Associated Bank hired Neil Riegelman as senior vice president and commercial banking segment leader and appointed Gus Hernandez senior vice president and director of business banking as part of its plans to expand its commercial middle market team. The bank plans to further expand the segment by hiring more than 20 additional relationship managers to focus on markets such as Milwaukee; Madison, WI; Chicago; Minnesota and St. Paul, MN; and St. Louis.
Riegelman has more than 20 years of experience, 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 at BMO. In his new role, Riegelman will oversee relationship development strategies in Milwaukee and Madison, WI.
In his new role, Hernandez will be responsible for business banking sales, product management and credit functions across the Associated Bank’s major metropolitan markets, including Milwaukee, Madison, Chicago and the Twin Cities. With approximately 35 years of banking experience, Hernandez will bridge Associated Bank’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.
Associated Bank’s expansion of its commercial middle market team is part of the second phase of its strategic plan that began in 2021. As part of this next phase, the bank advanced its private wealth strategy by hiring Jayne Hladio as executive vice president and president of private wealth while announcing several adjustments to its consumer lending strategy, including limiting construction lending to customers with Associated Bank deposit relationships, reducing portfolio lending to private wealth, mass affluent and CRA customers only and emphasizing the sale of conforming mortgage loans.
This next phase also includes a focus on accelerating customer deposit relationships to decease the bank’s reliance on network and brokered funding sources. The new commercial relationship managers the bank plans to hire will be focused on attracting and deepening whole customer relationships across multiple products, including loans, deposits, treasury management and other services. Associated Bank also plans to dedicate additional resources to grow the mass affluent segment, and in an effort to drive growth in consumer and small business households, Associated Bank plans to release several product enhancements, including early pay, automated savings and credit score monitoring.
In addition to product enhancements, Associated Bank is planning to add several new features and functionality to its digital banking platform in 2024, including an artificial intelligence-enabled chatbot, an omnichannel branch sales platform, a personal digital marketplace and credit score and identity protection functionalities.
The bank also plans to reduce expenses and reposition its balance sheet. The company has identified $25 million to $30 million in non-interest expense reductions for 2024 and expects to incur a one-time charge of approximately $5 million in severance and other expenses in Q4/23 in connection with its expense reduction initiatives. On the balance sheet side, under the terms of its repositioning transaction, Associated Bank 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 the end of the year. The repositioning 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 Q4/23.
“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,” Andy Harmening, president and CEO of Associated Bank, said. “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.”
