Business Context and Reporting Period
Company: Associated Banc-Corp (ASB)
Filing Type: Form 10-Q (Quarterly Report)
Period Ended: March 31, 2026
Overview: Associated Banc-Corp is a large accelerated filer headquartered in Green Bay, Wisconsin. The quarter concluded with the company reporting strong profitability driven by loan growth and improved net interest margins. A significant subsequent event occurred on April 1, 2026, with the completion of the acquisition of American National Corporation.
Key Financial Metrics
| Metric | Q1 2026 | Q1 2025 | Change |
|---|---|---|---|
| Net Income | $119.6 million | $101.7 million | +17.6% |
| Diluted EPS | $0.70 | $0.59 | +18.6% |
| Net Interest Income | $307.2 million | $285.9 million | +7.4% |
| Net Interest Margin (FTE) | 3.03% | 2.97% | +6 bps |
| Noninterest Income | $75.9 million | $58.8 million | +29.1% |
| Noninterest Expense | $219.2 million | $210.6 million | +4.1% |
| Provision for Credit Losses | $11.0 million | $13.0 million | -15.4% |
| Total Assets | $45.6 billion | $43.3 billion | +5.3% |
| Total Loans | $31.8 billion | $30.3 billion | +5.0% |
| Total Deposits | $35.7 billion | $35.2 billion | +1.5% |
| CET1 Capital Ratio | 10.47% | 10.11% | +36 bps |
Material Changes vs. Prior Period
- Revenue Growth: Net interest income increased $21.2 million, driven by a $2.1 billion increase in average earning assets and a 39 basis point decrease in the cost of interest-bearing liabilities. Noninterest income surged 29%, primarily due to higher wealth management fees, increased mortgage banking revenue, and the absence of a $7.0 million loss on mortgage portfolio sale recorded in Q1 2025.
- Expense Management: Noninterest expense rose 4% year-over-year, largely due to increased personnel costs (healthcare benefits and incentive accruals). This was partially offset by a decrease in "Other" expenses due to elevated OREO write-downs in the prior year that did not recur.
- Asset Quality: Nonaccrual loans increased to $110.6 million (0.35% of total loans) from $100.4 million at year-end 2025, driven by commercial and industrial and auto finance segments. Net charge-offs decreased to $5.3 million from $8.7 million in Q1 2025.
- Balance Sheet: Loans grew 2% sequentially to $31.8 billion, with commercial and business lending being the primary driver. Deposits increased 1% sequentially, with growth in savings and time deposits offsetting declines in brokered CDs.
Guidance, Outlook, and Risks
- Acquisition of American National: On April 1, 2026, the company completed the acquisition of American National for $594.1 million in stock consideration. American National brings $5.2 billion in assets, $3.8 billion in loans, and $4.5 billion in deposits, expanding the company's footprint in Nebraska, Minnesota, and Iowa. Initial accounting for the acquisition is pending.
- Capital Actions: The Board authorized a new $100 million share repurchase program. A quarterly dividend of $0.24 per common share was declared.
- Interest Rate Risk: The company remains asset-sensitive. Earnings at Risk (EAR) modeling indicates a 2.0% increase in earnings for a 100 bp gradual rate increase and a 1.4% decrease for a 100 bp gradual rate decrease.
- Risk Factors: Management notes that the Allowance for Credit Losses (ACLL) is a critical accounting estimate susceptible to change based on economic forecasts. The company utilizes the Moody's baseline scenario for its modeling.
Investor Verification Checklist
- Acquisition Integration: Verify the final purchase price allocation and the impact of the American National acquisition on Q2 2026 earnings and capital ratios.
- Commercial Loan Quality: Monitor the trend in nonaccrual loans within the Commercial and Industrial segment, which saw a significant increase in nonaccruals during the quarter.
- Deposit Mix: Track the reduction in brokered CDs and the stability of core customer deposits to assess funding cost sustainability.
- Interest Rate Sensitivity: Review future earnings guidance in the context of the company's asset-sensitive profile and potential Federal Reserve rate adjustments.
- Non-GAAP Reconciliations: Review the reconciliation of Tangible Common Equity and Adjusted Efficiency Ratios to understand management's view of core performance excluding intangible amortization.