Associated Banc-Corp (ASB) Q2 Earnings In Line, NII Declines
Associated Banc-Corp's (ASB) second-quarter earnings match estimates on the back of a higher loan balance. However, lower fee income and NII, rising expenses and provisions remain undermining factors.
Associated Banc-Corp (ASB) Q2 2024 Earnings Call Transcript
Associated Banc-Corp (NYSE:ASB ) Q2 2024 Earnings Conference Call July 25, 2024 5:00 PM ET Company Participants Andy Harmening – President and Chief Executive Officer Derek Meyer – Chief Financial Officer Pat Ahern – Chief Credit Officer Conference Call Participants Daniel Tamayo – Raymond James Scott Siefers – Piper Sandler Timur Braziler – Wells Fargo Securities Terry McEvoy – Stephens Inc. Jon Arfstrom – RBC Capital Markets Operator Good afternoon, everyone, and welcome to Associated Banc-Corp's Second Quarter 2024 Earnings Conference Call. My name is Paul, and I will be your operator today.
Associated Banc-Corp (ASB) Q2 Earnings: How Key Metrics Compare to Wall Street Estimates
Although the revenue and EPS for Associated Banc-Corp (ASB) give a sense of how its business performed in the quarter ended June 2024, it might be worth considering how some key metrics compare with Wall Street estimates and the year-ago numbers.
Associated Banc-Corp (ASB) Q2 Earnings Meet Estimates
Associated Banc-Corp (ASB) came out with quarterly earnings of $0.52 per share, in line with the Zacks Consensus Estimate. This compares to earnings of $0.56 per share a year ago.
Countdown to Associated Banc-Corp (ASB) Q2 Earnings: A Look at Estimates Beyond Revenue and EPS
Looking beyond Wall Street's top -and-bottom-line estimate forecasts for Associated Banc-Corp (ASB), delve into some of its key metrics to gain a deeper insight into the company's potential performance for the quarter ended June 2024.
Analysts Estimate Associated Banc-Corp (ASB) to Report a Decline in Earnings: What to Look Out for
Associated Banc-Corp (ASB) doesn't possess the right combination of the two key ingredients for a likely earnings beat in its upcoming report. Get prepared with the key expectations.
Will Associated Banc-Corp (ASB) Beat Estimates Again in Its Next Earnings Report?
Associated Banc-Corp (ASB) has an impressive earnings surprise history and currently possesses the right combination of the two key ingredients for a likely beat in its next quarterly report.
ASB or HBAN: Which Is the Better Value Stock Right Now?
Investors with an interest in Banks - Midwest stocks have likely encountered both Associated Banc-Corp (ASB) and Huntington Bancshares (HBAN). But which of these two stocks presents investors with the better value opportunity right now?
Here's Why Associated Banc-Corp (ASB) is Worth Buying Now
Associated Banc-Corp (ASB) is set to benefit from its efforts to strategically drive loans and deposit growth and boost operating efficiency. Also, high rates and a solid balance sheet lend support.
Associated Banc-Corp (ASB) Ratings, Outlook Affirmed by Moody's
Associated Banc-Corp (ASB) announces that its ratings and outlook have been affirmed given well-managed loans and deposit mix. Weak capital & liquidity and significant CRE loan concentration are woes.
Associated Banc-Corp. (ASB) Loans & Deposits Aid Amid High Costs
Associated Banc-Corp. (ASB Quick QuoteASB - Free Report) remains well-positioned for revenue growth on the back of solid loans and deposit balance alongside higher rates. Further, strategic initiatives and a strong balance sheet are likely to bolster operational efficiency. However, an elevated expense base, worsening asset quality and concentrated loan portfolio remain challenges.Associated Banc-Corp.’s organic growth strategy is reflected in its robust loans and deposit balances and efforts to boost fee income. Though the company’s revenues dipped in the first quarter of 2024, the metric witnessed a compound annual growth rate (CAGR) of 3.2% over the six years ended 2023. Loans and deposits saw a CAGR of 5.8% and 6.6% over the same time period, respectively. The uptrend continued in the first quarter of 2024 for both metrics. The company aims to expand its lending capabilities under its strategic plan through the addition of “higher-margin” lending portfolios and digital investments. This will boost revenues and help the company achieve positive operating leverage over time. We project total revenues-Full-Time Equivalent to witness a CAGR of 2.5% by 2026. Amid the current high interest rates scenario, Associated Banc-Corp.’s net interest margin (NIM) is likely to witness a moderate expansion as high funding costs are weighing on it. The metric witnessed a decline in 2023 and the first quarter of 2024 due to a substantial increase in funding and deposit costs. Nonetheless, ASB’s balance sheet repositioning actions undertaken in the fourth quarter of 2023 and steady stabilization in funding costs are likely to support NIM expansion in 2024. We estimate NIM to be 2.85%, 3.02% and 3.10% in 2024, 2025 and 2026, respectively.Furthermore, ASB has been undertaking numerous measures to enhance operational efficiency and strengthen its balance sheet. In November 2023, the firm announced the second phase of its strategic plan, under which it aims to leverage the success of the first phase (announced in September 2021) and emphasize loan and deposit growth by 2025. Phase 1 of the plan boosted the lending capabilities and will continue to aid core business growth through the transformation of digital capabilities. The full impact of the initiatives undertaken in phase 2 is expected to be observed in the second half of 2024 and in 2025 by the company.Moreover, as of Mar 31, 2024, Associated Banc-Corp.’s total debt was $1.87 billion, while its cash and due from banks and interest-bearing deposits in other financial institutions were $850 million. The company enjoys investment-grade ratings of Baa3 and BBB- from Moody’s and Standard and Poor’s, respectively. Thus, given its earnings strength, the company is likely to meet its debt obligations in the near term in any case of economic downturn.Associated Banc-Corp. currently carries a Zacks Rank #3 (Hold). Over the past six months, shares of the company have rallied 23.3%, outperforming the industry’s growth of 19.2%. Image Source: Zacks Investment ResearchHowever, ASB’s elevated expense base remains a concern. Expenses witnessed a 2.3% CAGR over the past six years ended 2023, with the uptrend persisting in the first quarter of 2024. The increase was primarily due to higher personnel costs and technological expenses. Operating expenses are likely to remain elevated in light of the company’s strategic initiatives, digitization and inflationary pressure. Management expects a $25-$30 million reduction in non-interest expenses for 2024 under its strategic plan. Despite this, the overall expense base is expected to remain high due to business expansionary measures. We project adjusted total non-interest expenses to grow 2.7% in 2024.Worsening asset quality is another headwind for Associated Banc-Corp. Provision for credit losses witnessed an increase in 2022 and 2023. The uptrend persisted in the first quarter of 2024 as well. Even though the near-term recession risks have been reduced, expectations of an economic slowdown are likely to put pressure on asset quality. We estimate provision for credit losses to rise 16.7% this year.Additionally, a concentrated loan portfolio is another challenge for ASB. As of Mar 31, 2024, 62% of the loan portfolio comprised total commercial loans. A tough operating backdrop is likely to subdue the demand for such loans. Moreover, an economic slowdown might lead to a deterioration of the quality of these loans. 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With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time. This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.Free: See Our Top Stock and 4 Runners Up >>
Associated Banc-Corp: Baby Bond Presents Best Income Option
Associated Bancorp is not adverse to some of the challenges faced by the regional banking sector. The bank offers a baby bond that is currently trading at a higher coupon yield than the bank's preferred share dividends. There are risks to be mindful of involving the bank and the baby bond's reset rate prior to investing.
