We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties. You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies. In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Associated Banc-Corp (ASB) Q1 Earnings Top as Fee Income Rises
Read MoreHide Full Article
Associated Banc-Corp’s (ASB - Free Report) first-quarter 2024 earnings of 52 cents per share beat the Zacks Consensus Estimate of 49 cents. However, the bottom line compared unfavorably with the prior-year quarter’s earnings of 66 cents. The results in the reported quarter include the FDIC special assessment charge.
Results benefited from higher non-interest income and a rise in loans and deposit balance. However, a decline in net interest income (NII) and an increase in expenses and provisions were headwinds.
Net income available to common shareholders was $78.3 million, down 22% from the year-ago quarter. Our estimate for the metric was $73.7 million.
Revenues Decline, Expenses Rise
Net revenues (FTE basis) were $326.6 million, down 4% year over year. The top line also marginally missed the Zacks Consensus Estimate of $327.5 million.
NII was $253.4 million, down 6%. The net interest margin was 2.79%, down 28 basis points (bps) year over year. We had expected NII and net interest yield to be $259.2 million and 2.77%, respectively.
Non-interest income was $65 million, growing 5%. The rise was largely driven by higher wealth management fees, card-based fees and investment securities gains. Our estimate for the non-interest income was $61.2 million.
Non-interest expenses increased 5% to $197.7 million. These included the FDIC special assessment charge of $7.7 million. Excluding this, adjusted non-interest expenses were $190 million. Our estimate for non-interest expenses was the same as the reported number.
Adjusted FTE efficiency ratio was 57.25%, up from 54.64% in the prior-year quarter. A rise in the efficiency ratio indicates a deterioration in profitability.
As of Mar 31, 2024, total loans were $29.5 billion, up 1% sequentially. Total deposits also increased 1% to $33.7 billion.
Credit Quality Worsens
In the reported quarter, the company recorded a provision for credit losses of $24 million, jumping 34% from the prior-year quarter. Our estimate for the metric was $28.2 million.
As of Mar 31, 2024, total non-performing assets were $188 million, surging 42%. Total non-accrual loans were $178.3 million, rising 52%.
Net charge-offs were $30 million, up substantially from $5 million in the prior-year quarter.
Capital Ratios Deteriorates
As of Mar 31, 2024, Tier 1 risk-based capital ratio was 10.02%, down from 10.05% recorded in the corresponding period of 2023. The common equity Tier 1 capital ratio was 9.43%, down from 9.45%.
Share Repurchase Update
During the reported quarter, Associated Banc-Corp repurchased 0.9 million shares.
2024 Outlook
Management expects loan growth of 4-6%.
Total core customer deposits are estimated to rise 3-5%.
NII is projected to increase 2-4%.
After adjusting to exclude the impact of non-recurring items related to the balance sheet repositioning announced in the fourth quarter of 2023, total non-interest income is expected to remain stable or decrease 2%.
After adjusting to exclude the impact of the FDIC special assessment, total non-interest expenses are anticipated to rise 2-3%.
The effective tax rate is expected to be 19-21%.
Our Take
Associated Banc-Corp’s business-restructuring efforts are likely to keep supporting financials. The company has a solid balance sheet position, making it well-poised for growth. However, elevated expenses and provisions are likely to hurt profits in the near term.
Associated Banc-Corp Price, Consensus and EPS Surprise
East West Bancorp, Inc.’s (EWBC - Free Report) adjusted earnings per share of $2.08 in the first quarter of 2024 surpassed the Zacks Consensus Estimate of $2.00. However, the bottom line declined 10.3% from the prior-year quarter.
EWBC’s results were primarily aided by an increase in non-interest income. Also, deposit balances increased sequentially in the quarter. However, lower NII and higher expenses and provisions were the undermining factors.
Webster Financial’s (WBS - Free Report) first-quarter 2024 adjusted quarterly earnings per share of $1.35 missed Zacks Consensus Estimate of $1.37. This compares unfavorably with earnings of $1.49 per share reported a year ago.
Results were affected by a fall in both NII and deposit balances, along with elevated expenses. However, lower provisions and a rise in loan balances acted as tailwinds for WBS.
Zacks' 7 Best Strong Buy Stocks (New Research Report)
Valued at $99, click below to receive our just-released report predicting the 7 stocks that will soar highest in the coming month.
Image: Bigstock
Associated Banc-Corp (ASB) Q1 Earnings Top as Fee Income Rises
Associated Banc-Corp’s (ASB - Free Report) first-quarter 2024 earnings of 52 cents per share beat the Zacks Consensus Estimate of 49 cents. However, the bottom line compared unfavorably with the prior-year quarter’s earnings of 66 cents. The results in the reported quarter include the FDIC special assessment charge.
Results benefited from higher non-interest income and a rise in loans and deposit balance. However, a decline in net interest income (NII) and an increase in expenses and provisions were headwinds.
Net income available to common shareholders was $78.3 million, down 22% from the year-ago quarter. Our estimate for the metric was $73.7 million.
Revenues Decline, Expenses Rise
Net revenues (FTE basis) were $326.6 million, down 4% year over year. The top line also marginally missed the Zacks Consensus Estimate of $327.5 million.
NII was $253.4 million, down 6%. The net interest margin was 2.79%, down 28 basis points (bps) year over year. We had expected NII and net interest yield to be $259.2 million and 2.77%, respectively.
Non-interest income was $65 million, growing 5%. The rise was largely driven by higher wealth management fees, card-based fees and investment securities gains. Our estimate for the non-interest income was $61.2 million.
Non-interest expenses increased 5% to $197.7 million. These included the FDIC special assessment charge of $7.7 million. Excluding this, adjusted non-interest expenses were $190 million. Our estimate for non-interest expenses was the same as the reported number.
Adjusted FTE efficiency ratio was 57.25%, up from 54.64% in the prior-year quarter. A rise in the efficiency ratio indicates a deterioration in profitability.
As of Mar 31, 2024, total loans were $29.5 billion, up 1% sequentially. Total deposits also increased 1% to $33.7 billion.
Credit Quality Worsens
In the reported quarter, the company recorded a provision for credit losses of $24 million, jumping 34% from the prior-year quarter. Our estimate for the metric was $28.2 million.
As of Mar 31, 2024, total non-performing assets were $188 million, surging 42%. Total non-accrual loans were $178.3 million, rising 52%.
Net charge-offs were $30 million, up substantially from $5 million in the prior-year quarter.
Capital Ratios Deteriorates
As of Mar 31, 2024, Tier 1 risk-based capital ratio was 10.02%, down from 10.05% recorded in the corresponding period of 2023. The common equity Tier 1 capital ratio was 9.43%, down from 9.45%.
Share Repurchase Update
During the reported quarter, Associated Banc-Corp repurchased 0.9 million shares.
2024 Outlook
Management expects loan growth of 4-6%.
Total core customer deposits are estimated to rise 3-5%.
NII is projected to increase 2-4%.
After adjusting to exclude the impact of non-recurring items related to the balance sheet repositioning announced in the fourth quarter of 2023, total non-interest income is expected to remain stable or decrease 2%.
After adjusting to exclude the impact of the FDIC special assessment, total non-interest expenses are anticipated to rise 2-3%.
The effective tax rate is expected to be 19-21%.
Our Take
Associated Banc-Corp’s business-restructuring efforts are likely to keep supporting financials. The company has a solid balance sheet position, making it well-poised for growth. However, elevated expenses and provisions are likely to hurt profits in the near term.
Associated Banc-Corp Price, Consensus and EPS Surprise
Associated Banc-Corp price-consensus-eps-surprise-chart | Associated Banc-Corp Quote
ASB currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Banks
East West Bancorp, Inc.’s (EWBC - Free Report) adjusted earnings per share of $2.08 in the first quarter of 2024 surpassed the Zacks Consensus Estimate of $2.00. However, the bottom line declined 10.3% from the prior-year quarter.
EWBC’s results were primarily aided by an increase in non-interest income. Also, deposit balances increased sequentially in the quarter. However, lower NII and higher expenses and provisions were the undermining factors.
Webster Financial’s (WBS - Free Report) first-quarter 2024 adjusted quarterly earnings per share of $1.35 missed Zacks Consensus Estimate of $1.37. This compares unfavorably with earnings of $1.49 per share reported a year ago.
Results were affected by a fall in both NII and deposit balances, along with elevated expenses. However, lower provisions and a rise in loan balances acted as tailwinds for WBS.