Associated Banc-Corp Q4 Earnings Beat as NII Rises, Provisions Fall

Associated Banc-Corp’s ASB fourth-quarter 2024 adjusted earnings of 57 cents per share surpassed the Zacks Consensus Estimate of 55 cents. Also, the bottom line compared favorably with 53 cents earned in the prior-year quarter.See the Zacks Earnings Calendar to stay ahead of market-making news.Results benefited from an increase in net interest income (NII) and adjusted non-interest income. A rise in deposit balance and lower provisions acted as tailwinds. However, higher adjusted expenses were the undermining factor.Results excluded certain non-recurring items. After considering these, the net loss available to common shareholders was $164.5 million or $1.03 per share, compared with a net loss of $93.7 million or 62 cents per share in the year-ago quarter. For 2024, adjusted earnings of $2.38 per share beat the consensus estimate of $2.15 and rose 5% year over year. Net income available to common shareholders (GAAP) was $111.6 million or 72 cents per share, down from $171.5 million or $1.13 per share in the year-ago quarter.ASB’s Adjusted Revenues Rise, Adjusted Expenses UpTotal adjusted revenues (FTE basis) for the quarter were $345.8 million, up 5% year over year. Also, the top line beat the Zacks Consensus Estimate of $343.3 million.For 2024, total adjusted revenues grew marginally to $1.33 billion. The top line also outpaced the consensus estimate of $1.32 billion.NII was $270.3 million, up 7%. The net interest margin was 2.81%, up 12 basis points (bps) year over year. The increase was driven by a fall in average cost of total interest-bearing liabilities. We had expected NII and net interest yield to be $268.3 million and 2.84%, respectively.The non-interest loss was $206.8 million in the reported quarter compared with a loss of $131 million in the prior-year quarter. Excluding the loss on mortgage portfolio sale and investment securities loss, adjusted non-interest income came in at $71.8 million, rising 2%. Our estimate for the non-interest income was $65 million.Non-interest expenses decreased 6% to $224.3 million. These included certain non-recurring charges. Excluding these, adjusted expenses were $210 million, up marginally. Our estimate for non-interest expenses was $205.4 million and did not include the abovementioned non-recurring charge.The adjusted FTE efficiency ratio was 61.11%, down from 64.12% in the prior-year quarter. A fall in the efficiency ratio indicates an improvement in profitability.Associated Banc-Corp’s Loans Dip, Deposits RiseAs of Dec. 31, 2024, total loans were $29.8 billion, down 1% from the prior quarter. The fall was attributable to the sale of $723 million in residential mortgages associated with the balance sheet repositioning. Our estimate for total loans was $30.4 million.On the other hand, total deposits grew 3% to $34.6 billion. Our estimate for total deposits was $34.5 million.Associated Banc-Corp’s Credit Quality ImprovesIn the reported quarter, the company recorded a provision for credit losses of $17 million, down 19% from the prior-year quarter. Our estimate for the metric was $22 million.As of Dec. 31, 2024, total non-performing assets were $144.2 million, down 10%. Total non-accrual loans were $123.3 million, falling 17%.Net charge-offs were $12.2 million, down 22% from the prior-year quarter.Associated Banc-Corp’s Capital Ratios ImproveAs of Dec. 31, 2024, the Tier 1 risk-based capital ratio was 10.57%, up from 9.99% recorded in the corresponding period of 2023. The common equity Tier 1 capital ratio was 10%, up from 9.39%.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-poised for growth. However, mounting expenses are a headwind. 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 PeersBankUnited, Inc.’s BKU fourth-quarter 2024 earnings of 91 cents per share handily surpassed the Zacks Consensus Estimate of 71 cents. The bottom line compares favorably with 27 cents in the prior-year quarter.BKU’s results were aided by growth in NII and non-interest income alongside lower non-interest expenses and provisions. Also, stable deposits were another positive. However, a fall in loan balance and weak asset quality were the undermining factors. Commerce Bancshares Inc. CBSH reported fourth-quarter 2024 earnings per share of $1.01, which surpassed the Zacks Consensus Estimate of 94 cents. The bottom line also jumped 27.8% from the prior-year quarter.Results benefited from a rise in NII and non-interest income. Also, stable adjusted expenses posed a tailwind. However, a substantial jump in provisions hurt CBSH’s results to some extent.Zacks Names #1 Semiconductor StockIt's only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. NVIDIA is still strong, but our new top chip stock has much more room to boom.With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028.See This Stock Now for Free >>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 Commerce Bancshares, Inc. (CBSH): Free Stock Analysis Report BankUnited, Inc. (BKU): Free Stock Analysis Report Associated Banc-Corp (ASB): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks