Contradictions Unveiled: Associated Banc-Corp's Q1 2025 Earnings Call on Deposit Growth, Loan Trends, and CRE Risks

Deposit growth expectations, loan growth expectations, issues with commercial real estate non-performing loans are the key contradictions discussed in Associated Banc-Corp's latest 2025Q1 earnings call.



Strong Financial Performance and Loan Growth:
- Associated Banc-Corp reported over $500 million in loan growth for Q1, with $526 million in total loans and $352 million in C&I loans.
- The growth was supported by core customer deposit growth of $502 million, and a 16 basis points margin expansion to 2.97%.
- This trend was driven by the expansion of the commercial banking team and the completion of balance sheet repositioning, which improved profitability.

Balance Sheet and Capital Management:
- Associated Banc-Corp added 10 basis points to its CET1 capital, achieving a ratio of 10.11% by Q1 2025.
- The company's total net interest income increased to $286 million, reflecting a 16 basis points margin increase and a $16 million rise from the previous quarter.
- These improvements were due to effective asset and liability yield management, particularly through the repositioning of securities and reduced deposit costs.

Credit Quality and Risk Management:
- The total non-accrual balance decreased to $135 million, representing a 24% reduction year-on-year, with only 0.12% in net charge-offs.
- The allowance for credit losses increased by $4 million to $407 million, driven by normal loan growth and risk rating changes.
- The stable credit profile was attributed to a conservative underwriting approach and proactive portfolio monitoring, ensuring resilience amidst uncertainties like tariffs and trade negotiations.

Strategic Plan and Market Expansion:
- The completion of Phase 2 of the strategic plan included the lift-out of three talented RMs in Kansas City and the addition of a branch in St. Louis.
- The company saw record customer satisfaction scores and positive household growth, driven by investments in talent, products, and technology.
- These strategic actions have positioned the bank for continued growth and market share capture in key metropolitan areas, despite macroeconomic uncertainties.