Associated Banc-Corp (ASB) Earnings

Management highlights

### Core Growth Strategy & Execution • Primary corporate focus remains delivering sustainable, profitable organic growth, with disciplined growth and conservative risk, expense, and credit management as foundational strategy pillars. • Organic C&I loan growth hit the full-year 9-10% target by June 30, six months early, with $1.2 billion in organic growth (10%) in the first half of 2026. • Annualized organic customer household growth held above 2% through the first half of 2026, exceeding the full-year 2% target; primary checking household growth hit 2.4% annualized, the strongest rate in over a decade of tracking. • Organic core customer deposits grew 6% year-over-year, up from 4% in 2025 and 2% in 2024, the strongest June-over-June growth in five years. ### American National Acquisition Integration • The acquisition closed in Q2 2026, adding nearly $4 billion in loan balances and over $4 billion in deposit balances; balance sheet incorporation and purchase accounting are complete. • The transaction is broadly in line with original deal expectations: credit marks matched projections, non-recurring merger costs are slightly above original forecasts due to higher interest rate impacts on fair value marks, but expected cost savings have increased from 25% to 30% of American National's expense base, keeping the expected earn-back period stable at 2.25 years. • The next major milestone is systems and branch conversion scheduled for October 2026, with full run-rate cost savings expected to be realized starting in Q1 2027. • Post-acquisition credit review of the American National portfolio is mostly complete, with no material surprises; overall credit quality is modestly better than expected during due diligence. ### Strategic Investment Updates • The firm has expanded its commercial footprint: doubled the size of the Kansas City CNI team after strong initial results, and launched a new CNI office in Dallas led by an experienced market leader. • A new franchise banking vertical launched in April 2026, and has already begun booking new deals. • Key leadership hires have been made for the private wealth business to deepen penetration in under-served major metro markets, and connect wealth opportunities to growing commercial and consumer relationships. • Tech upgrades for the new HOA and title company commercial deposit vertical are complete, with the platform launching in June 2026 already generating initial deposits. • Treasury management and HSA businesses are both growing double digits year-over-year, with strong treasury management sales acting as a leading indicator for future deposit growth. • Digital banking upgrades and marketing improvements for consumer banking have driven faster organic customer growth.

Guidance

• Full-year 2026 total period-end loan growth is projected at 18-20% (up from prior guidance), while C&I loan growth guidance is maintained at 20-22% versus 2025 standalone Associated results; the incremental total loan growth increase comes from stronger first-half CRE production, with elevated payoffs expected in the second half that offset the upward adjustment to full-year growth. • Full-year 2026 total period-end deposit growth guidance is 17-19%, and core customer deposit growth guidance is 19-21% versus 2025 standalone Associated results. • 2026 net interest income growth guidance is 19-21% versus 2025 standalone results. • 2026 total non-interest income growth guidance is maintained at 8-10% versus 2025 standalone results. • 2026 total non-interest expense growth guidance is 20-21% versus 2025 standalone results, with core organic expense growth largely on track with the original 3% guidance, adjusted for modestly higher non-recurring merger costs and neutral deferred compensation expenses that are offset by fee income. • Management expects net interest margin expansion in both Q3 and Q4 2026, following Q2's NIM of 3.17%. • The securities plus cash to total assets ratio finished at 23.3% in Q2, within the firm's 22-24% full-year target range. • Cost savings from the American National acquisition are expected to result in a lower 2027 operating expense run-rate than originally projected, offsetting slightly higher one-time merger costs and fair value marks from higher interest rates.

Segment performance

The firm does not break out formal product segment financials with individual absolute and percentage contributions in this transcript. Key overall balance sheet and income performance is as follows: Reported GAAP EPS of $0.63, or $0.73 after adjusting for $24 million in non-recurring American National acquisition costs. Total loans grew 15% quarter-over-quarter to $X billion, adding $4.7 billion, with $4 billion from American National; organic loan growth was 3% ($940 million), led by $644 million in organic Commercial and Industrial (C&I) growth and $251 million in organic Commercial Real Estate (CRE) growth. Total deposits and core customer deposits both grew 12% quarter-over-quarter, adding over $4 billion from American National; excluding the acquisition, total deposits decreased 1% due to normal Q2 seasonality, while organic core customer deposits grew 6% year-over-year to $1.7 billion, the strongest June-over-June growth in five years. Q2 net interest income was $370 million, up 20% ($63 million) quarter-over-quarter, with a net interest margin of 3.17%, up 14 basis points. Total non-interest income was $80 million, up $5 million quarter-over-quarter, led by growth in wealth management, service charges, and card fees. Total non-interest expense was $272 million, up $53 million quarter-over-quarter, including $24 million in one-time merger costs; the adjusted efficiency ratio was 52.9%. Asset quality: Provision for credit losses was $19 million, the ACL ratio increased 2 basis points to 1.36%, and net charge-offs were $23 million, of which $7 million came from inherited American National credits; adjusted charge-offs were in line with historical trends. Common Equity Tier 1 (CET1) ratio was 10.47%, flat quarter-over-quarter, and Tangible Common Equity (TCE) ratio was 8.27%, also flat quarter-over-quarter.

Risks & headwinds

• Macro economic risks: Management is monitoring ongoing credit stressors including higher inflation, shifting labor markets, tariff negotiations, and the impact of elevated interest rates on the loan portfolio, with regular sensitivity analysis conducted bank-wide. • Interest rate risk: The firm maintains a relatively neutral position to interest rate changes, but NII would decline by 1.9% in a 100bps rate hike scenario and 1.2% in a 100bps rate cut scenario. • Integration execution risk: Systems and branch conversion for American National is scheduled for October 2026, and there is uncertainty around the timing of one-time merger costs and full realization of cost savings. • Funding risk: While organic core deposit growth is strong, material acceleration of non-core/wholesale funding reduction would require holding back broader bank growth, which management is unwilling to do. • Competitive lending environment: Industry competition for loans remains ongoing, requiring discipline to avoid pursuing credits that do not meet the firm's credit and return requirements.

Analyst Q&A

• Q: Analyst asks why total loan growth guidance was increased while C&I growth guidance was held steady, and what is driving the incremental total growth.

  A: The upward adjustment to total loan growth comes from stronger-than-expected first half CRE production, with some CNI and CRE originations pulled forward into the first half. Elevated payoffs from 2021-vintage production are still expected in the second half, so the full-year C&I guidance remains unchanged despite the strong first half performance. Organic production pipelines remain strong, with CNI pipelines up 20% year-over-year, but management built guidance around expected second half paydowns. /

• Q: Analyst asks about management's current appetite for additional M&A after closing the American National acquisition.

  A: Associated's primary growth strategy remains organic, and the firm has already delivered 20% annualized C&I growth and strong deposit growth while integrating American National, proving organic momentum has not slowed. The priority is executing on the American National integration to leverage the combined platform for enhanced organic growth in new markets like Omaha. Management will not pursue a bad M&A deal that would erode five years of work building out the firm's organic growth engine, and will not consider new M&A until the current conversion is complete. /

• Q: Analyst asks about HOA and title business growth outlook and what is holding back deposit generation.

  A: All required technology and digital upgrades for the vertical are complete, and the platform launched in June 2026 with an experienced industry team already onboard. No barriers to growth exist, and initial deposits have already started flowing in the first weeks post-launch. Management expects the business to grow to $200-$300 million in deposits by the end of 2027, with steady, significant growth over the long term. Strong double-digit growth in treasury management sales also signals future deposit growth across the commercial segment, complementing the new HOA/title vertical. /

• Q: Analyst asks about management's outlook for share buybacks after closing the American National acquisition.

  A: Management now sees the conditions required for buybacks: the firm has delivered improved profitability and margin expansion, has a clear growth forecast for the second half of 2026, and has completed review of the American National balance sheet and purchase accounting marks. Management will deploy the already approved share repurchase authorization in Q3 and Q4 2026. /

• Q: Analyst asks for color on the quarter's NPL increase, half of which came from the American National acquisition.

  A: Half of the increase comes from aligning a small number of American National credits to Associated's risk grading and credit philosophy, with no concentrated industry or geographic risks and no material concerns. The remaining increase is normal cyclical movement in the legacy Associated portfolio, with no emerging risk areas identified. The overall American National portfolio credit quality matches or exceeds due diligence expectations, and the $7 million in charge-offs from the inherited portfolio were a one-time alignment that will not repeat going forward.