Associated Banc-Corp (ASB) Q4 2023 earnings summary

Executive summary

• 4Q23 net loss was $94M, or $0.62/share; adjusted diluted EPS was $0.53 excluding balance-sheet repositioning losses and the FDIC special assessment.

• Deposits grew $1.3B in 4Q, while reported loans declined $977M following a $969M mortgage loan sale; adjusted loans declined $8M.

• FY2023 net income available to common equity was $171M, or $1.13/share, versus $355M, or $2.34/share, in 2022; FY2023 EPS excluding 4Q one-time items was $2.27.

• Back-half momentum included diversified loan growth, improving household growth metrics, and 3% core customer deposit growth; a new strategic-plan phase was announced in 4Q.

Financial highlights

• 4Q net interest income was $253M and net interest margin was 2.69%, down 2 bps QoQ; FY2023 net interest income rose 9%, or $82M, to $1.0B.

• FY2023 GAAP net income was $183M; net income excluding one-time items, net of tax, was $357M.

• 4Q GAAP noninterest income was $(131)M, or $70M excluding repositioning losses; expense was $239M, or $209M excluding the $31M FDIC assessment.

• FY2023 GAAP noninterest income was $63M versus adjusted income of $264M; adjusted total revenue was $1.304B.

• FY2023 total revenue fell 11.0% and noninterest expense rose 8.9%; adjusted revenue increased 5.2% and adjusted expense rose 4.8%.

Outlook and guidance

• FY2024 end-period loan growth guidance: 4%–6%; core customer deposit growth: 3%–5%, versus Dec. 31, 2023.

• FY2024 NII growth guidance: 2%–4%; noninterest income is expected to decrease 0%–2%, using adjusted FY2023 results as the comparison basis.

• FY2024 noninterest expense growth guidance: 2%–3%; effective tax rate guidance: 19%–21%.

• Organic growth targets by year-end 2025 include $750M cumulative incremental commercial loans, $2.5B incremental deposits, and a 3% annual household growth run rate.