Associated Banc-Corp

Q2 GAAP EPS was $0.63, or $0.73 adjusted for $24 million of nonrecurring costs tied to the American National acquisition. Net interest income was $370 million, up $63 million sequentially and $70 million versus Q2 2025, and net interest margin was 3.17%, up 14 bps from Q1. Total loans grew 15% sequentially with nearly $4 billion of American National balances added; excluding that deal, organic loan growth was 3% or $940 million, including $644 million of organic C&I growth. Total deposits and core customer deposits both grew 12% sequentially, while organic core customer deposits were up 6% year over year. On credit, provision was $19 million, ACLL was $494 million and the ACL ratio was 1.36%; net charge-offs were $23 million, including $7 million from American National. Management now expects 2026 total loan growth of 18% to 20%, C&I loan growth of 20% to 22%, total deposit growth of 17% to 19%, core customer deposit growth of 19% to 21%, net interest income growth of 19% to 21%, noninterest income growth of 8% to 10%, and noninterest expense growth of 20% to 21% versus Associated stand-alone results.

Andy Harmening framed the quarter as evidence that Associated is sustaining profitable organic growth while integrating American National. He emphasized that the bank already hit its original 9% to 10% organic C&I growth target for the year by June 30, and said the company is building a stronger commercial, deposit, and wealth platform for 2027 and beyond. His tone was notably upbeat about the growth pipeline, the new Kansas City and Dallas C&I teams, the franchise banking vertical, and the HOA/title opportunity, while stressing discipline on risk and expenses.

Derek Meyer focused on the earnings and balance-sheet impacts of the acquisition. He said Q2 NII was $370 million, margin was 3.17%, the securities book was repositioned by selling about $1 billion of securities and reinvesting at about 4.6%, and CET1 ended at 10.47% with TCE at 8.27% and tangible book value per share at $22.15. He also noted noninterest expense was $272 million, including $24 million of one-time acquisition costs, and that after these items the efficiency ratio was 52.9%; he pointed to a better-than-expected cost-save outlook, now about 30% of American National’s expense base, while maintaining a 2.25-year earn-back.

Analysts focused on the higher expense guide, the path to full run-rate savings after the October conversion, and whether loan growth implied more CRE versus C&I moderation in the back half of the year. Management said the expense guide is being driven mainly by deferred comp and one-time merger costs, that the first full quarter of cost savings should be first quarter 2027, and that the Q2-to-back-half loan growth pattern reflects timing and expected CRE paydowns rather than weaker demand. They also said deposit costs improved modestly, NIM should expand in the third and fourth quarters, and the company is comfortable with its noncore funding reduction plan and the quality of the American National credit book.