GREEN BAY, Wis.,
Oct. 24,
2024 /PRNewswire/ --Associated Banc-Corp (NYSE: ASB)
("Associated" or "Company") today reported net income available to
common equity ("earnings") of $85
million, or $0.56 per common
share, for the quarter ended September 30,
2024. These amounts compare to earnings of
$113 million, or $0.74 per
common share, for the quarter ended June 30,
2024 and earnings of $80 million, or $0.53 per common share, for the quarter ended
September 30, 2023.
"In the first nine months of 2024, we've remained squarely
focused on executing Phase 2 of our strategic growth plan, and the
financial tailwinds have started to emerge here in the third
quarter," said President and CEO Andy
Harmening. "During the quarter, we drove nearly $400 million in balanced loan growth and over
$600 million in core customer
deposit1 growth, which enabled us to decrease our
reliance on wholesale funding and expand our margin. We also saw
strong credit performance again during the quarter, helping us to
deliver solid bottom line results for our shareholders."
"We're growing our customer base, delivering industry-leading
customer satisfaction, and adding top talent to our commercial
banking team. We look forward to building on this momentum and
providing additional updates along the way."
Third Quarter 2024 Highlights (all comparisons to Second
Quarter 2024)
- Diluted earnings per common share of $0.56
- Total period end core customer deposit1 growth of
$618 million
- Total period end deposit growth of $863
million
- Total period end loan growth of $373
million
- Net interest income of $263
million
- Net interest margin of 2.78%
- Noninterest income of $67
million
- Noninterest expense of $201
million
- Provision for credit losses of $21
million
- Allowance for credit losses on loans / total loans of
1.33%
- Net charge offs / average loans (annualized) of 0.18%
1 This is a non-GAAP financial measure.
See financial tables for a reconciliation of non-GAAP financial
measures to GAAP financial measures.
|
Loans
Third quarter 2024 average total loans of $29.6 billion increased $55 million from the prior quarter and decreased
1%, or $251 million, from the same
period last year. With respect to third quarter 2024 average
balances by loan category:
- Commercial and business lending decreased $40 million from the prior quarter and decreased
$14 million from the same period last
year to $11.0 billion.
- Commercial real estate lending decreased $14 million from the prior quarter and decreased
$77 million from the same period last
year to $7.2 billion.
- Consumer lending increased $109
million from the prior quarter and decreased $159 million from the same period last year to
$11.4 billion.
Third quarter 2024 period end total loans of $30.0 billion increased 1%, or $373 million, from the prior quarter and
decreased 1%, or $202 million, from
the same period last year. With respect to third quarter 2024
period end balances by loan category:
- Commercial and business lending increased $307 million from the prior quarter and increased
$226 million from the same period
last year to $11.4 billion.
- Commercial real estate lending decreased $72 million from the prior quarter and decreased
$165 million the same period last
year to $7.2 billion.
- Consumer lending increased $138
million from the prior quarter and decreased $263 million from the same period last year to
$11.4 billion.
We continue to expect 2024 period end loan growth to finish at
the lower end of our previous 4% to 6% range as compared to
2023.
Deposits
Third quarter 2024 average deposits of $33.3 billion increased 2%, or $691 million, from the prior quarter and
increased 4%, or $1.3 billion, from
the same period last year. With respect to third quarter 2024
average balances by deposit category:
- Noninterest-bearing demand deposits decreased $60 million from the prior quarter and decreased
$667 million from the same period
last year to $5.7 billion.
- Savings decreased $9 million from
the prior quarter and increased $311
million from the same period last year to $5.1 billion.
- Interest-bearing demand deposits increased $129 million from the prior quarter and increased
$415 million from the same period
last year to $7.4 billion.
- Money market deposits decreased $53
million from the prior quarter and decreased $352 million from the same period last year to
$5.9 billion.
- Total time deposits increased $635
million from the prior quarter and increased $1.6 billion from the same period last year to
$7.6 billion.
- Network transaction deposits increased $49 million from the prior quarter and increased
$5 million from the same period last
year to $1.6 billion.
Third quarter 2024 period end deposits of $33.6 billion increased 3%, or $863 million, from the prior quarter and
increased 4%, or $1.4 billion, from
the same period last year. With respect to third quarter 2024
period end balances by deposit category:
- Noninterest-bearing demand deposits increased $42 million from the prior quarter and decreased
$566 million from the same period
last year to $5.9 billion.
- Savings decreased $85 million
from the prior quarter and increased $236
million from the same period last year to $5.1 billion.
- Interest-bearing demand deposits increased $322 million from the prior quarter and increased
$1.1 billion from the same period
last year to $8.6 billion.
- Money market deposits decreased $200
million from the prior quarter and decreased $1.2 billion from the same period last year to
$6.1 billion.
- Total time deposits increased $784
million from the prior quarter and increased $1.9 billion from the same period last year to
$7.9 billion.
- Network transaction deposits (included in money market and
interest-bearing demand deposits) increased $64 million from the prior quarter and decreased
$82 million from the same period last
year to $1.6 billion.
We continue to expect 2024 period end core customer deposit
growth to finish at the lower end of our previous 3% to 5% range as
compared to 2023.
Net Interest Income and Net Interest Margin
Third quarter 2024 net interest income of $263 million increased $6
million from the prior quarter and increased $8 million
from the same period last year. The net interest margin increased
to 2.78%, reflecting a 3 basis point increase from the prior
quarter and a 7 basis point increase from the same period last
year.
- The average yield on total loans for the third quarter of 2024
increased 6 basis points from the prior quarter and increased 31
basis points from the same period last year to 6.27%.
- The average cost of total interest-bearing liabilities for the
third quarter of 2024 decreased 1 basis point from the prior
quarter and increased 23 basis points from the same period last
year to 3.59%.
- The net free funds benefit for the third quarter of 2024
decreased 1 basis point from the prior quarter and decreased 2
basis points from the same period last year to 0.69%.
Based on current market conditions, we now expect total net
interest income growth of 0% to 1% in 2024.
Noninterest Income
Third quarter 2024 total noninterest income of $67 million
increased $2 million, or 3%, from the prior quarter and
increased $1 million, or 1%, from the same period last year.
With respect to third quarter 2024 noninterest income line
items:
- Wealth management fees increased $2
million from the prior quarter and increased $3 million from the same period last year.
- Service charges and deposit account fees increased $1 million from both the prior quarter and the
same period last year.
- Mortgage banking, net decreased slightly from the prior quarter
and decreased $4 million from the
same period last year.
Excluding the impact of the mortgage and investment securities
sales announced during the fourth quarter of 2023, we continue to
expect total noninterest income to finish within a range of
negative 1% to 1% growth in 2024.
Noninterest Expense
Third quarter 2024 total noninterest expense of
$201 million increased $5
million, or 2%, from the prior quarter and increased
$4 million, or 2%, from the same period last year as we
continued to invest in our strategic initiatives. With respect to
third quarter 2024 noninterest expense line items:
- Personnel expense decreased $1
million from the prior quarter and increased $4 million from the same period last year.
- Legal and professional expense increased $1 million from both the prior quarter and the
same period last year.
- Technology expense increased slightly from the prior quarter
and increased $1 million from the
same period last year.
- FDIC assessment expense increased $1
million from the prior quarter and decreased $1 million from the same period last year.
After adjusting to exclude the impact of the $31 million FDIC special assessment booked
during the fourth quarter of 2023 and $4
million of FDIC special assessment, net recognized over the
first three quarters of 2024, we now expect total noninterest
expense to grow by 1% to 2% in 2024.
Taxes
Third quarter 2024 tax expense was $20 million compared to
a $13 million tax benefit in the
prior quarter and $19 million of tax
expense in the same period last year. The benefit recognized in the
second quarter of 2024 was primarily driven by a strategic
reallocation of our investment securities portfolio resulting in a
deferred tax benefit of approximately $33
million during the quarter. The effective tax rate for the
third quarter of 2024 was 18.6% compared to an effective tax rate
of 18.9% in the same period last year.
After excluding the impact of the one time $33 million tax benefit recognized in the second
quarter of 2024, we continue to expect the annual effective tax
rate to be between 19% and 21% in 2024, assuming no change in the
corporate tax rate.
Credit
The third quarter 2024 provision for credit losses on loans was
$21 million, compared to a provision of $23 million in
the prior quarter and a provision of $22 million in the same
period last year. With respect to third quarter 2024 credit
quality:
- Nonaccrual loans of $128 million
decreased $26 million from the prior
quarter and decreased $40 million
from the same period last year. The nonaccrual loans to total loans
ratio was 0.43% in the third quarter, down from 0.52% in the prior
quarter and down from 0.56% in the same period last year.
- Third quarter 2024 net charge offs of $13 million decreased compared to net charge offs
of $21 million in the prior quarter
and decreased compared to net charge offs of $18 million in the same period last year.
- The allowance for credit losses on loans (ACLL) of $398 million increased $8
million compared to the prior quarter and increased
$17 million compared to the same
period last year. The ACLL to total loans ratio was 1.33% in the
third quarter, up from 1.32% in the prior quarter and up from 1.26%
in the same period last year.
In 2024, we continue to expect to adjust provision to reflect
changes to risk grades, economic conditions, loan volumes, and
other indications of credit quality.
Capital
The Company's capital position remains strong, with a CET1
capital ratio of 9.72% at September 30,
2024. The Company's capital ratios continue to be in excess
of the Basel III "well-capitalized" regulatory benchmarks on a
fully phased in basis.
THIRD QUARTER 2024 EARNINGS RELEASE CONFERENCE CALL
The Company will host a conference call for investors and
analysts at 4:00 p.m. Central Time
(CT) today, October 24, 2024.
Interested parties can access the live webcast of the call through
the Investor Relations section of the Company's website,
http://investor.associatedbank.com. Parties may also dial into the
call at 877-407-8037 (domestic) or 201-689-8037 (international) and
request the Associated Banc-Corp third quarter 2024 earnings call.
The third quarter 2024 financial tables with an accompanying slide
presentation will be available on the Company's website just prior
to the call. An audio archive of the webcast will be available on
the Company's website approximately fifteen minutes after the call
is over.
ABOUT ASSOCIATED BANC-CORP
Associated Banc-Corp (NYSE: ASB) has total assets of
$42 billion and is the largest bank
holding company based in Wisconsin. Headquartered in
Green Bay, Wisconsin, Associated
is a leading Midwest banking franchise, offering a full range of
financial products and services from nearly 200 banking locations
serving more than 100 communities throughout Wisconsin, Illinois and Minnesota. The Company also operates loan
production offices in Indiana,
Michigan, Missouri, New
York, Ohio and Texas. Associated Bank, N.A. is an Equal
Housing Lender, Equal Opportunity Lender and Member FDIC. More
information about Associated Banc-Corp is available at
www.associatedbank.com.
FORWARD-LOOKING STATEMENTS
Statements made in this presentation which are not purely
historical are forward-looking statements, as defined in the
Private Securities Litigation Reform Act of 1995. This includes any
statements regarding management's plans, objectives, or goals for
future operations, products or services, and forecasts of its
revenues, earnings, or other measures of performance. Such
forward-looking statements may be identified by the use of words
such as "believe," "expect," "anticipate," "plan," "estimate,"
"should," "intend," "target," "outlook," "project," "guidance,"
"forecast," or similar expressions. Forward-looking statements are
based on current management expectations and, by their nature, are
subject to risks and uncertainties. Actual results may differ
materially from those contained in the forward-looking statements.
Factors which may cause actual results to differ materially from
those contained in such forward-looking statements include those
identified in the Company's most recent Form 10-K and subsequent
Form 10-Qs and other SEC filings, and such factors are incorporated
herein by reference.
NON-GAAP FINANCIAL MEASURES
This press release and related materials may contain references
to measures which are not defined in generally accepted accounting
principles ("GAAP"). Information concerning these non-GAAP
financial measures can be found in the financial tables. Management
believes these measures are meaningful because they reflect
adjustments commonly made by management, investors, regulators, and
analysts to evaluate the adequacy of earnings per common share,
provide a greater understanding of ongoing operations and enhance
comparability of results with prior periods.
Investor Contact:
Ben
McCarville, Vice President, Director of Investor
Relations
920-491-7059
Media Contact:
Andrea
Kozek, Senior Manager, Public Relations
920-491-7518
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SOURCE Associated Banc-Corp