Q4 2025 Associated Banc-Corp Earnings Call

January 22, 2026

Speaker #1: At this time, all participants are in listen-only mode. We will be conducting a question-and-answer session at the end of this conference. Copies of the slides that will be referenced during today's call are available on the company's website at investor.associatedbank.com.

Speaker #1: Actual results could differ materially from the results anticipated or projected in any such forward-looking statements. Additional detailed information concerning the important factors that could cause Associated's actual results to differ materially from the information discussed today is readily available on the SEC website in the Risk Factors section of Associated's most recent Form 10-K and subsequent SEC filings.

Operator: Additional detailed information concerning the important factors that could cause Associated's actual results to differ materially from the information discussed today is readily available on the SEC website in the risk factors section of Associated's most recent Form 10-K and subsequent SEC filings. These factors are incorporated herein by reference. For reconciliation of the non-GAAP financial measures to the GAAP financial measures mentioned in this conference call, please refer to pages 33 and 34 of the slide presentation and to pages 10 and 11 of the press release financial tables. Following today's presentation, instructions will be given for the question-and-answer session. At this time, I would like to turn the conference over to Andy Harmening, President and CEO, for opening remarks. Please go ahead, sir. Yeah, thank you for the introduction, and good afternoon. Welcome to our Q4 earnings call. This is Andy Harmening.

Additional detailed information concerning the important factors that could cause Associated's actual results to differ materially from the information discussed today is readily available on the SEC website in the risk factors section of Associated's most recent Form 10-K and subsequent SEC filings. These factors are incorporated herein by reference. For reconciliation of the non-GAAP financial measures to the GAAP financial measures mentioned in this conference call, please refer to pages 33 and 34 of the slide presentation and to pages 10 and 11 of the press release financial tables. Following today's presentation, instructions will be given for the question-and-answer session. At this time, I would like to turn the conference over to Andy Harmening, President and CEO, for opening remarks. Please go ahead, sir.

Speaker #1: These factors are incorporated herein by reference. For a reconciliation of the non-GAAP financial measures to the GAAP financial measures mentioned in this conference call, please refer to pages 33 and 34 of the slide presentation and to pages 10 and 11 of the press release financial tables.

Following today's presentation, instructions will be given for the question-and-answer session. At this time, I would like to turn the conference over to Andy Harmening.

Q4 2025 Associated Banc-Corp Earnings Call

Request a DemoDemo

ASB

Associated Bank

Earnings

Q4 2025 Associated Banc-Corp Earnings Call

ASB

Thursday, January 22nd, 2026 at 10:00 PM

Transcript

No Transcript Available

No transcript data is available for this event yet. Transcripts typically become available shortly after an earnings call ends.

Want AI-powered analysis? Try AllMind AI →

Speaker #1: President and CEO for opening remarks. Please go ahead, sir.

Andy Harmening: Yeah, thank you for the introduction, and good afternoon. Welcome to our Q4 earnings call. This is Andy Harmening. I am joined once again by our Chief Financial Officer, Derek Meyer, and our Chief Credit Officer, Pat Ahern. I'll start off with some highlights from the Q4 and 2025 as a whole. From there, Derek will cover the income statement and capital trends, and Pat will provide an update on credit. 2025 was a pivotal year for Associated Bank. In March of last year, we marked the completion of all major investments from phase two of our strategic plan. Those investments gave us strong momentum throughout 2025, and they positioned us for additional momentum in 2026 and beyond. We are growing and deepening our customer base organically and taking share in major metropolitan markets.

Speaker #2: Yeah. Thank you for the introduction, and good afternoon. Welcome to our fourth quarter earnings call. This is Andy Harmening. I am joined once again by our Chief Financial Officer, Derek Meyer, and our Chief Credit Officer, Pat Ahern.

Operator: I am joined once again by our Chief Financial Officer, Derek Meyer, and our Chief Credit Officer, Pat Ahern. I'll start off with some highlights from the Q4 and 2025 as a whole. From there, Derek will cover the income statement and capital trends, and Pat will provide an update on credit. 2025 was a pivotal year for Associated Bank. In March of last year, we marked the completion of all major investments from phase two of our strategic plan. Those investments gave us strong momentum throughout 2025, and they positioned us for additional momentum in 2026 and beyond. We are growing and deepening our customer base organically and taking share in major metropolitan markets. We delivered our strongest year for organic household growth since we began tracking a decade ago, with net growth in all four quarters of 2025. We're growing and remixing our balance sheet simultaneously.

Speaker #2: I'll start off with some highlights from the fourth quarter and 2025 as a whole. From there, Derek will cover income statement and capital trends, and Pat will provide an update on credit.

Speaker #2: 2025 was a pivotal year for Associated Bank. In March of last year, we marked the completion of all major investments from phase two of our strategic plan.

Speaker #2: Those investments gave us strong momentum throughout 2025, and they positioned us for additional momentum in 2026 and beyond. We are growing and deepening our customer base organically and taking share in major metropolitan markets.

We delivered our strongest year for organic household growth since we began tracking a decade ago, with net growth in all four quarters of 2025. We're growing and remixing our balance sheet simultaneously.In 2025, we added over $1.2 billion in relationship C&I loan growth while steadily reducing our low-yielding, low-relationship value Resi mortgage loan balances. On the liability side, we added nearly $1 billion in core customer deposits during the year. We're driving stronger profitability. Over each of the last three quarters, we set a company record for net interest income. We also saw strength in several fee income categories in the back half of the year. This enhanced revenue profile, combined with expense discipline and solid credit performance, helped us deliver the strongest net income in our company's history in 2025.

Speaker #2: We delivered our strongest year for organic household growth since we began tracking a decade ago. With net growth in all four quarters of 2025, we're growing and remixing our balance sheet simultaneously.

Speaker #2: In 2025, we added over $1.2 billion in relationship CNI loan growth, while steadily reducing our low-yielding, low-relationship value resi mortgage loan balances. And on the liability side, we added nearly $1 billion in core customer deposits during the year.

Operator: In 2025, we added over $1.2 billion in relationship C&I loan growth while steadily reducing our low-yielding, low-relationship value Resi mortgage loan balances. On the liability side, we added nearly $1 billion in core customer deposits during the year. We're driving stronger profitability. Over each of the last three quarters, we set a company record for net interest income. We also saw strength in several fee income categories in the back half of the year. This enhanced revenue profile, combined with expense discipline and solid credit performance, helped us deliver the strongest net income in our company's history in 2025. To further enhance and accelerate our organic growth momentum, we announced an agreement to acquire American National Corporation in December.

Speaker #2: And we're driving stronger profitability. Over each of the last three quarters, we set a company record for net interest income. We also saw strength in several fee income categories in the back half of the year.

Speaker #2: This enhanced revenue profile, combined with expense discipline and solid credit performance, helped us deliver the strongest net income in our company's history in 2025.

To further enhance and accelerate our organic growth momentum, we announced an agreement to acquire American National Corporation in December. The transaction is financially attractive, but importantly, it also enables us to expand our organic growth prospects by providing entry into the vibrant Omaha market with a number two market deposit share and strengthening our position in the Twin Cities market, where we already have momentum. We believe that Associated and American National are a natural cultural fit, and we look forward to welcoming American National employees and customers to Associated later this year. Further underscoring our commitment to organic growth, we're planning several additional investments in 2026 to accelerate momentum in multiple strategic growth markets, including the Twin Cities, Omaha, Kansas City, and Dallas.

Speaker #2: To further enhance and accelerate our organic growth momentum, we announced an agreement to acquire American National Corporation in December. The transaction is financially attractive, but importantly, it also enables us to expand our organic growth prospects by providing entry into the vibrant Omaha market with the number two market deposit share and strengthening our position in the Twin Cities market, where we already have momentum.

Operator: The transaction is financially attractive, but importantly, it also enables us to expand our organic growth prospects by providing entry into the vibrant Omaha market with a number two market deposit share and strengthening our position in the Twin Cities market, where we already have momentum. We believe that Associated and American National are a natural cultural fit, and we look forward to welcoming American National employees and customers to Associated later this year. Further underscoring our commitment to organic growth, we're planning several additional investments in 2026 to accelerate momentum in multiple strategic growth markets, including the Twin Cities, Omaha, Kansas City, and Dallas. Our expectation is to maintain a growth and profitability focus while simultaneously managing our low-risk profile. Credit discipline remains foundational to our strategy and our growth centers on high-quality commercial relationships and prime/super prime consumer borrowers.

Speaker #2: We believe that Associated and American National are a natural cultural fit, and we look forward to welcoming American National employees and customers to Associated later this year.

Speaker #2: To further underscore our commitment to organic growth, we're planning several additional investments in 2026 to accelerate momentum in multiple strategic growth markets, including the Twin Cities, Omaha, Kansas City, and Dallas.

Speaker #2: Our expectation is to maintain a growth and profitability focus, while simultaneously managing our low-risk profile. Credit discipline remains foundational to our strategy, and our growth centers on high-quality commercial relationships and prime, super-prime consumer borrowers.

Our expectation is to maintain a growth and profitability focus while simultaneously managing our low-risk profile. Credit discipline remains foundational to our strategy and our growth centers on high-quality commercial relationships and prime/super prime consumer borrowers. We continue to manage our existing portfolios proactively to stay on top of any emerging risks. As we look into 2026, Associated Bank's momentum continues to build. We're excited about the future of this company and look forward to providing additional updates along the way. With that, I'd like to walk through our financial highlights on slide four. We reported earnings of $0.80 per share in Q4 and $2.77 per share for the full year. Total loans grew by another 1% versus the prior quarter and 5% versus Q4 of 2024.

Speaker #2: We continue to manage our existing portfolios proactively to stay on top of any emerging risks. As we look into 2026, Associated Bank's momentum continues to build.

Operator: We continue to manage our existing portfolios proactively to stay on top of any emerging risks. As we look into 2026, Associated Bank's momentum continues to build. We're excited about the future of this company and look forward to providing additional updates along the way. With that, I'd like to walk through our financial highlights on slide four. We reported earnings of $0.80 per share in Q4 and $2.77 per share for the full year. Total loans grew by another 1% versus the prior quarter and 5% versus Q4 of 2024. C&I has continued to be a primary growth driver for us throughout the year. We grew C&I loans another 2% in Q4 and added over $1.2 billion in C&I balances for the year.

Speaker #2: We're excited about the future of this company and look forward to providing additional updates along the way. With that, I'd like to walk through our financial highlights on Slide 4.

Speaker #2: We reported earnings of $0.80 per share in Q4 and $2.77 per share for the full year. Total loans grew by another 1% versus the prior quarter and 5% versus Q4 of 2024.

C&I has continued to be a primary growth driver for us throughout the year. We grew C&I loans another 2% in Q4 and added over $1.2 billion in C&I balances for the year. On the funding side, core customer deposits grew by nearly $700 million versus Q3 and nearly $1 billion versus Q4 of last year. Point to point, this represented a 3.5% growth rate, but on a quarterly average basis, core customer deposits were 5% higher in Q4 of 2025 versus Q4 of 2024. Shifting to the income statement, Q4 net interest income of $310 million set another record for the strongest quarterly NII in company history, and our NII was up 15% for the year. After posting strong quarterly non-interest income of $81 million in Q3, we posted another strong quarter of $79 million in Q4.

Speaker #2: CNI has continued to be a primary growth driver for us throughout the year. We grew CNI loans another 2% in Q4 and added over $1.2 billion in CNI balances for the year.

Speaker #2: On the funding side, core deposits grew by nearly core customer deposits grew by nearly $700 million versus Q3 and nearly $1 billion versus Q4 of last year.

Operator: On the funding side, core customer deposits grew by nearly $700 million versus Q3 and nearly $1 billion versus Q4 of last year. Point to point, this represented a 3.5% growth rate, but on a quarterly average basis, core customer deposits were 5% higher in Q4 of 2025 versus Q4 of 2024. Shifting to the income statement, Q4 net interest income of $310 million set another record for the strongest quarterly NII in company history, and our NII was up 15% for the year. After posting strong quarterly non-interest income of $81 million in Q3, we posted another strong quarter of $79 million in Q4. Capital markets, wealth fees, and card fees all grew in the Q4, and on an adjusted basis, total non-interest income grew by 9% versus 2024.

Speaker #2: Point-to-point, this represented a 3.5% growth rate, but on a quarterly average basis, core customer deposits were 5% higher in Q4 2025 versus Q4 2024.

Speaker #2: Shifting to the income statement, Q4 net interest income of $310 million set another record for the strongest quarterly NII in company history, and our NII was up 15% for the year.

Speaker #2: After posting strong quarterly non-interest income of $81 million in Q3, we posted another strong quarter of $79 million in Q4. Capital markets, wealth fees, and card fees all grew in the fourth quarter, and on an adjusted basis, total non-interest income grew by 9% versus 2024.

Capital markets, wealth fees, and card fees all grew in the Q4, and on an adjusted basis, total non-interest income grew by 9% versus 2024. Total non-interest expense of $219 million increased $3 million from the prior quarter, delivering positive operating leverage, remains a primary objective as we execute our plan. On the credit front, we remain pleased with asset quality trends. In Q4, our criticized loans decreased, and our non-accruals dipped to 32 basis points of total loans. Net charge-offs decreased to just 3 basis points for the quarter and 12 basis points for the full year. And finally, our return on average tangible common equity increased steadily throughout the year, finishing over 15% in Q4. On slide five, we wanted to take a moment to highlight how our strategic investments since 2021 have transformed our return profile.

Speaker #2: Total non-interest expense of $219 million increased $3 million from the prior quarter. Delivering positive operating leverage remains a primary objective as we execute our plan.

Operator: Total non-interest expense of $219 million increased $3 million from the prior quarter, delivering positive operating leverage, remains a primary objective as we execute our plan. On the credit front, we remain pleased with asset quality trends. In Q4, our criticized loans decreased, and our non-accruals dipped to 32 basis points of total loans. Net charge-offs decreased to just 3 basis points for the quarter and 12 basis points for the full year. And finally, our return on average tangible common equity increased steadily throughout the year, finishing over 15% in Q4. On slide five, we wanted to take a moment to highlight how our strategic investments since 2021 have transformed our return profile. First, after investing in talented RMs in major metropolitan markets across our footprint, we've grown C&I loans by over 50% since 2020.

Speaker #2: On the credit front, we remain pleased with asset quality trends. In Q4, our criticized loans decreased, and our non-accruals dipped to 32 basis points of total loans.

Speaker #2: Net charge-offs decreased to just three basis points for the quarter and 12 basis points for the full year. And finally, our return on average tangible common equity increased steadily throughout the year, finishing over 15% in Q4.

Speaker #2: On slide five, we wanted to take a moment to highlight how our strategic investments since ’21 have transformed our return profile. First, after investing in talented RMs in major metropolitan markets across our footprint, we’ve grown CNI loans by over 50% since 2020.

First, after investing in talented RMs in major metropolitan markets across our footprint, we've grown C&I loans by over 50% since 2020. With pipelines remaining strong and a few more non-competes set to roll off between now and the end of Q1, we expect our momentum to carry through 2026 in both commercial lending and deposit acquisition. As we continue to add relationship C&I loans to the books, they're replacing lower-yielding non-relationship Resi Mortgage balances as they roll off. Since 2020, we've worked down our concentration of mortgage loans by over 10 percentage points. This ongoing mix shift is contributing to enhanced profitability. In 2025, we posted three consecutive quarters of record NII and a NIM north of 3% for the year, 50 basis points higher than 2020.

Speaker #2: With pipelines remaining strong, and a few more non-competes set to roll off between now and the end of Q1, we expect our momentum to carry through 2026 in both commercial lending and deposit acquisition.

Operator: With pipelines remaining strong and a few more non-competes set to roll off between now and the end of Q1, we expect our momentum to carry through 2026 in both commercial lending and deposit acquisition. As we continue to add relationship C&I loans to the books, they're replacing lower-yielding non-relationship Resi Mortgage balances as they roll off. Since 2020, we've worked down our concentration of mortgage loans by over 10 percentage points. This ongoing mix shift is contributing to enhanced profitability. In 2025, we posted three consecutive quarters of record NII and a NIM north of 3% for the year, 50 basis points higher than 2020. While we've invested significantly to transform the growth profile of the bank, we've remained disciplined on the credit front, and our net charge-off rate has remained below our medium-term target of 35 basis points.

Speaker #2: As we continue to add relationship CNI loans to the books, they're replacing lower-yielding, non-relationship resi mortgage balances as they roll off. Since 2020, we've worked down our concentration of mortgage loans by over 10 percentage points.

Speaker #2: This ongoing makeshift is contributing to enhanced profitability. In 2025, we posted three consecutive quarters of record NII and a NIM north of 3% for the year.

Speaker #2: 50 basis points higher than 2020. While we've invested significantly to transform the growth profile of the bank, we've remained disciplined on the credit front, and our net charge-off rate has remained below our medium-term target of 35 basis points.

While we've invested significantly to transform the growth profile of the bank, we've remained disciplined on the credit front, and our net charge-off rate has remained below our medium-term target of 35 basis points. We've also managed our expense base in a disciplined way to support revenue expansion, positive operating leverage, and enhanced profitability. As a result, our adjusted efficiency ratio decreased by over 700 basis points from 2020 to 2025, and our ROTC increased to 13.6% in 2025. In Q4 of 2025, our ROTC climbed above 15%. So, as you can see, our strategic investments from phase one and two are having a meaningful impact on the strength and return profile of our company. We believe the momentum from these investments will carry well into 2026.

Speaker #2: We've also managed our expense base in a disciplined way to support revenue expansion, positive operating leverage, and enhanced profitability. As a result, our adjusted efficiency ratio decreased by over 700 basis points from 2020 to 2025.

Operator: We've also managed our expense base in a disciplined way to support revenue expansion, positive operating leverage, and enhanced profitability. As a result, our adjusted efficiency ratio decreased by over 700 basis points from 2020 to 2025, and our ROTC increased to 13.6% in 2025. In Q4 of 2025, our ROTC climbed above 15%. So, as you can see, our strategic investments from phase one and two are having a meaningful impact on the strength and return profile of our company. We believe the momentum from these investments will carry well into 2026. With that said, we also see additional opportunities to incrementally build on our momentum in 2026. On slide six, we've already proven through our strategic plan that we can grow in legacy major metro markets like Milwaukee and Chicago.

Speaker #2: And our ROTI increased to 13.6% in 2025. In Q4 of '25, our ROTI climbed above 15%. So, as you can see, our strategic investments from phase one and two are having a meaningful impact on the strength and return profile of our company.

Speaker #2: We believe the momentum from these investments will carry well into 2026. And with that said, we also see additional opportunities to incrementally build on our momentum in '26.

With that said, we also see additional opportunities to incrementally build on our momentum in 2026. On slide six, we've already proven through our strategic plan that we can grow in legacy major metro markets like Milwaukee and Chicago. The investments we've made to bolster market leadership, add talented RMs, enhance our value proposition for consumers and small businesses, and amplify our brand presence are having a clear impact. Over the course of the past two years combined, we've driven double-digit deposit growth, double-digit C&I loan growth, and household growth that's outpaced population growth in both markets. Milwaukee and Chicago are great markets for us, and we see plenty of additional growth opportunities in those markets going forward. But we also see opportunities to double down and duplicate our success in several other attractive metropolitan areas with strong growth characteristics.

Speaker #2: On slide six, we've already proven through our strategic plan that we can grow in legacy major metro markets like Milwaukee and Chicago. The investments we've made to bolster market leadership, add talented RMs, enhance our value proposition for consumers and small businesses, and amplify our brand presence are having a clear impact.

Operator: The investments we've made to bolster market leadership, add talented RMs, enhance our value proposition for consumers and small businesses, and amplify our brand presence are having a clear impact. Over the course of the past two years combined, we've driven double-digit deposit growth, double-digit C&I loan growth, and household growth that's outpaced population growth in both markets. Milwaukee and Chicago are great markets for us, and we see plenty of additional growth opportunities in those markets going forward. But we also see opportunities to double down and duplicate our success in several other attractive metropolitan areas with strong growth characteristics. In the Twin Cities, we already have a solid retail presence, and we've built a very strong commercial team under the guidance of our head of corporate banking, Phil Trier, and our new market president, Mike Labins.

Speaker #2: Over the course of the past two years combined, we've driven double-digit deposit growth, double-digit CNI loan growth, and household growth that's outpaced population growth in both markets.

Speaker #2: Milwaukee and Chicago are great markets for us, and we see plenty of additional growth opportunities in those markets going forward. But we also see opportunities to double down and duplicate our success in several other attractive metropolitan areas with strong growth characteristics.

In the Twin Cities, we already have a solid retail presence, and we've built a very strong commercial team under the guidance of our head of corporate banking, Phil Trier, and our new market president, Mike Labins. We're also planning to move into our new regional headquarters in the heart of downtown Minneapolis in March. The acquisition of American National is expected to deepen our presence in that market, giving us a top 10 pro forma deposit market share. The American National deal also gives us entry into the attractive Omaha market, with stronger population growth and median household characteristics than both the Midwest and national averages. Our number two pro forma deposit market share gives us scale, and our product set and marketing engine provide meaningful opportunities to both deepen and grow relationships post-close.

Speaker #2: In the Twin Cities, we already have a solid retail presence, and we've built a very strong commercial team under the guidance of our head of corporate banking, Phil Treer, and our new market president, Mike Labins.

Speaker #2: We're also planning to move into a new regional headquarters in the heart of downtown Minneapolis in March. The acquisition of American National is expected to deepen our presence in that market, giving us a top 10 pro forma deposit market share.

Operator: We're also planning to move into our new regional headquarters in the heart of downtown Minneapolis in March. The acquisition of American National is expected to deepen our presence in that market, giving us a top 10 pro forma deposit market share. The American National deal also gives us entry into the attractive Omaha market, with stronger population growth and median household characteristics than both the Midwest and national averages. Our number two pro forma deposit market share gives us scale, and our product set and marketing engine provide meaningful opportunities to both deepen and grow relationships post-close. On the commercial side, we've added a small team in Kansas City in March of last year. That's a market our management team knows well, and we brought in a talented, experienced group of bankers who had the tools to hit the ground running.

Speaker #2: The American National deal also gives us entry into the attractive Omaha market, with stronger population growth and median household characteristics than both the Midwest and national averages.

Speaker #2: Our number two pro forma deposit market share gives us scale, and our product set and marketing engine provide meaningful opportunities to both deepen and grow relationships post-close.

On the commercial side, we've added a small team in Kansas City in March of last year. That's a market our management team knows well, and we brought in a talented, experienced group of bankers who had the tools to hit the ground running. In fact, the team is off to such a strong start that we see opportunities to double down and drive additional momentum there. Dallas is also a market our management team knows well. Associated has had a CRE office in the market for roughly a decade, but we now see opportunity to replicate the success we've had in Kansas City with the addition of C&I presence in the Lone Star State.

Speaker #2: On the commercial side, we've added a small team in Kansas City as of March of last year. That's a market our management team knows well.

Speaker #2: And we brought in a talented, experienced group of bankers who had the tools to hit the ground running. In fact, the team is off to such a strong start that we see opportunities to double down and drive additional momentum there.

Operator: In fact, the team is off to such a strong start that we see opportunities to double down and drive additional momentum there. Dallas is also a market our management team knows well. Associated has had a CRE office in the market for roughly a decade, but we now see opportunity to replicate the success we've had in Kansas City with the addition of C&I presence in the Lone Star State. Moving to slide seven, we're going to accelerate organic growth in these major metropolitan markets through two categories of investment in 2026. First, we've created a best-in-class value proposition for our customers with a combination of digital and product upgrades, and we've had success growing and deepening primary checking households through acquisition-focused marketing. In 2026, we're doubling down on the success to accelerate household growth in major metropolitan markets.

Speaker #2: Dallas is also a market our management team knows well. Associated has had a CRE office in the market for roughly a decade. But we now see opportunity to replicate the success we've had in Kansas City with the addition of CNI presence in the Lone Star State.

Speaker #2: Moving to slide seven. We're going to accelerate organic growth in these major metropolitan markets through two categories of investment in 2026. First, we've created a best-in-class value proposition for our customers with a combination of digital and product upgrades.

Moving to slide seven, we're going to accelerate organic growth in these major metropolitan markets through two categories of investment in 2026. First, we've created a best-in-class value proposition for our customers with a combination of digital and product upgrades, and we've had success growing and deepening primary checking households through acquisition-focused marketing. In 2026, we're doubling down on the success to accelerate household growth in major metropolitan markets.

Speaker #2: And we've had success growing and deepening primary checking households through acquisition-focused marketing. In 2026, we're doubling down on that success to accelerate household growth in major metropolitan markets.

Speaker #2: Specifically, we're planning to increase acquisition-focused marketing spend in the Twin Cities and Omaha by over 100% between the two markets combined. The total marketing acquisition spend across all markets will increase by 25%.

Operator: Specifically, we're planning to increase acquisition-focused marketing spend in the Twin Cities and Omaha by over 100% between the two markets combined. The total marketing acquisition spend across all markets will increase by 25%. Through these actions, we're confident we can deliver stronger household growth in our major metro markets in 2026 and 2027, which we expect will translate to stronger household growth for the bank overall. As we grow primary checking households across the bank, this drives additional deposit growth, but it also brings additional fee income. On the commercial side, we've invested significantly in recent years to hire talented RMs who can gather relationship loans and deposits across our footprint as we look to remix both sides of our balance sheet. This remix is already well underway. Since 2020, C&I loans are up 50%, or over $4 billion.

Specifically, we're planning to increase acquisition-focused marketing spend in the Twin Cities and Omaha by over 100% between the two markets combined. The total marketing acquisition spend across all markets will increase by 25%. Through these actions, we're confident we can deliver stronger household growth in our major metro markets in 2026 and 2027, which we expect will translate to stronger household growth for the bank overall. As we grow primary checking households across the bank, this drives additional deposit growth, but it also brings additional fee income. On the commercial side, we've invested significantly in recent years to hire talented RMs who can gather relationship loans and deposits across our footprint as we look to remix both sides of our balance sheet.This remix is already well underway. Since 2020, C&I loans are up 50%, or over $4 billion.

Speaker #2: Through these actions, we're confident we can deliver stronger household growth in our major metro markets in ’26 and ’27, which we expect will translate to stronger household growth for the bank overall.

Speaker #2: As we grow primary checking households across the bank, this drives additional deposit growth. But it also brings additional fee income. On the commercial side, we've invested significantly in recent years to hire talented RMs who can gather relationship loans and deposits across our footprint as we look to remix both sides of our balance sheet.

Speaker #2: This remix is already well underway. Since 2020, CNI loans are up 50%, or over $4 billion. To build on this momentum, we're announcing another wave of selective RM hires in the Twin Cities, Kansas City, and Dallas, where we see attractive growth opportunities.

Operator: To build on this momentum, we're announcing another wave of selective RM hires in the Twin Cities, Kansas City, and Dallas, where we see attractive growth opportunities. We expect to add approximately five more RMs in the Twin Cities, two in Kansas City, and four in Dallas, which equates to a 10% increase in overall RMs bank-wide. We expect these actions to help us drive approximately $1.2 billion of relationship C&I growth across the total bank in 2026. In 2027 and beyond, we expect to continue adding talented RMs to drive sustainable, high-quality commercial growth. On slide eight, we highlight our quarterly loan trends through Q4. Total loans grew by 1% on both an average and a period-end basis in Q4. As expected, C&I led the way with over $200 million in balances during the quarter.

To build on this momentum, we're announcing another wave of selective RM hires in the Twin Cities, Kansas City, and Dallas, where we see attractive growth opportunities. We expect to add approximately five more RMs in the Twin Cities, two in Kansas City, and four in Dallas, which equates to a 10% increase in overall RMs bank-wide. We expect these actions to help us drive approximately $1.2 billion of relationship C&I growth across the total bank in 2026. In 2027 and beyond, we expect to continue adding talented RMs to drive sustainable, high-quality commercial growth. On slide eight, we highlight our quarterly loan trends through Q4. Total loans grew by 1% on both an average and a period-end basis in Q4. As expected, C&I led the way with over $200 million in balances during the quarter.

Speaker #2: We expect to add approximately five more RMs in the Twin Cities, two in Kansas City, and four in Dallas, which equates to a 10% increase in overall RMs bank-wide.

Speaker #2: We expect these actions to help us drive approximately $1.2 billion of relationship CNI growth across the total bank in 2026. In 2027 and beyond, we expect to continue adding talented RMs to drive sustainable, high-quality commercial growth.

Speaker #2: On slide eight, we highlight our quarterly loan trends through Q4. Total loans grew by 1% on both an average and a period-end basis in Q4. As expected, CNI led the way with over $200 million in balances during the quarter.

Speaker #2: Auto balances grew by another $65 million in Q4 as we've continued to selectively add high-quality balances to our book. Total period-end CRE balances dipped by $88 million versus Q3 due to elevated payoff activity.

Operator: Auto balances grew by another $65 million in Q4 as we've continued to selectively add high-quality balances to our book. Total period-end CRE balances dipped by $88 million versus Q3 due to elevated payoff activity. We expect elevated CRE payoff activity to linger in the coming quarters. On slide nine, we show an annual view of loan trends. In this broader view, you can clearly see the growth and remix story that has been in progress since 2021. We've decreased our concentration of low-yielding, non-customer Resi mortgages and diversified into higher-quality, higher-return categories like C&I and auto. We've also grown total loans by nearly 30% over this time without abandoning our disciplined approach to credit. In 2025, total loan growth was once again led by C&I, where we achieved our $1.2 billion growth target for the year.

Auto balances grew by another $65 million in Q4 as we've continued to selectively add high-quality balances to our book. Total period-end CRE balances dipped by $88 million versus Q3 due to elevated payoff activity. We expect elevated CRE payoff activity to linger in the coming quarters. On slide nine, we show an annual view of loan trends. In this broader view, you can clearly see the growth and remix story that has been in progress since 2021. We've decreased our concentration of low-yielding, non-customer Resi mortgages and diversified into higher-quality, higher-return categories like C&I and auto. We've also grown total loans by nearly 30% over this time without abandoning our disciplined approach to credit. In 2025, total loan growth was once again led by C&I, where we achieved our $1.2 billion growth target for the year.

Speaker #2: We expect elevated CRE payoff activity to linger in the coming quarters. On slide nine, we show an annual view of loan trends. In this broader view, you can clearly see the growth and remix story that has been in progress since 2021.

Speaker #2: We've decreased our concentration of low-yielding, non-customer resi mortgages and diversified into higher-quality, higher-return categories like CNI and auto. We've also grown total loans by nearly 30% over this time, without abandoning our disciplined approach to credit.

Speaker #2: In 2025, total loan growth was once again led by CNI, where we achieved our $1.2 billion growth target for the year. With pipelines remaining strong and additional lift expected as our last few non-competes roll off, we expect continued momentum in CNI into 2026.

Operator: With pipelines remaining strong and additional lift expected as our last few non-competes roll off, we expect continued momentum in C&I into 2026. As such, we expect C&I loan growth of 9% to 10% in 2026. At the top of the house, we expect total bank loan growth of 5% to 6% for the year. Both growth figures are on a standalone basis, excluding the impact of American National. Shifting to slide 10, we added nearly $700 million in core customer deposits in Q4 after adding over $600 million in Q3. In Q4, our growth was once again spread across most categories, with customer CDs being the only category that decreased. This core deposit growth enabled us to work down our wholesale funding balances by 1% in Q4, including a $161 million decrease in broker CDs. On slide 11, we show a broader annual view of deposit trends.

With pipelines remaining strong and additional lift expected as our last few non-competes roll off, we expect continued momentum in C&I into 2026. As such, we expect C&I loan growth of 9% to 10% in 2026. At the top of the house, we expect total bank loan growth of 5% to 6% for the year. Both growth figures are on a standalone basis, excluding the impact of American National. Shifting to slide 10, we added nearly $700 million in core customer deposits in Q4 after adding over $600 million in Q3. In Q4, our growth was once again spread across most categories, with customer CDs being the only category that decreased. This core deposit growth enabled us to work down our wholesale funding balances by 1% in Q4, including a $161 million decrease in broker CDs.

Speaker #2: As such, we expect CNI loan growth of 9% to 10% in 2026. At the top of the house, we expect total bank loan growth of 5% to 6% for the year.

Speaker #2: Both growth figures are on a standalone basis, excluding the impact of American National. Shifting to slide 10, we added nearly $700 million in core customer deposits in Q4 after adding over $600 million in Q3.

Speaker #2: In Q4, our growth was once again spread across most categories, with customer CDs being the only category that decreased. This core deposit growth enabled us to work down our wholesale funding balances by 1% in Q4, including a $161 million decrease.

Speaker #2: In broker CDs, on slide 11, we show a broader annual view of deposit trends. We've consistently grown our deposit base on an annual basis, and after adding $1.2 billion in core customer deposits in '24, we added another $1 billion in 2025.

On slide 11, we show a broader annual view of deposit trends. We've consistently grown our deposit base on an annual basis, and after adding $1.2 billion in core customer deposits in 2024, we added another $1 billion in 2025. On a percentage basis, period-end core customer deposits grew 3.5% relative to 2024. This number was influenced by seasonal flows in a couple of larger accounts that impacted balance flows at the tail end of 2025. That being said, core customer deposits still grew by 5% on a quarterly average basis from Q4 of 2024 to Q4 of 2025.

Operator: We've consistently grown our deposit base on an annual basis, and after adding $1.2 billion in core customer deposits in 2024, we added another $1 billion in 2025. On a percentage basis, period-end core customer deposits grew 3.5% relative to 2024. This number was influenced by seasonal flows in a couple of larger accounts that impacted balance flows at the tail end of 2025. That being said, core customer deposits still grew by 5% on a quarterly average basis from Q4 of 2024 to Q4 of 2025. As we look to 2026, we're bullish on our ability to drive incremental core customer deposit growth thanks to best-in-class consumer value proposition, household growth momentum supported by increased marketing, acquisition spend, and growth markets, and significant momentum in our commercial deposit gathering capabilities.

Speaker #2: On a percentage basis, period-end core customer deposits grew 3.5% relative to 2024. This number was influenced by seasonal flows in a couple of larger accounts and impacted balance flows at the tail end of 2025.

Speaker #2: That being said, core customer deposits still grew by 5% on a quarterly average basis from Q4 of ’24 to Q4 of 2025. As we look to 2026, we’re bullish on our ability to drive incremental core customer deposit growth thanks to our best-in-class consumer value proposition, household growth momentum supported by increased marketing acquisition spend and growth markets, and significant momentum in our commercial deposit gathering capabilities.

As we look to 2026, we're bullish on our ability to drive incremental core customer deposit growth thanks to best-in-class consumer value proposition, household growth momentum supported by increased marketing, acquisition spend, and growth markets, and significant momentum in our commercial deposit gathering capabilities. As such, we expect core customer deposits to grow by 5% to 6% for the year, excluding the impact of American National acquisition. With that, I'll pass it to Derek to discuss our income statement and capital trends. Derek.

Speaker #2: As such, we expect core customer deposits to grow by 5% to 6% for the year, excluding the impact of the American National acquisition. With that, I'll pass it to Derek to discuss our income statement and capital trends.

Operator: As such, we expect core customer deposits to grow by 5% to 6% for the year, excluding the impact of American National acquisition. With that, I'll pass it to Derek to discuss our income statement and capital trends. Derek. Thanks, Andy. I'll start with yield trends on slide 12. Within the major asset categories, the yields of our largely floating-rate CRE and commercial books decreased by 24 basis points and 27 basis points, respectively, in Q4. Auto and investment yields also saw slight decreases. These decreases were modestly offset by a slight uptick in the yield for our largely fixed-rate Resi mortgage book. Total interest-bearing deposit costs decreased by 17 basis points in Q4 and are down 49 basis points since Q4 of last year. In Q4, total earning asset yields decreased 16 basis points to 5.34%, while total interest-bearing liabilities decreased 21 basis points to 2.82%.

Speaker #2: Derek: Thanks, Andy. I'll start with yield trends on slide 12. Within the major asset categories, the yields of our largely floating-rate CRE and commercial books decreased by 24 basis points and 27 basis points, respectively, in Q4.

Derek Meyer: Thanks, Andy. I'll start with yield trends on slide 12. Within the major asset categories, the yields of our largely floating-rate CRE and commercial books decreased by 24 basis points and 27 basis points, respectively, in Q4. Auto and investment yields also saw slight decreases. These decreases were modestly offset by a slight uptick in the yield for our largely fixed-rate Resi mortgage book. Total interest-bearing deposit costs decreased by 17 basis points in Q4 and are down 49 basis points since Q4 of last year. In Q4, total earning asset yields decreased 16 basis points to 5.34%, while total interest-bearing liabilities decreased 21 basis points to 2.82%.

Speaker #2: Auto and investment yields also saw slight decreases. These decreases were modestly offset by a slight uptick in the yield for our largely fixed-rate resi mortgage book.

Speaker #2: Total interest-bearing deposit costs decreased by 17 basis points in Q4 and are down 49 basis points since Q4 of last year. In Q4, total earning asset yields decreased 16 basis points to 5.34%, while total interest-bearing liabilities decreased 21 basis points to 2.82%.

Speaker #2: Moving to slide 13, third-quarter net interest income of $310 million increased $5 million versus the prior quarter and $40 million versus Q4 of 2024.

Operator: Moving to slide 13, third-quarter net interest income of $310 million increased $5 million versus the prior quarter and $40 million versus Q4 of 2024. Our net interest margin increased 2 basis points to 3.06 for the quarter. As compared to the same period a year ago, our NIM increased 25 basis points. In 2026, we expect to drive net interest income growth of between 5.5% and 6.5%. This forecast assumes two Fed rate cuts in 2026 and excludes any impact from the American National acquisition. On slide 14, we provided a reminder of the steps we've taken to put ourselves in a more neutral interest rate position and protect against rate changes, and other external factors. We're maintaining repricing flexibility by keeping our funding obligations short.

Moving to slide 13, third-quarter net interest income of $310 million increased $5 million versus the prior quarter and $40 million versus Q4 of 2024. Our net interest margin increased 2 basis points to 3.06 for the quarter. As compared to the same period a year ago, our NIM increased 25 basis points. In 2026, we expect to drive net interest income growth of between 5.5% and 6.5%. This forecast assumes two Fed rate cuts in 2026 and excludes any impact from the American National acquisition. On slide 14, we provided a reminder of the steps we've taken to put ourselves in a more neutral interest rate position and protect against rate changes, and other external factors. We're maintaining repricing flexibility by keeping our funding obligations short.

Speaker #2: Our net interest margin increased two basis points to 3.06% for the quarter. As compared to the same period a year ago, our NIM increased 25 basis points.

Speaker #2: In 2026, we expect to drive net interest income growth of between 5.5% and 6.5%. This forecast assumes two Fed rate cuts in 2026 and excludes any impact from the American National acquisition.

Speaker #2: On slide 14, we provided a reminder of the steps we've taken to put ourselves in a more neutral interest rate position and protect against rate changes and other external factors.

Speaker #2: We're maintaining repricing flexibility by keeping our funding obligations short. We're protecting our variable-rate loan portfolio by maintaining received fixed swap balances of approximately $2.45 billion, and we've built a $3.1 billion fixed-rate auto book with low prepayment risk.

Operator: We're protecting our variable-rate loan portfolio by maintaining received fixed swap balances of approximately $2.45 billion, and we've built a $3.1 billion fixed-rate auto book with low prepayment risk. While we're still modestly asset-sensitive, a down-100 ramp scenario represents less than a 1% impact to our NII as of Q4. We expect to maintain this relatively neutral position going forward. Moving to slide 15, total investment security balances grew to $9.3 billion in Q4. Our securities plus cash to total assets ratio climbed to 24.3% to the end of the year, but we continue to target a range of 22% to 24% for this ratio. Slide 16 highlights our non-interest income trends for the quarter. After posting $81 million in non-interest income in Q3, we followed that up with another strong quarter in Q4.

We're protecting our variable-rate loan portfolio by maintaining received fixed swap balances of approximately $2.45 billion, and we've built a $3.1 billion fixed-rate auto book with low prepayment risk. While we're still modestly asset-sensitive, a down-100 ramp scenario represents less than a 1% impact to our NII as of Q4. We expect to maintain this relatively neutral position going forward. Moving to slide 15, total investment security balances grew to $9.3 billion in Q4. Our securities plus cash to total assets ratio climbed to 24.3% to the end of the year, but we continue to target a range of 22% to 24% for this ratio. Slide 16 highlights our non-interest income trends for the quarter. After posting $81 million in non-interest income in Q3, we followed that up with another strong quarter in Q4.

Speaker #2: While we're still modestly asset-sensitive, a down 100 ramp scenario represents less than a 1% impact to our NII as of Q4. We expect to maintain this relatively neutral position going forward.

Speaker #2: Moving to slide 15, total investment security balances grew to $9.3 billion in Q4. Our securities plus cash to total assets ratio climbed to 24.3% at the end of the year, but we continue to target a range of 22% to 24% for this ratio.

Speaker #2: Slide 16 highlights our non-interest income trends for the quarter. After posting $81 million in non-interest income in Q3, we followed that up with another strong quarter in Q4.

Speaker #2: Total non-interest income of $79 million was down $2 million from the prior quarter, but was up $8 million from our adjusted Q4 2024 number.

Operator: Total non-interest income of $79 million was down $2 million from the prior quarter but was up $8 million from our adjusted Q4 2024 number. Our strong Q4 was supported by additional growth in wealth management fees, card-based fees, and capital markets. As we continue to grow our customer base and deepen relationships across the bank, those trends are beginning to flow through in our core fee businesses. While quarterly results in an area like capital markets can be lumpy, we're confident in our ability to drive non-interest income higher over time. As such, we expect non-interest income to grow by 4% to 5% in 2026, excluding any potential impacts from the American National acquisition. Moving to slide 17, Q4 expenses came in at $219 million, 2% higher than the prior quarter.

Total non-interest income of $79 million was down $2 million from the prior quarter but was up $8 million from our adjusted Q4 2024 number. Our strong Q4 was supported by additional growth in wealth management fees, card-based fees, and capital markets. As we continue to grow our customer base and deepen relationships across the bank, those trends are beginning to flow through in our core fee businesses. While quarterly results in an area like capital markets can be lumpy, we're confident in our ability to drive non-interest income higher over time. As such, we expect non-interest income to grow by 4% to 5% in 2026, excluding any potential impacts from the American National acquisition. Moving to slide 17, Q4 expenses came in at $219 million, 2% higher than the prior quarter.

Speaker #2: Our strong Q4 was supported by additional growth in wealth management fees, card-based fees, and capital markets. As we continue to grow our customer base and deepen relationships across the bank, those trends are beginning to flow through in our core fee businesses.

Speaker #2: While quarterly results in an area like capital markets can be lumpy, we're confident in our ability to drive non-interest income higher over time. As such, we expect non-interest income to grow by 4% to 5% in 2026, excluding any potential impacts from the American National acquisition.

Speaker #2: Moving to slide 17, Q4 expenses came in at $219 million, 2% higher than the prior quarter. The quarterly increase was primarily driven by a $3 million increase in equipment expense, along with a $1 million increase in variable comp expense, and $1 million of severance, as we continue to execute against our strategic plan and set ourselves up for a productive 2026.

Operator: The quarterly increase was primarily driven by a $3 million increase in equipment expense, along with a $1 million increase in variable comp expense, and a $1 million of severance as we continue to execute against our strategic plan and set ourselves up for a productive 2026. These increases were partially offset by a $3 million decrease in FDIC assessment expense, following another adjustment to the special assessment, and a $1 million decrease in overall personnel expense. Throughout the year, we continued to invest in the growth of our franchise, but delivering positive operating leverage has remained the top priority along the way. After steadily decreasing over the course of the year, our efficiency ratio held at 55% in Q4. In 2026, our expense philosophy remains the same as it has each year since Andy arrived.

The quarterly increase was primarily driven by a $3 million increase in equipment expense, along with a $1 million increase in variable comp expense, and a $1 million of severance as we continue to execute against our strategic plan and set ourselves up for a productive 2026. These increases were partially offset by a $3 million decrease in FDIC assessment expense, following another adjustment to the special assessment, and a $1 million decrease in overall personnel expense. Throughout the year, we continued to invest in the growth of our franchise, but delivering positive operating leverage has remained the top priority along the way. After steadily decreasing over the course of the year, our efficiency ratio held at 55% in Q4. In 2026, our expense philosophy remains the same as it has each year since Andy arrived.

Speaker #2: These increases were partially offset by a $3 million decrease in FDIC assessment expense following another adjustment to the special assessment, and a $1 million decrease in overall personnel expense.

Speaker #2: Throughout the year, we continued to invest in the growth of our franchise, but delivering positive the way. After steadily operating, leverage has remained the top priority. Along decreasing over the course of the year, our efficiency ratio held at 55% in Q4.

Speaker #2: In 2026, our expense philosophy remains the same as it has each year since Andy arrived. We're going to invest in the future growth of the company, while finding ways to offset these investments with cost reductions in other areas.

Operator: We're going to invest in the future growth of the company while finding ways to offset these investments with cost reductions in other areas. With this in mind, we expect total non-interest expense growth of 3% in 2026, excluding the impact of the American National acquisition. On slide 18, capital ratios increased across the board once again in Q4. Our TCE ratio increased to 8.29%, up 11 basis points versus Q3 and 47 basis points versus Q4 of 2024. Our CT1 ratio increased to 10.49%, a 16 basis point increase relative to the prior quarter, and a 48 basis point increase versus the same period a year ago. We've also seen consistent expansion of our tangible book value per share, with Q4 coming in above $22 per share. This represents a $0.65 increase versus Q3 and a $2.30 increase versus the same period a year ago.

We're going to invest in the future growth of the company while finding ways to offset these investments with cost reductions in other areas. With this in mind, we expect total non-interest expense growth of 3% in 2026, excluding the impact of the American National acquisition. On slide 18, capital ratios increased across the board once again in Q4. Our TCE ratio increased to 8.29%, up 11 basis points versus Q3 and 47 basis points versus Q4 of 2024.

Speaker #2: With this in mind, we expect total non-interest expense growth of 3% in 2026, excluding the impact of the American National acquisition. On slide 18, capital ratios increased across the board once again in Q4.

Speaker #2: Our TCE ratio increased to 8.29%, up 11 basis points versus Q3 and 47 basis points versus Q4 of 2024. Our CET1 ratio increased to 10.49%, a 16 basis point increase relative to the prior quarter, and a 48 basis point increase versus the same period a year ago.

Our CT1 ratio increased to 10.49%, a 16 basis point increase relative to the prior quarter, and a 48 basis point increase versus the same period a year ago. We've also seen consistent expansion of our tangible book value per share, with Q4 coming in above $22 per share. This represents a $0.65 increase versus Q3 and a $2.30 increase versus the same period a year ago. I'll now hand it over to our Chief Credit Officer, Pat Ahern, to provide an update on credit quality.

Speaker #2: We've also seen consistent expansion of our tangible book value per share, with Q4 coming in above $22 per share. This represents a $0.65 increase versus Q3 and a $2.30 increase versus the same period a year ago.

Speaker #2: I'll now turn it over to our Chief Credit Officer, Pat Ahern, to provide an update on credit quality.

Operator: I'll now hand it over to our Chief Credit Officer, Pat Ahern, to provide an update on credit quality. Thanks, Derek. I'll start with an allowance update on slide 19. Our CECL forward-looking assumptions utilize the Moody's November 2025 baseline forecast. This forecast remains consistent with a resilient economy despite the higher interest rate environment. It contains continuing rate cuts in early 2026, slower but positive GDP growth rates, a cooling labor market, continued elevated levels of inflation, and continued monitoring of ongoing market developments and tariff negotiations. In Q4, our ACLL increased by $5 million to $419 million. This increase was primarily driven by commercial and business lending, which largely stemmed from a combination of loan growth plus normal movement within risk-rating categories. Our ACL ratio largely remained flat throughout the year in 2025. In Q4, the ratio increased one basis point from the prior quarter to 1.35%.

Pat Ahern: Thanks, Derek. I'll start with an allowance update on slide 19. Our CECL forward-looking assumptions utilize the Moody's November 2025 baseline forecast. This forecast remains consistent with a resilient economy despite the higher interest rate environment. It contains continuing rate cuts in early 2026, slower but positive GDP growth rates, a cooling labor market, continued elevated levels of inflation, and continued monitoring of ongoing market developments and tariff negotiations. In Q4, our ACLL increased by $5 million to $419 million. This increase was primarily driven by commercial and business lending, which largely stemmed from a combination of loan growth plus normal movement within risk-rating categories. Our ACL ratio largely remained flat throughout the year in 2025. In Q4, the ratio increased one basis point from the prior quarter to 1.35%.

Speaker #3: Thanks, Derek. I'll start with an allowance update on slide 19. Our CISO forward-looking assumptions utilize the Moody's November 2025 baseline forecast. This forecast remains consistent with a resilient economy despite the higher interest rate environment.

Speaker #3: It contains continuing rate cuts in early 2026, slower but positive GDP growth rates, a cooling labor market, continued elevated levels of inflation, and continued monitoring of ongoing market developments and tariff negotiations.

Speaker #3: In Q4, our ACLL increased by $5 million to $419 million. This increase was primarily driven by commercial and business lending, which largely stemmed from a combination of loan growth plus normal movement within risk-rating categories.

Speaker #3: Our ACLL ratio remained largely flat throughout the year in 2025. In Q4, the ratio increased one basis point from the prior quarter to 1.35%.

Speaker #3: On slide 20, we continue to review our portfolio closely amidst ongoing macro uncertainty. We continue to see solid performance in Q4. Total delinquencies ticked up slightly versus the prior quarter to $61 million.

Operator: On slide 20, we continue to review our portfolios closely amidst ongoing macro uncertainty, but we continue to see solid performance in Q4. Total delinquencies ticked up slightly versus the prior quarter to $61 million, but we're down $19 million versus Q4 of 2024. We remain comfortable with the benign delinquency trends we've seen over the past several quarters. Total criticized loans decreased by $165 million versus the prior quarter, with decreases in all three major components of the metric. The decrease in Q4 reflects continued resolutions with some of these stress credits, with liquidity present in the market in terms of both payoffs and loan remargin. We remain confident that there hasn't been a material shift in the credit profile of the portfolio that would result in corresponding risk of loss.

On slide 20, we continue to review our portfolios closely amidst ongoing macro uncertainty, but we continue to see solid performance in Q4. Total delinquencies ticked up slightly versus the prior quarter to $61 million, but we're down $19 million versus Q4 of 2024. We remain comfortable with the benign delinquency trends we've seen over the past several quarters. Total criticized loans decreased by $165 million versus the prior quarter, with decreases in all three major components of the metric. The decrease in Q4 reflects continued resolutions with some of these stress credits, with liquidity present in the market in terms of both payoffs and loan remargin. We remain confident that there hasn't been a material shift in the credit profile of the portfolio that would result in corresponding risk of loss.

Speaker #3: But we're down $19 million versus Q4 of 2024. We remain comfortable with the benign delinquency trends we've seen over the past several quarters. Total criticized loans decreased by $165 million versus the prior quarter.

Speaker #3: With decreases in all three major components of the metric, the decrease in Q4 reflects continued resolutions with some of these stress credits, with liquidity present in the market in terms of both payoffs and loan remargin.

Speaker #3: We remain confident that there hasn't been a material shift in the credit profile of the portfolio that would result in a corresponding risk of loss.

Speaker #3: Non-accrual balances decreased to $100 million in Q4, down $6 million versus Q2, and down $23 million from the same period a year ago. Finally, we booked just $2 million in net charge-offs during the quarter, and total net charge-offs for the year represented just 12 basis points of average loans.

Operator: Non-accrual balances decreased to $100 million in Q4, down $6 million versus Q2, and down $23 million from the same period a year ago. Finally, we booked just $2 million in net charge-offs during the quarter. In total, net charge-offs for the year represented just 12 basis points of average loans. We also added a modest provision of $7 million during the quarter. As we shift our focus to 2026, our team remains vigilant in reviewing our portfolios and staying in regular contact with customers to stay ahead of any emerging risks. We also remain diligent in monitoring credit stressors in the macroeconomy to ensure current underwriting reflects the impact of ongoing inflation pressures, shifting labor markets, tariffs, and other economic concerns. In addition, we continue to maintain specific attention to the effects of elevated interest rates on the portfolio, including ongoing interest rate sensitivity analysis bank-wide.

Non-accrual balances decreased to $100 million in Q4, down $6 million versus Q2, and down $23 million from the same period a year ago. Finally, we booked just $2 million in net charge-offs during the quarter. In total, net charge-offs for the year represented just 12 basis points of average loans. We also added a modest provision of $7 million during the quarter. As we shift our focus to 2026, our team remains vigilant in reviewing our portfolios and staying in regular contact with customers to stay ahead of any emerging risks. We also remain diligent in monitoring credit stressors in the macroeconomy to ensure current underwriting reflects the impact of ongoing inflation pressures, shifting labor markets, tariffs, and other economic concerns.

Speaker #3: We also added a modest provision of $7 million during the quarter. As we shift our focus to 2026, our team remains vigilant in reviewing our portfolios and staying in regular contact with customers to stay ahead of any emerging risks.

Speaker #3: We also remain diligent in monitoring credit stressors in the macroeconomy to ensure current underwriting reflects the impact of ongoing inflation, markets, tariffs, and other pressures shifting labor economic concerns.

Speaker #3: In addition, we continue to maintain specific attention to the effects of elevated interest rates on the portfolio, including ongoing interest rate sensitivity analysis bank-wide.

In addition, we continue to maintain specific attention to the effects of elevated interest rates on the portfolio, including ongoing interest rate sensitivity analysis bank-wide. We expect any future provision adjustments will reflect changes to risk rates, economic conditions, loan volumes, and other indications of credit quality. With that, I will now pass it back to Andy for closing remarks.

Speaker #3: We expect any future provision adjustments will reflect changes to risk rates, economic conditions, loan volumes, and other indications of credit quality. With that, I will now pass it back to Andy for closing remarks.

Operator: We expect any future provision adjustments will reflect changes to risk rates, economic conditions, loan volumes, and other indications of credit quality. With that, I will now pass it back to Andy for closing remarks. Thank you, Pat. In summary, we're very pleased with the strong organic growth momentum and the record-setting financial results we delivered as a company in 2025. We're entering 2026 with stronger profitability, better capital generation, and discipline on credit and expenses. With that said, we feel like our growth story is just beginning to emerge at Associated Bank. In 2026, we expect continued organic growth tailwinds from our prior investments in RMs, in products, and in marketing. But we also intend to accelerate our momentum through the American National acquisition and another wave of investments to double down in major metropolitan growth markets across the footprint.

Andy Harmening: Thank you, Pat. In summary, we're very pleased with the strong organic growth momentum and the record-setting financial results we delivered as a company in 2025. We're entering 2026 with stronger profitability, better capital generation, and discipline on credit and expenses. With that said, we feel like our growth story is just beginning to emerge at Associated Bank. In 2026, we expect continued organic growth tailwinds from our prior investments in RMs, in products, and in marketing.But we also intend to accelerate our momentum through the American National acquisition and another wave of investments to double down in major metropolitan growth markets across the footprint. We look forward to providing additional updates along the way. With that, we'll open it up for questions.

Speaker #1: Thank you, Pat. In summary, we're very pleased with the strong organic growth momentum and the record-setting financial results we delivered as a company in 2025.

Speaker #1: We're entering 2026 with stronger profitability, better capital generation, and discipline on credit and expenses. With that said, we feel like our growth story is just beginning to emerge at Associated Bank.

Speaker #1: In 2026, we expect continued organic growth tailwinds from our prior investments in RMs, in products, and in marketing. But we also intend to accelerate our momentum through the American National acquisition.

Speaker #1: And another wave of investments to double down in major metropolitan growth markets across the footprint. We look forward to providing additional updates along the way.

Operator: We look forward to providing additional updates along the way. With that, we'll open it up for questions. Thank you. We will now be conducting a question-and-answer session. If you would like to ask a question, please press star and the number one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star and the number two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Our first question comes from Daniel Tomeo with Raymond James. Please proceed. Good afternoon, everybody. First thing, I guess on the non-interest income guidance, given it's excluding American National, I'm just going to try and see what you can say about that on an all-in basis.

Speaker #1: And with that, we'll open it up for questions.

Speaker #1: questions. Thank you.

Operator: Thank you. We will now be conducting a question-and-answer session. If you would like to ask a question, please press star and the number one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star and the number two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Our first question comes from Daniel Tomeo with Raymond James. Please proceed.

Speaker #4: We will now be conducting a question and answer session. If you would like to ask a question, please press star and the number one on your telephone keypad.

Speaker #4: A confirmation tone will indicate your line is in the question queue. You may press star and the number 2 if you would like to remove your question from the queue.

Speaker #4: For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Our first question comes from Daniel Tameo with Raymond James.

Speaker #4: Please

Speaker #4: proceed. Good afternoon,

Daniel Tamayo: Good afternoon, everybody. First thing, I guess on the non-interest income guidance, given it's excluding American National, I'm just going to try and see what you can say about that on an all-in basis. So just curious if there's anything you can give us in terms of thoughts around how that net interest income line might look, including American National, whether it's from a purchase accounting perspective or balance sheet. I know we talked about potential balance sheet actions post-close, just trying to get to kind of an all-in number there.

Speaker #5: Everybody, first thing—I guess on interest income guidance, given it’s excluding American National, I’m just going to try and see what you can say about that on an all-in basis.

Speaker #5: So, just curious if there's anything you can give us in terms of thoughts around how that net interest income line might look including American National, whether it's from a purchase accounting perspective or balance sheet?

Operator: So just curious if there's anything you can give us in terms of thoughts around how that net interest income line might look, including American National, whether it's from a purchase accounting perspective or balance sheet. I know we talked about potential balance sheet actions post-close, just trying to get to kind of an all-in number there. Yeah, Daniel, we don't have a lot of updates on that, on the financial end of that. Obviously, we're going through the approval process, and we're hopeful to close in Q2 and integrate in Q3. What I will tell you is what we've realized very clearly is the franchises are very well aligned from a strategic standpoint, from a product and go-to-market standpoint. That matters just in trying to validate what our initial payback period was, which was 2.25 years. So we're feeling more bullish.

Speaker #5: I know we talked about potential balance sheet actions post-close. Just trying to get to a kind of an all-in number there.

Speaker #6: Yeah, Daniel, we don't have a lot of updates on that. On the financial end of that, obviously, we're going through the approval process, and we're hopeful to close in the second quarter, and integrate in the third quarter.

Andy Harmening: Yeah, Daniel, we don't have a lot of updates on that, on the financial end of that. Obviously, we're going through the approval process, and we're hopeful to close in Q2 and integrate in Q3. What I will tell you is what we've realized very clearly is the franchises are very well aligned from a strategic standpoint, from a product and go-to-market standpoint. That matters just in trying to validate what our initial payback period was, which was 2.25 years. So we're feeling more bullish. We're on track with our plan on the integration plan. What we're seeing is continued opportunity in both of their major metropolitan markets, both in Omaha, where we know we can bring some capabilities, but they already have a very good presence and very good growth pattern.

Speaker #6: What I will tell you is what we've realized very clearly is the franchises are very well aligned. From a strategic standpoint, from a product and go-to-market standpoint, that matters just in trying to validate what our initial payback period was, which was two and a quarter years.

Speaker #6: So we're feeling more bullish. We're on track with our integration plan. And what we're seeing is continued opportunity in both of their major metropolitan markets, both in Omaha, where we know we can bring some capabilities, but they already have a very good presence and a very good growth pattern.

Operator: We're on track with our plan on the integration plan. What we're seeing is continued opportunity in both of their major metropolitan markets, both in Omaha, where we know we can bring some capabilities, but they already have a very good presence and very good growth pattern. In Minneapolis, where there'll be additions to customer-based conversations that make us believe that we can grow on top of that. What we haven't done is really projected any of that upside growth we have. So the transaction is pretty logical to us internally, but we don't have an update from a financial side. We'll have to wait till we get approval and get to maybe legal day one in the next quarter to give a little clear view there. Okay. Thanks, Andy.

Andy Harmening: In Minneapolis, where there'll be additions to customer-based conversations that make us believe that we can grow on top of that. What we haven't done is really projected any of that upside growth we have. So the transaction is pretty logical to us internally, but we don't have an update from a financial side. We'll have to wait till we get approval and get to maybe legal day one in the next quarter to give a little clear view there.

Speaker #6: And in Minneapolis, where there'll be additional additions to customer-based conversations that make us believe that we can grow on top of that. What we haven't done is really projected any of that upside growth we have.

Speaker #6: So, we don't have the transaction. It's pretty logical to us internally, but we don't have an update from a financial side. We'll have to wait.

Speaker #6: Till we get approval and get to maybe legal day one in the next quarter, to give a little clearer view.

Speaker #6: there. Okay.

Daniel Tamayo: Okay. Thanks, Andy. Maybe something that might be a little bit easier to talk about than on the investments that you really clearly laid out there in terms of the four cities where you're going to be investing in 2026, including a couple of new cities. Can you provide any kind of color around, from a quantitative perspective, what that may look like, including kind of pace and just trying to think through how this could affect the pace of expense growth as the year moves on? Thanks.

Speaker #5: Thanks, Andy. Maybe something that might be a little bit easier to talk about then, on the investments that you really clearly laid out there in terms of the four cities where you're going to be investing in 2026, including a couple of new cities.

Operator: Maybe something that might be a little bit easier to talk about than on the investments that you really clearly laid out there in terms of the four cities where you're going to be investing in 2026, including a couple of new cities. Can you provide any kind of color around, from a quantitative perspective, what that may look like, including kind of pace and just trying to think through how this could affect the pace of expense growth as the year moves on? Thanks. Yeah. I mean, we've given the expense target, expense growth target at 3%. And just as in every other year, we've made some hard decisions on where to cut costs to invest. The expectation is that these investments, we get asked sometimes the question is, how do you believe that you have sustainability in your earnings?

Speaker #5: Can you provide any kind of color around that from a quantitative perspective—what that may look like, including kind of pace—and just trying to think through how this could affect the pace of expense growth as the year moves on?

Andy Harmening: Yeah. I mean, we've given the expense target, expense growth target at 3%. And just as in every other year, we've made some hard decisions on where to cut costs to invest. The expectation is that these investments, we get asked sometimes the question is, how do you believe that you have sustainability in your earnings? And the way that you get sustainability is you do something on the consumer side and commercial side, but you show that you've been able to do that in legacy major metropolitan markets. So we have that in Chicago, and we have that in Milwaukee, and we're able to show that. When you get into markets that grow a little faster, it's the same game plan.

Speaker #6: Yeah.

Speaker #6: I mean, we've given the expense target, expense growth target at 3%. And just as in every other year, we've made some hard decisions on where to cut costs to invest.

Speaker #6: The expectation is that these investments—we get asked sometimes, the question is: How do you believe that you have sustainability in your earnings? And the way that you get sustainability is you do something on the consumer side and commercial side, but you also show that you've been able to do that in legacy, major metropolitan markets.

Operator: And the way that you get sustainability is you do something on the consumer side and commercial side, but you show that you've been able to do that in legacy major metropolitan markets. So we have that in Chicago, and we have that in Milwaukee, and we're able to show that. When you get into markets that grow a little faster, it's the same game plan. And so from an expense standpoint, the significant increase in marketing expense for Omaha is not going to come until we get systems conversion for logical reasons. In Minneapolis, we have momentum there right now. So we'll start in that market throughout probably end of Q1, Q2, Q3. With regards to RMs, we want them on the ground right now. So we have outlined where we're going to make our hires there.

Speaker #6: So we have that in Chicago, and we have that in Milwaukee, and we're able to show that. When you get into markets that grow a little faster, it's the same game plan.

Speaker #6: And so, from an expense standpoint, the significant increase in marketing expense for Omaha is not going to come until we get systems conversion, because—for logical reasons.

And so from an expense standpoint, the significant increase in marketing expense for Omaha is not going to come until we get systems conversion for logical reasons. In Minneapolis, we have momentum there right now. So we'll start in that market throughout probably end of Q1, Q2, Q3. With regards to RMs, we want them on the ground right now. So we have outlined where we're going to make our hires there. I expect half those hires to happen in the first quarter. In fact, two of them started this week. We're not waiting for that to occur. Really what this does for us, it gives us a clear path on how we're going to be able to maintain our org structure, our balance sheet remix, which, as you know, drives our profitability profile.

Speaker #6: In Minneapolis, we have momentum there right now. So we'll start in that market throughout probably the end of first quarter, second quarter, and third quarter.

Speaker #6: With regards to RMs, we want them on the ground right now. So, we have outlined where we're going to make our hires there. I expect half those hires to happen in the first quarter.

Operator: I expect half those hires to happen in the first quarter. In fact, two of them started this week. We're not waiting for that to occur. Really what this does for us, it gives us a clear path on how we're going to be able to maintain our org structure, our balance sheet remix, which, as you know, drives our profitability profile. Okay. Great. Just, I guess, lastly, following up on that, would you say there's at least some benefit on the loan side and the deposit side in guidance from these hires that are happening in 2026, or is that mostly a 2027 and beyond story? Well, what we saw in Kansas City when we did a team lift-out is significant loan growth in the first 12 months. It is in our numbers. It is in our forecast.

Speaker #6: In fact, two of them started this week. So we're not waiting for that to occur. And really, what this does for us is it gives a clear—it gives us a clear path on how we're going to be able to maintain our growth structure, our balance sheet remix, which, as you know, drives our profitability.

Speaker #6: profile. Okay.

Daniel Tamayo: Okay. Great. Just, I guess, lastly, following up on that, would you say there's at least some benefit on the loan side and the deposit side in guidance from these hires that are happening in 2026, or is that mostly a 2027 and beyond story?

AllMind AI

AllMind AI

Q4 2025 Associated Banc-Corp Earnings Call

Event Details

Associated Bank

Q4 2025 Associated Banc-Corp Earnings Call

Open Event Documents

Search Transcript

Associated Bank

Q4 2025 Associated Banc-Corp Earnings Call

Transcript

No Transcript Available