雅虎香港財經 Associated Banc-Corp (ASB) Q2 Earnings In Line, NII Declines
Associated Banc-Corp’s ASB second-quarter 2024 adjusted earnings of 52 cents per share met the Zacks Consensus Estimate. However, the bottom line compared unfavorably with the prior-year quarter’s earnings of 56 cents per share.
Results benefited from a higher loan balance. However, a decline in net interest income (NII), non-interest income, and an increase in expenses and provisions were headwinds.
Net income available to common shareholders (GAAP basis) was $113 million, up 34.5% from the year-ago quarter. This included the $2 million FDIC special assessment adjustment and a one-time tax benefit of $33 million. Our estimate for the metric was $77.8 million.
Revenues Decline, Expenses Rise
Total revenues were $321.8 million, down marginally year over year. The top line also missed the Zacks Consensus Estimate of $331.2 million.
NII was $256.6 million, down marginally. The net interest margin was 2.75%, down 5 basis points (bps) year over year. We had expected NII and net interest yield to be $261.6 million and 2.82%, respectively.
Non-interest income was $65.2 million, down marginally. The fall was largely due to lower service charges and deposit account fees, mortgage banking and net asset losses. Our estimate for non-interest income was $64.5 million.
Non-interest expenses increased 2.7% to $195.9 million. These included the FDIC special assessment adjustment of $2 million. Our estimate for non-interest expenses was $198 million. Adjusted non-interest expenses were $198 million.
The adjusted FTE efficiency ratio was 60.85%, up from 56.96% in the prior-year quarter. A rise in the efficiency ratio indicates a deterioration in profitability.
As of Jun 30, 2024, total loans were $29.6 billion, up marginally from the prior quarter. However, total deposits declined 3% to $32.7 billion.
Credit Quality Worsens
In the reported quarter, the company recorded a provision for credit losses of $23 million, rising 4.5% from the prior-year quarter. Our estimate for the metric was $25.5 million.
As of Jun 30, 2024, total non-performing assets were $163.4 million, rising 17.4%. Total non-accrual loans were $154.4 million, up 17.6%.
Net charge-offs were $21.1 million, up substantially from $11.2 million in the prior year quarter.
Capital Ratios Improve
As of Jun 30, 2024, the Tier 1 risk-based capital ratio was 10.27%, up from 10.07% recorded in the corresponding period of 2023. The common equity Tier 1 capital ratio was 9.68%, up from 9.48%.
2024 Outlook
Management expects loan growth to be at the lower end of 6-8%.
Total core customer deposits are estimated to rise at the lower end of 3-5%.
NII is projected to increase 1-3%.
After adjusting to exclude the impact of non-recurring items related to the balance sheet repositioning announced in the fourth quarter of 2023, total non-interest income is expected to grow 1% or decrease 1%.
After adjusting to exclude the impact of the FDIC special assessment charges and adjustments, total non-interest expenses are anticipated to rise 2-3%.
The effective tax rate is expected to be 19-21%.
Our Take
Associated Banc-Corp’s business-restructuring efforts are likely to keep supporting financials. The company has a solid balance sheet position, making it well-poised for growth. However, elevated expenses and provisions are likely to hurt profits in the near term.
Associated Banc-Corp Price, Consensus and EPS Surprise
Associated Banc-Corp price-consensus-eps-surprise-chart | Associated Banc-Corp Quote
ASB currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Banks
Prosperity Bancshares Inc.’s PB second-quarter 2024 adjusted EPS of $1.22 beat the Zacks Consensus Estimate of $1.20. Moreover, the bottom line compared favorably with adjusted earnings of $1.21 in the prior-year quarter.
PB’s results benefited from lower provisions and an increase in NII. Further, a rise in deposits and loans was another positive. Nevertheless, a fall in adjusted non-interest income and rising expenses were major headwinds.
East West Bancorp, Inc.’s EWBC second-quarter 2024 adjusted EPS of $2.07 surpassed the Zacks Consensus Estimate of $1.97. However, the bottom line declined 5.9% from the prior-year quarter.
The results were primarily aided by an increase in adjusted non-interest income. Also, deposit and loan balances increased sequentially in the quarter. However, lower NII and higher adjusted non-interest expenses and provisions were the undermining factors for EWBC.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Prosperity Bancshares, Inc. (PB) : Free Stock Analysis Report
East West Bancorp, Inc. (EWBC) : Free Stock Analysis Report
Associated Banc-Corp (ASB) : Free Stock Analysis Report
