Associated Banc-Corp Q1 Earnings Beat as NII Rises, Provisions Fall

Associated Banc-Corp’s ASB first-quarter 2025 earnings of 59 cents per share surpassed the Zacks Consensus Estimate of 57 cents. Also, the bottom line compared favorably with 52 cents earned in the prior-year quarter.Results benefited from an increase in net interest income (NII) and adjusted non-interest income. A rise in loans and deposit balances and lower provisions acted as tailwinds. However, higher expenses were the undermining factor.Net income available to common shareholders was $98.8 million, up 26% from the year-ago quarter. Our estimate for the metric was $89.5 million.ASB’s Revenues Rise, Adjusted Expenses UpTotal revenues (FTE basis) for the quarter were $349 million, up 7% year over year. However, the top line lagged the Zacks Consensus Estimate of $350.7 million.NII was $285.9 million, up 11%. The net interest margin was 2.97%, up 18 basis points (bps) year over year. The increase was driven by a fall in the average cost of total interest-bearing liabilities. We had expected NII and net interest yield to be $278.4 million and 2.84%, respectively.The non-interest income was $58.8 million, down 10%. Excluding the loss on mortgage portfolio sale, adjusted non-interest income came in at $66 million, rising 2%. Our estimate for adjusted non-interest income was $66.8 million.Non-interest expenses increased 7% to $210.6 million. Our estimate for non-interest expenses was $203.5 million.The adjusted FTE efficiency ratio was 58.6%, up from 58.2% in the prior-year quarter. A rise in the efficiency ratio indicates a fall in profitability.Associated Banc-Corp’s Loans & Deposits RiseAs of March 31, 2025, total loans were $30.3 billion, up 2% from the prior quarter. Our estimate for total loans was $30.5 million.Also, total deposits grew 2% to $35.2 billion. Our estimate for total deposits was $34.2 million.Associated Banc-Corp’s Credit Quality ImprovesIn the reported quarter, the company recorded a provision for credit losses of $13 million, down 46% from the prior-year quarter.As of March 31, 2025, total non-performing assets were $159 million, down 15%. Total non-accrual loans were $134.8 million, falling 24%.Net charge-offs were $8.7 million, plunging 61% from the prior-year quarter.Associated Banc-Corp’s Capital Ratios ImproveAs of March 31, 2025, the Tier 1 risk-based capital ratio was 10.68%, up from 10.02% recorded in the corresponding period of 2024. The common equity Tier 1 capital ratio was 10.11%, up from 9.43%.ASB’s Share Repurchase UpdateDuring the reported quarter, Associated Banc-Corp repurchased 0.9 million shares.Associated Banc-Corp’s Outlook for 2025Management expects loans to grow at the rate of 5-6%.Total core customer deposits are estimated to rise in the range of 4-5%, while total deposits are projected to increase 1-2%.NII is projected to jump in the 12-13% range.After adjusting to exclude the impact of non-recurring items related to the balance sheet repositioning announced in the fourth quarter of 2024, total non-interest income is expected to be stable or grow 1%.After adjusting to exclude the impact of the loss on prepayments of FHLB advances, total non-interest expenses are likely to rise 3-4%.The effective tax rate is expected to be 19-21%.Our Take on ASBAssociated Banc-Corp’s business restructuring efforts are likely to keep supporting financials. The company has a solid balance sheet position, making it well-positioned for growth. However, mounting expenses and a challenging operating backdrop are headwinds. Associated Banc-Corp Price, Consensus and EPS Surprise Associated Banc-Corp price-consensus-eps-surprise-chart | Associated Banc-Corp QuoteASB currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Performance of ASB’s PeersEast West Bancorp, Inc.’s EWBC first-quarter 2025 adjusted earnings per share of $2.09 beat the Zacks Consensus Estimate of $2.05. Moreover, the bottom line increased marginally from the prior-year quarter’s level. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)EWBC’s results were primarily aided by an increase in NII and non-interest income. Also, loan balances increased sequentially in the quarter. However, higher provisions and non-interest expenses alongside lower deposits were headwinds.Zions Bancorporation’s ZION first-quarter 2025 adjusted earnings per share (EPS) of $1.24 beat the Zacks Consensus Estimate of $1.20. Moreover, the bottom line surged 29.2% from the year-ago quarter.Results were primarily aided by higher NII and non-interest income. Also, higher loans were another positive. However, higher provisions and a rise in adjusted non-interest expenses were major headwinds for ZION.Only $1 to See All Zacks' Buys and SellsWe're not kidding.Several years ago, we shocked our members by offering them 30-day access to all our picks for the total sum of only $1. No obligation to spend another cent.Thousands have taken advantage of this opportunity. Thousands did not - they thought there must be a catch. Yes, we do have a reason. We want you to get acquainted with our portfolio services like Surprise Trader, Stocks Under $10, Technology Innovators,and more, that closed 256 positions with double- and triple-digit gains in 2024 alone.See Stocks Now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Zions Bancorporation, N.A. (ZION): Free Stock Analysis Report East West Bancorp, Inc. (EWBC): Free Stock Analysis Report Associated Banc-Corp (ASB): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks