Associated Banc-Corp surges on record earnings, bullish 2026 outlook
Banking

Associated Banc-Corp surges on record earnings, bullish 2026 outlook

Regional bank delivers 18% EPS beat with net margin expansion and raised guidance for loan growth

Associated Banc-Corp reported its strongest quarterly performance in company history, crushing analyst expectations with a fourth-quarter earnings beat that sent shares to their highest level in nearly a year. The Green Bay, Wisconsin-based regional bank posted earnings per share of $0.80, surpassing analyst estimates of $0.68 by 18.5% and exceeding the $0.69-$0.70 range projected ahead of results. Revenue reached $389.4 million, topping the $378 million consensus by 3.1%.

The fourth-quarter performance capped what management called the strongest bottom line in the bank's history. Full-year 2025 net income surged to $463 million, a remarkable 313% increase from the prior year, with annual EPS jumping to $2.77 from just $0.72 in 2024. The dramatic turnaround reflects strategic initiatives that have positioned the Midwest-focused lender to capitalize on improving credit conditions and stabilizing funding costs that have benefited regional banks throughout 2025.

A key driver of the earnings surprise was net interest margin expansion, a critical profitability metric for banks. Associated Banc-Corp grew its NIM by 25 basis points to 3.03%, a significant improvement that helped fuel the record profitability. The margin expansion comes as regional banking peers have similarly benefited from favorable interest rate dynamics, with the broader sector outperforming the S&P 500 throughout much of 2025.

Looking ahead, management raised its 2026 outlook, projecting loan growth of 5-6% and net interest income growth of 5.5-6.5%. The guidance provides a clear growth trajectory for the $4.4 billion market cap bank, which operates primarily across Wisconsin, Illinois and Minnesota. The positive outlook aligns with what analysts have described as favorable industry prospects for regional banks heading into 2026.

Shares of Associated Banc-Corp gained 0.6% on Wednesday to $27.47, extending a rally that has pushed the stock near its 52-week high of $27.58. The stock has now climbed more than 54% from its 52-week low of $17.82, reflecting renewed investor confidence in regional banks following sector volatility in previous years. Despite the strong performance, the stock trades below the consensus analyst price target of $29.50, suggesting potential upside.

Analyst sentiment remains mixed but generally positive. Two analysts rate the stock a strong buy, one recommends buy, while seven maintain a hold rating, according to recent data. The bank's forward price-to-earnings ratio of 9.35 suggests reasonable valuation compared to its trailing P/E of 30.86, which was elevated by the earnings surge.

Associated Banc-Corp's quarterly performance follows strong results from regional banking peers, including S&T Bancorp, which beat EPS and revenue expectations, and Old National Bancorp, which exceeded adjusted EPS despite missing revenue forecasts. The sector has benefited from improved credit quality and resilient consumer activity throughout 2025, with regional banks collectively outperforming the broader financial sector.

The company's 3.45% dividend yield provides additional appeal to income-focused investors, with the most recent dividend of $0.92 per share paid in December 2025. Institutional investors hold 87.6% of outstanding shares, indicating strong professional confidence in the bank's turnaround strategy.

For 2026, investors will be watching whether Associated Banc-Corp can maintain its NIM above 3% while executing on the projected loan growth targets. The bank's ability to sustain profitability in a potentially changing interest rate environment will be critical to justifying the elevated forward valuation and continuing its recovery from previous years' challenges.