ASB Q3 Earnings Beat as Provisions Decline, Fee Income View Raised

Associated Banc-Corp’s ASB third-quarter 2025 earnings of 73 cents per share outpaced the Zacks Consensus Estimate of 66 cents. Also, the bottom line compared favorably with 56 cents earned in the prior-year quarter.

Results benefited from an increase in net interest income (NII) and non-interest income. A rise in loans and deposit balances, and lower provisions acted as tailwinds. However, higher expenses were the undermining factor.

Net income available to common shareholders was $122 million, up 43% from the year-ago quarter. Our estimate for the metric was $106.1 million.

ASB’s Revenues Rise, Expenses Up

Total revenues (FTE basis) for the quarter were $391 million, up 20% year over year, reflecting solid growth in both core banking and fee-based operations. Also, the top line beat the Zacks Consensus Estimate of $375.91 million. 

NII reached a record $305 million, increasing 16%. The rise was fueled by higher commercial lending volumes and favorable deposit mix management. The net interest margin was 3.04%, up 26 basis points (bps) year over year. The increase was driven by a fall in the average cost of total interest-bearing liabilities. We had expected NII and net interest yield to be $304.8 million and 3.06%, respectively.

Non-interest income totaled $81 million, increasing 21%. This was primarily driven by higher capital markets revenues, net mortgage banking fees, wealth management fees and card-based fees. Our estimate for adjusted non-interest income was $68.1 million.

Non-interest expenses were $216 million, up 8%, mainly due to higher personnel, business development and advertising and technology costs. Our estimate for non-interest expenses was $209.3 million.

The FTE efficiency ratio was 54.77%, down from 59.51% in the prior-year quarter. A fall in the efficiency ratio indicates an improvement in profitability.

Associated Banc-Corp’s Loans & Deposits Rise

As of Sept. 30, 2025, total loans were $31.0 billion, up 1% sequentially, mainly driven by higher commercial and business lending. Our estimate for total loans was $31.1 billion.

Total deposits rose 2% to $34.9 billion. Our estimate for total deposits was $34.8 billion.

Associated Banc-Corp’s Credit Quality Improves

In the reported quarter, the company recorded a provision for credit losses of $16 million, down from $21 million in the prior-year quarter. Our estimate for the metric was $20.9 million.

As of Sept. 30, 2025, total non-performing assets were $136.2 million, down 8%. Total non-accrual loans were $106 million, falling 17%.

Net charge-offs were $13 million, up 1% from the prior-year quarter.

Associated Banc-Corp’s Capital Ratios Improve

As of Sept. 30, 2025, the Tier 1 risk-based capital ratio was 10.89%, up from 10.30% recorded in the corresponding period of 2024. The common equity Tier 1 capital ratio was 10.33%, up from 9.72%.

Associated Banc-Corp’s Outlook for 2025

Management expects loans to grow at the rate of 5-6%.

Total core customer deposits are estimated to rise in the range of 4-5%, while total deposits are projected to increase 1-3%.

NII is projected to grow in the 14-15% range. 

After adjusting to exclude the impact of non-recurring items related to the balance sheet repositioning announced in the fourth quarter of 2024, total non-interest income is now expected to rise in the 5-6% range, up from prior guidance of an increase in the band of 1-2%.

After adjusting to exclude the impact of the loss on prepayments of FHLB advances, total non-interest expenses are now projected to rise 5-6%. Previously, the company anticipated a 4-5% increase in the metric.

The effective tax rate is expected to be 18-19%.

Our Take on ASB

Associated Banc-Corp’s solid quarterly performance highlights the benefits of its diversified franchise and disciplined balance sheet management. Continued commercial lending momentum, expanding customer deposits and a robust capital base position the company well for sustained growth. However, rising expenses and a competitive funding environment could limit margin expansion in the near term.
 

Associated Banc-Corp Price, Consensus and EPS Surprise

Associated Banc-Corp price-consensus-eps-surprise-chart | Associated Banc-Corp Quote

ASB currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Associated Banc-Corp’s Peers

BankUnited, Inc.’s BKU third-quarter 2025 earnings of 95 cents per share surpassed the Zacks Consensus Estimate of 84 cents. The bottom line also compared favorably with 81 cents in the prior-year quarter.

BKU’s results benefited from growth in NII and non-interest income. However, higher expenses and provisions alongside a fall in loan and deposit balances were the undermining factors.

Bank OZK’s OZK third-quarter 2025 earnings per share were a record $1.59, which increased 2.6% year over year. However, the bottom line missed the Zacks Consensus Estimate of $1.67.

OZK’s results were primarily hurt because of an increase in expenses and provisions. Nevertheless, higher NII and non-interest income were the tailwinds. Increases in loans and deposit balances were other positives.

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This article originally published on Zacks Investment Research (zacks.com).

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