ASB-PF — Associated Banc-Corp

Summary of Associated Banc-Corp Q4 2025 Earnings Call

1. Key Financial Results and Metrics:

• Earnings: Q4 earnings per share (EPS) were $0.80, with a full-year EPS of $2.77.
• Net Interest Income (NII): Q4 NII reached a record $310 million, up 15% year-over-year. The net interest margin (NIM) was 3.06%.
• Loan Growth: Total loans grew by 1% quarter-over-quarter and 5% year-over-year, driven primarily by a 2% increase in commercial and industrial (C&I) loans, which added $1.2 billion in 2025.
• Deposits: Core customer deposits increased by nearly $700 million in Q4 and $1 billion for the year, reflecting a 3.5% growth rate.
• Credit Quality: Non-accrual loans decreased to 32 basis points of total loans, with net charge-offs at just 3 basis points for Q4 and 12 basis points for the year.

2. Strategic Updates and Business Highlights:

• Strategic Plan Completion: Associated Banc-Corp completed major investments from Phase Two of its strategic plan in March 2025, enhancing customer base growth and market share in metropolitan areas.
• Acquisition: An agreement to acquire American National Corporation was announced, aimed at expanding into the Omaha market and strengthening the Twin Cities presence.
• Organic Growth: The company reported its strongest year for organic household growth since tracking began, with plans to invest in marketing and talent in key markets (Twin Cities, Omaha, Kansas City, and Dallas) to further accelerate growth.

3. Forward Guidance and Outlook:

• 2026 Expectations: The company anticipates continued organic growth, projecting C&I loan growth of 9% to 10% and total bank loan growth of 5% to 6% for 2026, excluding the impact of the American National acquisition.
• NII Growth: Expected NII growth of 5.5% to 6.5% in 2026, assuming two Federal Reserve rate cuts.
• Deposit Growth: Core customer deposits are projected to grow by 5% to 6% in 2026, supported by enhanced marketing efforts and a strong value proposition.

4. Bad News, Challenges, or Points of Concern:

• Residential Mortgage Loans: The company continues to reduce its low-yielding residential mortgage loan balances, which may remain a drag on overall growth.
• Market Conditions: Ongoing macroeconomic uncertainties, including inflation and interest rate sensitivity, could pose risks to credit quality and profitability.
• Competitive Pressures: There is concern about how competitors will behave regarding deposit pricing, which could impact margins.

5. Notable Q&A Insights:

• Integration of American National: Management expressed optimism about the cultural fit and strategic alignment with American National, but specific financial impacts from the acquisition remain to be clarified post-approval.
• Loan and Deposit Growth: Executives indicated that new hires in key markets are expected to contribute to loan and deposit growth in 2026, with a strong pipeline already in place.
• Credit Quality Monitoring: The Chief Credit Officer noted that while credit metrics are strong, the company remains vigilant in monitoring economic conditions and potential stressors in the portfolio.

Overall, Associated Banc-Corp demonstrated strong financial performance in 2025 with positive growth momentum and strategic initiatives aimed at enhancing its market position, despite facing challenges in certain loan categories and external economic pressures.