Company: ASB
Filing Date: 2025-10-28
Form Type: 10-Q
Source: 0000007789-25-000179
Chunk: 9

Company: ASSOCIATED BANC-CORP
Filing Date: 2025-10-28
Form: 10-Q
Item: Part I, Item 2
Chunk 9
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.69%Fully tax-equivalent net interest income and net interest margin$309,444 3.04%$304,228 3.04%$266,232 2.78%Fully tax-equivalent adjustment(4,222)(4,228)(3,723)Net interest income$305,222 $300,000 $262,509 

(a) Prior period has been adjusted to conform with current period presentation.(b) The yield on tax-exempt loans and securities is computed on a fully tax-equivalent basis using a tax rate of 21%.

(c) Nonaccrual loans and loans held for sale have been included in the average balances.

56

Notable Contributions to the Change in Net Interest Income

•Fully tax-equivalent net interest income and net interest income increased $115.7 million and $114.2 million, or 15%, as compared to the first nine months of 2024, respectively. The average yield on earning assets decreased 18 bp and the cost of interest-bearing liabilities decreased 54 bp from the first nine months of 2024.The increase in net interest income was driven, in part, by the actions taken by the Corporation as part of the balance sheet repositioning announced in the fourth quarter of 2024 which sold off lower yielding investment securities and residential mortgages.  Additionally, the Corporation saw organic growth in net interest income from the continued growth in higher yielding loans in commercial and industrial and auto finance.  Finally, given that the Corporation is slightly asset sensitive, the Federal Reserve decreasing the federal funds target interest rate by 100 bp in the second half of 2024 caused contraction in the average yield on earning assets; however, this was more than offset by the repricing of deposits downward in line with market rates. See sections Interest Rate Risk and Quantitative and Qualitative Disclosures about Market Risk for a discussion of interest rate risk and market risk.

•Average earning assets increased $2.0 billion, or 5%, from the first nine months of 2024. Average loans increased $925.5 million, or 3%, from the first nine months of 2024, driven by increases in commercial and industrial, auto loans, and commercial real estate-investor, partially offset by decreases in residential mortgage as a result of our balance sheet repositioning announced in the fourth quarter of 2024 and real estate construction loans. Average investments increased $1.1 billion, or 13%, from the first nine months of