On July 25, 2024, Associated Banc-Corp (ASB, Financial) released its 8-K filing for the second quarter of 2024. Associated Banc-Corp is a bank holding company that provides a broad array of banking and nonbanking products and services to individuals and businesses through its subsidiaries. The company operates in three reportable segments: Corporate and Commercial Specialty; Community, Consumer, and Business; and Risk Management and Shared Services. The majority of its revenue is derived from the Corporate and Commercial Specialty and Community, Consumer, and Business segments.
Performance Overview
Associated Banc-Corp (ASB, Financial) reported net income available to common equity of $113 million, or $0.74 per common share, for the quarter ended June 30, 2024. Excluding a one-time tax benefit, the adjusted earnings were $80 million, or $0.52 per common share, aligning with the analyst estimate of $0.52 per share. This compares to earnings of $78 million, or $0.51 per share, in the previous quarter and $84 million, or $0.56 per share, in the same quarter last year.
“After demonstrating an ability to execute with Phase 1 of our strategic plan, we continued to build momentum across the company by adding talent in key areas and deploying product and digital enhancements during the second quarter,” said President and CEO Andy Harmening.
Financial Achievements
Key financial highlights for Q2 2024 include:
| Metric | Q2 2024 | Q1 2024 | Q2 2023 |
|---|---|---|---|
| Net Interest Income | $257 million | $257 million | $257 million |
| Net Interest Margin | 2.75% | 2.79% | 2.80% |
| Noninterest Income | $65 million | $65 million | $65 million |
| Noninterest Expense | $196 million | $198 million | $191 million |
| Provision for Credit Losses | $23 million | $24 million | $22 million |
Income Statement and Balance Sheet Insights
For the second quarter of 2024, net interest income remained stable at $257 million, while the net interest margin slightly decreased to 2.75%. Noninterest income was $65 million, consistent with the previous quarter and the same period last year. Noninterest expense decreased by 1% from the prior quarter to $196 million, reflecting ongoing investments in strategic initiatives.
Average total loans increased by $211 million from the prior quarter to $29.6 billion, driven by growth in commercial and business lending and consumer lending. However, commercial real estate lending saw a decline. Average deposits decreased by $638 million from the prior quarter to $32.6 billion, with notable decreases in noninterest-bearing demand deposits and money market deposits.
Key Metrics and Analysis
Important metrics for the quarter include:
- Allowance for credit losses on loans was 1.32% of total loans.
- Net charge-offs were 0.29% of average loans (annualized).
- Common Equity Tier 1 (CET1) capital ratio stood at 9.68%.
These metrics indicate a stable credit environment and a strong capital position, essential for maintaining investor confidence and supporting future growth.
Challenges and Strategic Initiatives
Despite the positive financial performance, Associated Banc-Corp faces challenges such as macroeconomic uncertainty and a competitive banking environment. The company has been proactive in addressing these challenges by adding talent, enhancing digital capabilities, and focusing on customer satisfaction.
“Importantly, we also delivered strong financial results during the quarter through steady revenues, credit stability, and capital accretion. While macro uncertainty remains top of mind in the near-term, we feel well-positioned as we move to the back half of the year thanks to our foundational discipline, the stability of our markets, and the execution of our strategic plan,” added Harmening.
For more detailed financial information, please refer to the full 8-K filing.
Explore the complete 8-K earnings release (here) from Associated Banc-Corp for further details.
