ASSOCIATED BANC-CORP

Previous wording

•Average loans of $30.1 billion increased $742 million, or 3%, from the first three months of 2024, driven primarily by increases in commercial and business lending and auto finance loans, partially offset by a decrease in residential mortgage lending resulting from the Corporation's balance sheet repositioning announced in the fourth quarter of 2024.

Current wording

•Average loans of $30.3 billion increased $828.3 million, or 3%, from the first six months of 2024, driven primarily by increases in commercial and business lending and auto finance loans, partially offset by a decrease in residential mortgage lending resulting from the Corporation's balance sheet repositioning announced in the fourth quarter of 2024.

Previous wording

•Average deposits of $34.8 billion increased $1.6 billion, or 5%, from the first three months of 2024, driven by increases in all deposit types except noninterest-bearing demand and money market deposits.

Current wording

•Average deposits of $34.5 billion increased $1.6 billion, or 5%, from the first six months of 2024, driven by increases in all deposit types except noninterest-bearing demand and money market deposits.

Previous wording

•Net interest income of $286 million increased $28 million, or 11%, from the first three months of 2024, and net interest margin was 2.97%, compared to 2.79% for the first three months of 2024. The increases in net interest income and net interest margin were primarily driven by balance sheet repositioning announced in the fourth quarter of 2024.

Current wording

•Net interest income of $585.9 million increased $71.5 million, or 14%, from the first six months of 2024, and net interest margin was 3.01%, compared to 2.77% for the first six months of 2024. The increases in net interest income and net interest margin were driven by increases in higher yielding loan balances in commercial and industrial and auto finance and the balance sheet repositioning announced in the fourth quarter of 2024 which sold lower yielding residential mortgage loans and investment securities allowing for reinvestment in higher yielding investment securities.

Previous wording

•Provision for credit losses was $13 million compared to $24 million for the first three months of 2024, driven by nominal credit movement coupled with general macroeconomic trends.

Current wording

•Provision for credit losses was $31.0 million compared to $47.0 million for the first six months of 2024, driven by nominal credit movement coupled with general macroeconomic trends.

Previous wording

•Noninterest income of $59 million decreased $6 million, or 10%, from the first three months of 2024, primarily driven by a $7 million loss recognized related to the settlement of the mortgage loan sale as part of the balance sheet repositioning announced in the fourth quarter of 2024.

Current wording

•Noninterest income of $125.8 million decreased $4.4 million, or 3%, from the first six months of 2024, primarily driven by the loss recognized related to the settlement of the mortgage loan sale as part of the balance sheet repositioning announced in the fourth quarter of 2024.

Previous wording

•Noninterest expense of $211 million increased $13 million, or 7%, from the first three months of 2024, primarily driven by increases in personnel expense due to annual merit increases and other noninterest expense primarily due to a $4 million OREO write down, partially offset by a decrease in FDIC assessment expense given the recognition of the FDIC special assessment in the first quarter of 2024.

Current wording

•Noninterest expense of $420.0 million increased $26.5 million, or 7%, from the first six months of 2024, primarily driven by increases in personnel expense due to annual merit increases, legal and professional expenses due to increased consultant and IT staff augmentation expenditures and other noninterest expense primarily due to OREO write downs in 2025.

Previous wording

(a) The average yield on tax-exempt loans and securities is computed on a fully tax-equivalent basis using a tax rate of 21%.

Current wording

(b) The yield on tax-exempt loans and securities is computed on a fully tax-equivalent basis using a tax rate of 21%.

Previous wording

(b) Loans held for sale have been included in the average balances.

Current wording

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

Previous wording

•Fully tax-equivalent net interest income and net interest income were $29 million and $28 million, or 11%, higher than the first three months of 2024, respectively. The Federal Reserve decreased the federal funds target interest rate by 100 bp in the second half of 2024 causing a decrease in the rate environment and resulted in the average yield on earning assets to decrease 19 bp and the cost of interest-bearing liabilities to decrease 49 bp from the first three 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.

Current wording

•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.

Previous wording

• Average interest-bearing liabilities increased $1.6 billion, or 5%, compared to the first three months of 2024. Average interest-bearing deposits increased $1.8 billion, or 7%, from the first three months of 2024, driven by increases in all deposit types except money market. Average total short and long-term funding decreased $162 million, or 6%, from the first three months of 2024, primarily driven by a decrease in other short-term funding related to the payoff of BTFP advances, partially offset by increases in all other funding categories. Average noninterest-bearing demand deposits decreased $242 million, or 4%, from the first three months of 2024.

Current wording

• Average interest-bearing liabilities increased $1.8 billion, or 6%, compared to the first six months of 2024. Average interest-bearing deposits increased $1.7 billion, or 6%, from the first six months of 2024, driven by increases in all deposit types except money market which decreased slightly. Average total short and long-term funding increased $80.6 million, or 2%, from the first six months of 2024, primarily driven by increases in all funding categories except other short-term funding which decreased related to the payoff of BTFP advances in October 2024. Average noninterest-bearing demand deposits decreased $152.5 million, or 3%, from the first six months of 2024.

Previous wording

•Loss on mortgage portfolio sale increased $7 million from the first three months of 2024, due to the recognition of a loss in the first quarter of 2025 related to the settlement of the mortgage sale announced in the fourth quarter of 2024.

Current wording

•Loss on mortgage portfolio sale increased $7.0 million from the first six months of 2024, due to the recognition of a loss in the first quarter of 2025 related to the settlement of the balance sheet repositioning transactions announced in the fourth quarter of 2024.

Previous wording

•Bank and corporate owned life insurance increased $3 million from the first three months of 2024, driven by an increased number of claims.

Current wording

•Bank and corporate owned life insurance increased $2.2 million from the first six months of 2024, driven by an increased number of claims.

Previous wording

•Investment securities gains (losses), net, decreased $4 million from the first three months of 2024, as a result of the sale of the Corporation's remaining Visa B shares in the first quarter of 2024.

Current wording

•Investment securities gains (losses), net, decreased $3.9 million from the first six months of 2024, as a result of the sale of the Corporation's remaining Visa B shares in the first quarter of 2024.

Previous wording

The Corporation records income tax expense during interim periods based on the best estimate of the full year's effective tax rate as adjusted for discrete items, if any, taken into account in the relevant interim period. Each quarter, the Corporation updates its estimate of the annual effective tax rate and the effect of any change in the estimated rate is recorded on a cumulative basis. The Corporation recognized income tax expense of $19 million for the three months ended March 31, 2025, compared to income tax expense of $20 million for the three months ended March 31, 2024. The Corporation's effective tax rate from continuing operations was 16.03% and 19.78% for the three months ended March 31, 2025, and 2024, respectively. The decrease in income tax expense of $1 million and lower effective tax rate during the first three months of 2025 as compared to the same period of 2024 were primarily due to a partial release of a valuation allowance on deferred taxes offset by higher net income in the current period.

Current wording

The Corporation records income tax expense during interim periods based on the best estimate of the full year's effective tax rate as adjusted for discrete items, if any, taken into account in the relevant interim period. Each quarter, the Corporation updates its estimate of the annual effective tax rate and the effect of any change in the estimated rate is recorded on a cumulative basis. The Corporation recognized income tax expense of $47.8 million for the six months ended June 30, 2025, compared to income tax expense of $7.3 million for the six months ended June 30, 2024. The Corporation's effective tax rate from continuing operations was 18.34% and 3.59% for the six months ended June 30, 2025, and 2024, respectively. The increase in income tax expense of $40.5 million and higher effective tax rate during the first six months of 2025 as compared to the same period of 2024 were primarily due to a strategic reallocation of the investment portfolio and the adaptation of a legal entity rationalization plan that resulted in the recognition of deferred benefits in 2024.

Previous wording

Income tax expense recorded on the consolidated statements of income involves the interpretation and application of certain accounting pronouncements and federal and state tax laws and regulations. The Corporation is subject to examination by various taxing authorities. Examination by taxing authorities may impact the amount of tax expense and/or the reserve for uncertainty in income taxes if their interpretations differ from those of management, based on their judgments about information available to them at the time of their examinations.

Current wording

The Corporation is subject to examination by various taxing authorities. Examination by taxing authorities may impact the amount of tax expense and/or the reserve for uncertainty in income taxes if their interpretations differ from those of management, based on their judgments about information available to them at the time of their examinations.

Previous wording

•At March 31, 2025, total assets were $43.3 billion, up $286 million, or 1%, from December 31, 2024, and up $2.2 billion, or 5%, from March 31, 2024.

Current wording

•At June 30, 2025, total assets were $44.0 billion, up $970.7 million, or 2%, from December 31, 2024.

Previous wording

•AFS investment securities, at fair value were $4.8 billion at March 31, 2025, up $215 million, or 5%, from December 31, 2024, and up $1.1 billion, or 29%, from March 31, 2024. HTM investment securities, net, at amortized cost were $3.7 billion at March 31, 2025, down $33 million, or 1%, from December 31, 2024, and down $127 million, or 3%, from March 31, 2024. See Note 5 Investment Securities of the notes to consolidated financial statements for additional details.

Current wording

◦AFS investment securities, at fair value were $5.0 billion at June 30, 2025, up $455.1 million, or 10%, from December 31, 2024. FHLB and Fed Reserve Stocks were $278.4 million at June 30, 2025, up $98.7 million, or 55%, from December 31, 2024. See Note 5 Investment Securities of the notes to the consolidated financial statements for details on these changes.

Previous wording

•Short-term funding was $311 million at March 31, 2025, decreasing $159 million, or 34%, from December 31, 2024 mainly due to lower federal funds purchased and down $454 million, or 59%, from March 31, 2024 primarily due to the payoff of BTFP advances. FHLB advances were $2.0 billion at March 31, 2025, up $173 million, or 9%, from December 31, 2024, and up $694 million, or 52%, from March 31, 2024. Other long-term funding was $591 million at March 31, 2025, down $246 million, or 29%, from December 31, 2024, due to subordinated notes maturing and up $55 million, or 10%, from March 31, 2024 due to the issuance of senior notes in 2024 that exceeded the subordinated notes that matured in the first quarter of 2025. See Note 8 Short and Long-Term Funding of the notes to consolidated financial statements for additional details.

Current wording

◦Other long-term funding was $593.5 million at June 30, 2025, down $244.1 million, or 29%, from December 31, 2024, primarily due to subordinated notes maturing in January 2025. See Note 8 Short and Long-Term Funding of the notes to consolidated financial statements for additional details.

Previous wording

The Corporation has long-term guidelines relative to the proportion of Commercial and Business, CRE, and Consumer loan commitments within the overall loan portfolio, with each targeted to represent 30% to 40% of the overall loan portfolio. The targeted long-term guidelines were unchanged during 2024 and the first three months of 2025. Furthermore, certain sub-asset classes within the respective portfolios are further defined and dollar limitations are placed on these sub-portfolios. These guidelines and limits are reviewed quarterly and approved annually by the Enterprise Risk Committee of the Corporation’s Board of Directors. These guidelines and limits are designed to create balance and diversification within the loan portfolios.

Current wording

The Corporation has long-term guidelines relative to the proportion of Commercial and Business, CRE, and Consumer loan commitments within the overall loan portfolio, with each targeted to represent 30% to 40% of the overall loan portfolio. The targeted long-term guidelines were unchanged during 2024 and the first six months of 2025. Furthermore, certain sub-asset classes within the respective portfolios are further defined and dollar limitations are placed on these sub-portfolios. These guidelines and limits are reviewed quarterly and approved annually by the Enterprise Risk Committee of the Corporation’s Board of Directors. These guidelines and limits are designed to create balance and diversification within the loan portfolios.

Previous wording

At March 31, 2025, $20.6 billion, or 68%, of the loans outstanding and $17.5 billion, or 90%, of the commercial loans outstanding were floating rate, adjustable rate, re-pricing within one year, or maturing within one year.

Current wording

At June 30, 2025, $20.9 billion, or 68%, of the loans outstanding and $17.7 billion, or 90%, of the commercial loans outstanding were floating rate, adjustable rate, re-pricing within one year, or maturing within one year.

Previous wording

(b) 62% of the total utilities exposure comes from renewable energy sources (wind, solar, hydroelectric, and geothermal).

Current wording

(b) 63% of the total utilities exposure comes from renewable energy sources (wind, solar, hydroelectric, and geothermal).

Previous wording

Commercial real estate - investor: CRE-investor is comprised of loans secured by various non-owner occupied or investor income producing property types.

Current wording

Commercial real estate - investor: Commercial real estate - investor is comprised of loans secured by various non-owner occupied or investor income producing property types.

Previous wording

The remaining CRE-investor portfolio is spread over various other property types, none of which exceed 2% of total loan exposure.

Current wording

The remaining commercial real estate - investor portfolio is spread over various other property types, none of which exceed 2% of total loan exposure.

Previous wording

•Total nonaccrual loans increased $12 million, or 9%, from December 31, 2024, and decreased $44 million, or 24%, from March 31, 2024. The increase from December 31, 2024 was driven by increases in CRE - investor lending and residential mortgage lending, partially offset by a decrease in commercial and industrial lending. The decrease from March 31, 2024 was driven by a decrease in commercial and industrial lending, partially offset by increases in CRE - investor lending and residential mortgage lending. See Note 6 Loans of the notes to consolidated financial statements and Table 10 for additional disclosures on the changes in asset quality.

Current wording

•Total nonaccrual loans decreased $10.3 million, or 8%, from December 31, 2024, and decreased $41.4 million, or 27%, from June 30, 2024. The decrease from December 31, 2024 was driven by a decrease in commercial and business lending, partially offset by an increase in residential mortgage lending. The decrease from June 30, 2024 was driven by decreases in commercial real estate - investor and commercial and business lending, partially offset by an increase in residential mortgage lending. See Note 6 Loans of the notes to consolidated financial statements and Table 10 for additional disclosures on the changes in asset quality.

Previous wording

•YTD net charge offs decreased $13 million from March 31, 2024, primarily driven by a decrease within commercial and industrial lending, partially offset by an increase in CRE - investor lending. See Table 11 and Table 12 for additional information on the activity in the ACLL.

Current wording

•YTD net charge offs decreased $21.7 million from June 30, 2024, primarily driven by a decrease within commercial and industrial lending, partially offset by an increase in commercial real estate - investor lending. See Table 11 and Table 12 for additional information on the activity in the ACLL.

Previous wording

•Total deposits, which are the Corporation's largest source of funds, increased $548 million, or 2% from December 31, 2024, and increased $1.5 billion, or 4%, from March 31, 2024. The increase from December 31, 2024, was driven by increases in all deposit categories besides brokered CDs and interest-bearing demand deposits which partially offset the overall increase, while the increase from March 31, 2024 was driven by increases in all deposit categories except non-interest bearing demand deposits.

Current wording

•Total deposits, which are the Corporation's largest source of funds, decreased $500.9 million, or 1% from December 31, 2024, and increased $1.5 billion, or 4%, from June 30, 2024. The decrease from December 31, 2024, was primarily driven by decreases in interest-bearing demand and brokered CDs, offset by increases in savings and other time deposits, while the increase from June 30, 2024 was driven by increases in all deposit categories except non-interest bearing demand deposits which decreased slightly by 1%.

Previous wording

•Estimated uninsured and uncollateralized deposits, excluding intercompany deposits, were 26.1% of total deposits at March 31, 2025, compared to 23.0% at December 31, 2024 and 22.9% at March 31, 2024. The increase was primarily driven by increases in uninsured balances in business deposit accounts.

Current wording

•Estimated uninsured and uncollateralized deposits, excluding intercompany deposits, were 24.8% of total deposits at June 30, 2025, compared to 23.0% at December 31, 2024 and 21.9% at June 30, 2024. The increase was primarily driven by increases in uninsured balances in business deposit accounts.

Previous wording

•Lines of credit with the Federal Reserve Bank and FHLB, which require eligible loan and investment collateral to be pledged. Based on the amount of collateral pledged, the FHLB established a collateral value from which the Bank may draw advances, and issue letters of credit in favor of public fund depositors, against the collateral. As of March 31, 2025, the Bank had $6.4 billion available for future funding. The Federal Reserve Bank also establishes a collateral value of assets to support borrowings from the discount window. As of March 31, 2025, the Bank had $3.3 billion available for discount window borrowings.

Current wording

•Lines of credit with the Federal Reserve Bank and FHLB, which require eligible loan and investment collateral to be pledged. Based on the amount of collateral pledged, the FHLB established a collateral value from which the Bank may draw advances, and issue letters of credit in favor of public fund depositors, against the collateral. As of June 30, 2025, the Bank had $5.0 billion available for future funding. The Federal Reserve Bank also establishes a collateral value of assets to support borrowings from the discount window. As of June 30, 2025, the Bank had $5.4 billion available for discount window borrowings.

Previous wording

For the three months ended March 31, 2025, net cash provided by operating and financing activities was $98 million and $242 million, respectively, while net cash used in investing activities was $127 million, for a net increase in cash and cash equivalents of $213 million since year-end 2024. At March 31, 2025, assets of $43.3 billion increased $286 million, or 1%, from year-end 2024. On the funding side, deposits of $35.2 billion increased $548 million, or 2% from year-end 2024, short-term funding decreased $159 million, or 34%, and other long-term funding decreased $246 million, or 29%.

Current wording

For the six months ended June 30, 2025, net cash provided by operating and financing activities was $239.6 million and $765.5 million, respectively, while net cash used in investing activities was $764.6 million, for a net increase in cash and cash equivalents of $240.5 million since year-end 2024. At June 30, 2025, assets of $44.0 billion increased $970.7 million, or 2%, from year-end 2024. On the funding side, deposits of $34.1 billion decreased $500.9 million, or 1% from year-end 2024, short-term funding decreased $394.8 million, or 84%, and other long-term funding decreased $244.1 million, or 29%.

Previous wording

For the three months ended March 31, 2024, net cash provided by operating and financing activities was $155 million and $49 million, respectively, while net cash used in investing activities was $275 million, for a net decrease in cash and cash equivalents of $72 million since year-end 2023. At March 31, 2024, assets of $41.1 billion increased $121 million, from year-end 2023. On the funding side, deposits of $33.7 billion increased $267 million, or 1%, from year-end 2023, short-term funding increased $439 million, or 134%, and FHLB advances decreased $607 million, or 31%.

Current wording

For the six months ended June 30, 2024, net cash provided by operating and financing activities was $268.0 million and $422.4 million, respectively, while net cash used in investing activities was $655.1 million, for a net increase in cash and cash equivalents of $35.3 million since year-end 2023. At June 30, 2024, assets of $41.6 billion increased $608.1 million, from year-end 2023. On the funding side, deposits of $32.7 billion decreased $755.0 million, or 2%, from year-end 2023, short-term funding increased $532.8 million, or 163%, and FHLB advances increased $732.9 million, or 38%.

Previous wording

While a gradual shift in interest rates was used in this analysis to provide an estimate of exposure under a probable scenario, an instantaneous shift in interest rates would have a more significant impact. No EAR breaches occurred during the first three months of 2025.

Current wording

While a gradual shift in interest rates was used in this analysis to provide an estimate of exposure under a probable scenario, an instantaneous shift in interest rates would have a more significant impact. No EAR breaches occurred during the first six months of 2025.

Previous wording

See Part II, Item 2, Unregistered Sales of Equity Securities and Use of Proceeds, for information on the shares repurchased during the first quarter of 2025.

Current wording

See Part II, Item 2, Unregistered Sales of Equity Securities and Use of Proceeds, for information on the shares repurchased during the second quarter of 2025.

Previous wording

The Corporation reported net income of $102 million for the first quarter of 2025, compared to a net loss of $162 million for the fourth quarter of 2024, with the net loss attributable to impacts of balance sheet restructuring announced in the fourth quarter of 2024. Net income available to common equity was $99 million for the first quarter of 2025, or $0.60 for basic earnings per common share and $0.59 for diluted earnings per common share. Comparatively, the net loss available to common equity for the fourth quarter of 2024 was $164 million, or $1.04 for basic loss per common share and $1.03 for diluted loss per common share (see Table 1).

Current wording

The Corporation reported net income of $111.2 million for the second quarter of 2025, compared to a net income of $101.7 million for the first quarter of 2025. Net income available to common equity was $108.4 million for the second quarter of 2025, or $0.65 for both basic and diluted earnings per common share. Comparatively, the net income available to common equity for the first quarter of 2025 was $98.8 million, or $0.60 for basic earnings per common share and $0.59 for diluted earnings per common share. The increase was primarily driven by increase in net interest income.

Previous wording

The provision for credit losses was $13 million for the first quarter of 2025 and $17 million for the fourth quarter of 2024 (see Table 11). See discussion under sections: Provision for Credit Losses, Nonperforming Assets, and Allowance for Credit Losses on Loans.

Current wording

The provision for credit losses was $18.0 million for the second quarter of 2025, compared to a provision of $23.0 million for the second quarter of 2024. This was due to decreases in commercial real estate lending and commercial real estate - investor, offset by smaller increases in commercial and business lending. See discussion under sections: Provision for Credit Losses, Nonperforming Assets, and Allowance for Credit Losses on Loans.

Previous wording

•Average earning assets and average loans both increased $977 million from the three months ended March 31, 2024, primarily driven by growth in commercial and business lending.

Current wording

•Average earning assets and average loans both increased $1.2 billion from the six months ended June 30, 2024, primarily driven by growth in commercial and business lending.

Previous wording

•Net income decreased $5 million from the three months ended March 31, 2024, driven by a $7 million decrease in net interest income due to lower FTP allocations and a $2 million increase in noninterest expense primarily due to increased technology expenses. These were offset by a $2 million increase in noninterest income primarily due to increased mortgage banking revenues and a $1 million reduction in income tax expense due to lower pre-tax income.

Current wording

•Net income decreased $13.1 million from the six months ended June 30, 2024, driven by a decrease in net interest income due to lower FTP allocations partially offset by organic net interest income growth, an increase in noninterest income primarily related to higher mortgage banking fees due to MSR valuation impacts and larger gains on sales of loans originated for sale, an increase in noninterest expense predominantly due to elevated technology costs, and a decrease in income tax expense due to the lower net income before taxes.

Previous wording

•Average deposits increased $433 million from the three months ended March 31, 2024, primarily driven by increases in all deposit types except for time deposits.

Current wording

•Average deposits increased $1.1 billion from the six months ended June 30, 2024, primarily driven by increases in all deposit types except for noninterest-bearing demand deposits.

Previous wording

•Average earning assets increased $846 million from the three months ended March 31, 2024, driven by higher balances of AFS investment securities in the portfolio and higher deposits in other financial institutions offset by a decrease in average loans.

Current wording

•Average earning assets increased $963.5 million from the six months ended June 30, 2024, driven by higher balances of AFS investment securities in the portfolio offset by a decreases in all loans categories.

Previous wording

•Average loans decreased $94 million from the three months ended March 31, 2024, driven by lower balances in all loan categories.

Current wording

•Average loans decreased $84.3 million from the six months ended June 30, 2024, attributable to lower balances in all loan categories.