ASSOCIATED BANC-CORP [ASB] Filings

10-Q 1 asb-20240630.htm 10-Q asb-20240630

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


☑			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: June 30, 2024


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
			For the transition period from to

Commission file number: 001-31343

Associated Banc-Corp

(Exact name of registrant as specified in its charter)


Wisconsin									39-1098068
(State or other jurisdiction of incorporation or organization)									(I.R.S. Employer Identification No.)


433 Main Street
Green Bay,	Wisconsin	54301
(Address of principal executive offices)		(Zip Code)

(920) 491-7500

(Registrant’s telephone number, including area code)

(not applicable)

(Former name, former address and former fiscal year, if changed since last report)

Securities Registered Pursuant to Section 12(b) of the Act:


Title of each class	Trading symbol(s)	Name of each exchange on which registered
Common stock, par value $0.01 per share	ASB	New York Stock Exchange
Depositary Shrs, each representing 1/40th intrst in a shr of 5.875% Non-Cum. Perp Pref Stock, Srs E	ASB PrE	New York Stock Exchange
Depositary Shrs, each representing 1/40th intrst in a shr of 5.625% Non-Cum. Perp Pref Stock, Srs F	ASB PrF	New York Stock Exchange
6.625% Fixed-Rate Reset Subordinated Notes due 2033	ASBA	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☑

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☑

APPLICABLE ONLY TO CORPORATE ISSUERS:

The number of shares outstanding of registrant’s common stock, par value $0.01 per share, at July 25, 2024 was 150,900,815.


ASSOCIATED BANC-CORP
Table of Contents


		Page
PART I. Financial Information

	Item 1. Financial Statements (Unaudited):	5

	Consolidated Balance Sheets	5

	Consolidated Statements of Income	6

	Consolidated Statements of Comprehensive Income	7

	Consolidated Statements of Changes in Stockholders’ Equity	8

	Consolidated Statements of Cash Flows	10

	Notes to Consolidated Financial Statements	12

	Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	50

	Item 3. Quantitative and Qualitative Disclosures About Market Risk	73

	Item 4. Controls and Procedures	74

PART II. Other Information

	Item 1. Legal Proceedings	75

	Item 1A. Risk Factors	75

	Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	75

	Item 5. Other Information	75

	Item 6. Exhibits	76

	Signatures	77


ASSOCIATED BANC-CORP
Commonly Used Terms
The following listing provides a reference of common acronyms, abbreviations, and other defined terms used throughout the document:






ACLL			Allowance for Credit Losses on Loans

AFS			Available for Sale
ALCO			Asset / Liability Committee



ASU			Accounting Standards Update


the Bank			Associated Bank, National Association
Basel III			International framework established by the Basel Committee on Banking Supervision for the regulation of capital and liquidity
bp			basis point(s)
BTFP			Bank Term Funding Program


CDs			Certificates of Deposit
CDIs			Core Deposit Intangibles
CECL			Current Expected Credit Losses
CET1			Common Equity Tier 1


CFPB			Consumer Financial Protection Bureau
Corporation / our			Associated Banc-Corp collectively with all of its subsidiaries and affiliates
CRA			Community Reinvestment Act
CRE			Commercial Real Estate


EAR			Earnings at Risk



Exchange Act			Securities Exchange Act of 1934, as amended


FDIC			Federal Deposit Insurance Corporation
Federal Reserve			Board of Governors of the Federal Reserve System
FFELP			Federal Family Education Loan Program
FHLB			Federal Home Loan Bank
FHLMC			Federal Home Loan Mortgage Corporation
FICO			Fair Isaac Corporation, provider of a broad-based risk score to aid in credit decisions
FNMA			Federal National Mortgage Association

FTEs			Full-time equivalent employees
FTP			Funds Transfer Pricing
GAAP			Generally Accepted Accounting Principles
GNMA			Government National Mortgage Association
GSE			Government-Sponsored Enterprise

HTM			Held to Maturity






LTV			Loan-to-Value


Moody's			Moody’s Investors Service
MSRs			Mortgage Servicing Rights
MVE			Market Value of Equity
NAV			Measured at fair value using Net Asset Value per share (or its equivalent) as a practical expedient
Net Free Funds			Noninterest-bearing sources of funds

NPAs			Nonperforming Assets

OCI			Other Comprehensive Income
OREO			Other Real Estate Owned
Parent Company			Associated Banc-Corp individually
RAP			Retirement Account Plan - the Corporation's noncontributory defined benefit retirement plan
Repurchase Agreements			Securities sold under agreements to repurchase


Restricted Stock Awards			Restricted common stock and restricted common stock units to certain key employees
Retirement Eligible Colleagues			Colleagues whose retirement meets the early retirement or normal retirement definitions under the applicable equity compensation plan
ROCET1			Return on Common Equity Tier 1

SBA			Small Business Administration
SEC			U.S. Securities and Exchange Commission
Series E Preferred Stock			The Corporation's 5.875% Non-Cumulative Perpetual Preferred Stock, Series E, liquidation preference $1,000 per share
Series F Preferred Stock			The Corporation's 5.625% Non-Cumulative Perpetual Preferred Stock, Series F, liquidation preference $1,000 per share





YTD			Year-to-Date

Table of Contents


PART I - FINANCIAL INFORMATION

ITEM 1.			Financial Statements:

ASSOCIATED BANC-CORP

Consolidated Balance Sheets


	Jun 30, 2024		Dec 31, 2023
(In thousands, except share and per share data)	(Unaudited)		(Audited)
Assets
Cash and due from banks	$	470,818	$	484,384
Interest-bearing deposits in other financial institutions	484,677		425,089
Federal funds sold and securities purchased under agreements to resell	3,600		14,350
AFS investment securities, at fair value	3,912,730		3,600,892
HTM investment securities, net, at amortized cost	3,799,035		3,860,160
Equity securities	22,944		41,651
FHLB and Federal Reserve Bank stocks, at cost	212,102		229,171
Residential loans held for sale	83,795		33,011
Commercial loans held for sale	—		90,303
Loans	29,618,271		29,216,218
Allowance for loan losses	(355,844)		(351,094)
Loans, net	29,262,428		28,865,124
Tax credit and other investments	246,300		258,067

Premises and equipment, net	369,968		372,978
Bank and corporate owned life insurance	683,451		682,649
Goodwill	1,104,992		1,104,992
Other intangible assets, net	36,066		40,471
Mortgage servicing rights, net	85,640		84,390

Interest receivable	173,106		169,569
Other assets	672,256		658,604
Total assets	$	41,623,908	$	41,015,855
Liabilities and stockholders' equity
Noninterest-bearing demand deposits	$	5,815,045	$	6,119,956
Interest-bearing deposits	26,875,995		27,326,093
Total deposits	32,691,039		33,446,049




Short-term funding	859,539		326,780
FHLB advances	2,673,046		1,940,194
Other long-term funding	536,113		541,269

Allowance for unfunded commitments	33,776		34,776
Accrued expenses and other liabilities	588,057		552,814
Total liabilities	$	37,381,571	$	36,841,882
Stockholders’ equity
Preferred equity	$	194,112	$	194,112
Common equity
Common stock	$	1,752	$	1,752
Surplus	1,711,316		1,714,822
Retained earnings	3,070,762		2,946,805
Accumulated other comprehensive (loss)	(219,214)		(171,096)
Treasury stock, at cost	(516,391)		(512,421)
Total common equity	4,048,225		3,979,861
Total stockholders’ equity	4,242,337		4,173,973
Total liabilities and stockholders’ equity	$	41,623,908	$	41,015,855
Preferred shares authorized (par value $1.00 per share)	750,000		750,000
Preferred shares issued and outstanding	200,000		200,000
Common shares authorized (par value $0.01 per share)	250,000,000		250,000,000
Common shares issued	175,216,409		175,216,409
Common shares outstanding	150,785,257		151,036,674

Numbers may not sum due to rounding.

See accompanying notes to consolidated financial statements.

Table of Contents

Item 1. Financial Statements Continued:

ASSOCIATED BANC-CORP

Consolidated Statements of Income (Unaudited)


	Three Months Ended Jun 30,				Six Months Ended Jun 30,
(In thousands, except per share data)	2024		2023		2024		2023
Interest income
Interest and fees on loans	$	456,788	$	423,307	$	911,260	$	814,626
Interest and dividends on investment securities
Taxable	50,278		35,845		96,826		65,987
Tax-exempt	14,669		15,994		29,443		32,019
Other interest	8,539		6,086		16,133		11,415
Total interest income	530,274		481,231		1,053,662		924,048
Interest expense
Interest on deposits	221,062		162,196		447,293		271,618
Interest on federal funds purchased and securities sold under agreements to repurchase	2,303		2,261		5,166		5,404
Interest on other short-term funding	6,077		—		10,785		1
Interest on FHLB advances	34,143		49,261		55,814		99,222
Interest on long-term funding	10,096		9,596		20,154		15,876
Total interest expense	273,681		223,314		539,211		392,121
Net interest income	256,593		257,917		514,451		531,927
Provision for credit losses	23,008		22,100		47,009		40,071
Net interest income after provision for credit losses	233,585		235,817		467,442		491,856
Noninterest income
Wealth management fees	22,628		20,483		44,323		40,672
Service charges and deposit account fees	12,263		12,372		24,702		25,366
Card-based fees	11,975		11,396		23,242		21,982
Other fee-based revenue	4,857		4,465		9,259		8,740
Capital markets, net	4,685		5,093		8,735		10,176
Mortgage banking, net	2,505		7,768		5,166		11,313
Bank and corporate owned life insurance	4,584		2,172		7,154		4,835

Asset (losses), net	(627)		(299)		(933)		(35)
Investment securities gains, net	67		14		3,947		66

Other	2,222		2,080		4,549		4,501
Total noninterest income	65,159		65,543		130,144		127,616
Noninterest expense
Personnel	121,581		114,089		240,976		230,510
Technology	27,161		24,220		53,362		47,818
Occupancy	13,128		13,587		26,761		28,650
Business development and advertising	7,535		7,106		14,052		12,955
Equipment	4,450		4,975		9,049		9,906
Legal and professional	4,429		4,831		9,101		8,688
Loan and foreclosure costs	1,793		1,635		3,771		2,773
FDIC assessment	7,131		9,550		21,077		16,425
Other intangible amortization	2,203		2,203		4,405		4,405

Other	6,450		8,476		10,963		15,955
Total noninterest expense	195,861		190,673		393,518		378,086
Income before income taxes	102,884		110,687		204,068		241,386
Income tax (benefit) expense	(12,689)		23,533		7,326		50,873
Net income	115,573		87,154		196,742		190,514
Preferred stock dividends	2,875		2,875		5,750		5,750
Net income available to common equity	$	112,698	$	84,279	$	190,992	$	184,764
Earnings per common share
Basic	$	0.75	$	0.56	$	1.27	$	1.23
Diluted	$	0.74	$	0.56	$	1.26	$	1.22
Average common shares outstanding
Basic	149,872		149,986		149,864		149,875
Diluted	151,288		150,870		151,310		150,903

Numbers may not sum due to rounding.

See accompanying notes to consolidated financial statements.

Table of Contents

Item 1. Financial Statements Continued:

ASSOCIATED BANC-CORP

Consolidated Statements of Comprehensive Income (Unaudited)


	Three Months Ended Jun 30,				Six Months Ended Jun 30,
($ in thousands)	2024		2023		2024		2023

Net income	$	115,573	$	87,154	$	196,742	$	190,514
Other comprehensive (loss), net of tax
AFS investment securities
Net unrealized (losses)	(11,126)		(49,066)		(41,014)		(12,588)

Amortization of net unrealized losses on AFS securities transferred to HTM securities	2,122		2,289		4,182		4,556
Reclassification adjustment for net losses realized in net income	—		—		197		—


Income tax benefit	2,253		11,843		9,138		1,951
Other comprehensive (loss) on AFS securities	(6,751)		(34,934)		(27,498)		(6,081)
Cash flow hedge derivatives
Net unrealized (losses)	(6,787)		(34,147)		(26,248)		(20,384)
Reclassification adjustment for net losses realized in net income	4,769		3,319		9,592		4,581
Income tax (expense) benefit	(503)		7,867		(2,192)		3,173
Other comprehensive (loss) on cash flow hedge derivatives	(2,522)		(22,961)		(18,848)		(12,630)
Defined benefit pension and postretirement obligations
Amortization of prior service cost	(73)		(81)		(144)		(163)
Amortization of actuarial (gain) loss	(7)		(7)		(14)		22

Income tax benefit (expense)	20		(71)		(1,614)		8
Other comprehensive (loss) on pension and postretirement obligations	(60)		(159)		(1,772)		(132)
Total other comprehensive (loss)	(9,333)		(58,054)		(48,117)		(18,843)
Comprehensive income	$	106,241	$	29,100	$	148,625	$	171,671

Numbers may not sum due to rounding.

See accompanying notes to consolidated financial statements.

Table of Contents

Item 1. Financial Statements Continued:

ASSOCIATED BANC-CORP

Consolidated Statements of Changes in Stockholders’ Equity (Unaudited)


(In thousands, except per share data)	Preferred Equity		Common Stock		Surplus		Retained Earnings		Accumulated Other Comprehensive (Loss)		Treasury Stock		Total
Balance, December 31, 2023	$	194,112	$	1,752	$	1,714,822	$	2,946,805	$	(171,096)	$	(512,421)	$	4,173,973


Comprehensive income:
Net income	—		—		—		81,169		—		—		81,169
Other comprehensive (loss)	—		—		—		—		(38,785)		—		(38,785)
Comprehensive income													42,384
Common stock issued:
Stock-based compensation plans, net	—		—		(13,839)

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ASSOCIATED BANC-CORP [ASB] Filings

ASSOCIATED BANC-CORP [ASB-PE] Filings

ASSOCIATED BANC-CORP [ASB-PF] Filings

ASSOCIATED BANC-CORP [ASBA] Filings