Financial Data and Key Metrics Changes - The adjusted net loss narrowed to $0.07 per diluted share, a significant improvement compared to the previous quarter [3][16] - The net interest margin (NIM) expanded for the third consecutive quarter, increasing by 10 basis points to 1.91% [4][18] - Operating expenses decreased by approximately $800 million on an annualized basis compared to the previous year [4][18] - Criticized and classified assets declined by $600 million or 5% quarter-over-quarter and by $2.8 billion or 20% year-to-date [4][24] Business Line Data and Key Metrics Changes - The Commercial and Industrial (C&I) business originated $1.7 billion in new loan outstandings, with net loan growth of $448 million in the C&I portfolio [4][15] - Multifamily and Community Reinvestment Act (CRA) payoffs totaled $1.3 billion, continuing a trend of exceeding forecasts [4][14] - The provision for loan losses decreased by 41%, while net charge-offs declined by 38% [5][15] Market Data and Key Metrics Changes - The total Commercial Real Estate (CRE) balances have declined by $9.5 billion or 20% since year-end 2023, aiding in the diversification of the loan portfolio [21] - The CRE concentration ratio decreased by 95 basis points to 407% since year-end 2023 [21] Company Strategy and Development Direction - The company is focused on transforming into a top-performing regional bank, emphasizing a customer-centric relationship-based culture [27] - The strategy includes reducing reliance on wholesale funding and enhancing liquidity, which has resulted in a significant reduction in funding costs [12][20] - The company plans to start originating new high-quality CRE loans in the fourth quarter, diversifying its portfolio geographically [15][33] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the trajectory of profitability, citing a consistent narrowing of net losses and improved credit quality [3][5] - The company anticipates continued growth in the C&I business, with expectations of funding between $1.7 billion to $2.2 billion in C&I loans per quarter going forward [36][48] - Management noted that the balance sheet is expected to stabilize in the fourth quarter and begin to grow in 2026 [46][68] Other Important Information - The company completed a holding company reorganization, simplifying its corporate structure and reducing operating expenses by approximately $15 million [27][28] - The CET1 capital ratio stands at 12.45%, ranking among the highest among regional bank peers [19] Q&A Session Summary Question: NII guidance for the year - Management indicated that the balance sheet would likely be at its low point in Q4, with expectations for growth in 2026 and continued NIM expansion [30][31] Question: C&I production expectations - Management expects C&I production to stabilize at $1.7 billion to $2.2 billion per quarter, with plans to hire additional staff to support growth [36][41] Question: Regulatory relief from holding company elimination - The elimination of the holding company reduces regulatory burdens and streamlines examinations, freeing up resources and time [49][50] Question: Expense management and future cost savings - Management highlighted significant reductions in non-interest expenses and identified further opportunities for cost savings in FDIC expenses and vendor costs [57][60] Question: Non-interest-bearing deposit growth - Management expects non-interest-bearing deposits to grow as new C&I relationships are established and private banking efforts are enhanced [61][62] Question: Credit quality and provisioning outlook - Management anticipates a downward trend in non-performing loans and has a pipeline for significant reductions in the fourth quarter [64][66]

Associated Banc-Corp (NYSE:ASB) Q3 2025 Earnings Call October 23, 2025 05:00 PM ET Speaker0Good afternoon, everyone, and welcome to Associated Banc-Corp's third quarter 2025 earnings conference call. My name is Diego, and I will be your operator today. At this time, all participants are in a listen-only mode. We will be conducting a question-and-answer session at the end of this conference. Copies of the slides that will be referenced during today's call are available on the company's website at investor.as ...

Banc of California (NasdaqGM:BANC) Q3 2025 Earnings Call October 23, 2025 01:00 PM ET Company ParticipantsTimothy Coffey - Managing Director and Associate Director of Depository ResearchAnn DeVries - Head of Investor RelationsJared Wolff - Chairman and CEOJoe Kauder - CFOChris McGratty - Head of U.S. Bank ResearchJared Shaw - Managing DirectorTony Elliott - Head of EMEA Controls for Wholesale PaymentsConference Call ParticipantsDavid Feaster - Director and Senior Equity Research AnalystGary Tenner - Managin ...

Financial Data and Key Metrics Changes - The company reported a net loss of $7.7 million for the second quarter, compared to a net income of $6.9 million in the first quarter [5][6] - Adjusted pre-provision net revenue was $3.6 million, representing a 12 basis point return on assets [6][21] - The net interest margin (NIM) for the second quarter was 1.68%, a slight increase from the previous quarter [17][21] Business Line Data and Key Metrics Changes - The company reduced its commercial real estate (CRE) held for sale loans by a total of $858 million during the second quarter [6][10] - New loan balances funded in the quarter amounted to $256 million, with an average yield of 7.18%, primarily in commercial and industrial (C&I) loans [8][10] - Non-performing loans remained stable at 35 basis points, and net charge-offs were low at $135,000 [8][24] Market Data and Key Metrics Changes - Assets under management at the end of the quarter were $5.3 billion, slightly up from the previous quarter [10] - Trust assets under advisement were stable at $1.2 billion [10] - Digital banking deposits surpassed $1 billion for the first time, representing 12% of total deposits as of June 30 [12] Company Strategy and Development Direction - The company is focused on reducing its CRE concentration and growing C&I loans, which is expected to result in a higher allowance for credit losses (ACL) over time [10][24] - The strategic initiatives include improving core funding and accelerating growth in private banking and wealth management [10][11] - The company aims to be fully exited from the held for sale CRE portfolio by the end of 2025 [7][17] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about future performance despite the current net loss, citing strong core financial performance [6][27] - The company remains well-capitalized with a common equity Tier 1 ratio of 11.1% and a leverage ratio of 8.3% [12][25] - Management anticipates continued margin expansion and expects the NIM to exit 2025 between 1.8% and 2.2% [26] Other Important Information - The company experienced a modest gain from the June securitization of $481 million of CRE loans, which was more favorable than the earlier loan sale [15][17] - Customer service costs decreased to $12.9 million from $15.1 million in the prior quarter, primarily due to a reduction in MSR deposits [23][24] - The company is undergoing management changes, with searches for key executive positions ongoing [13][46] Q&A Session Summary Question: Optimization of the balance sheet and future sales - Management indicated a focus on reducing CRE concentration and stabilizing the balance sheet, with no immediate plans for further asset sales [31][33] Question: Private banking initiative and talent acquisition - Management expressed optimism about the private banking initiative, highlighting ongoing recruitment efforts and early successes in client acquisition [36][38] Question: Balance sheet contraction and future asset levels - Management expects the balance sheet to reach a trough by the end of the year, with potential for growth into 2026 [40][42] Question: Management turnover and filling key roles - Management acknowledged turnover as part of the transition and emphasized the need for new leadership to align with the company's strategic direction [45][46] Question: Plans for reducing high-cost deposits - Management plans to continue reducing high-cost deposits, with expectations for further reductions in the coming months [49][52] Question: Loan yields and cash position - Total loan yields exited the quarter just under 4.70%, and management is comfortable with the current cash position, anticipating stability moving forward [58][62]

Financial Data and Key Metrics Changes - The company reported a GAAP net income of $51.1 million for Q2 2025, with diluted EPS of $1.20, resulting in a 1.04% return on assets and a 6.68% return on average common equity [21] - Adjusted operating net income for the quarter was $53.5 million or $1.25 diluted EPS, representing a 1.09% return on assets [21] - Tangible book value per share increased by $0.99 during the quarter, reflecting solid earnings retention [22] Business Line Data and Key Metrics Changes - C&I loans increased by 3.4% in the second quarter, while CRE and construction loan balances decreased by 1.7% [8][10] - Total loans increased modestly, with C&I balances driving growth, while transactional CRE balances experienced attrition [24] - Wealth Management business grew AUA by 4% to $7.4 billion, driven mostly by market appreciation [17] Market Data and Key Metrics Changes - Non-performing loans decreased significantly from $89.5 million to $56.2 million, representing 39 basis points of total loans [24] - The cost of deposits was reported at 1.54%, highlighting the value of the deposit franchise [16] Company Strategy and Development Direction - The company aims to reduce its CRE concentration below 300%, with a current concentration of 274% expected to rise to 310-315% post-acquisition of Enterprise Bank [10] - The strategic focus includes growing C&I loans to reduce dependence on CRE and drive deposit and fee income growth [10][20] - The company is preparing for a core conversion scheduled for May 2026, which is expected to enhance technology infrastructure and support future growth [16] Management's Comments on Operating Environment and Future Outlook - Management noted that while economic uncertainty has improved, the impact of tariffs and federal government actions remains unclear, causing customers to pause significant expansion initiatives [7] - The management expressed confidence in the ability to unlock earnings power through prudent expense and capital management, alongside the benefits from the Enterprise acquisition [20] Other Important Information - The company announced a $150 million stock buyback plan to be opportunistic in buying back stock [5] - The acquisition of Enterprise Bank is expected to enhance shareholder value and provide cross-sell opportunities [15][19] Q&A Session Summary Question: Where were new loan originations during the quarter? - Management indicated good loan originations across most segments, with a competitive landscape remaining challenging [37][38] Question: Why has small business lending been successful? - The success is attributed to experienced bankers and a centralized underwriting unit that enables quick loan request turnaround [40] Question: What is the outlook for the net interest margin? - Management expects the margin to gradually rise, particularly if the Fed cuts rates, with a focus on asset repricing [49] Question: Is the worst behind for credit? - Management is cautious, acknowledging progress but not ready to declare that the worst is over [50][51] Question: Can you provide details on a large loan modification? - A large syndicated loan was restructured into a Note A and Note B structure, with no cash payments until mid-2026 [55][56] Question: What is the expected pro forma CET1 ratio? - The pro forma CET1 ratio is expected to be in the mid-12% range, around 12.5% [92]

Financial Data and Key Metrics Changes - The fourth quarter GAAP losses per common share were $1.90, while distributable earnings showed a loss of $0.03. Excluding realized losses on asset sales, distributable earnings were $0.23 per common share, representing a 7.1% return on average stockholders' equity [32] - Book value per share decreased to $10.61 from $12.59 in the previous quarter, primarily due to an increase in combined CECL and valuation allowance [40] Business Line Data and Key Metrics Changes - The core portfolio contracted by $1.3 billion, with new production limited to $485 million, resulting in an 840 basis points contribution to distributable ROE before realized losses [15] - Small business lending operations experienced significant origination growth of 1.7%, with fourth quarter originations of $350 million, capping a record year of $1.2 billion [22] Market Data and Key Metrics Changes - The CRE loan portfolio totaled $7.2 billion, split into 83% core and 17% non-core assets. The core portfolio has a contractual yield of 8% with a 93% pay rate [13] - 60-day plus delinquencies in the core portfolio were only 2%, with an average risk rating of 2.2% [14] Company Strategy and Development Direction - The company has undertaken aggressive actions to reset the balance sheet, including a $284 million combined CECL and valuation allowances, marking 100% of non-performing loans to current values [9] - The strategy involves bifurcating the CRE portfolio into core and non-core assets to enhance transparency and track asset management strategies [12] Management's Comments on Operating Environment and Future Outlook - Management expects recovery in net interest margin and ROE over the succeeding year, with a focus on aggressive liquidation of the non-core portfolio [10][29] - The company anticipates originating between $1 billion and $1.5 billion of new production in lower middle market CRE loans in 2025 [15] Other Important Information - The company has a strong liquidity position with $185 million of unrestricted cash and has raised $350 million of corporate financing across two transactions [41] - The company plans to execute a $150 million share repurchase program to enhance shareholder returns [11] Q&A Session Summary Question: Will cash earnings cover the new dividend level? - Management expects to cover the dividend approximately 1.5 times over the course of the year, with earnings ramping up as the year progresses [46] Question: What is the rationale behind the UDF acquisition? - The acquisition is viewed as highly accretive on an EPS basis, with a strong historical performance of the loans involved [78] Question: How does the company plan to address 2026 maturities? - The company plans to access markets for refinancing and has already started addressing some maturities with recent senior secured notes [72] Question: What are the credit trends in the SBA business? - The company has seen strong credit trends in its SBA portfolio, with 60-plus delinquencies remaining at a moderate level of 2.8% [89]