Associated Banc-Corp Reports Second Quarter 2024 Earnings of $0.74 per Common Share, or $0.52 per Common Share (1) Excluding a One Time Item Recognized During the Quarter

GREEN BAY, Wis. -- July 25, 2024 -- Associated Banc-Corp (NYSE: ASB) ("Associated" or "Company") today reported net income available to common equity ("earnings") of $113 million, or $0.74 per common share, for the quarter ended June 30, 2024. Excluding a one time tax benefit recognized during the quarter ended June 30, 2024, Associated reported earnings of $80 million, or $0.52 per common share. These amounts compare to earnings of $78 million, or $0.52 per common share, for the quarter ended March 31, 2024 and earnings of $84 million, or $0.56 per common share, for the quarter ended June 30, 2023.

"After demonstrating an ability to execute with Phase 1 of our strategic plan, we continued to build momentum across the company by adding talent in key areas and deploying product and digital enhancements during the second quarter," said President and CEO Andy Harmening. "This momentum has translated to encouraging trends in several foundational performance measures, including industry-leading customer satisfaction scores and the strongest consumer checking household growth we've seen in over a decade."

"Importantly, we also delivered strong financial results during the quarter through steady revenues, credit stability and capital accretion. While macro uncertainty remains top of mind in the near-term, we feel well-positioned as we move to the back half of the year thanks to our foundational discipline, the stability of our markets, and the execution of our strategic plan."

Second Quarter 2024 Highlights

• GAAP diluted earnings per share of $0.74; Adjusted diluted earnings per share¹ of $0.52
• Total quarterly average loan growth of $211 million vs. first quarter 2024
• Total quarterly average core customer deposit¹ decrease of $240 million vs. first quarter 2024; total quarterly average deposit decrease of $638 million vs. first quarter 2024
• Net interest income of $257 million
• Net interest margin of 2.75%
• Noninterest income of $65 million
• Noninterest expense of $196 million
• Provision for credit losses of $23 million
• Allowance for credit losses on loans / total loans of 1.32%
• Net charge offs / average loans (annualized) of 0.29%

¹ This is a non-GAAP financial measure. See financial tables for a reconciliation of non-GAAP financial measures to GAAP financial measures.

Loans

Second quarter 2024 average total loans of $29.6 billion increased 1%, or $211 million, from the prior quarter and increased $141 million from the same period last year. With respect to second quarter 2024 average balances by loan category:

• Commercial and business lending increased $195 million from the prior quarter and increased $112 million from the same period last year to $11.0 billion.
• Commercial real estate lending decreased $140 million from the prior quarter and decreased $46 million from the same period last year to $7.2 billion.
• Consumer lending increased $156 million from the prior quarter and increased $75 million from the same period last year to $11.3 billion.

Second quarter 2024 period end total loans of $29.6 billion increased $124 million from the prior quarter and decreased 1%, or $231 million, from the same period last year. With respect to second quarter 2024 period end balances by loan category:

• Commercial and business lending increased $118 million from the prior quarter and decreased $41 million from the same period last year to $11.1 billion.
• Commercial real estate lending decreased $65 million from both the prior quarter and the same period last year to $7.3 billion.
• Consumer lending increased $71 million from the prior quarter and decreased $125 million from the same period last year to $11.3 billion.

Based on current market conditions, we now expect 2024 total loan growth to finish at the lower end of our previous 4% to 6% range on an end of period basis as compared to the year ended December 31, 2023.

Deposits

Second quarter 2024 average deposits of $32.6 billion decreased 2%, or $638 million, from the prior quarter and increased 4%, or $1.3 billion, from the same period last year. With respect to second quarter 2024 average balances by deposit category:

• Noninterest-bearing demand deposits decreased $170 million from the prior quarter and decreased $958 million from the same period last year to $5.7 billion.
• Savings increased $206 million from the prior quarter and increased $384 million from the same period last year to $5.1 billion.
• Interest-bearing demand deposits decreased $224 million from the prior quarter and increased $602 million from the same period last year to $7.3 billion.
• Money market deposits decreased $122 million from the prior quarter and decreased $749 million from the same period last year to $6.0 billion.
• Total time deposits decreased $271 million from the prior quarter and increased $1.9 billion from the same period last year to $6.9 billion.
• Network transaction deposits decreased $57 million from the prior quarter and increased $127 million from the same period last year to $1.6 billion.

Second quarter 2024 period end deposits of $32.7 billion decreased 3%, or $1.0 billion, from the prior quarter and increased 2%, or $677 million, from the same period last year. With respect to second quarter 2024 period end balances by deposit category:

• Noninterest-bearing demand deposits decreased $439 million from the prior quarter and decreased $751 million from the same period last year to $5.8 billion.
• Savings increased $32 million from the prior quarter and increased $380 million from the same period last year to $5.2 billion.
• Interest-bearing demand deposits decreased $463 million from the prior quarter and increased $1.2 billion from the same period last year to $8.3 billion.
• Money market deposits decreased $427 million from the prior quarter and decreased $1.2 billion from the same period last year to $6.3 billion.
• Total time deposits increased $274 million from the prior quarter and increased $1.0 billion from the same period last year to $7.1 billion.
• Network transaction deposits (included in money market and interest-bearing demand deposits) decreased $290 million from the prior quarter and decreased $98 million from the same period last year to $1.5 billion.

Based on current market conditions, we now expect 2024 core customer deposit growth to finish at the lower end of our previous 3% to 5% range on an end of period basis as compared to the year ended December 31, 2023.

Net Interest Income and Net Interest Margin

Second quarter 2024 net interest income of $257 million decreased $1 million from both the prior quarter and the same period last year. The net interest margin decreased to 2.75%, reflecting a 4 basis point decrease from the prior quarter and a 5 basis point decrease from the same period last year.

• The average yield on total loans for the second quarter of 2024 decreased 1 basis point from the prior quarter and increased 44 basis points from the same period last year to 6.21%.
• The average cost of total interest-bearing liabilities for the second quarter of 2024 increased 5 basis points from the prior quarter and increased 54 basis points from the same period last year to 3.60%.
• The net free funds benefit for the second quarter of 2024 remained flat compared to the prior quarter and increased 2 basis points from the same period last year to 0.70%.

Based on current market conditions, we now expect total net interest income growth of 1% to 3% in 2024.

Noninterest Income

Second quarter 2024 total noninterest income of $65 million increased slightly compared to the prior quarter and decreased slightly from the same period last year. With respect to second quarter 2024 noninterest income line items:

• Bank and corporate owned life insurance increased $2 million from both the prior quarter and the same period last year.
• Wealth management fees increased $1 million from the prior quarter and increased $2 million from the same period last year.
• Card-based fees increased $1 million from both the prior quarter and the same period last year.
• Investment securities gains (losses), net decreased $4 million from the prior quarter and increased slightly from the same period last year, with the quarterly decrease driven primarily by a $4 million gain on sale of Visa B shares recognized in the first quarter of 2024.

Excluding the impact of the mortgage and investment securities sales announced during the fourth quarter of 2023, we now expect total noninterest income to finish within a range of negative 1% to 1% growth in 2024.

Noninterest Expense

Second quarter 2024 total noninterest expense of $196 million decreased $2 million, or 1%, from the prior quarter and increased $5 million, or 3%, from the same period last year as we continued to invest in our strategic initiatives. With respect to second quarter 2024 noninterest expense line items:

• Personnel expense increased $2 million from the prior quarter and increased $7 million from the same period last year.
• Technology expense increased $1 million from the prior quarter and increased $3 million from the same period last year.
• FDIC assessment expense decreased $7 million from the prior quarter and decreased $2 million from the same period last year. The quarterly decrease was driven primarily by an $8 million increase in special assessment recognized in the first quarter of 2024, partially offset by a $2 million adjustment based on an updated special assessment estimate received from the FDIC in the second quarter of 2024.

After adjusting to exclude the impact of the $31 million FDIC special assessment booked during the fourth quarter of 2023, the $8 million FDIC special assessment booked during the first quarter of 2024, and the $2 million FDIC special assessment adjustment booked during the second quarter of 2024, we continue to expect total noninterest expense to grow by 2% to 3% in 2024.

Taxes

Second quarter 2024 results included a tax benefit of $13 million compared to $20 million of tax expense in the prior quarter and $24 million of tax expense in the same period last year. The benefit recognized in the second quarter of 2024 was primarily driven by a strategic reallocation of our investment securities portfolio resulting in a deferred tax benefit of approximately $33 million during the quarter.

After excluding the impact of the one-time $33 million tax benefit recognized in the second quarter of 2024, we continue to expect the annual effective tax rate to be between 19% and 21% in 2024, assuming no change in the corporate tax rate.

Credit

The second quarter 2024 provision for credit losses on loans was $23 million, compared to a provision of $24 million in the prior quarter and a provision of $22 million in the same period last year. With respect to second quarter 2024 credit quality:

• Nonaccrual loans of $154 million decreased $24 million from the prior quarter and increased $23 million from the same period last year. The nonaccrual loans to total loans ratio was 0.52% in the second quarter, down from 0.60% in the prior quarter and up from 0.44% in the same period last year.
• Second quarter 2024 net charge offs of $21 million decreased compared to net charge offs of $22 million in the prior quarter and increased compared to net charge offs of $11 million in the same period last year.
• The allowance for credit losses on loans (ACLL) of $390 million increased $2 million compared to the prior quarter and increased $13 million compared to the same period last year. The ACLL to total loans ratio was 1.32% in the second quarter, up from 1.31% in the prior quarter and up from 1.26% in the same period last year.

In 2024, we continue to expect to adjust provision to reflect changes to risk grades, economic conditions, loan volumes, and other indications of credit quality.

Capital

The Company's capital position remains strong, with a CET1 capital ratio of 9.68% at June 30, 2024. The Company's capital ratios continue to be in excess of the Basel III "well-capitalized" regulatory benchmarks on a fully phased in basis.

SECOND QUARTER 2024 EARNINGS RELEASE CONFERENCE CALL

The Company will host a conference call for investors and analysts at 4:00 p.m. Central Time (CT) today, July 25, 2024. Interested parties can access the live webcast of the call through the Investor Relations section of the Company's website, http://investor.associatedbank.com. Parties may also dial into the call at 877-407-8037 (domestic) or 201-689-8037 (international) and request the Associated Banc-Corp second quarter 2024 earnings call. The second quarter 2024 financial tables with an accompanying slide presentation will be available on the Company's website just prior to the call. An audio archive of the webcast will be available on the Company's website approximately fifteen minutes after the call is over.

ABOUT ASSOCIATED BANC-CORP

Associated Banc-Corp (NYSE: ASB) has total assets of $42 billion and is the largest bank holding company based in Wisconsin. Headquartered in Green Bay, Wisconsin, Associated is a leading Midwest banking franchise, offering a full range of financial products and services from nearly 200 banking locations serving more than 100 communities throughout Wisconsin, Illinois and Minnesota. The Company also operates loan production offices in Indiana, Michigan, Missouri, New York, Ohio and Texas. Associated Bank, N.A. is an Equal Housing Lender, Equal Opportunity Lender and Member FDIC. More information about Associated Banc-Corp is available at www.associatedbank.com.

FORWARD-LOOKING STATEMENTS

Statements made in this presentation which are not purely historical are forward-looking statements, as defined in the Private Securities Litigation Reform Act of 1995. This includes any statements regarding management's plans, objectives, or goals for future operations, products or services, and forecasts of its revenues, earnings, or other measures of performance. Such forward-looking statements may be identified by the use of words such as "believe," "expect," "anticipate," "plan," "estimate," "should," "intend," "target," "outlook," "project," "guidance," "forecast," or similar expressions. Forward-looking statements are based on current management expectations and, by their nature, are subject to risks and uncertainties. Actual results may differ materially from those contained in the forward-looking statements. Factors which may cause actual results to differ materially from those contained in such forward-looking statements include those identified in the Company's most recent Form 10-K and subsequent Form 10-Qs and other SEC filings, and such factors are incorporated herein by reference.

NON-GAAP FINANCIAL MEASURES

This press release and related materials may contain references to measures which are not defined in generally accepted accounting principles ("GAAP"). Information concerning these non-GAAP financial measures can be found in the financial tables. Management believes these measures are meaningful because they reflect adjustments commonly made by management, investors, regulators, and analysts to evaluate the adequacy of earnings per common share, provide a greater understanding of ongoing operations and enhance comparability of results with prior periods.

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