Associated Banc-Corp expects to add 10 more commercial lenders within the next few months, part of an ongoing expansion effort that CEO Andy Harmening said is producing growth in the bank's loan pipeline.
The $42.2 billion-asset parent company of Associated Bank has hired 16 lenders since announcing
Commercial and business loans have increased by $200 million since year-end 2023. Moreover, the company's pipeline of probable loans — deals where Associated rates the likelihood of closing the loan above 50% — has increased 18% over the past year, according to Harmening.
Associated previously forecast 4% to 6% loan growth for all of 2024. Harmening said Thursday that the bank expects to reach the "lower end" of that range.
"We continue to build momentum by adding strong producers in key growth markets," Harmening said Thursday on an earnings call, which focused on Associated's third-quarter financial results.
"It's great to hire people [but] we don't make money by hiring people," Harmening added. "We make money by having them get out there, get a full relationship and book it."
On Tuesday, Green Bay, Wisconsin-based Associated announced it had hired Rick Bruhn from U.S. Bank to establish a specialty deposit and payments vertical focused on deposit-rich niches such as title and escrow firms, homeowner associations and fintechs. The $201 billion-asset Huntington Bancshares launched a similar commercial deposits initiative in June.
Harmening's hiring update comes days after Hauppauge, New York-based Dime Bancorp signaled its intent to
While data is pointing to a cooling economy nationwide, the bank said, Associated's core markets continue to hold steady. "Closer to home, we continue to see signs of resiliency and stability in our Midwestern footprint," Harmening said. He pointed to below-average regional unemployment and solid consumer and commercial borrowing bases.
"We serve stable markets," Harmening said.
Associated reported third-quarter net income totaling $85 million, or $0.56 per share, up from $80 million and $0.53 cents per share for the same period in 2023. Investors and analysts had predicted earnings of $0.51 per share, according to Zacks investment research. The bottom-line beat was driven by solid deposit growth, which allowed the company to offload more expensive wholesale funding and widen its net interest margin, Chief Financial Officer Derek Meyer said on the conference call.
Deposits totaled $33.6 billion on Sept. 30, up nearly 5% from the same date in 2023. Associated's quarterly net interest margin of 2.78% was six basis points higher than it was during the third quarter of 2023.
Revenue totaled $329.7 million for the quarter ending Sept. 30, up 2% from the same period last year. Net interest income of $253 million increased by $8 million year over year, but the bank expects that growth to slow in the fourth quarter. The revenue benefits from hiring additional bankers are not expected to materialize until well into 2025, Harmening said.
Associated said Thursday that its full-year 2024 net interest income is expected to be flat or up 1%. Previous guidance had forecast growth in the 1% to 3% range.
Associated reported solid third-quarter asset quality trends with net charge-offs totaling $13 million, down from $18 million a year ago. Similarly, nonaccrual loans of $128 million were down 24% from the same period in 2023.
"We maintain a high degree of confidence in the quality of our loan portfolio with continued solid performance in core credit quality trends," Chief Credit Officer Patrick Ahern said on the conference call.
