
BMO Harris Bank since 2005, he most recently held the position of
managing director and team lead for commercial banking in
Wisconsin. In his new role,
Riegelman will oversee relationship development strategies in
Milwaukee and Madison.
- Associated's Gus
Hernandez has been appointed to the role of SVP,
director of business banking. In his new role, he is responsible
for business banking sales, product management and credit functions
across the Company's major metropolitan markets, including
Milwaukee, Madison, Chicago and the Twin
Cities. With approximately 35 years of banking experience,
Hernandez is well-positioned to bridge Associated's retail, small
business and commercial middle market strategies. He is also
expected to lead the Company's efforts to add business bankers
across the footprint.
- A new commercial banking group leader reporting to head
of corporate banking John Utz is
also expected to be announced by December 1,
2023.
- Associated has also advanced its private wealth
strategy by hiring Jayne
Hladio as EVP, president of private wealth in October. A
Midwest banking leader, Hladio brings more than 30 years of market
expertise to Associated. After serving a 12-year career at U.S.
Bank, ultimately leading as national wealth management executive
across 26 states, she most recently served as President of Midland
Wealth Management and Midland Trust Co. Hladio will play an
influential role in advancing the Company's private wealth and mass
affluent strategies.
- As the Company looks to broaden and grow its loan portfolio,
Associated also announced several adjustments to the
Company's consumer lending strategy. These adjustments
are expected to decrease reliance on low-yielding portfolio
mortgage loans and maintain capacity for more profitable growth in
other areas. Key strategic changes include:
- Limiting construction lending to customers with Associated Bank
deposit relationships
- Reducing portfolio lending to private wealth, mass affluent
and CRA customers only
- Emphasizing the sale of conforming mortgage loans to continue
fully serving our communities while maintaining capacity for more
profitable loan growth in other areas
Leveraging Talent, Products and Services to Drive Core
Customer Deposit Growth
Following the successful launch of several deposit gathering
initiatives over the past 24 months, the Company is focused on
accelerating core customer deposit relationships to decrease
reliance on higher-cost network and brokered funding sources. In
addition to bolstering talent in key business units, the Company is
leveraging customer feedback to deliver targeted product and
service enhancements and supporting these efforts with customer
acquisition-focused marketing and branding.
- The planned 20+ new commercial relationship managers will be
focused on attracting and deepening whole customer relationships
including loans, deposits, treasury management and other
services.
- Associated also plans to dedicate additional resources to grow
the mass affluent segment, which is expected to attract and deepen
high-value customer relationships and create upstream opportunities
into private wealth.
- To drive growth in consumer and small business households,
Associated plans to release several key product enhancements
including early pay, automated savings and credit score monitoring.
These enhancements will be supported by the Company's customer
acquisition-focused brand strategy.
Continued Execution on Associated's Digital Roadmap
Following the successful launch of a new digital banking
platform in September of 2022, Associated has leveraged agile
delivery to execute 11 major customer-facing upgrades. This work
has contributed to double-digit percentage increases in customer
acquisition, double-digit percentage decreases in customer
attrition, and multi-year highs in digital banking customer
satisfaction. To build on this momentum, the Company has continued
to make digital-forward investments and expects to deliver a
quarterly cadence of feature and functionality upgrades. In 2024,
planned initiatives include:
- An A.I. enabled chatbot,
- An omnichannel branch sales platform,
- A personalized digital marketplace,
- Credit score and identity protection functionality, and
- An enhanced digital banking experience for private wealth
clients
Funding Investments with Diligent Expense Control
In
keeping with the Company's strategy, a cross-functional team has
reviewed Associated's expense structure in partnership with a
third-party consultant to identify cost saves and reinvest into the
Company's growth initiatives. Through these efforts, the Company
has identified $25 million to
$30 million in noninterest expense
reductions for 2024. Expense reductions are primarily comprised of
FTE reductions, branch consolidations and decreased discretionary
spending. In connection with these expense reduction initiatives,
the Company expects to incur a one-time charge of approximately
$5 million in severance and other
expenses in the fourth quarter of 2023.
After fully implementing these expense reductions and
reinvestments, Associated's noninterest expense is expected to grow
by between 3% and 4% in both 2023 and 2024, excluding the one-time
expenses anticipated in the fourth quarter of 2023.
Balance Sheet Repositioning
To accelerate the financial impacts of the Associated's organic
growth strategy, the Company also announced today a balance sheet
repositioning transaction.
- Under the terms of the transaction, Associated Bank has sold
approximately $0.8 billion of
investment securities and has agreed to sell approximately
$1 billion in mortgage loans,
generally in single-product relationships. The sale of the mortgage
loans is expected to close by year-end 2023.
- The transaction is expected to result in an after-tax loss of
approximately $157 million which will
cause the Company to report a net loss for the fourth quarter of
2023.
The transaction is expected to significantly increase
Associated's wholesale funding capacity by paying down FHLB
advances and other high-cost funding, while also removing
low-yielding assets from the books. The Company has also chosen to
reinvest over $700 million into
investment securities at current rates and cash.
Associated Bank management intends to provide additional details
on its strategic plan and initiatives in a conference call for
investors and analysts at 5:00 p.m. Central
Time (CT) today, November 9,
2023. Interested parties can access the live webcast of the
call through the Investor Relations section of the Company's
website, http://investor.associatedbank.com. Parties may also dial
into the call at 877-407-8037 (domestic) or 201-689-8037
(international) and request the Associated Banc-Corp strategic
update call. An accompanying slide presentation will be available
on the Company's website just prior to the call. An audio archive
of the webcast will be available on the Company's website
approximately fifteen minutes after the call is over.
An investor presentation has been filed as a Form 8-K with the
Securities and Exchange Commission and can be accessed via
Associated Banc-Corp's website
at http://investor.associatedbank.com.
ABOUT ASSOCIATED BANC-CORP
Associated Banc-Corp (NYSE:
ASB) has total assets of $42 billion
and is the largest bank holding company based in
Wisconsin. Headquartered in Green
Bay, Wisconsin, Associated is a leading Midwest banking
franchise, offering a full range of financial products and services
from more than 200 banking locations serving more than 100
communities throughout Wisconsin,
Illinois and Minnesota. The Company also operates loan
production offices in Indiana,
Michigan, Missouri, New
York, Ohio and Texas. Associated Bank, N.A. is an Equal
Housing Lender, Equal Opportunity Lender and Member FDIC. More
information about Associated Banc-Corp is available at
www.associatedbank.com.
FORWARD-LOOKING STATEMENTS
Statements made in this
document which are not purely historical are forward-looking
statements, as defined in the Private Securities Litigation Reform
Act of 1995. This includes any statements regarding management's
plans, objectives, or goals for future operations, products or
services, and forecasts of its revenues, earnings, or other
measures of performance. Such forward-looking statements may be
identified by the use of words such as "believe," "expect,"
"anticipate," "plan," "estimate," "should," "will," "intend,"
"target," "outlook," "project," "guidance," or similar expressions.
Forward-looking statements are based on current management
expectations and, by their nature, are subject to risks and
uncertainties. Actual results may differ materially from those
contained in the forward-looking statements. Factors which may
cause actual results to differ materially from those contained in
such forward-looking statements include those identified in the
Company's most recent Form 10-K and subsequent SEC filings. Such
factors are incorporated herein by reference.
Media Contact: Jennifer
Kaminski
Vice President | Public Relations Senior
Manager
920-491-7576 | Jennifer.Kaminski@AssociatedBank.com
Investor Contact: Ben McCarville Vice
President | Director of Investor Relations
920-491-7059 | Ben.McCarville@AssociatedBank.com
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SOURCE Associated Banc-Corp