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Jun 30, 2022
Associated Bank Q2 2022 Earnings Report
Reported net income available to common equity, driven by robust loan growth, expanding margins, stable deposits, and resilient credit.
Key Takeaways
Associated Banc-Corp reported a net income available to common equity of $84 million, or $0.56 per common share, for the quarter ended June 30, 2022. The results were driven by strong loan growth, expanding margins, stable deposits, and resilient credit quality.
Total commercial loans were up $1.2 billion to $16.8 billion.
Total consumer loans were up $766 million to $9.7 billion.
Total deposits were up $171 million to $28.6 billion.
Net interest margin was up 29 basis points to 2.71%.
Associated Bank
Associated Bank
Forward Guidance
The company expects full-year total commercial loan growth of approximately $1.7 billion and auto finance loan growth of approximately $1.3 billion in 2022. They also expect 2022 net interest income to exceed $890 million and total noninterest expense of approximately $730 million to $740 million.
Positive Outlook
- Short-term interest rates are expected to rise by 75 basis points following the Federal Open Market Committee (FOMC) meeting in July.
- A 25 basis point increase is expected at each remaining FOMC meeting this year.
- 2022 net interest income is expected to exceed $890 million.
- Full-year total commercial loan growth of approximately $1.7 billion is expected.
- Auto finance loan growth of approximately $1.3 billion is expected.
Challenges Ahead
- Shifting economic environment necessitates a disciplined focus on credit quality.
- Mortgage Banking, net was down $2 million from the same period last year and down $2 million from the prior quarter, driven by slowing refinance activity and higher retention of mortgages on our balance sheet.
- Wealth management fees decreased $1 million from the same period last year and decreased $1 million from the prior quarter.
- Total noninterest expense of approximately $730 million to $740 million for 2022 is expected.
- The effective tax rate for second quarter of 2022 was 21.2% compared to an effective tax rate of 20.1% in the prior quarter.