Associated Banc-Corp Q4 Earnings Beat as NII Rises, Provisions Fall

Core Viewpoint - Associated Banc-Corp (ASB) reported fourth-quarter 2024 adjusted earnings of 57 cents per share, exceeding the Zacks Consensus Estimate of 55 cents and up from 53 cents in the prior-year quarter [1] Financial Performance - The increase in adjusted earnings was driven by a rise in net interest income (NII) and adjusted non-interest income, supported by a growth in deposit balances and lower provisions, although higher adjusted expenses posed a challenge [2] - Total adjusted revenues for the quarter were $345.8 million, a 5% increase year over year, surpassing the Zacks Consensus Estimate of $343.3 million [5] - For 2024, total adjusted revenues grew marginally to $1.33 billion, also exceeding the consensus estimate of $1.32 billion [5] Income and Expenses - NII was reported at $270.3 million, reflecting a 7% increase, with a net interest margin of 2.81%, up 12 basis points year over year [6] - Non-interest loss for the quarter was $206.8 million, compared to a loss of $131 million in the prior-year quarter; adjusted non-interest income, excluding certain losses, was $71.8 million, up 2% [7] - Non-interest expenses decreased by 6% to $224.3 million, but adjusted expenses rose marginally to $210 million [8] Loan and Deposit Trends - Total loans as of December 31, 2024, were $29.8 billion, down 1% from the prior quarter due to the sale of $723 million in residential mortgages [9] - Total deposits increased by 3% to $34.6 billion, exceeding the estimate of $34.5 billion [9] Credit Quality - The provision for credit losses was $17 million, down 19% from the prior-year quarter, with total non-performing assets decreasing by 10% to $144.2 million [10] - Net charge-offs were reported at $12.2 million, down 22% from the prior-year quarter [11] Capital Ratios - As of December 31, 2024, the Tier 1 risk-based capital ratio improved to 10.57%, up from 9.99% in the corresponding period of 2023 [12] Future Outlook - Management anticipates loan growth of 5-6% and total core customer deposits to rise by 4-5% in 2025, with NII projected to increase by 12-13% [13] - Total non-interest income is expected to remain stable or grow by 1%, while total non-interest expenses are likely to rise by 3-4% [14]