Associated Banc-Corp

Good afternoon, everyone, and welcome to Associated Bancorp's third quarter 2026 earnings conference call. My name is Sherry, and I will be your operator today. At this time, all participants are in a listen-only mode. We will be conducting a question-and-answer session at the end of this conference. A copy of the slides that will be referenced during today's call are available on the company's website at investor.associatedbank.com. As a reminder, this conference call is being recorded. As outlined on slide two during the course of this discussion today, management may make statements that constitute projections, expectations, beliefs, or similar forward-looking statements. Associated 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 Actual results to differ materially from the information discussed today is readily available on the SEC website and risk factor 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 the conference call, Please refer to pages 26 and 27 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 a 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.

Well, good afternoon, and welcome to our third quarter earnings call. I'm Andy Harmening, and I'm joined by our Chief Financial Officer, Derek Meyer, and our Chief Credit Officer, Pat Ahern. I'll start with some highlights for the quarter. From there, Derek will cover income statement and capital trends, and Pat will provide an update on credit quality. Across the bank, we remain squarely focused on attracting and deepening relationships as a means to drive sustainable organic growth, remix our balance sheet, enhance profitability and improve our return profile. Through the third quarter, we've maintained our momentum. We're improving our profitability by growing and remixing our loan portfolio. We overcame elevated payoffs in Q3 and grew relationship commercial loan balances while continuing to work down low yielding non-relationship resi mortgage loans. And recent pipeline trends give us confidence in sustainable growth trajectory. We're growing our customer base. and funding loan growth primarily with core deposits. We've grown our customer household base for seven consecutive quarters and in Q3, we posted nearly 700 million in core customer deposit growth, a 2% increase versus the prior quarter. This growth helped us reduce wholesale funding during the quarter. Our ability to fund our growth with customer deposits is driving expansion of both net interest income and margin. In Q3, Our net interest income increased by $7 million, while our net interest margin expanded by three basis points to 3.2%, our second best quarter in over a decade. And our focus on relationship deepening is also contributing to emerging non-interest income growth. In Q3, we posted total non-interest income of $87 million, an 8% increase versus the prior quarter, with broad-based improvement across several fee categories. Combined with disciplined expense management and stable credit trends, our third quarter results are further illustration of a model that's repeatable and sustainable.

As a result of our improved profitability profile, we can now support growth and contemplate other uses of capital simultaneously.