Associated Banc-Corp at Barclays Conference: Strategic Growth and AI Focus

On Tuesday, 09 September 2025, Associated Banc-Corp (NYSE:ASB) presented its strategic growth initiatives and future outlook at the Barclays 23rd Annual Global Financial Services Conference. The company highlighted its transition to phase two of its strategic plan, emphasizing commercial loan growth and AI adoption. However, challenges such as potential rate cuts and competitive pressures were also discussed.

Key Takeaways

• Associated Banc-Corp aims for double-digit C&I growth, driven by new commercial relationship managers.
• The bank’s net interest margin increased by 29 basis points, surpassing the 3% margin barrier.
• Geographic expansion plans include growth in Milwaukee, Chicago, and Minneapolis, with potential moves into Omaha, Kansas City, and Denver.
• AI integration is a priority, with an AI council and executive training in place.
• The company expects a 14% to 15% year-over-year increase in net interest income.

Financial Results

Associated Banc-Corp reported several financial achievements:

• Net Interest Margin (NIM) increased by 29 basis points from the previous year, breaching the 3% margin barrier.
• Loan growth reached $700 million in the first half of the year, with a target of $1.2 billion for the full year.
• Household growth improved from -2% five years ago to +2% annualized this year.
• Net Interest Income (NII) is projected to grow by 14% to 15% year-over-year.

Operational Updates

The company has made significant strides in its operations:

• Expanded its executive leadership team with nine new members over four years.
• Increased relationship managers by 28% to boost commercial banking efforts.
• Plans to implement a deposit vertical Homeowners Association (HOA) title business in Q4.
• AI initiatives include the creation of an AI council and executive training programs.

Future Outlook

Looking ahead, Associated Banc-Corp is focused on:

• Continuing organic growth strategies and dividend payouts.
• Expanding geographically into new markets such as Omaha, Kansas City, and Denver.
• Anticipating commercial deposit growth as a key focus in 2026.
• Forecasting three interest rate cuts in their growth projections.

Q&A Highlights

During the Q&A session, the following points were emphasized:

• Competitors identified include BMO, U.S. Bank, and Wells Fargo.
• 40% of new consumer deposit accounts are now with fintechs.
• AI is being implemented in call centers, legal, and risk management to solve business problems.

In conclusion, for a detailed understanding of Associated Banc-Corp’s strategic plans and financial performance, please refer to the full transcript below.

Full transcript - Barclays 23rd Annual Global Financial Services Conference:

Jared: Thanks, everybody. We’re excited to wrap up our second day of the conference today with Associated Banc-Corp. Andy Harmening is the President and CEO. We’re excited to talk about a little bit what’s going on in your market. Thanks for joining us.

Andy Harmening, President and CEO, Associated Banc-Corp: Yeah, it’s good to be here. Maybe a couple of words about what’s been going on at Associated Banc-Corp. I won’t go on too long on that, but it was four years ago at this conference where we kicked off our new growth strategy. It was during COVID, and it was remote, and I’d been there for six months. We fast forward and we think about having sustainable organic growth. We look at the things that we’ve done. We’ve essentially bolstered our executive leadership team, bringing in nine new members over those four years. We’ve invested heavily in the commercial bank. We’ve built a value proposition from the product side and the digital side in the consumer bank. We’ve repositioned the balance sheet twice, and we’ve changed the mix of what we produce on the loan side, kind of transitioning from non-customer residential real estate to commercial banking.

You fast forward to 2025, phase two of our strategic plan. We are halfway through that. We finished the investments in the first quarter, and that’s mostly on the hiring front and the product front. On the hiring front, that means that our commercial bankers have all been hired. As we look at what that means for us, it means that in the first half of the year, we were able to grow $700 million. We had guided to growing $1.2 billion, which looks like a very achievable number for us. On the consumer side of the business, we’ve gone from a negative two household growth to a minus one, to zero, to plus one, to plus 2% annualized this year. We have the highest customer satisfaction we’ve had.

Fast forward to the remix, our net margin’s up 29 basis points from the second quarter of last year to the second quarter of this year. We finally breached the 3% margin barrier and improved our ROTC. We look at credit and we look at efficiency. Really, the name of the game for us has been driving positive operating leverage. We’ve been able to substantially do that in the first half, and we think we’ll be able to land that plan in the second half. Getting to the second half of this year, going into 2026 with household growth, high customer satisfaction, commercial growth, expanded margin, and ROTC feels like the best position we’ve been in for quite some time.

Jared: Great. As you mentioned, you’ve undertaken an ambitious expansion plan, hiring new relationship managers in commercial lending. As we look forward with them all on board as of March, how will these hires change the trajectory of commercial loan growth versus what you had before?

Andy Harmening, President and CEO, Associated Banc-Corp: Yeah, they’re already changing. It is the good news. We’re not betting on the come. When we think about double-digit C&I growth for the year, it’s exciting to see that and see what it means in the second half. When we take a deeper dive on it, what we see is only 13%. We’ve increased our RMs by about 28%, but only about 13% of our production is coming from the new RM. As non-solicitation agreements expire every single quarter, by this time next year, none of them will be under a non-solicitation. Today, there’s 13 of them. We really expect a nice second half of the year, but really the momentum going into next year. We look at pipelines and they’re nice, but in the absence of production, not as exciting.

We’re getting the production, but the pipeline on the commercial side versus the same time last year, August to August, is up about 36%. Trailing that, because the ambition is to fund our bank with deposit growth, the deposit pipeline’s up 100%. We feel pretty good from an organic standpoint. These kind of remixes from resi to commercial, from wholesale to core customer growth, are what’s going to drive the continued margin expansion and return profile.

Jared: What’s been the sentiment at commercial customers more recently? Have you seen any incremental hesitancy to re-engage due to tariffs or just the broader economic uncertainty?

Andy Harmening, President and CEO, Associated Banc-Corp: It’s the start-stop, right? Trump gets elected, people are excited, a pro-business president, then a lot of noise and tariffs and concern. Then the realization that we have a pretty good economy and back in it, then a little bit more information comes out and concern. I think at this point, it’s defaulting back to we have a pro-business president. There are some positives from capital acquisition. We are seeing some deals get done. You can see pipelines build, then they stall, then you get some production, and it goes on. It looks to me like the pipelines are up and the industry really up for us. Then we’ll pull some of that through as kind of people get to the point to say, okay, things are okay and they’re dealing with the uncertainty that might be out there.

Jared: You had mentioned the success with deposit growth. Can you just give us an update on where you feel like you can really leg in and see some continued benefits from there, and what your ultimate goal is for that deposit loan growth mix?

Andy Harmening, President and CEO, Associated Banc-Corp: Yeah, the good news on the deposit front is we don’t have all of our eggs in one basket. The big piece of it for us is household growth. That’s kind of the piece that’s not spoken about in the industry a lot. Household growth for banks right now, regional banks, is just a 0% to 1%. When we look back and see a -2% household growth five years ago versus a +2% household growth now, if you think that it’s $100 million to $150 million per %, which we do in a differentiated deposit growth, you’re talking about in the neighborhood of $500 million just in organic growth from five years ago to where we are today. That’s a good start. You get more quality from every customer, which we’ve started to do because of the product. You have a segmentation strategy on Nassef Sawiris, which brings it in.

We will ultimately have an upstreaming strategy to private wealth in the near term. We have a Health Savings Account (HSA) business that’s growing at double digits, which is a deposit franchise. That’s just on the consumer side, and that’s where the biggest piece of the growth is. We have not had a tailwind going into the next year, frankly, since I’ve been here. 1% is nice. 2% feels like a tailwind. 2.5% to 3% would feel even better. That’s the consumer side, which a lion’s share of the deposits come on. The commercial piece of it, there’s no doubt that that will be a story for us in 2026. We have a deposit vertical Homeowners Association (HOA) title business that will come on board in the fourth quarter of this year. Just the existing pipeline, even with a modest pull-through, will show improvement for us.

You close that out with customer satisfaction for us being as high as it’s ever been, meaning it’s stickier. Really a feeling of being able to compete quite well. If loan growth is there, which we think it is, then we fund that loan growth with lower cost deposits. If loan growth is lower, we just substitute in wholesale funding and benefit that way.

Jared: How are you looking at your markets geographically? You did a bigger push into Milwaukee that was very successful earlier on. You’re growing into Chicago, and then newer markets a little further west. How are you looking at the geography, the geographic composition of growth from here?

Andy Harmening, President and CEO, Associated Banc-Corp: Yeah, that’s a great question because when we look at our home markets, they are our strength, but they’re also some lower growth markets, so 0 to 1% growth. We have to take market share. You can do that for quite some time when you’re a little bit lower. We’ll be able to do that for a few years. We’ve been thinking of Milwaukee, for instance. Chicago, you can grab market share for years and years. It’s a very big market. Interestingly enough, if we think of Wisconsin as the foundation, we’re actually growing Northeast Wisconsin at kind of twice the rate of the market. These are good things, but we’re going to have to get a little bit bigger in some existing markets. Minneapolis, with absolute certainty, is one that we need to grow in.

As we do that for the next couple of years, we’ll have plenty of growth. We just hired a team, a lift out of a team in Kansas City. They’ve hit the ground running, and it’s a very strong team, which shows that if you get strong lenders that you know in a market that you’re not deep into, you can still do quite a bit of business. I think of that core footprint, Milwaukee, Chicago, Minneapolis, as the places where we can grow over the next couple of years. We’ll think outside of that geography and contiguous markets as time goes by. If we can go from a 0 to 1% growth market to a 1 to 2, 2 to 3% growth market, we’ve shown that there’s a playbook in the major metropolitans.

We think that whether that’s in Omaha, Kansas City, Denver, things of that nature going a little farther west could be in the cards in the future for us.

Jared: If we end up getting the rate cuts the market’s expecting over the next few months, how does that impact your expectations for the performance and growth of commercial real estate from here? Does it change your appetite?

Andy Harmening, President and CEO, Associated Banc-Corp: Yeah, commercial real estate, we’ve forecasted some, we have three cuts forecasted in our growth. Our forecast takes into account a decrease in rates. The impact on CRE, we would think it’d be really pegged to the 10-year. We do expect that will come down at some point and payoffs will increase a little bit. That’s in our forecast. It’s a book that we expect to grow kind of in line with the overall portfolio of the bank. The question I think comes into the industry of what happens with deposits and deposit pricing. Most people think that will be a quick pivot and will be a lever for people to be able to manage deposit pricing. We’re relatively neutral on the asset sensitivity side. One cut, 25 basis points, we’ll be able to absorb that with kind of maturing CDs and market length CDs.

From a CRE standpoint, I think it’s really just good hygiene to get some of those into the permanent market, put a little bit on the books. If the payoffs bring that down a little, we’re not over-indexed in CRE, and we think that we still hit the guidance that we’ve provided on loan growth.

Jared: We have a few questions for the audience through our ARS, and then happy to see if you have any questions. Maybe we can pull the ARS questions up. First question is, what’s your current position in Associated Banc-Corp shares? Number one, overweight or long. Two, market weight. Three, underweight or short. Four, not involved. It’s probably a better way than not interested.

Andy Harmening, President and CEO, Associated Banc-Corp: Mine’s a one.

Jared: Yeah, most people in the room are owners. That’s good.

Andy Harmening, President and CEO, Associated Banc-Corp: We’ve got one that got the wrong room.

Jared: Second question. Which would have the largest impact on improving the relative valuation of shares of Associated Banc-Corp? One, better relative margin performance. Two, above peer loan growth. Three, better expense control. Four, credit quality outperformance. Five, more active share repurchases. Six, secretive bank acquisitions. Most of the room is looking for loan growth as a differentiator, followed a little bit by margin. We can get into that. Any thoughts?

Andy Harmening, President and CEO, Associated Banc-Corp: I don’t know if you remember last year, not a single answer that wasn’t NIM. Apparently, getting 29 basis points and starting to move that upward has been a positive for us. We feel pretty confident we’ll deliver on number two. I’m a little bit surprised on six. That’s not always the end case from the investment community, but what I like to hear.

Jared: Yeah, it’s a bank merger week.

Andy Harmening, President and CEO, Associated Banc-Corp: Right.

Jared: Let’s see, number three. What will organic loan growth be at Associated Banc-Corp in 2026? One, 3 to 5%. Two, 5 to 7%. Three, 7 to 9%. Four, 9 plus %. It seems like most thinking that 3 to 5%.

Andy Harmening, President and CEO, Associated Banc-Corp: I feel like we have an outperform opportunity.

Jared: Yeah, although one looking for nine plus, we’ll see. Let’s see, our last question. To what do you attribute the current valuation discount relative to peers? Concerns over deposit-based stickiness or price sensitivity? Uncertainty around long-term growth? General asset quality concerns? Or weaker profitability relative to peers? A little bit on the growth, but mostly the profitability. It feels like your focus on that is as well.

Andy Harmening, President and CEO, Associated Banc-Corp: Yeah, Derek wanted to add a fifth one on that, and it was not yet. We know it’s coming.

Jared: I guess, sticking to the, or moving your credit, there was an uptick in credit migration into classified credits. Can you walk us through some of the drivers of that and what’s your outlook on broader credit trends from here?

Andy Harmening, President and CEO, Associated Banc-Corp: Yeah, I mean, overall credit’s been pretty solid, pretty stable for us. I mean, if you take into account we have $11 billion of super prime, high prime consumer on the books, that’s a good start point, and delinquencies have been very steady there. Credit size classified, we’ve been a little proactive on early identification. We didn’t want to get caught off guard, taking that as a kind of a conjunction with that fire alarm.

Jared: Yeah, I think it’s in an elevator bill.

Andy Harmening, President and CEO, Associated Banc-Corp: Just raising the degree of difficulty. You look at Crit Class, that’s a category that we made decisions on to be a little bit more proactive. When you see the pull-through on non-accrual, really a pretty flat story. When you see the story on charge-offs, a pretty good story. The Crit Class has creeped up a little bit, self-induced. We think it’s a little bit more cautious approach, and we’ve been a pretty conservative bank. As you saw, the zero answers on credit quality, we think that’s about the right range. We’re in pretty good shape, and we’re very proactive about the portfolio. That’s been a staple for us going forward. I support that approach to kind of early identification, but I’m not seeing it pull through on the loss or provision side.

Jared: Yeah, we’ve seen a marked uptick in M&A activity across really the mid-cap bank space with an expectation for more deals as the regulatory environment remains friendly. How are you looking at capital deployment more broadly now? Should we expect Associated Banc-Corp to be a participant?

Andy Harmening, President and CEO, Associated Banc-Corp: I thought you were going to ask if we could sell at 3 times tangible book.

Jared: Three? We want to look for 3.5.

Andy Harmening, President and CEO, Associated Banc-Corp: Right. What was the final question there, Jared? I was just thinking about that. How do we think about M&A and capital deployment?

Jared: Yes.

Andy Harmening, President and CEO, Associated Banc-Corp: Yeah, the answer’s been largely the same. We’ve had pretty good relative peer TSR over the last three years, and we’ve done that by having organic growth strategies. We had a phase one with organic growth strategies. We’ve had a phase two that we’re halfway through. We are not nearly deeply penetrated enough in some of the larger markets that we have. Number one and two would be continued organic growth strategies, dividend payout. I would say the third is if you can find a deal at the right time, at the right price, with the right culture and the right geography, that would be interesting at some point. For 2025, it continues to be the same message. It’s organic growth, and we want to land the plane with a strong year.

Jared: Great. Yeah, I guess when we look at the rate environment, the expectation for a few cuts, how are you thinking of the dynamics of margin and, I guess, more specifically on the deposit side going through the rest of the year and pricing?

Andy Harmening, President and CEO, Associated Banc-Corp: Yeah, you know, I think the deposit, I think of margin in the rest of this year going through next year. What we have going on is a constant shift, a remix of our balance sheet. If you think about substituting in commercial, if you think about the funding sources being a little different, and you think about the runoff of a really low-yielding correspondent resi lending, just by virtue of that and being somewhat neutral in asset sensitivity, it feels like, you know, over the course of a quarter, all things being equal, we probably pick up a couple basis points a quarter for the next several quarters. Deposit pricing, of course, if that is irrationally high or irrationally low, could swing that a little bit.

It looks like right now, with the likely 25 basis point cut, we would expect some repricing on the deposit side of the balance sheet. Does that help or hurt us? It depends on how far and how aggressive people go. The way that we model it is that it’s going to be fairly neutral and that we’re going to be fairly neutral, and we don’t pick up any basis points in the coming quarters from this mix shift. We try to forecast fairly conservatively. If the market gets a little bit hotter, we’re clearly in a position with the commercial lending. If the deposit rates would go our way, we’re in a position where we could, you know, outperform what we have, guided to. Frankly, at this point, we’ve guided to a 14 to 15% net interest income increase year over year.

We feel like we’ve been pretty on point to that, and we feel pretty good about achieving that guidance. Things could move in a direction that could be beneficial for us, I guess, the rest of the year, potentially.

Jared: Okay. Any questions in the audience? Happy to open it up. There’s one. If you just wait for the microphone, or I can repeat it. Go ahead.

Andy Harmening, President and CEO, Associated Banc-Corp: The question, changes by competitors, Green Bay, Milwaukee, Chicago, Minneapolis would probably be the ones that Madison would come to mind. For us, we’ve had some big, we’ve had some large players that we’ve been able to have some very key strategic hires in the marketplace. In Wisconsin, BMO has been a very, very good competitor for a number of years, and we’ve been able to hire our key leader in that market there. U.S. Bank and Wells Fargo have been very good competitors in Minnesota, and we hired two folks, one to lead our commercial business overall and one to lead the Minneapolis market. They were both former market presidents in that market, so they kind of know every single name in the market. What we’ve been able to do is add people that are very familiar with the commercial side in particular, the names.

On the consumer side, the question is, how do you grow 2% or 3% in a market that’s 0% to 1% growth? It’s not just banks anymore. What I would say is 40% of new deposit accounts, consumer deposit accounts, transaction accounts are now fintechs. That’s a startling number. Ten years ago, that number was 30%. You have to have a product set that appeals to the consumer, whether they’re banking at Chase or U.S. Bank or B of A or Johnson Bank or Chime or Dave. What we do is we look at the attributes that people need to see in order to switch. When we understand those, and there’s 15 of them, then we basically categorize that with every major bank and every fintech and see how we compete.

Right now, we have as many positive attributes of that 15 as any bank in the country or any fintech in the country. That’s been on purpose. We built those out. I don’t remember the number that we had when I started. It was less than five, and now it’s 11 or 12 out of the 15. You have to consider everyone on the consumer side, a fintech, large bank, small bank, credit union, and deliver something that they care about. We have, and that’s been very helpful on that side. On the commercial side, you have to hire people that are familiar with the market, and we’ve been able to do that.

Jared: Pam, up in the back.

Pam: Hey, Andy, thank you. Just going off of your reaction to the survey, it does seem like you think maybe your growth rate can be better than what the majority of people responded on that slide. I would love to hear a little bit more about just the specific opportunities you see, both from a market perspective and a hiring perspective, that can kind of bring you into that sustainable growth rate as kind of similar to this year.

Andy Harmening, President and CEO, Associated Banc-Corp: Yeah, so we’re at a 5% to 6% growth rate this year. Largely what I see in our residential book is a similar attrition. We’re planning for a slow attrition of that book over several years, and that’s part of the deal. When I think about the commercial production, and we think about having 13 out of our 28 new hires under a non-solicitation agreement, and we get to next year and we have zero at the end of the first quarter, and they’ve been here longer and they manage that calling effort, I would see that as a significant positive. When I see a 36% increase in pipeline, you can, we would take math to that by level and category and say, gosh, here’s what the pull-through is going to be on that pipeline. These are just from the initiatives that we have ongoing.

We’ve been a bank that has had significant proactive change to meet the market every single year that I’ve been here, and it’s been four and a half years. I think of what we have going on coming into the year, and it’s more substantial than what we’ve had in the past. Should we find a way to invest in a vertical and a team strategically in the next six months, it’s something we’ll take a look at. Four years ago, I was probably involved in every single interview and trying to convince somebody of what our story is. Now our story is clear on the growth side, particularly on commercial, and we have people that are calling us. I think the recruiting side of that has become, we’ve become quite a bit better, stronger in that side.

What I see going on, what I see in pipeline, what I see in non-solicitations, what I see in our community markets, what I see in small business, what I see in commercial, what I see in the vertical of equipment finance and asset-based lending, it’s not just one piece that’s driving this. When you have a lot of pieces that are coming together simultaneously, and our start point may be a little bit better than the prior year, that gives me hope for what that could be. We can’t control the market, but what I would say would be disappointing to me if we didn’t grow our commercial bank faster than the market.

Jared: Maybe making a little bit of a shift. You know, looking at AI, have you evaluated AI and what it could do for the bank? Do you feel that there’s some tangible areas where you could see some improvement if you’re able to implement something there?

Andy Harmening, President and CEO, Associated Banc-Corp: There is no question that there are already tangible areas emerging. People already know about call center, legal, risk, and private wealth. I think for me, part of it is how we structure ourselves to make sure that we capture new ideas, business ideas. What I mean by that is the artificial intelligence (AI) part of the portion of it is technology, but the question is what business issue are you trying to solve for? We put together an AI council. We are going to require every single executive to explain what their two or three top priorities are using AI, which is forcing a continual view of what that might mean for the company.

I think starting from a position of solving for a business problem as opposed to executing on technology is the way that we will have some success. I have done this in the past on digital, where people wanted digital right now, and the question was, wait a second, what are you trying to solve for? Once we identified the business issue, then we could plug in the technology with process, and it worked. I feel somewhat there is an overlapping similarity with AI. I am pretty excited about that. We are also requiring all of our executives to go through training. I have got a two-hour session next week, and I am sure I will be the slowest learner in that category.

The reality is if I am not willing to do that, if our executive leadership team is not willing to do that, they are not even going to understand how to ask the right question. AI is real. It is powerful. Our CIO would tell you that he will look for co-development opportunities. He will tell me that he wants to make sure that we have a lab that we can test in. I agree with both those things, but only if we know what business problem we are trying to solve for. We have already executed on the legal side and the document side, and that has been a big positive. We have already executed in our call center, and that has been very helpful. I would say we have worked on governance, which I think everyone will struggle with in the legitimized world, not the criminals.

I think they will be much quicker on the non-governed attacks that we have seen. That will be important to try to figure out how you control generative AI by its very nature. I am very interested. I do not think we are behind the curve, and I think that you have to structure your company in a way that allows you to take advantage of what is to come.

Jared: Should we think of that as a phase three of the strategic plan, or how should we think about that?

Andy Harmening, President and CEO, Associated Banc-Corp: You know, Jared, I don’t know if that’s a wise crack about the nomenclature of our strategies being phase one and two, but we’ve saved money by not bringing in an outside group to name these strategies. We’ll have a phase three. We’re now probably shamed into calling it something more dramatic, three plus. Yeah, could be phase three.

Jared: Great. Thank you very much for the time. It was great to hear from you as always. Thanks to everybody for joining us again this year, and looking forward to next year.

Andy Harmening, President and CEO, Associated Banc-Corp: All right. Thank you. Thanks.

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