Associated Banc-Corp Reports Quarterly Results for the Period Ended September 30, 2025
Associated Banc-Corp reported its quarterly financial results for the period ended September 30, 2025. The company’s net income was $123.6 million, a decrease of 12.1% compared to the same period last year. Total revenue was $343.8 million, a decrease of 5.6% year-over-year. The decline in net income was primarily due to a decrease in non-interest income and an increase in non-interest expense. The company’s net interest margin was 3.44%, a decrease of 14 basis points from the same period last year. Associated Banc-Corp’s total assets were $34.6 billion, an increase of 4.1% from the same period last year. The company’s common equity tier 1 capital ratio was 10.3%, exceeding the regulatory minimum requirement.
Financial Performance Overview
The Corporation reported strong financial results for the first nine months of 2025, with net income of $337.6 million, up 19% from the same period in 2024. Earnings per common share were $1.98, an increase of 8% year-over-year. The improved performance was driven by growth in net interest income, higher noninterest income, and disciplined expense management.
Net Interest Income and Margin Expansion
Fully tax-equivalent net interest income increased 15% to $903.9 million for the first nine months of 2025, compared to $788.2 million in the prior year period. The net interest margin expanded 25 basis points to 3.02%, reflecting the Corporation’s actions to reposition the balance sheet in late 2024 as well as organic growth in higher-yielding commercial and industrial loans.
Average earning assets grew 5% to $40.0 billion, with average loans increasing 3% to $30.5 billion. The Corporation saw strong growth in commercial and industrial loans, up 11%, as well as auto finance loans, up 16%. This was partially offset by a 10% decline in residential mortgage loans as the Corporation executed its balance sheet repositioning strategy.
On the funding side, average interest-bearing deposits rose 6% to $28.9 billion, with increases across most deposit categories except brokered CDs and money market accounts. The cost of interest-bearing liabilities declined 54 basis points to 3.04%, as the Corporation was able to reprice deposits downward in line with the lower interest rate environment.
Noninterest Income Trends
Noninterest income increased 5% to $207.0 million for the first nine months of 2025. Key drivers included:
- A 60% increase in capital markets revenue due to elevated activity in syndications and swaps businesses
- A 59% increase in mortgage banking revenue from higher mortgage servicing income and loan sale gains
- A $7.0 million loss on the mortgage portfolio sale related to the balance sheet repositioning
These positive trends were partially offset by a $4.0 million decrease in investment securities gains compared to the prior year period.
Expense Management
Noninterest expense increased 7% to $636.2 million, primarily due to:
- A 7% increase in personnel costs from higher variable compensation and healthcare expenses
- A 22% increase in legal and professional fees
- A $9.4 million increase in other noninterest expense, including OREO write-downs
The Corporation’s fully tax-equivalent efficiency ratio improved to 56.67% from 59.86% in the prior year period, reflecting disciplined expense control.
Asset Quality and Credit Trends
Nonperforming assets declined to 0.44% of total loans plus OREO and repossessed assets at September 30, 2025, down from 0.49% a year earlier. Net charge-offs for the first nine months of 2025 were $34.7 million, or 0.15% of average loans on an annualized basis, compared to $56.3 million, or 0.25%, in the prior year period.
The allowance for credit losses on loans increased to $414.6 million, or 1.34% of total loans, at September 30, 2025, up from $397.5 million, or 1.33%, a year earlier. The increase was driven by growth in the loan portfolio and general macroeconomic trends, partially offset by improved asset quality metrics.
Liquidity and Capital
The Corporation maintained a strong liquidity position, with $12.5 billion in funding available within one business day as of September 30, 2025. This provided ample coverage of the Corporation’s $8.7 billion in uninsured and uncollateralized deposits.
Capital ratios remained well above regulatory minimums, with a Common Equity Tier 1 ratio of 10.33% and a total capital ratio of 12.94% at the end of the third quarter. The Corporation’s tangible common equity ratio was 8.18%.
Outlook and Strategic Priorities
Looking ahead, the Corporation expects to continue executing on its strategic initiatives to drive sustainable, profitable growth. Key priorities include:
- Maintaining disciplined credit underwriting and proactive risk management
- Leveraging the Corporation’s commercial banking expertise to grow the commercial and industrial loan portfolio
- Optimizing the balance sheet through prudent management of the investment portfolio and deposit mix
- Investing in technology and digital capabilities to enhance the customer experience
- Carefully managing expenses while making strategic investments for the future
Overall, the Corporation delivered strong financial results in the first nine months of 2025, demonstrating the benefits of its balanced business model, prudent risk management, and strategic focus on driving long-term shareholder value.
