Company: ASB
Filing Date: 2025-07-29
Form Type: 10-Q
Source: 0000007789-25-000116
Chunk: 8

Company: ASSOCIATED BANC-CORP
Filing Date: 2025-07-29
Form: 10-Q
Item: Part I, Item 2
Chunk 8
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,420,063 $42,630,627 $41,100,606 Interest rate spread2.48%2.39%2.05%Net free funds0.56%0.58%0.70%Fully tax-equivalent net interest income and net interest margin$304,228 3.04%$290,195 2.97%$260,340 2.75%Fully tax-equivalent adjustment4,228 4,254 3,747 Net interest income$300,000 $285,941 $256,593 

(a) Prior periods have 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 were $72.5 million and $71.5 million, or 14%, higher than the first six months of 2024, respectively. The increase was driven 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 and increased earning assets.  This was offset by the Federal Reserve decreasing the federal funds target interest rate by 100 bp in the second half of 2024 causing a decrease in the rate environment.  This resulted in the average yield on earning assets to decrease 17 bp and the cost of interest-bearing liabilities to decrease 54 bp from the first six months of 2024 given our ability to reprice deposits downwards.  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 $1.9 billion, or 5%, from the first six months of 2024. Average loans increased $828.3 million, or 3%, from the first six months of 2024, driven by increases in commercial and industrial, commercial real estate-investor, and auto loans, 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 investment securities increased $1.1 billion, or 13%, from the first six months of