Associated Banc-Corp (ASB) Q2 2024 earnings summary

Executive summary

• Q2 2024 net income was $116 million, up from $87 million in Q2 2023, mainly due to a $33M one-time tax benefit; adjusted net income was $80 million ($0.52/share), flat sequentially and down year-over-year.

• Strategic plan execution drove customer satisfaction and the strongest consumer checking household growth in over a decade.

• Credit quality remained solid with lower delinquencies, criticized loans, and net charge-offs versus the prior quarter.

• Net interest income for Q2 2024 was $257 million, down $1 million sequentially and year-over-year; net interest margin declined to 2.75%.

• Average loans grew 1% year-over-year to $29.5 billion, led by commercial and auto lending; average deposits rose 8% year-over-year to $32.9 billion, driven by time deposits.

Financial highlights

• GAAP EPS was $0.74, including a $33M one-time tax benefit; adjusted EPS was $0.52, flat sequentially.

• Net interest income: $257M; net interest margin: 2.75%, down 4-5 bps sequentially and year-over-year.

• Noninterest income: $65M, stable to slightly up from Q1; full-year guidance ±1% versus 2023.

• Noninterest expense: $196M, down $2M sequentially but up $5M year-over-year; efficiency ratio at 59.88%-61.5%.

• Tangible book value per share: $19.28; CET1 ratio: 9.68%; TCE ratio: 7.18%.

Outlook and guidance

• 2024 total loan growth expected at the lower end of the previous 4%-6% range.

• 2024 core customer deposit growth expected at the lower end of the previous 3%-5% range.

• Net interest income growth for 2024 projected at 1%-3%, assuming two Fed rate cuts starting in September.

• Noninterest expense growth expected at 2%-3% for 2024, excluding FDIC special assessment impacts.

• Annual effective tax rate (excluding one-time benefit) expected between 19%-21%.