This updated analysis from October 27, 2025, offers a multifaceted examination of Associated Banc-Corp (ASB), assessing everything from its business moat and financial health to its future growth potential and fair value. Our report provides critical context by benchmarking ASB against key peers like Wintrust Financial Corporation (WTFC) and Comerica Incorporated (CMA), ultimately distilling our findings through the investment principles of Warren Buffett and Charlie Munger.
Mixed outlook for Associated Banc-Corp, balancing a recent recovery against long-term weaknesses.
The bank's earnings have been highly volatile, collapsing from $2.36 per share in 2022 to $0.73 in 2024.
Its business is stable but lacks a strong competitive advantage and is tied to the slow-growing Midwest economy.
However, recent performance shows a strong rebound, with revenue growing 20% in the last quarter.
Profitability has also recovered, with return on equity now at a healthier 10.34%.
While the stock appears fairly valued, a high dividend payout ratio of 93.78% raises sustainability concerns.
Investors should remain cautious, as the potential value is offset by weak growth prospects and dividend risk.
US: NYSE
Associated Banc-Corp (ASB) is a diversified regional bank holding company with its headquarters in Green Bay, Wisconsin. The bank's business model is firmly rooted in traditional relationship banking, serving communities, businesses, and individuals primarily across Wisconsin, Illinois, and Minnesota. ASB's operations are structured around three main segments: Commercial and Business Banking, which provides lending and treasury management solutions to small and mid-sized companies; Consumer and Business Banking, which offers a full suite of retail products like checking accounts, mortgages, and consumer loans through its physical branches and digital platforms; and Wealth Management, which delivers trust, investment, and financial planning services to high-net-worth clients and institutions. The company generates revenue primarily through the interest rate spread between its loans and deposits (net interest income) and, to a lesser extent, through fees for its services (noninterest income). This classic banking model relies on deep local market knowledge and long-term customer relationships to gather low-cost deposits and originate quality loans.
The largest component of ASB's business is its Commercial and Business Banking division, which is the primary engine for its lending activities. This segment provides a wide array of credit products, including commercial and industrial (C&I) loans for working capital and equipment, and commercial real estate (CRE) loans for both owner-occupied and investor properties. As of early 2024, C&I and CRE loans together constituted approximately 69% of the bank's total loan portfolio, making this segment the cornerstone of its interest income. The U.S. commercial lending market is valued in the trillions of dollars and is intensely competitive, with a modest projected CAGR of 2-3% annually, closely tracking economic growth. Profit margins in this space, known as net interest margins, are heavily influenced by Federal Reserve interest rate policy and competition. Key competitors in ASB's Midwest footprint include larger national players like JPMorgan Chase and U.S. Bank, Canadian-owned BMO, and other prominent regionals such as Wintrust Financial and Old National Bancorp, all of whom vie for the same middle-market clients. The primary customers for this segment are small-to-medium-sized enterprises (SMEs) with annual revenues typically ranging from $5 million to $500 million. These clients often require customized credit solutions and integrated services like treasury management and payroll, which increases their stickiness. Once a business has its primary operating accounts, loans, and cash management services with one bank, the operational hassle and potential disruption of switching providers are significant. The competitive moat for this division is built on this stickiness and ASB's long-standing local presence. Decades of operating in these communities provide ASB's bankers with intimate knowledge of local economic conditions and industries, theoretically leading to better credit underwriting and more personalized service than a larger, more bureaucratic national bank might offer. However, this moat is not impenetrable, as larger rivals can often offer more sophisticated technology platforms and more competitive pricing due to their greater scale.
ASB's Consumer and Business Banking segment serves as the primary deposit-gathering arm, which is critical for funding the bank's lending operations at a low cost. This division offers essential banking products to individuals and small businesses, including checking and savings accounts, residential mortgages, home equity lines of credit (HELOCs), and credit cards. While this segment also generates loan growth, its most vital function is attracting stable, low-cost core deposits, which contribute a significant portion of the bank's overall funding; this segment is responsible for roughly 45% of total deposits. The U.S. retail banking market is mature and massive, with competition coming from all angles. The market's growth is slow, and profit margins on basic deposit products are razor-thin. Competition is fierce, not only from the national and regional banks mentioned earlier but also from local credit unions, which often offer better rates, and a growing number of online-only banks and fintech companies that attract customers with high-yield savings accounts and user-friendly digital apps. The target customers are individuals, families, and small local businesses within the bank's geographic footprint. The stickiness of these customers varies greatly; an older customer with a mortgage, checking account, and direct deposit set up is very unlikely to switch, creating high switching costs. However, a younger, more digitally-savvy customer may be more transactional and willing to move their savings to an online bank offering a higher interest rate. The moat for retail banking has historically been the convenience and trust associated with a physical branch network. ASB's ~200 branches across the Midwest provide a tangible presence that many customers still value. However, this advantage is eroding as banking becomes increasingly digitized. The moat is therefore moderately effective but weakening over time, reliant on the inertia of its existing customer base and its ability to maintain a reputation for trustworthy, community-focused service.
Finally, the Wealth Management segment, operating through Associated Trust Company, provides a crucial source of diversified, fee-based revenue. This business offers services like investment management, financial planning, and trust and estate services for affluent individuals, families, and institutional clients. This division is important because its revenue is not directly tied to interest rate fluctuations, providing a stabilizing influence on the bank's overall earnings. In the first quarter of 2024, wealth management fees accounted for $20.4 million, or about 26%, of the bank's total noninterest income, making it the largest single contributor to fee revenue. The U.S. wealth management market is a high-growth area, expanding at a CAGR of 5-7% as the population ages and wealth becomes more concentrated. It is a high-margin business but also highly competitive, with rivals including major wirehouses like Morgan Stanley, asset management giants like BlackRock, other bank trust departments, and thousands of independent registered investment advisors (RIAs). ASB's target clients are high-net-worth individuals and business owners, often sourced from its commercial and retail banking relationships. These clients entrust the bank with managing significant assets, and the relationship is built on a foundation of deep trust and personalized advice. This makes the business exceptionally sticky; switching wealth advisors is a major decision involving significant time, paperwork, and emotional consideration. The competitive moat here is one of the strongest in the banking industry. It is not based on scale or technology but on trust and high switching costs. ASB's long history as a community institution gives it a credible brand to build these relationships upon. While it doesn't have the global reach of a bulge-bracket firm, its ability to offer integrated banking and wealth services under one roof is a compelling proposition for its target clientele in the Midwest.
In conclusion, Associated Banc-Corp's business model is that of a quintessential regional bank, leveraging its established local footprint to build relationships that drive its lending and deposit-gathering activities. Its moat is primarily derived from the moderate switching costs inherent in its commercial and retail banking relationships, which are reinforced by its physical presence and community-focused branding. The bank's strength lies in its balanced business mix, with its lending operations funded by a stable deposit base and supplemented by high-quality, recurring fee income from its wealth management division. This traditional model has proven resilient for decades and provides a solid foundation for consistent, albeit not spectacular, performance.
However, the durability of this moat is facing significant long-term tests. The competitive advantages of a local branch network are diminishing in the digital age, and the bank faces relentless pressure from larger competitors with massive technology budgets and greater economies of scale. Furthermore, its reliance on a generalist lending model without a standout, protected niche makes it vulnerable to economic downturns in its core markets and intense price competition. While its wealth management arm offers a strong, sticky business line, it is not large enough to single-handedly insulate the entire enterprise from the cyclical and competitive pressures of the broader banking industry. Therefore, while the business model is sound, its competitive edge appears stable but not particularly wide or deep, suggesting a future of steady operation rather than outsized growth.
Associated Banc-Corp's financial health has improved significantly in the most recent quarters compared to its last full fiscal year. Revenue and profitability metrics have rebounded strongly, driven by solid growth in net interest income. In its most recent quarter, the bank posted revenue of $370.49 million, a 20% year-over-year increase, with net interest income climbing 16.27% to $305.22 million. This performance boosted key profitability ratios, with return on assets (ROA) reaching 1.13% and return on equity (ROE) hitting 10.34%, a stark contrast to the weak 0.29% ROA and 2.8% ROE reported for the full fiscal year 2024.
The bank's balance sheet appears resilient. With total assets of $44.5 billion, it maintains a healthy funding mix, evidenced by a loans-to-deposits ratio of approximately 87.6%. This indicates that the bank is primarily using stable customer deposits to fund its lending activities rather than relying on more volatile wholesale funding. Leverage, measured by the debt-to-equity ratio, stands at a manageable 0.87. These figures suggest a stable foundation capable of supporting ongoing operations and absorbing moderate economic stress.
Despite the positive momentum, there are areas that warrant caution. The most notable red flag is the high dividend payout ratio, which currently stands at 93.78%. This means the bank is returning almost all of its earnings to shareholders as dividends, leaving a very thin margin for reinvestment or to absorb unexpected losses. While the dividend has been growing, this high payout level could be difficult to sustain if earnings growth were to slow. Additionally, the bank continues to set aside funds for potential loan losses ($16 million in the last quarter), a necessary but constant drag on earnings that investors must monitor. Overall, ASB's financial foundation is much more stable than a year ago, but risks surrounding its dividend sustainability remain.
An analysis of Associated Banc-Corp's performance over the last five fiscal years (FY2020-FY2024) reveals a company struggling with profitability despite achieving foundational growth. The bank has expanded its balance sheet consistently, with both loans and deposits growing at a compound annual rate of around 7% over the last three years. This core growth is a positive sign of maintaining relevance in its markets. Management has also maintained a prudent loan-to-deposit ratio, which ended FY2024 at a reasonable 85.9%, suggesting sound balance sheet management.
However, this balance sheet growth has not translated into durable profitability. The bank's earnings have been highly volatile, peaking in FY2022 with net income of $366 million before collapsing to $123 million by FY2024. This decline was driven by a sharp increase in interest expense, which squeezed net interest margins, and a steady rise in provisions for credit losses, which jumped from a net benefit in 2021 to a sustained expense of over $80 million in each of the last two years. Consequently, key profitability metrics like Return on Equity (ROE) have deteriorated, falling from a respectable 9.11% in 2022 to a very poor 2.8% in 2024, lagging far behind peers who often generate ROE in the double digits.
From a shareholder return perspective, the record is weak. While the dividend per share has consistently increased, the dividend payout ratio soared to an unsustainable 122% in FY2024 due to the earnings collapse. Furthermore, after years of modest share repurchases, the company's share count has increased over the last two years, diluting existing shareholders. This combination of weak earnings, declining returns, and shareholder dilution has led to significant underperformance. The bank's 5-year total shareholder return of ~25% is substantially lower than that of nearly all its major competitors, including Old National Bancorp (~45%) and Wintrust Financial (~80%). The historical record does not inspire confidence in the bank's execution or its resilience in the current economic environment.
The U.S. regional banking industry is navigating a period of significant transformation, with the next 3-5 years expected to be defined by consolidation, technological disruption, and a challenging macroeconomic environment. A primary driver of change is the relentless pressure for scale. The increasing costs of regulatory compliance and the necessity of major investments in digital technology are making it difficult for mid-sized banks like Associated Banc-Corp to compete with national giants like JPMorgan Chase and tech-savvy fintechs. This is accelerating industry consolidation, with the number of U.S. banks expected to continue its long-term decline from over 5,000 today. The market for core banking services is mature, with overall loan growth projected to track nominal GDP at a modest 2-4% annually.
Key shifts in the industry are being driven by evolving customer expectations. Digital adoption is no longer a trend but the standard, with over 60% of banking interactions now occurring through mobile or online channels. This shift diminishes the historical competitive advantage of physical branch networks and forces banks to compete on the quality of their digital experience. Furthermore, the recent period of rapidly rising interest rates has intensified competition for deposits, exposing weaknesses in banks' funding models. Catalysts for improved industry demand include a potential stabilization or decline in interest rates, which would ease pressure on funding costs and potentially revive mortgage activity, and sustained economic strength in key regional markets. However, the competitive intensity is set to increase as non-bank lenders and fintechs continue to chip away at profitable niches, making it harder for traditional, generalist banks to defend their market share.
Associated Banc-Corp's primary engine, its Commercial Lending division (including both Commercial & Industrial and Commercial Real Estate), faces a constrained growth outlook. Today, consumption of these loans is limited by economic uncertainty, which has dampened business investment, and significant stress within the commercial real estate (CRE) market, particularly office properties. ASB's large CRE portfolio, representing 39% of total loans, is a major constraint on its risk appetite. Over the next 3-5 years, any growth will likely come from its C&I portfolio, which is tied to the health of the Midwest's manufacturing and business services sectors. Consumption of CRE loans is expected to stagnate or decline, with a shift in focus toward less risky sub-sectors like industrial and multifamily properties. The U.S. commercial lending market is a multi-trillion dollar industry, but growth is slow. ASB competes against larger banks like BMO and regional peers like Wintrust. While ASB can win deals based on long-standing local relationships, it often struggles to compete on price and the sophistication of its treasury management platforms. The number of competitors is decreasing through M&A, but the remaining players are larger and more formidable. A key risk for ASB is a severe downturn in the CRE market, which would directly impact ~40% of its loan book and could lead to significant credit losses (High probability). Another risk is a regional economic slowdown in the Midwest, which would curtail C&I loan demand (Medium probability).
In Consumer Banking, the immediate future is focused on defending its deposit base rather than aggressive growth. The current environment is constrained by intense competition for customer funds from high-yield online savings accounts and money market funds, which has driven ASB’s cost of funds up to 2.33%. Mortgage origination, another key consumer product, is at a cyclical low due to high interest rates. Over the next 3-5 years, consumption patterns will continue to shift from branches to digital channels. The bank's main challenge will be to retain and deepen relationships to capture low-cost checking and operating accounts, which are less price-sensitive. A drop in interest rates is the most significant catalyst that could accelerate mortgage demand. In the massive U.S. retail deposit market, ASB is a small player competing with giants and nimble digital banks. It retains customers largely through inertia and bundled services but is vulnerable to price-shopping for savings products. The industry is consolidating, but new digital-only banks continue to emerge. A primary risk for ASB is the continued outflow of funds from its low-cost accounts into higher-cost certificates of deposit, which would further squeeze its net interest margin (High probability). Failure to adequately invest in its mobile and online platforms also presents a medium-probability risk of losing younger customers to competitors with superior digital experiences.
Wealth Management stands out as ASB's most promising growth driver. This segment provides stable, high-margin fee revenue that is not directly tied to interest rates. Current consumption is driven by cross-selling investment and trust services to the bank's existing commercial and affluent retail customers. Its growth is primarily constrained by its regional brand recognition and the scale of its advisory team. Looking ahead, this division is poised for increased consumption. ASB will likely focus on deepening its penetration of its existing client base, as business owners and high-net-worth individuals seek integrated banking and wealth solutions. The U.S. wealth management market is growing at a healthy 5-7% CAGR, and ASB's ability to capture a piece of this growth is critical. This segment generated ~$20 million in fee revenue in Q1 2024. In this fragmented market, ASB competes with wirehouses, independent advisors, and other banks. Its key advantage is offering a convenient, trusted, all-in-one financial relationship. A severe and prolonged equity market downturn is the main risk, as it would reduce assets under management and the associated fee income (Medium probability).
Ultimately, Associated Banc-Corp's future growth hinges on its ability to navigate its strategic position as a mid-sized regional bank. It lacks the scale of a national player and the focused niche of a specialized lender. Its future success will depend on flawlessly executing its relationship-banking model, leveraging its strong wealth management capabilities to drive fee income, and prudently managing the risks in its large CRE portfolio. Without a strategic acquisition to gain scale or a pivot to a more defensible lending niche, the bank risks being caught in a competitive vise, leading to a future of low, GDP-like growth. The bank's plans for digital transformation and capital deployment will be critical indicators of its ability to adapt and create shareholder value in an increasingly challenging industry landscape.
As of October 27, 2025, Associated Banc-Corp's stock price of $25.32 presents a mixed but compelling valuation picture. A triangulated approach suggests a fair value range where the current price sits comfortably, with potential for upside if earnings forecasts are met. A simple price check versus a fair value estimate of $27.00–$29.00 suggests a potential upside of around 10.6%, leading to a 'Fairly Valued' verdict. This makes it a solid candidate for a watchlist or a position for investors comfortable with execution risk on future earnings. A multiples approach highlights that while ASB's trailing P/E ratio of 26.08 is high, its forward P/E of 9.28 is very attractive, implying significant expected earnings growth. Applying a peer-average forward P/E multiple of 11.0x to 12.0x on its estimated future EPS of $2.73 suggests a fair value of $30.03 to $32.76. From an asset/NAV approach, the Price to Tangible Book Value (P/TBV) is a primary valuation tool. ASB's P/TBV is 1.17x, which is reasonable for a bank with a solid Return on Equity of 10.34%. Applying a conservative P/TBV multiple of 1.25x to its tangible book value per share of $21.69 implies a fair value of $27.11. The cash-flow/yield approach shows a competitive dividend yield of 3.60%. While the trailing payout ratio of 93.78% is a concern, the forward payout ratio is a much healthier 33.7%, suggesting the dividend is secure if earnings rebound as expected. Combining these methods, a fair value range of $27.00 to $29.00 is derived. The current price is slightly below this range, indicating the stock is fairly valued with a modest margin of safety.
Warren Buffett would view Associated Banc-Corp as a simple, understandable, and conservatively managed regional bank, which aligns with his preference for straightforward businesses. He would appreciate its solid capital base, reflected in a Common Equity Tier 1 (CET1) ratio of ~10.5%, as this provides a crucial margin of safety against economic stress. However, Buffett would likely be unenthusiastic about the bank's mediocre profitability, with a Return on Average Equity (ROAE) consistently around ~10%, which barely covers its cost of capital and signals a weak competitive moat. The bank's modest growth, tethered to the slow-growing Midwest economy, also fails to meet his criteria for a business that can intelligently reinvest capital at high rates. Ultimately, ASB is a fair business at a fair price (~1.3x Price-to-Tangible Book Value), not the wonderful business Buffett seeks. Forced to pick the best in the sector, he would likely favor Commerce Bancshares (CBSH) for its fortress balance sheet and industry-leading 15-17% ROAE, Wintrust Financial (WTFC) for its unique high-return niche businesses, and Huntington Bancshares (HBAN) for its dominant scale and efficiency. Buffett would likely avoid ASB, waiting for a potential price drop to below its tangible book value before considering it. A significant decline in valuation, creating a large margin of safety, could change his decision.
Charlie Munger’s approach to banking prioritizes simple, high-quality franchises with durable low-cost funding that generate high returns on equity without taking foolish risks. From this perspective, he would find Associated Banc-Corp (ASB) a decidedly mediocre and uninteresting investment in 2025. Munger would immediately focus on its Return on Average Equity (ROAE) of approximately 10%, a key measure of profitability, concluding it’s not a great business, especially when priced at 1.3 times its tangible book value. While its conservative capital level, shown by a Common Equity Tier 1 (CET1) ratio of ~10.5%, is prudent, it doesn’t compensate for the underlying lack of a strong competitive moat or superior profitability. If forced to choose top-tier banks, Munger would likely favor companies like Commerce Bancshares (CBSH) for its fortress balance sheet and ~16% ROAE, Wintrust Financial (WTFC) for its clever high-return business model, or Huntington Bancshares (HBAN) for its dominant scale and efficiency. Munger’s clear takeaway for retail investors would be to avoid ASB, as it represents a classic case of an average business at a fair price, which is not a recipe for outstanding long-term returns. He would only reconsider if the price fell to a significant discount to its tangible assets, perhaps below 0.8x tangible book value, but he would still much rather own a wonderful business.
Bill Ackman would likely view Associated Banc-Corp in 2025 as a classic activist target: a solid, understandable franchise that is significantly under-earning its potential. He would focus on the bank's relatively weak profitability metrics, such as its Return on Average Equity (ROAE) of approximately 10%, which trails best-in-class regional peers like Commerce Bancshares that consistently deliver ROAEs over 15%. Ackman's thesis would be that ASB's inefficiency, reflected in its ~60% efficiency ratio, presents a clear opportunity for operational improvements and aggressive cost-cutting to unlock substantial shareholder value. He would see a clear path to realizing this value through active engagement, potentially pushing management to either dramatically improve performance or pursue a sale to a larger, more efficient competitor at a significant premium. For retail investors, the takeaway is that ASB's value proposition from an Ackman perspective is not as a passive investment, but as a potential turnaround story where an activist could force changes to close the performance gap with its peers.
Associated Banc-Corp operates in the highly competitive and fragmented U.S. regional banking sector. Its identity is deeply rooted in its Midwest origins, focusing on traditional commercial banking, retail banking, and wealth management services. This community-focused model fosters strong local relationships, which is a key competitive advantage against larger, more impersonal national banks. However, this regional concentration also means its fortunes are closely tied to the economic health of the Great Lakes region, which has historically seen more moderate growth compared to other parts of the country. This creates a structural headwind when compared to banks located in high-growth markets in the Southeast or Southwest.
When measured against its direct competitors—other mid-sized regional banks—ASB often presents a picture of stability over dynamism. Its balance sheet is typically managed conservatively, with healthy capital ratios and a stable, low-cost deposit franchise. This approach prioritizes safety and soundness, which can be appealing during economic downturns. The trade-off, however, is a less aggressive growth posture. The bank has not engaged in the kind of large-scale, transformative acquisitions that have allowed peers like Huntington or Old National to rapidly expand their footprint and achieve greater economies of scale. Consequently, ASB's growth in loans and revenue tends to be more modest and organic.
From a performance perspective, ASB's key challenge is enhancing its profitability to match the top-tier of its peer group. Metrics like efficiency ratio (which measures non-interest expense as a percentage of revenue) and Return on Average Equity (ROAE) often lag behind more efficient or higher-growth competitors. While the bank generates reliable earnings and supports a consistent dividend, it struggles to produce the double-digit returns that shareholders in more dynamic banking franchises often enjoy. This performance gap is a central theme in its competitive comparison, forcing investors to weigh its safety and yield against the superior growth and returns offered elsewhere.
Ultimately, ASB's competitive position is that of a solid, middle-of-the-pack institution. It is neither a distressed bank facing existential threats nor a high-flying growth story. Its value proposition rests on its consistency, its strong regional identity, and its role as a reliable dividend payer. The detailed comparisons that follow will dissect how specific competitors leverage their unique strengths—be it scale, specialized business lines, or geographic advantages—to either outperform or underperform ASB on key financial and strategic metrics, providing a clearer picture of its relative strengths and weaknesses.
Wintrust Financial Corporation (WTFC) is a direct and formidable competitor to Associated Banc-Corp, particularly in the greater Chicago area, where both have a significant presence. WTFC differentiates itself with a more entrepreneurial culture and a collection of niche national lending businesses, which provide diversification and higher growth potential. While ASB operates as a more traditional, monolithic regional bank, WTFC's model of operating numerous distinct community bank charters under one holding company allows it to maintain a strong local feel while benefiting from centralized resources. This unique structure and its specialty finance focus give WTFC a clear edge in growth and profitability, even though ASB boasts a slightly more conservative risk profile.
In a head-to-head on Business & Moat, WTFC has a distinct advantage. Brand: Both have strong local brands, but WTFC's multi-charter model gives it a deeper perceived community connection across numerous Chicago suburbs, where it often holds a top 5 market share. ASB's brand is strong but more centralized. Switching Costs: High and similar for both, a feature of the industry. Scale: The two are similarly sized, with total assets for both in the $40-55 billion range, offering no clear winner on pure scale. Network Effects: WTFC's network is stronger due to its specialty lending platforms in areas like insurance premium financing, which create national networks and cross-selling opportunities that ASB's traditional model lacks. Regulatory Barriers: High and identical for both. Other Moats: WTFC's key moat is its expertise in niche commercial finance, which generates higher yields and diversifies its income away from standard commercial real estate. Winner: Wintrust Financial Corporation wins on Business & Moat due to its unique business model and diversified, higher-margin revenue streams.
Financially, Wintrust demonstrates superior performance. Revenue Growth: WTFC is better, consistently delivering high-single-digit to low-double-digit revenue growth (~9% TTM) driven by its niche businesses, while ASB's growth is more modest (~4% TTM). Profitability: WTFC is the clear winner, with a Return on Average Equity (ROAE) consistently above 14%, significantly better than ASB's ~10%. WTFC's Net Interest Margin (NIM) is also typically wider, around 3.6%, compared to ASB's 3.3%. Balance Sheet: ASB is slightly better, maintaining a higher Common Equity Tier 1 (CET1) ratio (~10.5% vs. WTFC's ~9.8%), indicating a larger capital cushion. Cash Generation & Dividends: Both are solid, but WTFC's higher earnings provide more robust dividend coverage, despite its lower yield. Overall Financials Winner: Wintrust Financial Corporation for its superior growth and profitability.
Looking at Past Performance, WTFC has been the stronger performer. Growth: WTFC wins, with a 5-year EPS CAGR of ~10% that handily beats ASB's ~3%. Margins: WTFC wins, having maintained a wider and more resilient NIM through different rate cycles. TSR: WTFC is the decisive winner, generating a 5-year total shareholder return of nearly 80% compared to ASB's ~25%. Risk: ASB wins on risk, as its stock has a lower beta (~1.1 vs. ~1.3) and its loan book has less exposure to potentially volatile national niche markets. Overall Past Performance Winner: Wintrust Financial Corporation, as its exceptional shareholder returns and growth far outweigh its slightly elevated risk profile.
For Future Growth, WTFC holds a significant edge. Revenue Opportunities: WTFC is better positioned, with its established national lending platforms poised to capture market share regardless of Midwest economic conditions. ASB's growth is more tethered to its local region. Cost Efficiency: WTFC has the edge, as its higher revenue growth allows for greater operating leverage, even if its efficiency ratio (~57%) is not dramatically different from ASB's (~60%). Demand Signals: Demand for WTFC's specialty finance products, such as life insurance premium financing, is less cyclical than the general commercial lending ASB relies on. Overall Growth Outlook Winner: Wintrust Financial Corporation due to its diversified growth engines and lesser dependence on a single regional economy.
From a Fair Value perspective, WTFC commands a premium, but it appears justified. Valuation: WTFC trades at a higher Price-to-Tangible Book Value (P/TBV) of ~1.7x compared to ASB's ~1.3x. Its forward P/E is also higher at ~10x versus ASB's ~9x. Dividend Yield: ASB is better for income investors, with a yield around 3.9% versus WTFC's ~2.0%. Quality vs. Price: WTFC's premium valuation is a direct reflection of its superior historical growth and higher profitability (ROAE). The market is pricing it as a higher-quality franchise. Better Value Today: Associated Banc-Corp is the better value on a pure metrics basis, especially for dividend-focused investors, but WTFC is arguably the better long-term investment, making this a close call.
Winner: Wintrust Financial Corporation over Associated Banc-Corp. WTFC is a superior banking franchise due to its differentiated business model, higher growth profile, and more robust profitability. Its key strengths are its niche national lending businesses that deliver a higher ROAE (>14%) and faster growth (~10% EPS CAGR) than ASB can achieve with its traditional model. ASB's main advantages are its higher dividend yield and slightly stronger capital position (~10.5% CET1 ratio). However, these strengths are not enough to overcome the significant gap in performance and shareholder returns. Wintrust has proven its ability to generate superior returns, making it the clear winner for growth-oriented investors.
Comerica Incorporated (CMA) represents a larger, more specialized competitor to Associated Banc-Corp. With assets exceeding $70 billion, CMA focuses heavily on commercial banking rather than retail, with a geographic footprint concentrated in Texas, California, and Michigan. This business model makes its financial performance highly sensitive to business credit cycles and interest rates, but it also provides a higher-margin, national platform. ASB, in contrast, is a more balanced, traditional regional bank. The comparison highlights a strategic trade-off: CMA's focused commercial model versus ASB's diversified but lower-growth community banking approach.
Analyzing their Business & Moat, the two banks operate in different weight classes. Brand: CMA has a strong national brand in commercial lending, particularly in its target markets, ranking as a top 10 commercial lender in several categories. ASB's brand is purely regional. Switching Costs: High for both, but arguably higher for CMA's commercial clients, whose complex treasury management services are deeply integrated into their operations. Scale: CMA is significantly larger, with assets nearly double that of ASB (~$79B vs. ~$41B), giving it major advantages in technology spending and product breadth. Network Effects: CMA benefits from network effects within its industry specializations (e.g., energy, technology), connecting businesses across its national footprint. ASB's network is local. Regulatory Barriers: High and identical for both. Winner: Comerica Incorporated wins decisively on Business & Moat due to its superior scale, national brand recognition in its niche, and stronger client entrenchment.
Financially, Comerica's model produces more variable but higher-quality earnings. Revenue Growth: CMA is better, demonstrating stronger revenue growth during periods of economic expansion and rising rates due to its asset-sensitive balance sheet. TTM revenue growth was recently ~10% for CMA vs. ~4% for ASB. Profitability: CMA typically wins, with a long-term ROAE target in the mid-teens (~15%), well above ASB's ~10%. Its efficiency ratio is also superior, often below 58%, compared to ASB's ~60%. Balance Sheet: ASB is better. CMA's reliance on commercial deposits makes its funding more volatile than ASB's stable, core retail deposit base. ASB's loan-to-deposit ratio is a more conservative ~85% vs. CMA's ~95%. Dividends: CMA is slightly better, with a similar yield to ASB (~4.0%) but a stronger history of dividend growth backed by higher earnings. Overall Financials Winner: Comerica Incorporated due to its superior profitability and efficiency, despite a more volatile funding profile.
In terms of Past Performance, CMA's cyclical nature is evident. Growth: CMA wins. Its 5-year EPS CAGR of ~6% is double ASB's ~3%, though it has experienced deeper troughs during downturns. Margins: CMA wins. Its NIM is structurally higher due to its commercial loan focus and often exceeds 3.8% in favorable rate environments, a level ASB rarely reaches. TSR: CMA wins, with a 5-year total shareholder return of ~35% versus ASB's ~25%. Risk: ASB wins. ASB's stock is less volatile (beta ~1.1 vs. ~1.4 for CMA), and its diversified loan book provides more stability than CMA's concentration in commercial loans. Overall Past Performance Winner: Comerica Incorporated, as its periods of strong outperformance have generated superior long-term returns for shareholders.
Looking at Future Growth, CMA has a higher ceiling. Revenue Opportunities: CMA has the edge. Its presence in high-growth states like Texas and California provides a more robust economic backdrop for loan demand compared to ASB's Midwest focus. Cost Efficiency: CMA has an edge, with ongoing technology and process improvement initiatives that should allow it to leverage its scale more effectively. Market Demand: CMA's focus on commercial lending makes it a primary beneficiary of business investment and expansion, giving it more upside in a strong economy. Overall Growth Outlook Winner: Comerica Incorporated due to its superior geographic positioning and leverage to business capital spending.
At Fair Value, the market prices in their different risk profiles. Valuation: They often trade at similar valuations. Both typically have a P/TBV ratio in the 1.3x-1.5x range and a forward P/E of 9-11x. Currently, ASB is at ~1.3x P/TBV and CMA is at ~1.4x. Dividend Yield: CMA is slightly better, with a current yield of ~4.1% compared to ASB's ~3.9%. Quality vs. Price: CMA's valuation does not seem to fully capture its superior profitability and growth potential, suggesting it may be undervalued relative to ASB, which is priced appropriately for its lower growth profile. Better Value Today: Comerica Incorporated offers a more compelling risk/reward, as its valuation is not significantly higher than ASB's despite being a larger, more profitable, and faster-growing bank.
Winner: Comerica Incorporated over Associated Banc-Corp. CMA is the stronger company due to its greater scale, superior profitability, and better positioning in high-growth markets. Its key advantages include a much higher ROAE (~15% vs ~10% for ASB) and a business model geared towards the attractive commercial banking segment. ASB's main strengths are its stable, low-cost deposit base and a more conservative, less volatile profile. However, these defensive characteristics are not enough to compensate for its structural disadvantages in growth and returns. For a long-term investor, CMA offers a clearer path to capital appreciation and dividend growth, making it the superior choice.
Zions Bancorporation (ZION) is a large regional bank with a unique geographic footprint across the Intermountain West, a region known for its strong demographic and economic growth. This contrasts sharply with ASB's concentration in the slower-growing Midwest. Zions also has a more complex balance sheet, with a higher concentration of commercial real estate loans and a greater sensitivity to interest rate changes. The comparison highlights the difference between a bank benefiting from strong regional tailwinds (Zions) and one operating in a mature, stable market (ASB), with Zions offering higher growth potential but also carrying higher risk.
On Business & Moat, Zions' geography is its key asset. Brand: Both have strong regional brands. Zions operates under several local bank brands (e.g., Amegy Bank in Texas, California Bank & Trust), giving it a strong community feel, similar to Wintrust's model. It holds a #1 deposit market share in Utah. Switching Costs: High and similar for both. Scale: Zions is significantly larger, with total assets over $87 billion compared to ASB's $41 billion. This gives Zions a major scale advantage. Network Effects: Zions has a stronger network, particularly for businesses operating across the fast-growing Western states it serves. Regulatory Barriers: High and identical. Winner: Zions Bancorporation wins on Business & Moat due to its superior scale and its entrenched position in more economically dynamic markets.
From a Financial perspective, Zions is more volatile but can be more profitable. Revenue Growth: Zions is better, with its loan growth historically outpacing ASB's due to the stronger economies in its footprint. Its 5-year revenue CAGR is ~5% versus ASB's ~2%. Profitability: Zions wins. Its ROAE has often exceeded 12% during stable periods, better than ASB's consistent ~10%. Its Net Interest Margin (NIM) is also highly sensitive to rates and can expand rapidly, often reaching above 3.5%. Balance Sheet: ASB is better. Zions has a higher concentration of commercial real estate (CRE) loans, which carries more risk, and its deposit base has been more volatile. ASB’s capital levels are also typically higher, with a CET1 ratio of ~10.5% versus Zions' ~10.2%. Overall Financials Winner: Zions Bancorporation, as its higher profitability and growth potential outweigh the risks associated with its balance sheet composition.
Reviewing Past Performance, Zions' higher beta nature is clear. Growth: Zions wins, with a 5-year EPS CAGR of ~5% versus ~3% for ASB. Margins: Zions has shown greater margin expansion in rising rate environments, but also more compression when rates fall, making it a mixed comparison. TSR: Zions wins, generating a 5-year total shareholder return of ~30%, slightly ahead of ASB's ~25%, though with much more volatility. Risk: ASB is the decisive winner. Zions' stock has a much higher beta (~1.5) and has experienced significantly larger drawdowns during periods of market stress, particularly when concerns over CRE or interest rates arise. Overall Past Performance Winner: Zions Bancorporation, but by a narrow margin, as its superior returns have come with significantly higher risk.
For Future Growth, Zions is far better positioned. Revenue Opportunities: Zions has a massive edge. Its markets in Utah, Arizona, and Texas are among the fastest-growing in the nation, providing a powerful tailwind for organic loan and deposit growth. Market Demand: The demographic influx and business formation in the Intermountain West create a level of demand that ASB's Midwest markets cannot match. Cost Efficiency: Even. Both banks operate with similar efficiency ratios in the ~60% range. Overall Growth Outlook Winner: Zions Bancorporation, as its geographic advantage is one of the most compelling among all regional banks and provides a clear path to long-term growth.
In terms of Fair Value, the market often discounts Zions for its risks. Valuation: Zions frequently trades at a discount to peers due to its perceived risks. Its P/TBV ratio is often below ASB's, currently at ~1.2x versus ASB's ~1.3x. Its forward P/E is also lower at ~8x. Dividend Yield: Zions is better, with a current yield of ~4.2% versus ASB's ~3.9%. Quality vs. Price: Zions offers a classic value proposition: you get access to a high-growth franchise at a discounted valuation, but you must accept higher volatility and balance sheet risk. Better Value Today: Zions Bancorporation is the better value, as its discounted valuation more than compensates for its risk profile, especially for investors with a long-term horizon who can look past short-term volatility.
Winner: Zions Bancorporation over Associated Banc-Corp. Zions is the more attractive investment due to its powerful geographic tailwinds, which provide a clear and sustainable path for long-term growth that ASB lacks. Its key strengths are its presence in high-growth states, leading to superior loan growth, and its higher potential profitability. ASB's primary advantages are its lower-risk loan portfolio and greater stability. However, ASB's safety comes at the cost of being anchored to a slow-growth economy. Zions' discounted valuation (~1.2x P/TBV) and higher dividend yield make it a compelling opportunity for investors to buy into a superior growth story at a reasonable price, making it the clear winner.
Old National Bancorp (ONB) is an exceptionally close competitor to Associated Banc-Corp, with both operating as mid-sized banks with a deep focus on the Midwest. ONB, however, has pursued a more aggressive growth-by-acquisition strategy, most notably with its merger with First Midwest Bancorp, which significantly expanded its scale and geographic reach, particularly in the Chicago market. This has made ONB a more dynamic, though slightly more leveraged, institution than the more staid and organically-focused ASB. The comparison is a study in two different strategies for navigating the mature Midwest market.
Dissecting their Business & Moat, ONB now has a slight edge due to its expanded scale. Brand: Both possess strong, century-old regional brands. ONB's brand recognition now covers a wider swath of the Midwest post-merger, giving it an advantage in market reach. ASB, however, maintains a highly concentrated and dominant brand in its home state of Wisconsin with a top 3 deposit market share. Switching Costs: High and identical for both, a core advantage of the retail and commercial banking model. Scale: ONB has pulled ahead, with total assets of over $48 billion compared to ASB's $41 billion, providing it with better operating leverage. Network Effects: ONB's larger and more contiguous branch network (over 250 branches vs. ASB's approx. 200) provides a slightly better network for commercial clients. Regulatory Barriers: High and identical for both. Winner: Old National Bancorp wins narrowly on Business & Moat due to its superior scale and broader geographic reach following its recent M&A activity.
From a Financials perspective, ONB's strategy has yielded better profitability. Revenue Growth: ONB is better, with recent TTM revenue growth of ~8% (boosted by its merger) far outpacing ASB's more modest ~4%. Profitability: ONB has the edge. Its Net Interest Margin (NIM) is slightly wider at ~3.5% versus ASB's ~3.3%. More importantly, its Return on Average Equity (ROAE) is stronger at ~11.5% compared to ASB's ~10.0%. Balance Sheet: ASB is slightly better. ASB maintains a higher Common Equity Tier 1 (CET1) ratio of ~10.5% versus ONB's ~10.1%, indicating a larger cushion against losses. Dividends: They are even, with both offering attractive yields around 3.5-4.0% and sustainable payout ratios. Overall Financials Winner: Old National Bancorp, as its superior profitability and growth metrics outweigh ASB's slightly more fortified capital position.
In Past Performance, ONB's M&A-fueled growth stands out. Growth: ONB wins. Its 5-year EPS CAGR of ~7% is more than double ASB's ~3%. Margins: ONB wins, as it has demonstrated a better ability to expand its NIM in the current rate environment. TSR: ONB is the clear winner, having delivered a 5-year total shareholder return of ~45% versus ASB's ~25%. Risk: ASB wins. Its stock has shown lower volatility (beta of ~1.1 vs. ONB's ~1.3), and its organic strategy avoids the integration risks associated with large mergers. Overall Past Performance Winner: Old National Bancorp, as its superior growth and shareholder returns are compelling, even with the added risk.
Looking at Future Growth, ONB has a clearer path forward. Revenue Opportunities: ONB has an edge. Having successfully integrated First Midwest, it now has a larger platform in more diverse markets to drive loan growth. Cost Efficiency: ONB has the edge. It is still in the process of realizing cost synergies from its merger, with a stated goal of getting its efficiency ratio below 58%, which would give it a distinct advantage over ASB's ~60%. M&A: ONB's successful track record makes it a more credible consolidator in the region, providing an additional avenue for future growth. Overall Growth Outlook Winner: Old National Bancorp due to its larger scale, synergy opportunities, and proven M&A capability.
Regarding Fair Value, the two banks are priced very similarly. Valuation: Both trade at nearly identical valuations. ASB trades at a Price-to-Tangible Book Value (P/TBV) of ~1.3x, while ONB is just slightly higher at ~1.4x. Their forward P/E ratios are both in the 9-10x range. Dividend Yield: ASB is marginally better, with a current yield of ~3.9% compared to ONB's ~3.7%. Quality vs. Price: ONB's slight valuation premium is easily justified by its stronger growth profile and higher profitability. It appears to be the higher-quality franchise for a very similar price. Better Value Today: Old National Bancorp. Given the minimal valuation difference, an investor is getting a faster-growing and more profitable bank for nearly the same price.
Winner: Old National Bancorp over Associated Banc-Corp. ONB emerges as the stronger company due to its successful execution of a growth-by-acquisition strategy, which has given it superior scale and profitability. Its key strengths are its higher ROAE (~11.5%) and a clearer path to future growth driven by its expanded footprint. ASB's main advantage is its slightly more conservative balance sheet, evidenced by a higher CET1 ratio (~10.5%). However, in a head-to-head comparison of two very similar banks, ONB has demonstrated a better ability to create shareholder value through strategic action, making it the more compelling investment.
Based on industry classification and performance score:
Associated Banc-Corp operates as a traditional, Midwest-focused regional bank with core businesses in commercial lending, retail banking, and wealth management. The company's strength lies in its efficient branch network and a well-diversified, stable deposit base that is not overly reliant on volatile funding sources. However, its business model faces challenges from a low proportion of noninterest-bearing deposits, which pressures funding costs, and a lack of a distinct lending niche to differentiate it from competitors. The investor takeaway is mixed; ASB is a solid community-focused bank but lacks a strong, defensible moat to protect it from broader industry pressures and larger, more technologically advanced rivals.
The bank maintains a healthy, though not exceptional, balance of fee-based income that represents nearly a quarter of total revenue, helping cushion its earnings from fluctuations in interest rates.
Diversifying revenue away from interest-rate-sensitive lending is key to creating a more resilient earnings stream. ASB's noninterest income contributes 24.2% of its total revenue, a figure that is IN LINE with the sub-industry average of 20-30%. This provides a solid, though not superior, buffer against net interest margin compression. The quality of this fee income is strong, with the largest and most consistent contributor being wealth management fees ($20.4 million in Q1 2024), which are recurring and relationship-driven. Other sources like service charges and card fees provide further diversification. While its mortgage banking income is currently minimal, this is an industry-wide cyclical issue. Overall, ASB's fee income structure is a positive attribute that supports its business model effectively.
Associated Banc-Corp features a well-diversified deposit base across consumer and commercial clients with a low reliance on less stable brokered deposits, indicating a healthy and stable funding mix.
A stable funding profile requires a diverse mix of depositors, reducing the risk of sudden outflows from any single source. ASB performs well on this metric. Its deposit base is balanced across its main operating segments, with Consumer & Business Banking contributing 45%, Commercial & Institutional 37%, and Wealth Management & Corporate 18%. This shows a healthy blend of retail and business customers. More importantly, the bank's reliance on brokered deposits—often considered a less stable, 'hot money' funding source—was low at approximately 5.5% of total deposits in early 2024. This level is well BELOW the 10% threshold that can sometimes be a red flag for regulators and investors, positioning ASB's funding base as relatively stable and sourced from genuine customer relationships.
Associated Banc-Corp operates as a generalist commercial and consumer lender, lacking a distinct, specialized lending niche that would provide a strong competitive advantage or pricing power.
A true competitive moat in banking often comes from a deep, defensible expertise in a specific lending niche, which can lead to better risk assessment and pricing power. ASB's loan portfolio, however, does not demonstrate such a focus. Its portfolio is broadly diversified across Commercial & Industrial (30%), Commercial Real Estate (39%), and Consumer loans (31%). While the bank has teams dedicated to sectors like manufacturing and healthcare, it operates primarily as a generalist lender in its Midwest markets. This lack of a defining niche means it competes head-on with a wide range of other banks on general terms like price and service, without the protective barrier that specialization provides. Furthermore, its significant 39% concentration in CRE, a sector facing cyclical headwinds, represents a notable risk without a clear focus on a lower-risk sub-segment like owner-occupied properties.
The bank's deposit base shows a significant weakness due to a below-average proportion of noninterest-bearing accounts, making its funding costs more sensitive to interest rate changes.
A bank's ability to attract and retain low-cost, stable deposits is fundamental to its profitability. In this regard, ASB shows a notable vulnerability. As of the first quarter of 2024, its noninterest-bearing deposits constituted only 19% of total deposits. This is WEAK and meaningfully BELOW the sub-industry average, which historically has been in the 25-30% range even after declining in the recent high-rate environment. Because these 'free' deposits are a small portion of its funding, ASB must pay interest on a larger share of its deposit base, leading to a higher cost of funds (2.33% in Q1 2024). This directly compresses its net interest margin and makes earnings more volatile as interest rates fluctuate. While its level of uninsured deposits is manageable at around 35%, the poor composition of its deposit mix is a clear structural disadvantage.
Associated Banc-Corp maintains an efficient and productive branch network in its core Midwest markets, with above-average deposits per branch that indicate strong local market penetration and operational leverage.
While the strategic importance of physical branches is declining across the banking industry, a well-managed network remains a key asset for gathering low-cost deposits. Associated Banc-Corp demonstrates strength in this area through efficiency rather than sheer size. As of early 2024, the bank operated approximately 201 branches holding $32.7 billion in deposits, which translates to roughly $163 million in deposits per branch. This figure is strong and sits comfortably ABOVE the regional bank sub-industry average, which typically ranges from $100 million to $120 million. This high productivity suggests that ASB's branches are well-located in valuable markets and are effective at attracting and retaining customer funds. The bank's ongoing strategy of consolidating its network reflects prudent capital management, optimizing its physical footprint to match modern banking habits without sacrificing its core deposit base.
Associated Banc-Corp's recent financial statements show a strong recovery after a challenging prior year. In its latest quarter, the bank reported robust revenue growth of 20% and a significant 16.27% increase in net interest income, its core earnings driver. Profitability has rebounded, with return on equity now at a healthier 10.34%. While credit reserves appear adequate and efficiency is strong, a high dividend payout ratio of 93.78% raises concerns about sustainability. The overall investor takeaway is mixed to positive, acknowledging the impressive turnaround but remaining cautious about the dividend coverage.
The bank maintains a healthy loan-to-deposit ratio and an adequate capital level, providing a reasonable buffer against potential losses and funding stress.
Associated Banc-Corp's capital and liquidity appear solid. The bank's loans-to-deposits ratio is 87.6%, calculated from its $30.6 billion in net loans and $34.9 billion in total deposits. This is a healthy level, indicating that it funds its loans with a stable base of customer deposits. Its Tangible Common Equity (TCE) to Total Assets ratio, a key measure of loss-absorbing capital, is 7.97%. While not exceptionally high, this is generally considered in line with the 7-9% average for regional bank peers. Although specific regulatory capital ratios like CET1 were not provided, these metrics suggest the bank has a sufficient buffer to withstand moderate economic shocks.
Associated Banc-Corp appears adequately reserved for potential loan defaults, with its allowance for credit losses in line with industry standards.
The bank's readiness for credit losses seems appropriate. As of the latest quarter, its allowance for credit losses stood at $378.34 million against a gross loan portfolio of $30.95 billion, resulting in a reserve ratio of 1.22%. This level of reserves is in line with the typical industry benchmark of 1.2% to 1.5% for regional banks, suggesting a prudent approach to managing credit risk. The bank also continues to build its reserves by recording a provisionForLoanLosses of $16 million in the quarter. While data on nonperforming loans was not available to assess the full coverage ratio, the overall allowance level indicates the bank is reasonably prepared for potential defaults.
The bank's earnings are sensitive to interest rate changes, with rising funding costs putting pressure on profitability, and a lack of detailed disclosure on its asset mix creates uncertainty for investors.
Associated Banc-Corp's income statement shows that its funding costs are rising quickly. In the most recent quarter, totalInterestExpense reached $251.37 million, consuming a significant portion of the $556.59 million in totalInterestIncome. This trend suggests the bank's profitability is sensitive to interest rate movements. The balance sheet contains a large investment securities portfolio of $9.9 billion, but key details such as its duration or the extent of unrealized losses are not provided. These unrealized losses can negatively impact the bank's tangible book value, a core measure of its net worth. Without this information, it is difficult for investors to fully assess the risk to the bank's capital if interest rates continue to change unexpectedly.
The bank is demonstrating excellent core earning power, with strong double-digit growth in its net interest income, a key measure of profitability from its main business of lending.
The core profitability of Associated Banc-Corp's lending operations is a clear highlight. In the third quarter, its net interest income (NII) — the difference between what it earns on loans and pays on deposits — grew by a robust 16.27% year-over-year to $305.22 million. This strong growth is a primary driver of the bank's overall earnings and shows it is successfully managing its loan and deposit pricing in the current interest rate environment. While the specific Net Interest Margin (NIM) percentage is not provided, this powerful NII growth is a very positive sign of the health and momentum of the bank's fundamental business.
The bank operates with strong cost discipline, as shown by an efficiency ratio well below the industry standard, allowing more revenue to convert into profit.
Associated Banc-Corp demonstrates strong expense management. Its efficiency ratio in the most recent quarter was 55.94%, which means it cost the bank about 56 cents to generate one dollar of revenue. This is a solid result, as an efficiency ratio below 60% is considered very good for a regional bank. This performance indicates that the bank is effectively controlling its non-interest expenses, such as salaries and building costs, relative to its income. This cost control is a key strength that directly supports higher profitability for shareholders.
Associated Banc-Corp's past performance presents a mixed but concerning picture. While the bank has successfully grown its core loan and deposit base and has a long track record of increasing its dividend, these positives are overshadowed by significant weaknesses. Over the last five years, and particularly in the last two, earnings have been volatile and have declined sharply, with Earnings Per Share (EPS) falling from $2.36 in 2022 to just $0.73 in 2024. This earnings collapse has pushed its return on equity (2.8% in 2024) and total shareholder returns well below those of key competitors like Wintrust Financial and Comerica. The investor takeaway is negative, as the operational struggles and poor recent profitability raise serious questions about the bank's ability to create shareholder value.
The bank has demonstrated consistent and healthy growth in both its loan portfolio and core deposit base over the last five years while maintaining a prudent balance sheet.
A key strength in Associated Banc-Corp's historical performance is its ability to grow its core business. From fiscal year-end 2020 to 2024, gross loans increased from $24.5 billion to $29.8 billion, while total deposits grew from $26.5 billion to $34.6 billion. This represents steady market share capture and expansion of its customer base. This growth appears to have been managed prudently.
The bank's loan-to-deposit ratio has remained in a conservative range, ending 2024 at 85.9%. This indicates that the bank is not overly aggressive in its lending and is funding its loan growth primarily through stable customer deposits rather than more volatile wholesale funding. This disciplined approach to balance sheet management is a positive historical trait that signals lower risk compared to some more aggressive peers.
The bank's profitability has been severely damaged by rapidly rising deposit costs, and its operational efficiency has deteriorated significantly over the past two years.
Despite growing its Net Interest Income (NII) from $726 million in 2021 to $1.05 billion in 2024, the underlying trend is concerning. This growth was driven by rising interest rates, but the bank's funding costs exploded, with interest expense soaring from just $72 million in 2021 to over $1 billion in 2024. This indicates that the bank's Net Interest Margin (NIM), a key measure of profitability, has come under intense pressure as it has had to pay up for deposits.
At the same time, the bank's cost control has worsened. Its efficiency ratio, calculated as non-interest expenses divided by revenue, deteriorated from 61.9% in 2022 to a very poor 85.9% in 2024. While some of this is due to non-recurring items in non-interest income, the trend in non-interest expense has been consistently upward. This performance compares unfavorably to more efficient peers like Huntington (<55%) and Commerce Bancshares (low 50s%), indicating a lack of both pricing power and cost discipline.
The bank's earnings per share have been extremely volatile and have collapsed over the past two years, reflecting poor performance and significant underachievement compared to peers.
Associated Banc-Corp's earnings track record is poor. After showing strong growth and peaking at $2.36 per share in 2022, EPS fell by over 50% to $1.14 in 2023 and then fell again to $0.73 in 2024. This is not a record of consistent growth but one of sharp decline. The 3-year compound annual growth rate for EPS from FY2021 to FY2024 is a dismal -24%.
This performance is particularly weak when compared to competitors. The provided analysis notes ASB's 5-year EPS CAGR is ~3%, the lowest among its peers, with competitors like Wintrust (~10%) and Old National (~7%) delivering far superior growth. This poor earnings history has also crushed the bank's profitability, with its 3-year average Return on Equity (ROE) from 2022-2024 being just 5.5%, a very weak figure for a bank.
After a period of benign credit, the bank has significantly increased its provision for credit losses over the last two years, signaling rising concern over the health of its loan portfolio.
Associated Banc-Corp's credit history shows a recent negative turn. Following the pandemic, the bank recorded a net benefit from its provision for credit losses in 2021 (-$88 million), indicating a very strong credit environment. However, this trend has reversed sharply. The bank set aside $33 million for losses in 2022, which then jumped to $83 million in 2023 and remained high at $85 million in 2024. This sustained high level of provisioning is a direct drain on earnings and reflects management's expectation of higher future loan losses.
While specific data on net charge-offs is not provided, the provisioning trend is a leading indicator of credit quality. The bank has been increasing its allowance for loan losses, which grew from 1.09% of gross loans in 2022 to 1.22% in 2024. While building reserves is a prudent measure, the necessity to do so suggests that the underlying risk within the loan book is increasing, making its credit performance less stable than in the recent past.
Associated Banc-Corp has a consistent history of raising its dividend, but an unsustainable payout ratio in 2024 and recent shareholder dilution are significant red flags.
On the surface, Associated Banc-Corp's dividend record looks strong, with the dividend per share rising every year from $0.72 in 2020 to $0.89 in 2024. This commitment to returning capital is a positive for income-focused investors. However, the foundation of this dividend has weakened considerably. As earnings collapsed, the dividend payout ratio, which was a healthy 37% in 2022, ballooned to 77% in 2023 and an unsustainable 122% in 2024, meaning the bank paid out more in dividends than it earned.
Furthermore, the bank's capital return policy has been undermined by share issuance. While ASB engaged in modest buybacks in prior years, its common shares outstanding increased from 147.8 million at the end of 2022 to 163.9 million at the end of 2024, an increase of nearly 11%. This dilution works directly against shareholder interests. A reliable capital return program should involve sustainable dividends and net share count reduction over time, a test which ASB currently fails.
Associated Banc-Corp's future growth outlook is mixed, characterized by stability rather than dynamic expansion. The bank's primary strength lies in its wealth management division, which provides a steady stream of fee income, and an efficient branch network that supports a stable, relationship-based deposit base. However, significant headwinds will likely limit growth over the next 3-5 years, including high funding costs from a weak deposit mix, a lack of a specialized lending niche, and considerable exposure to a challenged commercial real estate market. Compared to peers with stronger deposit franchises or more focused lending strategies, ASB's growth potential appears constrained. The investor takeaway is therefore mixed; while the bank is a solid, traditional institution, its path to meaningful earnings growth is unclear.
The bank's loan growth outlook is muted by its significant exposure to the challenged commercial real estate sector and a generalist approach that lacks a clear growth engine.
A bank's core function is lending, and ASB's forward outlook here is cautious. Management has not provided explicit loan growth guidance for the upcoming year, suggesting uncertainty. The primary concern is the bank's large concentration in commercial real estate (39% of loans), a sector facing significant headwinds that will likely limit new originations and increase credit vigilance. While its commercial and industrial loan book provides some stability, the lack of a specialized, high-growth lending niche means it is competing in a crowded market with limited pricing power. Without a clear pipeline in a growing segment to offset the challenges in CRE, the prospects for robust, bank-wide loan growth appear weak.
With no recent M&A activity and a modest buyback program, the bank's capital deployment strategy appears conservative and unlikely to be a significant driver of shareholder value growth in the near term.
For a regional bank of ASB's size, disciplined capital deployment through mergers, acquisitions, or share buybacks is a key lever for growth. However, the bank has not announced any significant acquisitions recently, indicating a cautious approach in a consolidating industry. Its share repurchase program, while active, is not aggressive enough to meaningfully boost earnings per share. In Q1 2024, the bank repurchased ~$25 million of its stock. While maintaining a strong capital position with a CET1 ratio comfortably above regulatory requirements is prudent, the lack of a clear, forward-looking strategy to deploy this capital for growth is a weakness. Without a visible M&A pipeline or a more substantial buyback authorization, the bank's capital plan points toward stability rather than accelerated growth.
The bank is effectively optimizing its physical footprint by closing branches while maintaining high productivity per location, but must demonstrate stronger growth in digital user adoption to secure future efficiency.
Associated Banc-Corp has shown a commitment to optimizing its branch network, a crucial step for a modern regional bank. The bank's strategy involves consolidating branches to reduce fixed costs, and its execution appears strong, with deposits per branch at an impressive ~$163 million, well above the industry average. This indicates that its remaining branches are in valuable locations and are highly productive. However, the other side of this strategy is digital growth, and the bank has not provided clear targets for growth in digital active users or specific cost savings from this channel shift. While its branch optimization is a clear positive, the lack of explicit forward-looking digital targets makes it difficult to assess the full scope and future impact of its efficiency plans. Given the strong performance of its physical assets, this factor is a pass, but investors should monitor for more detailed disclosures on digital engagement.
Significant pressure on funding costs, driven by a low proportion of noninterest-bearing deposits, is expected to weigh heavily on the bank's net interest margin (NIM), posing a major headwind to future earnings.
The outlook for Net Interest Margin (NIM) is arguably the most significant challenge for Associated Banc-Corp. The bank's funding base is structurally disadvantaged due to its low level of noninterest-bearing deposits (only 19% of total). This forces the bank to pay higher rates to attract and retain funds, resulting in a cost of deposits of 2.33% in Q1 2024. Management's guidance has reflected this pressure, and the path to NIM expansion appears difficult without a significant, favorable shift in the interest rate environment or a dramatic improvement in its deposit franchise. This persistent funding cost pressure directly limits the bank's core profitability and is a clear structural weakness compared to peers with stronger, lower-cost deposit bases.
The bank's strong wealth management division provides a solid foundation for fee income, but the lack of explicit growth targets for this or other noninterest income streams clouds the outlook for revenue diversification.
Fee-based income is a critical stabilizer for banks, and ASB's wealth management arm is its strongest asset in this regard, contributing over a quarter of its noninterest income. This provides a recurring, high-quality revenue stream. However, management has not provided specific public targets for growth in wealth management assets under management (AUM) or revenue. Similarly, there is little forward guidance on expanding other fee sources like treasury management or card services. While the existing base of fee income is healthy at nearly 25% of total revenue, a clear strategic plan to grow this contribution is not apparent. Without stated goals, investors cannot gauge the ambition or likely success of its plans to further diversify away from interest-rate-sensitive earnings.
Based on its forward-looking earnings estimates and tangible book value, Associated Banc-Corp (ASB) appears to be fairly valued to slightly undervalued. As of October 27, 2025, with a stock price of $25.32, the company trades at a significant discount based on expected future earnings but at a premium to its tangible book value. Key metrics influencing this valuation are its low forward P/E ratio of 9.28, a price-to-tangible-book (P/TBV) value of 1.17, and a dividend yield of 3.60%. The stock is currently trading in the upper half of its 52-week range of $18.32 to $28.18. The investor takeaway is cautiously optimistic, as the valuation hinges on the bank's ability to meet strong earnings growth forecasts.
The stock trades at a slight premium to its tangible book value, which is well-supported by its current profitability metrics like Return on Tangible Common Equity.
Price to Tangible Book Value (P/TBV) is a cornerstone valuation metric for banks. ASB's tangible book value per share as of the last quarter was $21.69. With a stock price of $25.32, the P/TBV ratio is 1.17x. For a bank to trade above its tangible book value (a multiple greater than 1.0x), it should be generating a Return on Tangible Common Equity (ROTCE) that exceeds its cost of equity. ASB's most recent quarterly Return on Equity (ROE) was 10.34%. While ROTCE is not directly provided, it is typically higher than ROE for banks with goodwill, and can be estimated to be in the 12-14% range. A bank with this level of profitability can justify a P/TBV multiple between 1.1x and 1.4x. Therefore, 1.17x appears to be a reasonable, and not excessive, valuation. It suggests the market is pricing the bank fairly for its ability to generate profits from its asset base.
The bank's Price-to-Book ratio is appropriately aligned with its Return on Equity, suggesting the market is fairly pricing its profitability.
A bank's Price-to-Book (P/B) multiple should reflect its ability to generate profits, measured by Return on Equity (ROE). ASB's P/B ratio is 0.89 (based on a book value per share of $28.60), while its most recent annualized ROE is 10.34%. An ROE of over 10% is generally considered a sign of a healthy, profitable bank. Typically, a bank with an ROE around 10% would be expected to trade at or near its book value (a P/B ratio of 1.0x). Trading at a slight discount (0.89x) suggests the market may not be giving full credit for its earnings power, or it may be pricing in some risks. Given that the ROE is solid, the P/B ratio appears well-aligned, if not slightly conservative. This indicates that the stock is not overvalued based on its profitability and may even offer some upside if it can sustain or improve its ROE. Global banks, for instance, are expected to see average ROEs around 11-12% in 2025.
The stock appears expensive on a trailing basis but very attractively priced based on strong forward earnings estimates, suggesting potential undervaluation if growth targets are met.
There is a significant disconnect between ASB's historical and expected earnings valuation. The trailing P/E ratio of 26.08 is nearly double the industry average for regional banks, suggesting overvaluation based on past performance. However, the forward P/E ratio is only 9.28. This indicates that analysts project a substantial increase in earnings per share (EPS) over the next year. Full-year 2025 earnings are expected to be around $2.60 per share. A forward P/E below 10 for a regional bank is generally considered cheap, especially when peers are trading at higher multiples. This low forward multiple suggests that the current stock price has not fully priced in the expected earnings recovery. While relying on forecasts carries risk, the valuation based on near-term growth potential is compelling, justifying a "Pass" for this factor.
The stock offers an attractive dividend yield, but it is undermined by a very high trailing payout ratio and recent shareholder dilution instead of buybacks.
Associated Banc-Corp provides a dividend yield of 3.60%, which is an attractive income stream for investors and slightly above the peer average for regional banks. However, the sustainability of this dividend is a major concern. The payout ratio based on trailing twelve-month (TTM) earnings is 93.78%, which is exceptionally high and leaves very little room for reinvestment or error. Furthermore, instead of returning capital to shareholders via buybacks, the company's shares outstanding have increased, as shown by the negative 9.16% buyback yield dilution. This indicates the company has been issuing shares, which dilutes the ownership stake of existing shareholders. While the dividend yield itself is a positive, the high payout ratio and shareholder dilution fail to support a strong capital return profile at this moment. The pass/fail decision is conservative; if earnings grow as projected, the dividend becomes much safer, but based on historical performance, it's a risk.
On a forward-looking basis, Associated Banc-Corp appears undervalued relative to its peers, with a lower forward P/E and a solid dividend yield.
When compared to industry benchmarks, ASB presents a compelling case on a relative basis. Its forward P/E of 9.28 is below the average for regional banks, which typically trade at a forward P/E of around 11.8x. This suggests a discount relative to the sector's future earnings potential. The P/TBV of 1.17x is also reasonable; many high-performing regional banks trade at higher multiples. The dividend yield of 3.60% is also competitive, exceeding the average yield for regional banks of 3.31%. While its 52-week price change has likely been volatile, its forward-looking valuation metrics signal a potential discount compared to its peers. This combination of a cheaper forward earnings multiple and a healthy dividend yield makes its relative valuation attractive.
The primary macroeconomic risk for Associated Banc-Corp is the uncertain path of interest rates and the economy. While higher rates can boost bank earnings, a "higher-for-longer" scenario creates significant challenges. It increases the bank's funding costs as it must pay more to keep customer deposits, which can compress its Net Interest Margin (NIM)—the core measure of a bank's profitability. For example, the bank's NIM has already seen pressure, declining to around 2.5%. Furthermore, as a regional bank heavily focused on Wisconsin, Illinois, and Minnesota, ASB's health is directly tied to the economic vitality of the Midwest. A slowdown in key regional industries like manufacturing could lead to a rise in loan delinquencies and defaults, forcing the bank to set aside more capital to cover potential losses.
The competitive and regulatory landscape presents another set of hurdles. ASB is caught between two powerful forces: giant national banks like JPMorgan Chase that have superior scale and technology, and innovative fintech companies offering high-yield savings accounts and seamless digital experiences. This intense competition for both loans and deposits makes growth more challenging and costly. On the regulatory front, the regional banking crisis of 2023 has led to increased scrutiny from regulators. Banks of ASB's size may face stricter capital and liquidity requirements in the future, which could limit their ability to deploy capital for growth and potentially increase compliance costs, weighing on overall efficiency.
From a company-specific perspective, ASB's loan portfolio contains notable concentrations that warrant investor attention. A significant portion of its loan book is dedicated to commercial lending, including commercial real estate (CRE). The CRE sector, particularly office and retail properties, faces structural headwinds from remote work and the growth of e-commerce. Any significant downturn in this segment could lead to an increase in non-performing assets on the bank's balance sheet. Additionally, like many banks, ASB must continually invest in technology to meet customer expectations and compete effectively. Failure to keep pace with digital banking trends could result in losing market share, while the high cost of these investments can pressure the bank's efficiency ratio.
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