Associated Banc-Corp (NYSE:ASB) Q2 2020 Earnings Conference Call - Final Transcript
Jul 23, 2020 • 05:00 pm ET
Good afternoon, everyone, and welcome to Associated Banc-Corp's Second Quarter 2020 Earnings Conference Call. My name is Devon and I'll be your operator today. [Operator Instructions] We will be conducting a question-and-answer session at the end of today's conference. Copies of the slides that will be referenced during the call are available on the company's website at investor.associatedbank.com. [Operator Instructions]
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. Additional detailed information concerning the important factors that could cause Associated's actual results to differ materially from the information discussed today is readily available on the SEC website in the Risk Factors section of Associated's most recent Form 10-K and subsequent SEC filings. These factors are incorporated herein by reference.
For a reconciliation of the non-GAAP financial measures to the GAAP financial measures, mentioned in the conference call, please refer to Page 23 on the slide presentation and to Page 10 on the press release financial tables. Following today's presentation, instructions will be given for the question-and-answer session.
At this time, I would like to turn the conference over to Philip Flynn, President and CEO, for opening remarks. Please go ahead, sir.
Philip B. Flynn
Thanks, and welcome to our second quarter 2020 earnings call. Joining me today are Chris Niles, our Chief Financial Officer; and Pat Ahern, our Chief Credit Officer.
Associated had an unusual but successful second quarter. I'm proud of how my thousands of colleagues have responded to the challenges. We focused on protecting the health of our customers and colleagues while meeting the needs of our customers. We met those needs with PPP loans, payment deferrals, fee waivers and the distribution of stimulus funds. We ensured our ability to meet the future needs of our communities and customers with a significant increase in our capital through the sale of Associated Benefits and Risk Consulting and a preferred stock issuance. We've seen record inflows of deposits and have abundant liquidity. With the revenue challenge brought on by near zero interest rates, we managed our expenses down. While no one could predict the ultimate impact of the COVID pandemic on credit, we saw some encouraging early signs from our borrowers.
So let's look at our financial results. Turning to Slide 2, our second quarter GAAP earnings were $0.94 per share, including the $163 million gain on sale of Associated Benefits and Risk Consulting. Average loans grew considerably during the quarter, largely driven by PPP loans and commercial line draws. Loan funding along with government stimulus programs and overall increased savings rates led to higher deposit balances as well. Our loan to deposit ratio was 94% at the end of the quarter, 90% without PPP, and 61% of our total deposits were made up of low cost deposits. While we haven't seen significant changes in credit metrics yet, our reserve for