Associated Banc-p(US:ASB)2026-01-22 23:02Financial Data and Key Metrics Changes - The company reported earnings of $0.80 per share in Q4 and $2.77 per share for the full year, marking the strongest net income in its history [7][8] - Total loans grew by 1% quarter-over-quarter and 5% year-over-year, with C&I loans being a primary growth driver [7][8] - Net interest income (NII) reached a record $310 million in Q4, up 15% for the year, while the net interest margin (NIM) was above 3% for the year, 50 basis points higher than 2020 [8][10] Business Line Data and Key Metrics Changes - C&I loans grew by over $1.2 billion in 2025, with a 2% increase in Q4 alone [7][8] - Core customer deposits increased by nearly $700 million in Q4 and $1 billion for the year, representing a 3.5% growth rate year-over-year [8][20] - Non-interest income for Q4 was $79 million, down slightly from Q3 but up from the previous year, supported by growth in wealth management and card fees [25][26] Market Data and Key Metrics Changes - The company is expanding its presence in major metropolitan markets, including Omaha and the Twin Cities, where it aims to deepen its market share [6][14] - The acquisition of American National Corporation is expected to enhance growth prospects in these markets [5][6] Company Strategy and Development Direction - The company completed major investments from its strategic plan in March 2025, positioning it for growth in 2026 and beyond [3][4] - Plans for 2026 include significant investments in marketing and hiring to accelerate organic growth in key markets [16][17] - The focus remains on high-quality commercial relationships and maintaining a low-risk profile [6][7] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's momentum heading into 2026, citing strong organic growth and profitability [7][33] - The company anticipates continued loan growth of 5%-6% and core customer deposit growth of 5%-6% in 2026, excluding the impact of the American National acquisition [21][19] Other Important Information - The efficiency ratio improved, decreasing by over 700 basis points from 2020 to 2025, indicating better cost management [11] - The company maintained a strong capital position, with a TCE ratio of 8.29% and a CET1 ratio of 10.49% [28] Q&A Session Summary Question: Non-interest income guidance - Management indicated that they do not have updates on financials related to the American National acquisition but are optimistic about the strategic alignment of the franchises [36][38] Question: Investments in key cities for 2026 - Management confirmed a 3% expense growth target and emphasized the importance of maintaining a balance between investments and cost reductions [40][41] Question: Loan and deposit growth expectations - Management expects significant loan growth from new hires and a strong pipeline, with a forecast of $1.2 billion in C&I growth for 2026 [44][45] Question: Capital management and buybacks - The primary focus remains on organic growth, with capital reserved for business investments rather than buybacks at this time [75][78] Question: Credit quality concerns - Management reported no significant stress in portfolios currently, with positive signs in commercial real estate paydowns [79][80] Question: Deposit mix changes - Management anticipates a shift towards demand deposit accounts as they focus on acquiring more households and commercial relationships [92][93]