Associated Banc (NYSE:ASB) reported first-quarter 2026 earnings of $0.70 per share as management highlighted continued momentum in commercial loan growth, customer acquisition, and early progress integrating the recently closed American National Bank acquisition.
Management highlights growth initiatives and acquisition progress
President and CEO Andy Harmening said the company entered 2026 “with strong momentum” following what he described as a “pivotal 2025” that included relationship loan and deposit growth, record customer growth, and solid credit performance.
Harmening also outlined steps the company has taken to accelerate growth in major metro markets, including key hires, a 23% year-over-year increase in marketing acquisition spend in the quarter, the launch of a new C&I office in Dallas, and the creation of a national franchise banking vertical.
The company closed its acquisition of American National Bank on April 1. Harmening said the combined organization is expected to complete systems and account conversion in late third quarter 2026, and that purchase accounting adjustments are expected to be finalized later in the second quarter. He said the deal is intended to expand growth opportunities in markets such as Omaha and the Twin Cities.
Loan and deposit growth driven by commercial momentum
Harmening reported total loans grew by more than $600 million, or 2%, versus the prior quarter, driven primarily by commercial activity. He said C&I balances increased $540 million from the prior quarter, while CRE balances rose $143 million as production outpaced “lower than expected payoffs.” He added that the company still expects payoffs to materialize throughout the year.
On funding, total deposits increased $179 million in the quarter, while core customer deposits grew by more than $800 million versus the fourth quarter. Harmening said seasonal inflows in a handful of accounts boosted first-quarter deposits but typically flow back out in the second quarter. Year over year, he said core customer deposits increased $1.3 billion, or 4.5%.
Following the American National acquisition, Associated updated its expectations for 2026 period-end growth rates versus its standalone results for the year ended December 31, 2025. Harmening said the company now expects:
- Period-end loan growth: 17%–19%
- Period-end total deposit growth: 17%–19%
- Period-end customer deposit growth: 19%–21%
Net interest income dips from Q4 record; margin pressured by accelerated funding
Chief Financial Officer Derek Meyer said first-quarter net interest income was $307 million, down $3 million from the prior quarter and up $21 million from the first quarter of 2025. Meyer attributed the sequential decline to the timing of strong loan growth outpacing deposit gathering, which led the company to “accelerate our funding to match,” putting “short-term downward pressure” on net interest income and net interest margin.
Net interest margin decreased three basis points to 3.03% in the quarter, though Meyer said it was up six basis points from the same period a year earlier.
Meyer also discussed yield and funding cost trends, noting that yields on the company’s “largely floating rate CRE and commercial books” decreased by 29 basis points in the quarter, while total interest-bearing deposit costs fell 17 basis points and were down 47 basis points from a year earlier.
Looking ahead, Meyer said the company continues to assess the balance sheet and income statement impacts of the American National acquisition and that “balances are generally in line with our due diligence assumptions.” He said Associated expects “income growth of 8%–10% in 2026” compared to its standalone results for the year ended December 31, 2025.
During Q&A, management said the acquisition’s impact on margin is expected to remain in line with prior disclosures. In response to a question from Barclays’ Jared Shaw, management reiterated it had “initially forecasted a potential increase of 5–10 basis points” to margin after purchase accounting marks are completed.
Expenses, capital, and operating leverage
Meyer said non-interest expense totaled $219 million, slightly lower than the prior quarter. He said increases in FDIC assessment, technology, and legal and professional fees were offset by declines in business development, equipment, and other costs. The adjusted efficiency ratio increased slightly to 55.8% from 55.2%.
Harmening told Raymond James’ Daniel Tamayo that the legacy Associated business is “almost flat as a pancake” on expenses from the fourth quarter to the first quarter and said he believes the legacy business “will manage to that 3% number.” Meyer said the company expects to provide an updated non-interest expense outlook next quarter after purchase accounting adjustments are finalized.
On capital, Meyer said the CET1 ratio ended the quarter at 10.47%, down slightly from the prior quarter due in part to loan growth but up 36 basis points from a year earlier. Tangible common equity ratio was 8.27%, down 2 basis points from Q4 but up 31 basis points from Q1 2025. Tangible book value per share was $22.23, up nearly $2 from a year ago.
In response to Autonomous Research’s Casey Haire, Harmening said he “fully expect[s]” the company will use its $100 million share repurchase authorization this year, while noting the company is working through acquisition marks. Management also discussed the Basel III proposal, saying it remains in the comment period and that any impact could be favorable, though they did not quantify a specific effect.
Credit trends remain stable; provision reflects growth and risk migration
Chief Credit Officer Pat Ahern said credit performance remained solid in the quarter. The company recorded a provision of $11 million and net charge-offs of $5 million, resulting in a net charge-off ratio of seven basis points.
Ahern said the allowance for credit losses increased $6 million to $425 million, driven primarily by commercial and business lending and CRE construction, “largely stem[ming] from a combination of loan growth plus normal movement within risk rating categories.” The ACL ratio decreased one basis point to 1.34%.
Total delinquencies rose to $88 million, with Ahern attributing $43 million of the increase to “two managed credits” where an extension process carried into the second quarter. Total criticized loans decreased $29 million from the prior quarter, while non-accrual loans increased $10 million to $111 million, though Ahern said that was still down $24 million from a year earlier. He added that the company remains confident there has not been “a material shift” in the portfolio’s credit profile that would imply higher loss risk.
In closing remarks, Harmening said the legacy Associated outlook “improved from last quarter” and that integration work with American National is on track, citing cultural alignment, progress toward planned non-interest expense reductions, and continued work toward late-third-quarter conversion.
About Associated Banc (NYSE:ASB)
Associated Banc-Corp, through its primary subsidiary Associated Bank, N.A., is a regional financial services company headquartered in Green Bay, Wisconsin. The bank operates more than 200 branches across the Midwest, offering community-focused banking solutions for individuals, small businesses and commercial clients. Its emphasis on personalized service and regional decision-making supports long-standing customer relationships.
On the consumer side, Associated Bank provides checking and savings accounts, residential mortgages, home equity lines of credit, auto financing and credit card products.
