Associated Banc-Corp (ASBC): New Analyst Report from Zacks Equity Research - Zacks Equity Research Report

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Summary:
Associated Banc-Corp's first-quarter 2014 earnings surpassed the Zacks Consensus Estimate. Improvement in net interest income (NII) and prudish expense management were the positives for the quarter. However, these were partially offset by a fall in non-interest income and higher provisions. Further, while capital ratios deteriorated, profitability ratios and credit quality were a mixed bag. Nonetheless, we expect capital ratios to stabilize, given the gradual recovery in the economy. Also, enhanced capital deployment activities will reinstate investors' confidence in the stock. However, considerable exposure to commercial loans, continuous rise in operating expenses and concentration risks arising from limited geographic diversification keep us apprehensive.

Overview:

Associated Banc-Corp founded in 1964 is headquartered in Green Bay, WI. This bank holding company, through its subsidiaries Associated Bank, National Association and various non-banking subsidiaries, provides an array of banking and non-banking products and services to individuals and businesses. It has approximately 200 banking offices serving more than 100 communities, primarily within the 3-state branch footprint Wisconsin, Illinois and Minnesota. As of Mar 31, 2014, the company had approximately 4,517 employees.

Associated Banc-Corp operates through the following three business segments:

Commercial Banking: The segment offers loans, deposits, and related banking services to businesses, which primarily include business checking and other business deposit products, business loans, lines of credit, commercial real estate financing, construction loans, letters of credit and revolving credit arrangements. It also includes insurance related products and services, business credit cards, equipment and machinery leases, and the support to deliver, fund and manage such banking services.

Consumer Banking: The segment consists of lending and deposit gathering to individuals and small businesses and also provides a variety of fiduciary, investment management, advisory and corporate agency services to assist customers in building, investing or protecting their wealth, including securities brokerage and trust / asset management. The segment offers a variety of loan and deposit products to retail customers.

Risk Management and Shared Services: The segment includes Corporate Risk Management, Finance, Treasury, Facilities Management, Operations and Technology functions. The earning assets within this segment include the company's investment portfolio and capital includes both allocated as well as any remaining unallocated capital.

As of Mar 31, 2014, Associated Banc-Corp had $24.8 billion in total assets, $623.4 million in cash and cash equivalents, $16.4 billion in total loans, $17.5 billion in total deposits and $2.9 billion in stockholders' equity.


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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



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