Results driven by balance sheet growth, margin expansion and continued execution of strategic initiatives GREEN BAY, Wis., April 25, 2024 /PRNewswire/ -- Associated Banc-Corp (NYSE:ASB) ("Associated" or "Company") today reported net income available to common equity ("earnings") of $78 million, or $0.52 per common share, for the quarter ended March 31, 2024. These amounts compare to a loss of $94 million, or $(0.62) per common share, for the quarter ended December 31, 2023 and earnings of $100 million, or $0.66 per common share, for the quarter ended March 31, 2023. "During the first quarter, we continued to make strong progress against our strategic plan," said President and CEO Andy Harmening. "We added talent in key areas, enhanced operational efficiency, and improved the customer experience through product and service enhancements. Here in April, our collective efforts were recognized when we were named #1 for Retail Banking Customer Satisfaction in the Upper Midwest Region by J.D. Power.1 Importantly, these efforts also contributed to the bottom line through balanced loan and deposit growth, net household growth, and expanding margins." "As we look forward, macroeconomic question marks remain, but we feel well-positioned thanks to the stability of our markets, the resilience of our customer base, and the quarterly momentum from our initiatives. We're excited to share our progress over the remainder of the year." First Quarter 2024 Highlights (all comparisons to Fourth Quarter 2023) Total period end commercial & business lending loans increased $161 million to $11.0 billion Total period end commercial real estate loans decreased $73 million to $7.3 billion Total period end consumer loans increased $190 million to $11.2 billion Total period end deposits increased $267 million to $33.7 billion Total period end core customer deposits2 increased $557 million to $28.0 billion Net interest income increased $4 million to $258 million Quarterly net interest margin increased 10 basis points to 2.79% Noninterest income increased $196 million to $65 million (increase primarily driven by one time items impacting 4Q 2023 results) Noninterest expense decreased $42 million to $198 million (decrease primarily driven by one time items impacting 4Q 2023 results) Provision for credit losses on loans increased $3 million to $24 million Net income available to common equity increased $172 million to $78 million (increase primarily driven by one time items impacting 4Q 2023 results) 1 For J.D. Power 2024 award information, visit jdpower.com/awards.2 This is a non-GAAP financial measure. See financial tables for a reconciliation of non-GAAP financial measures to GAAP financial measures. Loans First quarter 2024 average total loans of $29.4 billion decreased 2%, or $583 million, from the prior quarter and increased 2%, or $523 million, from the same period last year. With respect to first quarter 2024 average balances by loan category: Commercial and business lending decreased $4 million from the prior quarter and increased $200 million from the same period last year to $10.8 billion. Commercial real estate lending decreased $8 million from the prior quarter and increased $139 million from the same period last year to $7.4 billion. Consumer lending decreased $572 million from the prior quarter and increased $184 million from the same period last year to $11.2 billion. First quarter 2024 period end total loans of $29.5 billion increased 1%, or $278 million, from the prior quarter and increased 1%, or $287 million, from the same period last year. With respect to first quarter 2024 period end balances by loan category: Commercial and business lending increased $161 million from the prior quarter and increased $34 million from the same period last year to $11.0 billion. Commercial real estate lending decreased $73 million from the prior quarter and increased $81 million from the same period last year to $7.3 billion. Consumer lending increased $190 million from the prior quarter and increased $172 million from the same period last year to $11.2 billion. In 2024, we continue to expect total loan growth of 4% to 6% on an end of period basis as compared to the year ended December 31, 2023. Deposits First quarter 2024 average deposits of $33.3 billion increased 3%, or $1.1 billion, from the prior quarter and increased 11%, or $3.4 billion, from the same period last year. With respect to first quarter 2024 average balances by deposit category: Noninterest-bearing demand deposits decreased $289 million from the prior quarter and decreased $1.5 billion from the same period last year to $5.9 billion. Savings increased $66 million from the prior quarter and increased $263 million from the same period last year to $4.9 billion. Interest-bearing demand deposits increased $334 million from the prior quarter and increased $676 million from the same period last year to $7.5 billion. Money market deposits decreased $5 million from the prior quarter and decreased $1.4 billion from the same period last year to $6.1 billion. Total time deposits increased $934 million from the prior quarter and increased $4.8 billion from the same period last year to $7.2 billion. Network transaction deposits increased $35 million from the prior quarter and increased $505 million from the same period last year to $1.7 billion. First quarter 2024 period end deposits of $33.7 billion increased 1%, or $267 million, from the prior quarter and increased 11%, or $3.4 billion, from the same period last year. With respect to first quarter 2024 period end balances by deposit category: Noninterest-bearing demand deposits increased $134 million from the prior quarter and decreased $1.1 billion from the same period last year to $6.3 billion. Savings increased $289 million from the prior quarter and increased $394 million from the same period last year to $5.1 billion. Interest-bearing demand deposits decreased $97 million from the prior quarter and increased $1.8 billion from the same period last year to $8.7 billion. Money market deposits increased $391 million from the prior quarter and decreased $1.6 billion from the same period last year to $6.7 billion. Total time deposits decreased $450 million from the prior quarter and increased $3.9 billion from the same period last year to $6.9 billion. Network transaction deposits (included in money market and interest-bearing demand deposits) increased $227 million from the prior quarter and increased $519 million from the same period last year to $1.8 billion. In 2024, we continue to expect core customer deposit growth of 3% to 5% on an end of period basis as compared to the year ended December 31, 2023. Net Interest Income and Net Interest Margin First quarter 2024 net interest income of $258 million increased $4 million, or 2%, from the prior quarter and decreased $16 million, or 6%, from the same period last year. The net interest margin increased to 2.79%, reflecting a 10 basis point increase from the prior quarter and a 28 basis point decrease from the same period last year. The average yield on total loans for the first quarter of 2024 increased 14 basis points from the prior quarter and increased 73 basis points from the same period last year to 6.22%. The average cost of total interest-bearing liabilities for the first quarter of 2024 remained flat compared to the prior quarter and increased 107 basis points from the same period last year to 3.55%. The net free funds benefit for the first quarter of 2024 decreased 3 basis points from the prior quarter and increased 9 basis points from the same period last year to 0.70%. We continue to expect total net interest income growth of 2% to 4% in 2024. Noninterest Income First quarter 2024 total noninterest income of $65 million increased $196 million from the prior quarter (with the increase driven primarily by one time items impacting prior quarter results) and increased $3 million, or 5%, from the same period last year. With respect to first quarter 2024 noninterest income line items: Wealth management fees increased $1 million from the prior quarter and increased $2 million from the same period last year. Service charges and deposit account fees increased $2 million from the prior quarter and decreased $1 million from the same period last year. Capital markets, net decreased $5 million from the prior quarter and decreased $1 million from the same period last year. Investment securities gains (losses), net increased $63 million from the prior quarter and increased $4 million from the same period last year, driven primarily by a $65 million net loss on a sale of investments associated with a balance sheet repositioning recognized in the fourth quarter of 2023 and a $4 million gain on sale of Visa B shares recognized in the first quarter of 2024. As of March 31, 2024, we had no Visa B shares remaining. After adjusting to exclude the impact of the mortgage and investment securities sales announced during the fourth quarter of 2023, we continue to expect total noninterest income to decrease by 0% to 2% in 2024. Noninterest Expense First quarter 2024 total noninterest expense of $198 million decreased $42 million, or 17%, from the prior quarter  (with the decrease driven primarily by one time items impacting prior quarter results) and increased $10 million, or 5%, from the same period last year as we continued to invest in our strategic initiatives. With respect to first quarter 2024 noninterest expense line items: Personnel expense decreased $1 million from the prior quarter and increased $3 million from the same period last year. Technology expense decreased $2 million from the prior quarter and increased $3 million from the same period last year. FDIC assessment expense decreased $28 million from the prior quarter and increased $7 million from the same period last year. These results were driven primarily by a $31 million special assessment recognized in the fourth quarter of 2023 and an $8 million special assessment recognized in the first quarter of 2024. After adjusting to exclude the impact of the $31 million FDIC special assessment finalized during the fourth quarter of 2023 and the $8 million FDIC special assessment finalized during the first quarter of 2024, we expect total noninterest expense to grow by 2% to 3% in 2024. Taxes The first quarter 2024 tax expense was $20 million compared to $47 million of tax benefit in the prior quarter and $27 million of tax expense in the same period last year. The effective tax rate for the first quarter of 2024 was 19.8% compared to an effective tax rate of 20.9% in the same period last year. In 2024, we continue to expect the annual effective tax rate to be between 19% and 21%, assuming no change in the corporate tax rate. Credit The first quarter 2024 provision for credit losses on loans was $24 million, compared to a provision of $21 million in the prior quarter and a provision of $18 million in the same period last year. With respect to first quarter 2024 credit quality: Nonaccrual loans of $178 million increased $29 million from the prior quarter and increased $61 million from the same period last year. The nonaccrual loans to total loans ratio was 0.60% in the first quarter, up from 0.51% in the prior quarter and up from 0.40% in the same period last year. First quarter 2024 net charge offs of $22 million increased compared to net charge offs of $16 million in the prior quarter and increased compared to net charge offs of $3 million in the same period last year. The allowance for credit losses on loans (ACLL) of $388 million increased $2 million compared to the prior quarter and increased $22 million compared to the same period last year. The ACLL to total loans ratio was 1.31% in the first quarter, down from 1.32% in the prior quarter and up from 1.25% 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 9.43% at March 31, 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. FIRST 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, April 25, 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 first quarter 2024 earnings call. The first 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 $41 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 document 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," "will," "intend," "target," "outlook," "project," "guidance," 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 SEC filings. 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. Associated Banc-Corp Consolidated Balance Sheets (Unaudited) ($ in thousands) March 31, 2024 December 31, 2023 Seql Qtr $ Change September 30, 2023 June 30, 2023 March 31, 2023 Comp Qtr $ Change Assets Cash and due from banks $      429,859 $        484,384 $      (54,525) $        388,694 $     407,620 $      311,269 $      118,590 Interest-bearing deposits in other financial institutions 420,114 425,089 (4,975) 323,130 190,881 511,116 (91,002) Federal funds sold and securities purchased under agreements to resell 1,610 14,350 (12,740) 965 31,160 455 1,155 Investment securities available for sale, at fair value 3,724,148 3,600,892 123,256 3,491,679 3,504,777 3,381,607 342,541 Investment securities held to maturity, net, at amortized cost 3,832,967 3,860,160 (27,193) 3,900,415 3,938,877 3,967,058 (134,091) Equity securities 19,571 41,651 (22,080) 35,937 30,883 30,514 (10,943) Federal Home Loan Bank and Federal Reserve Bank stocks, at cost 173,968 229,171 (55,203) 268,698 271,637 331,420 (157,452) Residential loans held for sale 52,414 33,011 19,403 54,790 38,083 35,742 16,672 Commercial loans held for sale — 90,303 (90,303) — 15,000 33,490 (33,490) Loans 29,494,263 29,216,218 278,045 30,193,187 29,848,904 29,207,072 287,191 Allowance for loan losses (356,006) (351,094) (4,912) (345,795) (338,750) (326,432) (29,574) Loans, net 29,138,257 28,865,124 273,133 29,847,392 29,510,153 28,880,640 257,617 Tax credit and other investments 255,252 258,067 (2,815) 256,905 263,583 269,269 (14,017) Premises and equipment, net 367,618 372,978 (5,360) 373,017 374,866 375,540 (7,922) Bank and corporate owned life insurance 685,089 682,649 2,440 679,775 678,578 677,328 7,761 Goodwill 1,104,992 1,104,992 — 1,104,992 1,104,992 1,104,992 — Other intangible assets, net 38,268 40,471 (2,203) 42,674 44,877 47,079 (8,811) Mortgage servicing rights, net 85,226 84,390 836 89,131 80,449 74,479 10,747 Interest receivable 167,092 169,569 (2,477) 171,119 159,185 152,404 14,688 Other assets 640,638 658,604 (17,966) 608,068 573,870 518,115 122,523 Total assets $ 41,137,084 $    41,015,855 $     121,229 $   41,637,381 $ 41,219,473 $ 40,702,519 $      434,565 Liabilities and stockholders' equity Noninterest-bearing demand deposits $   6,254,135 $      6,119,956 $     134,179 $     6,422,994 $  6,565,666 $   7,328,689 $  (1,074,554) Interest-bearing deposits 27,459,023 27,326,093 132,930 25,700,332 25,448,743 23,003,134 4,455,889 Total deposits 33,713,158 33,446,049 267,109 32,123,326 32,014,409 30,331,824 3,381,334 Short-term funding 765,671 326,780 438,891 451,644 341,253 226,608 539,063 FHLB advances 1,333,411 1,940,194 (606,783) 3,733,041 3,630,747 4,986,138 (3,652,727) Other long-term funding 536,055 541,269 (5,214) 529,459 534,273 544,103 (8,048) Allowance for unfunded commitments 31,776 34,776 (3,000) 34,776 38,276 39,776 (8,000) Accrued expenses and other liabilities 588,341 552,814 35,527 637,491 537,640 448,407 139,934 Total liabilities 36,968,412 36,841,882 126,530 37,509,738 37,096,599 36,576,856 391,556 Stockholders' equity Preferred equity 194,112 194,112 — 194,112 194,112 194,112 — Common equity 3,974,561 3,979,861 (5,300) 3,933,531 3,928,762 3,931,551 43,010 Total stockholders' equity 4,168,673 4,173,973 (5,300) 4,127,643 4,122,874 4,125,663 43,010 Total liabilities and stockholders' equity $ 41,137,084 $    41,015,855 $     121,229 $   41,637,381 $ 41,219,473 $ 40,702,519 $      434,565 Numbers may not sum due to rounding.   Associated Banc-CorpConsolidated Statements of Income (Unaudited) - Quarterly Trend ($ in thousands, except per share data) Seql Qtr Comp Qtr 1Q24 4Q23 $ Change % Change 3Q23 2Q23 1Q23 $ Change % Change Interest income Interest and fees on loans $  454,472 $  457,868 $    (3,396) (1) % $  447,912 $  423,307 $  391,320 $    63,152 16 % Interest and dividends on investment securities Taxable 46,548 41,809 4,739 11 % 38,210 35,845 30,142 16,406 54 % Tax-exempt 14,774 15,273 (499) (3) % 15,941 15,994 16,025 (1,251) (8) % Other interest 7,595 10,418 (2,823) (27) % 6,575 6,086 5,329 2,266 43 % Total interest income 523,388 525,367 (1,979) — % 508,637 481,231 442,817 80,571 18 % Interest expense Interest on deposits 226,231 208,875 17,356 8 % 193,131 162,196 109,422 116,809 107 % Interest on federal funds purchased and securities sold under agreements to repurchase 2,863 3,734 (871) (23) % 3,100 2,261 3,143 (280) (9) % Interest on other short-term funding 4,708 — 4,708 N/M — — — 4,708 N/M Interest on FHLB advances 21,671 49,171 (27,500) (56) % 48,143 49,261 49,960 (28,289) (57) % Interest on long-term funding 10,058 10,185 (127) (1) % 10,019 9,596 6,281 3,777 60 % Total interest expense 265,530 271,965 (6,435) (2) % 254,394 223,314 168,807 96,723 57 % Net interest income 257,858 253,403 4,455 2 % 254,244 257,917 274,010 (16,152) (6) % Provision for credit losses 24,001 21,007 2,994 14 % 21,943 22,100 17,971 6,030 34 % Net interest income after provision for credit losses 233,857 232,395 1,462 1 % 232,301 235,817 256,039 (22,182) (9) % Noninterest income Wealth management fees 21,694 21,003 691 3 % 20,828 20,483 20,189 1,505 7 % Service charges and deposit account fees 12,439 10,815 1,624 15 % 12,864 12,372 12,994 (555) (4) % Card-based fees 11,267 11,528 (261) (2) % 11,510 11,396 10,586 681 6 % Other fee-based revenue 4,402 4,019 383 10 % 4,509 4,465 4,276 126 3 % Capital markets, net 4,050 9,106 (5,056) (56) % 5,368 5,093 5,083 (1,033) (20) % Mortgage banking, net 2,662 1,615 1,047 65 % 6,501 7,768 3,545 (883) (25) % Loss on mortgage portfolio sale — (136,239) 136,239 (100) % — — — — N/M Bank and corporate owned life insurance 2,570 3,383 (813) (24) % 2,047 2,172 2,664 (94) (4) % Asset gains (losses), net (306) (136) (170) 125 % 625 (299) 263 (569) N/M Investment securities gains (losses), net 3,879 (58,958) 62,837 N/M (11) 14 51 3,828 N/M Other 2,327 2,850 (523) (18) % 2,339 2,080 2,422 (95) (4) % Total noninterest income (loss) 64,985 (131,013) 195,998 N/M 66,579 65,543 62,073 2,912 5 % Noninterest expense Personnel 119,395 120,686 (1,291) (1) % 117,159 114,089 116,420 2,975 3 % Technology 26,200 28,027 (1,827) (7) % 26,172 24,220 23,598 2,602 11 % Occupancy 13,633 14,429 (796) (6) % 14,125 13,587 15,063 (1,430) (9) % Business development and advertising 6,517 8,350 (1,833) (22) % 7,100 7,106 5,849 668 11 % Equipment 4,599 4,742 (143) (3) % 5,016 4,975 4,930 (331) (7) % Legal and professional 4,672 6,762 (2,090) (31) % 4,461 4,831 3,857 815 21 % Loan and foreclosure costs 1,979 585 1,394 N/M 2,049 1,635 1,138 841 74 % FDIC assessment 13,946 41,497 (27,551) (66) % 9,150 9,550 6,875 7,071 103 % Other intangible amortization 2,203 2,203 — — % 2,203 2,203 2,203 — — % Other 4,513 12,110 (7,597) (63) % 8,771 8,476 7,479 (2,966) (40) % Total noninterest expense 197,657 239,391 (41,734) (17) % 196,205 190,673 187,412 10,245 5 % Income (loss) before income taxes 101,185 (138,009) 239,194 N/M 102,674 110,687 130,700 (29,515) (23) % Income tax expense (benefit) 20,016 (47,202) 67,218 N/M 19,426 23,533 27,340 (7,324) (27) % Net income (loss) 81,169 (90,806) 171,975 N/M 83,248 87,154 103,360 (22,191) (21) % Preferred stock dividends 2,875 2,875 — — %