Andrew Harmening was already familiar with Associated Bank’s core markets. He grew up in Chicago, has been coming to family reunions in Wisconsin for 30 years and has a brother living in Minnesota.
Now the chief executive officer of the Green Bay-based bank, Harmening said he was attracted to the opportunity to lead because of its good brand, reputation for customer satisfaction, engaged board and good risk culture.
“To me, those are all building blocks and then you get to say ‘OK, how do we become a growth company?’” Harmening said.
After taking over as CEO in April, Harmening spent 10 weeks talking with 400 of his new colleagues and gathering feedback from the wider company. In September, Associated unveiled new strategic plans aimed at accelerating the
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Those plans include expanding into auto and equipment financing and asset-based lending. Auto financing alone is expected to add $2.5 billion to Associated’s outstanding loans by the end of 2023. Asset-based and equipment lending will add another $600 million. Upwards of $250 million in additional loans will come from bolstering commercial middle-market lending, enhancing small business and consumer direct lending and retooling the bank’s mass affluent strategy.
Harmening said he had some of the ideas coming into his new job but also wasn’t sure exactly where Associated Bank would find opportunity.
“You can read any report you want, but you don’t really know what you’re getting until you arrive,” he said.
Talking to his new colleagues was energizing, Harmening said, and he found a desire for the bank to be bold, compete in the communities it serves and remain independent. He also noticed pride in the bank being based in Wisconsin.
“When I thought about those things, I thought about what is local for us? And we have heavy manufacturing, so equipment finance was logical, I didn’t have that on my mind before I came here, but it was a byproduct of engaging the communities that we’re in,” Harmening said.
In announcing the new plans, he noted Associated is already doing business with many potential equipment financing clients but doesn’t currently have an offering to meet the need.
Beyond adding new lending and enhancing existing business, Harmening said he also knew the bank would need to be digitally forward.
“Five, ten years ago, it was OK to be a fast follower entirely,” he said. “Today, you have to lead in some version of what you do digitally, and then you can follow in some others.”
Associated is redirecting $50 million of spending over the next five years to digital. The bank plans to launch a new digital platform for retail banking at the end of the first quarter. When it does, Harmening said it will have features unique to Associated. The bank also plans a revamp of its digital platform for commercial customers in 2023.
In discussing Associated’s plans, Harmening repeatedly used the phrase “people-led, digitally enabled” – and people certainly play an important role in it. The bank plans to increase its full-time employment by 250 over the next 12 months, including 200 hires related to technology or in revenue-driving roles.
The hiring has already started with more than 40 people brought on for the new auto lending business, hiring a leader for the asset-based lending business and adding to its middle-market team.
It might seem that growing the team in a tight labor market would prove challenging, but Harmening said shifting to a growth mindset and having a vision for where the bank is headed helps.
“I find that people want to make a difference,” he said.
Associated has also made promotions to boost its small business and wealth teams and Harmening noted that the hires the bank has already announced have led to more people being willing to have a conversation about joining the bank.
“Success breeds success,” he said.
It also might seem the bank would be challenged to grow at a time of low interest rates and businesses and consumers in good shape financially, in part due to the amount of government support during the pandemic.
When Harmening visited with customers in central Wisconsin in early November, he heard from many about supply chain issues and challenges hiring, but many also said they’d had their best year ever.
“The economy is in pretty good shape, our unemployment numbers are low, GDP has been strong and so it’s a matter of can they keep up with the growth of the economy,” Harmening said. “We actually think we’re investing exactly where there’s momentum.”
While Associated is aiming to grow, don’t expect to see the bank expand beyond its current footprint in the near term.
“I feel like you need to be good at home first,” Harmening said.
Pursuing acquisitions also isn’t a priority.
“The question of scale is one that comes up all the time,” Harmening said. “If you ask a $5 billion bank, they think they need to be 10, if it’s 10, they need to be 20 and so on. That’s not lost on me and we of course see all the deals coming by. The first thing we need to do is be a growth company, be known for something.”
“Assuming that you execute on that, then scale can be helpful,” he added.