Andrew Harmening has been with
Associated Bank since April and the new chief executive officer is now working on plans for the Green Bay-based bank to more aggressively pursue growth in the future.
Harmening said the bank would announce its new growth and efficiency initiatives by Sept. 13. While executives provided few details during the bank’s earnings call Thursday, the plans are significant enough for Associated to withdraw its 2021 expense guidance.
At the same time, Harmening said Associated would be able to exceed its second quarter pre-tax pre-provision for credit losses income of $78 million in both the third and fourth quarters, even with the planned growth investments.
Harmening did point to digital banking and small business and commercial as two areas where the bank planned to invest.
“What I’d heard from our colleagues as well is ‘we want to grow, we want to participate in the markets that we’re in,’” Harmening said.
He added that he heard a similar message from the investment community, who suggested “we want a reason to follow you and for you to be bold.”
“The feedback wasn’t that far apart,” Harmening said of the messages from Associated’s employees and investors.
“The thing that I find encouraging, when you start with listening and you get to as many folks as we have, and it wasn't just me as our entire executive leadership team, when you understand the nuance of what is on people's mind and you bring strategies forward that deliver on that, you typically get buy-in and execution,” Harmening said.
He did touch on how Associated will approach markets across the Midwest like the Twin Cities, Chicago and St. Louis.
Harmening said the bank wants to maintain its stronghold in northeastern Wisconsin.
“We have really deep roots and meeting those customers you feel the presence of Associated, the value of long-term relationships,” he said. “We want to make sure we maintain those.”
He highlighted Milwaukee as a population center and said he would be splitting office time between Milwaukee and Green Bay.
Harmening also highlighted the bank’s focus on small business and commercial lending and noted those offerings can scale without the need for “a massive footprint.”
As a result, he said the bank plans to “compete quite well” in markets like Chicago and Minneapolis when it comes to small business and commercial lending.
“What we intend to do is show that we can compete in major markets,” Harmening said.
From there, the bank will look to build out its digital strategy over a more medium time horizon.
“That makes you attractive in every market, rural, urban, large, small, and so that will be a point of emphasis for us on the mid-term,” Harmening said.
“As we get into our growth initiatives and execute on those, I believe that will open up optionality for us, both from a market standpoint, and then ultimately from a scale standpoint and potentially second step in the merger and acquisition market,” he added.
