[PART I. Financial Information](index=5&type=section&id=PART%20I.%20Financial%20Information) This section provides the unaudited financial statements and management's analysis of the company's financial condition and operational results [Item 1. Financial Statements (Unaudited)](index=5&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) The unaudited financial statements for June 30, 2025, show total assets of $44.0 billion and net income of $212.9 million, driven by increased net interest income [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets) Total assets increased to $44.0 billion by June 30, 2025, driven by loan growth and FHLB advances, while deposits slightly decreased Consolidated Balance Sheet Highlights (in thousands, as of June 30, 2025 vs. Dec 31, 2024) | Metric | Jun 30, 2025 (Unaudited) | Dec 31, 2024 (Audited) | Change | | :--- | :--- | :--- | :--- | | **Total Assets** | **$43,993,729** | **$43,023,068** | **+2.25%** | | Loans, net | $30,231,091 | $29,405,041 | +2.81% | | Total Deposits | $34,147,565 | $34,648,434 | -1.45% | | FHLB advances | $3,879,489 | $1,853,807 | +109.27% | | **Total Liabilities** | **$39,212,948** | **$38,417,506** | **+2.07%** | | **Total Stockholders' Equity** | **$4,780,781** | **$4,605,562** | **+3.80%** | [Consolidated Statements of Income](index=6&type=section&id=Consolidated%20Statements%20of%20Income) Net interest income rose 13.9% to $585.9 million for the six months ended June 30, 2025, contributing to an 8.2% increase in net income Consolidated Income Statement Summary (in thousands, Six Months Ended June 30) | Metric (except EPS) | 2025 | 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Net Interest Income | $585,940 | $514,451 | +13.9% | | Provision for credit losses | $30,999 | $47,009 | -34.1% | | Total Noninterest Income | $125,754 | $130,144 | -3.4% | | Total Noninterest Expense | $419,971 | $393,518 | +6.7% | | Net Income | $212,916 | $196,742 | +8.2% | | Net Income Available to Common Equity | $207,166 | $190,992 | +8.5% | | Diluted Earnings Per Common Share | $1.24 | $1.26 | -1.6% | [Consolidated Statements of Comprehensive Income](index=7&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income) Comprehensive income significantly increased to $273.0 million for the six months ended June 30, 2025, driven by net income and positive other comprehensive income Comprehensive Income Summary (in thousands, Six Months Ended June 30) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Net Income | $212,916 | $196,742 | | Total Other Comprehensive Income (Loss) | $60,119 | $(48,117) | | **Comprehensive Income** | **$273,035** | **$148,625** | [Consolidated Statements of Changes in Stockholders' Equity](index=8&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Stockholders'%20Equity) Total stockholders' equity grew to $4.78 billion by June 30, 2025, primarily due to comprehensive income, partially offset by dividends - Total stockholders' equity grew to **$4.78 billion** by June 30, 2025, up from **$4.61 billion** at the end of 2024[25](index=25&type=chunk) - Common stock dividends of **$0.23 per share** were paid in the second quarter of 2025[26](index=26&type=chunk) [Consolidated Statements of Cash Flows](index=10&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash provided by operating activities was $239.6 million, while financing activities provided $765.5 million, leading to a $240.5 million net increase in cash Cash Flow Summary (in thousands, Six Months Ended June 30) | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $239,637 | $267,996 | | Net cash used in investing activities | $(764,621) | $(655,093) | | Net cash provided by financing activities | $765,485 | $422,369 | | **Net increase in cash and cash equivalents** | **$240,501** | **$35,272** | [Notes to Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Detailed notes explain accounting policies and financial data, covering investment securities, loans, funding, and segment reporting [Note 5: Investment Securities](index=15&type=section&id=Note%205%3A%20Investment%20Securities) The investment portfolio includes $5.04 billion in AFS and $3.67 billion in HTM securities, with unrealized losses attributed to interest rate changes Investment Securities Portfolio (in thousands, June 30, 2025) | Category | Amortized Cost | Fair Value | | :--- | :--- | :--- | | Total AFS investment securities | $5,007,880 | $5,036,508 | | Total HTM investment securities | $3,672,161 | $3,140,331 | - Management does not believe any unrealized losses at June 30, 2025 represent credit deterioration, attributing them primarily to changes in interest rates and market conditions[60](index=60&type=chunk) [Note 6: Loans](index=20&type=section&id=Note%206%3A%20Loans) Total loans increased to $30.6 billion by June 30, 2025, with commercial loans forming the largest segment, and credit quality details provided Loan Composition (in thousands) | Loan Category | Jun 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Total commercial | $19,704,154 | $18,928,090 | | Total consumer | $10,903,451 | $10,840,496 | | **Total loans** | **$30,607,605** | **$29,768,586** | - Total nonaccrual loans stood at **$113.0 million** as of June 30, 2025, down from **$123.3 million** at December 31, 2024[76](index=76&type=chunk)[78](index=78&type=chunk) [Note 8: Short and Long-Term Funding](index=32&type=section&id=Note%208%3A%20Short%20and%20Long-Term%20Funding) Funding structure shifted with FHLB advances more than doubling to $3.88 billion, while short-term and other long-term funding decreased Funding Composition (in thousands) | Funding Source | Jun 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Short-term funding | $75,585 | $470,369 | | FHLB advances | $3,879,489 | $1,853,807 | | Other long-term funding | $593,530 | $837,635 | - In January 2025, **$250.0 million** of 10-year subordinated notes matured and were repaid, contributing to the decrease in long-term funding[102](index=102&type=chunk) [Note 14: Segment Reporting](index=45&type=section&id=Note%2014%3A%20Segment%20Reporting) The Corporation operates three segments, with Community, Consumer, and Business generating the highest net income at $171.8 million Net Income by Segment (in thousands, Six Months Ended June 30, 2025) | Segment | Net Income (Loss) | | :--- | :--- | | Corporate and Commercial Specialty | $135,377 | | Community, Consumer, and Business | $171,782 | | Risk Management and Shared Services | $(94,241) | | **Consolidated Net Income** | **$212,916** | - Effective in Q4 2024, the private wealth operating segment was moved from the Corporate and Commercial Specialty segment to the Community, Consumer and Business segment, with prior periods recast to reflect this change[159](index=159&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=53&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management's discussion highlights strong first-half 2025 performance with 14% net interest income growth and expanded net interest margin, maintaining robust capital and liquidity [Performance Summary](index=53&type=section&id=Performance%20Summary) First-half 2025 saw average loans increase 3% and net interest income grow 14% to $585.9 million, with net interest margin expanding to 3.01% - Average loans increased by **$828.3 million (3%)** from the first six months of 2024, driven by commercial and auto finance lending[191](index=191&type=chunk) - Net interest income rose by **$71.5 million (14%)** year-over-year, with net interest margin increasing to **3.01%** from **2.77%** due to balance sheet repositioning[191](index=191&type=chunk) - Noninterest expense increased by **$26.5 million (7%)** from the first six months of 2024, primarily due to annual merit increases, higher consultant fees, and OREO write-downs[191](index=191&type=chunk) [Balance Sheet Analysis](index=59&type=section&id=Balance%20Sheet%20Analysis) Total assets grew 2% to $44.0 billion by June 30, 2025, driven by loan growth and a 109% increase in FHLB advances, despite a 1% deposit decrease - Total assets reached **$44.0 billion**, up **2%** from December 31, 2024, with loans increasing by **$839.0 million**[209](index=209&type=chunk) - FHLB advances increased by **$2.0 billion (109%)** to fund loan growth and manage seasonal deposit outflows[209](index=209&type=chunk) - Residential loans held for sale decreased by **$549.9 million (85%)** following the closing of a mortgage portfolio sale in January 2025[209](index=209&type=chunk) [Credit Risk and Nonperforming Assets](index=61&type=section&id=Credit%20Risk%20and%20Nonperforming%20Assets) Credit risk is managed through diversification, with nonperforming assets at $148.2 million (0.48% of total loans plus OREO) and nonaccrual loans decreasing Nonperforming Assets (in thousands) | Metric | Jun 30, 2025 | Dec 31, 2024 | Jun 30, 2024 | | :--- | :--- | :--- | :--- | | Total nonaccrual loans | $112,999 | $123,260 | $154,423 | | OREO | $34,287 | $20,217 | $8,325 | | **Total nonperforming assets** | **$148,169** | **$144,164** | **$163,418** | | NPAs to total loans plus OREO | 0.48% | 0.48% | 0.55% | - The largest commercial and industrial industry exposures are in Real Estate (**9% of total loan exposure**) and Utilities (**8% of total loan exposure**)[216](index=216&type=chunk) [Liquidity and Capital](index=67&type=section&id=Liquidity%20and%20Capital) The Corporation maintains strong liquidity of $14.7 billion, covering uninsured deposits by 173%, and robust capital ratios exceeding regulatory minimums Key Capital Ratios (as of June 30, 2025) | Ratio | Value | Regulatory Minimum (Well-Capitalized) | | :--- | :--- | :--- | | CET1 capital ratio | 10.20% | 6.5% | | Tier 1 capital ratio | 10.77% | 8.0% | | Total capital ratio | 12.83% | 10.0% | | Tier 1 leverage ratio | 8.72% | 5.0% | - Total available liquidity was **$14.7 billion** at June 30, 2025, including **$5.0 billion** in FHLB capacity and **$5.4 billion** in Federal Reserve discount window capacity[252](index=252&type=chunk)[254](index=254&type=chunk) - Estimated uninsured and uncollateralized deposits were **24.8% of total deposits** at June 30, 2025, with available liquidity covering these deposits by **173%**[253](index=253&type=chunk)[254](index=254&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=76&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Market and interest rate risk are centrally managed, with the Corporation's asset-sensitive profile indicating a 1.6% earnings improvement from a 100 bp rate increase Estimated % Change in Rate Sensitive Earnings at Risk (EAR) Over 12 Months | Gradual Rate Change | Dynamic Forecast (Jun 30, 2025) | Static Forecast (Jun 30, 2025) | | :--- | :--- | :--- | | 100 bp increase | 1.6% | 1.4% | | 100 bp decrease | (1.0)% | (0.9)% | - The Corporation's interest rate risk profile is asset sensitive as of June 30, 2025, indicating that a higher yield curve generally adds to income[264](index=264&type=chunk) [Item 4. Controls and Procedures](index=77&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal control over financial reporting - The CEO and CFO concluded that the Corporation's disclosure controls and procedures were effective as of June 30, 2025[308](index=308&type=chunk) - There were no material changes to the Corporation's internal control over financial reporting during the second quarter of 2025[309](index=309&type=chunk) [PART II. Other Information](index=78&type=section&id=PART%20II.%20Other%20Information) This section provides other required information, including legal proceedings, risk factors, equity sales, and exhibits [Item 1. Legal Proceedings](index=78&type=section&id=Item%201.%20Legal%20Proceedings) The Corporation is involved in various legal proceedings, with management believing outcomes will not materially adversely affect its overall financial condition - The Corporation is party to various legal proceedings in the normal course of business and believes the outcomes will not have a material adverse effect on its overall financial condition[131](index=131&type=chunk)[134](index=134&type=chunk) [Item 1A. Risk Factors](index=78&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors were reported since the 2024 Annual Report on Form 10-K - No material changes in Risk Factors were reported since the 2024 Annual Report on Form 10-K[312](index=312&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=78&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The Corporation repurchased 4,134 common shares for tax withholding in Q2 2025, with $39.1 million remaining authorized for repurchase Common Stock Purchases (Q2 2025) | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | April 2025 | 1,045 | $21.41 | | May 2025 | 2,088 | $22.95 | | June 2025 | 1,001 | $22.88 | | **Total** | **4,134** | **$22.54** | - As of June 30, 2025, **$39.1 million** remained available for repurchase under the 2021 Board authorization[314](index=314&type=chunk) [Item 5. Other Information](index=78&type=section&id=Item%205.%20Other%20Information) No director or officer adopted or terminated Rule 10b5-1 trading arrangements during the second quarter of 2025 - No director or officer adopted or terminated a Rule 10b5-1 trading arrangement in the second quarter of 2025[316](index=316&type=chunk) [Item 6. Exhibits](index=79&type=section&id=Item%206.%20Exhibits) Exhibits filed with Form 10-Q include employment agreements, equity plans, and CEO/CFO certifications under Sarbanes-Oxley - Exhibits filed include certifications under Section 302 and 906 of Sarbanes-Oxley by the CEO and CFO[321](index=321&type=chunk)[322](index=322&type=chunk)

Core Viewpoint - Associated Banc-Corp (ASB) reported better-than-expected quarterly performance, with Q2 2025 earnings of 65 cents per share, surpassing the Zacks Consensus Estimate of 62 cents, although down from 74 cents in the prior-year quarter [1][8]. Financial Performance - Net income available to common shareholders was $108.4 million, a decrease of 4% from the year-ago quarter, exceeding the estimate of $101.9 million [2]. - Total revenues for the quarter were $371.2 million, a 14% year-over-year increase, beating the Zacks Consensus Estimate of $362.8 million [3]. - Net interest income (NII) rose to $300 million, up 17% year-over-year, with a net interest margin of 3.04%, an increase of 29 basis points [3][8]. - Non-interest income was $67 million, a 3% increase, slightly above the estimate of $66.8 million [4]. Expense and Efficiency - Non-interest expenses increased by 7% to $209.4 million, closely aligning with the estimate of $209.2 million [4]. - The efficiency ratio improved to 55.81%, down from 59.51% in the prior-year quarter, indicating enhanced profitability [4]. Loan and Deposit Trends - Total loans as of June 30, 2025, were $30.6 billion, a 1% increase from the prior quarter, slightly below the estimate of $30.8 billion [5]. - Total deposits declined by 3% to $34.1 billion, underperforming the estimate of $34.4 billion [5]. Credit Quality - The provision for credit losses was $18 million, down 22% from the prior-year quarter, slightly above the estimate of $16.3 million [6]. - Total non-performing assets decreased by 9% to $148.2 million, and total non-accrual loans fell by 27% to $113 million [6]. Capital Ratios - The Tier 1 risk-based capital ratio improved to 10.77%, up from 10.27% in the corresponding period of 2024 [9]. - The common equity Tier 1 capital ratio rose to 10.20%, compared to 9.68% previously [9]. Future Outlook - Management expects loans to grow at a rate of 5-6% and total core customer deposits to rise by 4-5% [10]. - NII growth is now projected to be in the range of 14-15%, an increase from the previous guidance of 12-13% [10]. - Total non-interest income is expected to rise by 1-2%, a change from the previous outlook of stability or 1% growth [11].

Core Insights - Associated Banc-Corp achieved a record net interest income of $300 million in Q2 2025, leading to GAAP earnings per share of $0.65, surpassing analyst estimates of $0.62 [1][2][5] - Despite the record net interest income, GAAP revenue fell short of expectations at $300 million, down 6.8% year-over-year, primarily due to subdued noninterest income growth [1][2][6] Financial Performance - GAAP EPS for Q2 2025 was $0.65, a decrease of 12.2% from $0.74 in Q2 2024 [2] - Total GAAP revenue was $300 million, down from $321.75 million in Q2 2024 [2] - Net interest income increased by 16.9% year-over-year, from $256.59 million in Q2 2024 [2][5] - Net interest margin improved to 3.04%, up from 2.75% a year earlier [2][5] - Total noninterest expense rose to $209 million, a 7% increase from the previous year [9] Business Operations - Associated Banc-Corp operates 188 branches across over 100 communities, focusing on retail and commercial banking services [3] - The bank's strategic focus includes accelerating commercial loan growth, improving deposit mix, and managing risk [4] - Commercial loan balances grew to $30.6 billion, reflecting a 3% year-over-year increase [7] Deposit Trends - Total deposits decreased by $1.0 billion or 3% sequentially but increased by 4% year-over-year [8] - Core customer deposits also fell by 3% from the previous quarter [8] - Noninterest-bearing demand deposits declined by 5.8% compared to the previous year [8] Credit Quality - Provision for credit losses rose by $5 million from the previous quarter but decreased by $5 million compared to last year [10] - Nonaccrual loans decreased to 0.37% of total loans from 0.52% a year ago [10] - The allowance for credit losses on loans increased slightly to 1.35% of total loans [10] Future Guidance - Management raised its outlook for net interest income growth to 14%-15% for the full year 2025 [13] - Noninterest income is expected to grow by 1%-2% annually, while noninterest expenses are projected to rise by 4%-5% [13] - Full-year loan growth is anticipated at 5%-6%, with total deposit growth guidance adjusted to 1%-3% [13]

Core Insights - Associated Banc-Corp reported revenue of $366.98 million for the quarter ended June 2025, reflecting a year-over-year increase of 12.7% [1] - The company's EPS was $0.65, up from $0.52 in the same quarter last year, exceeding the consensus estimate of $0.62 by 4.84% [1] - The revenue surpassed the Zacks Consensus Estimate of $362.81 million, resulting in a surprise of +1.15% [1] Financial Metrics - Total earning assets averaged $40.07 billion, exceeding the average estimate of $39.56 billion [4] - Net Interest Margin remained stable at 3%, matching the average estimate [4] - Annualized year-to-date net charge offs to average loans were 0.2%, consistent with analyst estimates [4] - Total nonperforming assets were reported at $148.17 million, lower than the estimated $161.65 million [4] - Adjusted efficiency ratio was 57.2%, slightly above the average estimate of 56.4% [4] - Net Interest Income (FTE) was $304.23 million, surpassing the average estimate of $296.03 million [4] - Bank and corporate owned life insurance revenue was $4.14 million, below the estimate of $4.33 million [4] - Capital markets net revenue was $5.77 million, exceeding the average estimate of $4.36 million [4] - Mortgage banking net revenue was $4.21 million, above the estimated $3.74 million [4] - Card-based fees were reported at $11.2 million, slightly higher than the estimate of $11.03 million [4] - Service charges and deposit accounts fees reached $13.15 million, exceeding the average estimate of $12.92 million [4] - Wealth management fees were $23.03 million, above the estimated $22.43 million [4] Stock Performance - Shares of Associated Banc-Corp have returned +8% over the past month, outperforming the Zacks S&P 500 composite's +5.7% change [3] - The stock currently holds a Zacks Rank 2 (Buy), indicating potential for outperformance in the near term [3]

Core Viewpoint - Associated Banc-Corp reported quarterly earnings of $0.65 per share, exceeding the Zacks Consensus Estimate of $0.62 per share, and showing an increase from $0.52 per share a year ago, indicating a positive earnings surprise of +4.84% [1] Financial Performance - The company achieved revenues of $366.98 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 1.15%, and up from $325.5 million year-over-year [2] - Over the last four quarters, Associated Banc-Corp has consistently surpassed consensus EPS estimates four times and topped revenue estimates two times [2] Stock Performance - Since the beginning of the year, Associated Banc-Corp shares have increased by approximately 8.4%, compared to the S&P 500's gain of 8.1% [3] Future Outlook - The current consensus EPS estimate for the upcoming quarter is $0.63 on revenues of $369.87 million, and for the current fiscal year, it is $2.50 on revenues of $1.46 billion [7] - The company's favorable estimate revisions trend prior to the earnings release has resulted in a Zacks Rank 2 (Buy), suggesting expected outperformance in the near future [6] Industry Context - The Banks - Midwest industry, to which Associated Banc-Corp belongs, is currently ranked in the top 29% of over 250 Zacks industries, indicating a favorable outlook for stocks within this sector [8]

Financial Data and Key Metrics Changes - The company reported earnings of $0.65 per share for Q2 2025, with total loans growing by 1% quarter-over-quarter and 3% year-over-year [9] - Net interest income reached a record $300 million, up $43 million or 17% compared to the same period last year [10][11] - The return on tangible common equity was 12.96%, a 62 basis point improvement from Q1 [12] Business Line Data and Key Metrics Changes - Commercial and industrial (C&I) loans grew by over $700 million in the first half of 2025, with $356 million added in Q2 alone [6][10] - Total average quarterly loans increased by nearly $400 million versus Q1, with C&I leading the growth [14] - Non-interest income for Q2 was $67 million, a 3% increase year-over-year [22] Market Data and Key Metrics Changes - Core customer deposits were up 4.3% compared to the same period last year, despite seasonal outflows in Q2 [10][15] - The net interest margin climbed above 3%, reflecting a strong profitability profile [13] Company Strategy and Development Direction - The company is focused on executing its strategic plan, which includes enhancing profitability through a mix shift in its asset base [5][12] - There is a strong emphasis on organic growth in customer relationships, with the best organic checking household growth in nearly a decade [5][16] - The company aims to reduce reliance on wholesale funding by increasing lower-cost core customer deposits [17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to grow core customer deposits in the second half of the year, citing strong household growth trends and a growing commercial pipeline [10][16] - The management remains vigilant regarding credit quality, with a proactive approach to managing portfolios amid macroeconomic uncertainties [8][30] Other Important Information - The company added nine basis points to its CET1 capital in Q2, totaling a 19 basis point increase year-to-date [7] - The efficiency ratio improved to below 56%, the lowest level since early 2023 [23] Q&A Session Summary Question: Seasonal decline in deposits - Management acknowledged the seasonal decline but noted that it was anticipated and that they expect a rebound in the second half of the year due to a growing commercial pipeline [36][39] Question: Update on office CRE portfolio - Management indicated that the office CRE portfolio is evolving positively, with proactive clients benefiting from improvements [46][48] Question: Margin outlook and deposit pricing strategy - Management discussed the importance of asset-side growth in maintaining margin strength and emphasized disciplined pricing strategies for deposits [53][59] Question: Thoughts on acquisitions - Management stated that any potential acquisition would need to be a good strategic, financial, and cultural fit, emphasizing the priority of executing their current strategic plan [68][70] Question: Increase in ACL for C&I portfolio - Management explained that the increase in the allowance for credit losses (ACL) for the C&I portfolio is primarily due to growth in that segment [72] Question: Sustainability of positive operating leverage - Management expressed confidence in sustaining positive operating leverage into 2026, driven by growth in commercial loans and disciplined expense management [79][81]

Financial Data and Key Metrics Changes - The company reported earnings of $0.65 per share for Q2 2025, with total loans growing by 1% quarter over quarter and 3% year over year [8][10] - Net interest income reached $300 million, marking a 17% increase compared to the same period last year, and was the highest in the company's history [10][18] - The return on tangible common equity was 12.96%, reflecting a 62 basis point improvement from Q1 [12] Business Line Data and Key Metrics Changes - Commercial and industrial (C&I) loans grew by over $700 million in the first half of 2025, with $356 million added in Q2 alone [6][9] - Total average quarterly loans increased by nearly $400 million compared to Q1, driven primarily by C&I growth [14] - Non-interest income for Q2 was $67 million, a 3% increase year over year, with fee-based revenues and capital markets income contributing to this growth [11][23] Market Data and Key Metrics Changes - Core customer deposits were up 4.3% compared to the same period last year, despite seasonal outflows in Q2 [10][15] - The net interest margin climbed above 3%, with a 29 basis point increase year over year [13][18] - The securities book increased to $9 billion, with an overall yield of 4.24% [22] Company Strategy and Development Direction - The company is focused on executing its strategic plan, which includes enhancing profitability through a mix shift in its asset base and deepening customer relationships [5][12] - The strategy involves replacing lower-yielding residential mortgage loans with higher-yielding C&I loans, aiming for total bank loan growth of 5% to 6% for the year [12][15] - The company remains open to potential acquisitions but emphasizes that any opportunity must align strategically, financially, and culturally with its goals [68][70] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to grow core customer deposits in the second half of the year, citing strong household growth trends and a growing commercial pipeline [16][41] - The management team remains vigilant regarding credit quality, with a proactive approach to managing portfolios amid macroeconomic uncertainties [7][30] - The company expects net interest income growth of 14-15% in 2025, assuming three Fed rate cuts [20] Other Important Information - The company added 19 basis points to its CET1 capital so far in 2025, reflecting a strong capital position [7][25] - Non-accrual loans decreased by 16%, indicating improved credit quality [11][31] - The efficiency ratio improved to below 56%, the lowest level since early 2023 [24] Q&A Session Summary Question: Seasonal decline in deposits - Management acknowledged the seasonal decline but noted that it was anticipated and that the commercial pipeline for deposits has increased significantly [38][40] Question: Update on office CRE portfolio - Management indicated that the office CRE portfolio is evolving positively, with proactive clients benefiting from improvements [47][49] Question: Margin outlook and deposit pricing strategy - Management discussed the importance of asset remixing for margin strength and emphasized disciplined pricing strategies for deposits [54][60] Question: Thoughts on acquisitions - Management reiterated that any acquisition would need to be a good strategic, financial, and cultural fit, while focusing on executing the current strategic plan [68][70] Question: ACL increase for C&I portfolio - Management explained that the increase in the allowance for credit losses (ACL) for the C&I portfolio is due to growth in that segment, reflecting a proactive risk management approach [71][72]

Second Quarter 2025 Earnings Presentation July 24, 2025 Associated Banc-Corp Important Disclosures Forward-looking statements: Non-GAAP Measures: This presentation includes certain non-GAAP financial measures. These financial measures have been included as they provide meaningful supplemental information to assess trends in the Corporation's results of operations. These non- GAAP measures are provided in addition to, and not as substitutes for, measures of our financial performance determined in accordance ...

Financial Performance - Associated Banc-Corp reported net income of $108 million, or $0.65 per common share, for Q2 2025, compared to $99 million, or $0.59 per share in Q1 2025, and $113 million, or $0.74 per share in Q2 2024[1]. - Noninterest income for Q2 2025 was $67 million, an increase of $8 million from Q1 2025[14]. - Income before income taxes increased by 36% to $139,629,000 in Q2 2025, compared to $102,884,000 in Q2 2024[28]. - Net income available to common equity decreased by 4% to $108,355,000 in Q2 2025, down from $112,698,000 in Q2 2024[28]. - Adjusted net income available to common equity was $210,470 thousand in Jun 2025, compared to $194,296 thousand in Jun 2024, reflecting an increase of 8.3%[45]. Interest Income and Margin - The company achieved record net interest income of $300 million, reflecting a 5% increase from Q1 2025 and a 17% increase from Q2 2024[4]. - Total interest income increased by 3% year-over-year to $545,536,000 in Q2 2025, compared to $530,274,000 in Q2 2024[28]. - Net interest income rose by 17% to $300,000,000 in Q2 2025, up from $256,593,000 in Q2 2024[28]. - The net interest margin increased to 3.04%, a 7 basis point increase from Q1 2025 and a 29 basis point increase from Q2 2024[10]. - The fully tax-equivalent net interest margin was 3.04%, up from 2.97% in the previous quarter and 2.75% a year ago[38]. Loans and Deposits - Total period end loans reached $30.6 billion, up 1% from Q1 2025 and 3% from Q2 2024[4]. - Total period end deposits were $34.1 billion, down 3% from Q1 2025 but up 4% from Q2 2024[9]. - Total loans increased to $30.30 billion in 2025, generating interest income of $882.16 million, a yield of 5.86%, compared to $29.47 billion and $912.30 million in 2024 with a yield of 6.22%[41]. - Total deposits decreased to $34,147,565 thousand in Jun 2025 from $35,196,713 thousand in Jun 2024[45]. - Commercial and industrial loans rose by 3% to $11,281,964 compared to the previous quarter, with a year-over-year increase of 13%[43]. Noninterest Expense - Total noninterest expense was $209 million, a decrease of $1 million from Q1 2025, with an expected growth of 4% to 5% in 2025[15]. - Total noninterest expense rose by 7% to $209,352,000 in Q2 2025, up from $195,861,000 in Q2 2024[28]. - Noninterest expense for Jun 2025 was $419,971, an increase from $393,518 in Jun 2024, reflecting a year-over-year increase of 6.1%[48]. Credit Quality - The provision for credit losses on loans was $18 million, compared to $13 million in Q1 2025 and $23 million in Q2 2024[19]. - The allowance for loan losses increased by $5.2 million to $376.5 million, reflecting a slight increase in risk provisions[26]. - Provision for credit losses was $30,999 thousand in Jun 2025, compared to $47,009 thousand in Jun 2024, indicating a decrease of 34.3%[45]. - Total nonaccrual loans decreased by 16% to $112,999 thousand from $134,808 thousand in the prior quarter[36]. Capital Ratios - The CET1 capital ratio stood at 10.20% as of June 30, 2025, exceeding Basel III regulatory benchmarks[20]. - Average stockholders' equity to average assets increased to 10.88% in Jun 2025 from 10.20% in Jun 2024[45]. - The common equity Tier 1 capital ratio improved to 10.20%, compared to 10.11% in the previous quarter[31]. Operational Efficiency - The fully tax-equivalent efficiency ratio improved to 57.70% in Jun 2025 from 60.03% in Jun 2024, showing enhanced operational efficiency[48]. - The adjusted efficiency ratio for Jun 2025 was 57.15%, compared to 58.85% in Jun 2024, reflecting a positive trend in cost management[48].

Core Insights - Associated Banc-Corp reported a net income of $108 million, or $0.65 per common share, for Q2 2025, showing a slight increase from $99 million in Q1 2025 but a decrease from $113 million in Q2 2024 [1][9][23] - The company experienced strong momentum in C&I loan growth, achieving over $350 million in the second quarter, alongside a 7 basis point margin expansion, leading to the highest quarterly net interest income in its history [2][10] Financial Performance - **Earnings**: Net income available to common equity was $108 million, or $0.65 per share, compared to $99 million ($0.59 per share) in Q1 2025 and $113 million ($0.74 per share) in Q2 2024 [1][9] - **Net Interest Income**: Q2 2025 net interest income reached $300 million, up $14 million from Q1 2025 and $43 million from Q2 2024, with a net interest margin of 3.04% [8][9] - **Loans**: Average total loans for Q2 2025 were $30.5 billion, a 1% increase from the prior quarter and a 3% increase from the same period last year [5][9] - **Deposits**: Average deposits decreased by 2% from the prior quarter to $34.2 billion but increased by 5% from the same period last year [6][9] Growth Projections - The company expects total net interest income growth of 14% to 15% for 2025, driven by balance sheet growth and favorable market conditions [10] - Loan growth is anticipated to be between 5% to 6% for the year compared to the end of 2024 [5][9] - Deposit growth is projected to be between 1% to 3%, with core customer deposit growth expected at 4% to 5% [6][9] Capital and Credit Quality - The CET1 capital ratio stood at 10.20% as of June 30, 2025, indicating a strong capital position above regulatory benchmarks [15] - The provision for credit losses was $18 million, reflecting a stable credit quality environment [14][21] Noninterest Income and Expense - Total noninterest income for Q2 2025 was $67 million, an increase from the prior quarter and the same period last year [11][9] - Noninterest expense decreased slightly by $1 million from the prior quarter to $209 million, but increased by $13 million from the same period last year [12][9]