Associated Banc-Corp (ASB): Business Model Canvas [10-2024 Updated]
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Associated Banc-Corp (ASB) Bundle
In today's rapidly evolving financial landscape, understanding the business model of a leading institution like Associated Banc-Corp (ASB) is essential for investors and industry professionals alike. This blog post delves into the Business Model Canvas of ASB, highlighting its key components such as partnerships, value propositions, and customer segments. Discover how ASB leverages its resources and activities to deliver tailored banking solutions while maintaining a competitive edge in the market.
Associated Banc-Corp (ASB) - Business Model: Key Partnerships
Collaborations with financial institutions
Associated Banc-Corp (ASB) has established significant collaborations with various financial institutions to enhance its service offerings and expand its market reach. As of September 30, 2024, ASB reported total deposits of $33.6 billion, reflecting a strategic approach to leveraging partnerships for liquidity and funding purposes.
The bank's partnerships include accessing funding from the Federal Home Loan Bank (FHLB), with advances totaling $1.9 billion at the end of the third quarter of 2024, which represents a 49% decrease year-over-year, indicating a shift in funding strategies.
Partnerships with technology providers
ASB has engaged with technology providers to enhance its digital banking capabilities. In 2023, ASB invested in upgrading its digital platforms, focusing on customer experience and operational efficiency. This initiative included a partnership with fintech companies to integrate advanced analytics and AI into its service offerings.
Moreover, the bank's noninterest income for the third quarter of 2024 reached $67 million, an increase of 3% from the previous quarter, driven partly by fee-based revenues linked to technology-driven services.
Relationships with government and regulatory bodies
ASB maintains strong relationships with government and regulatory bodies, ensuring compliance with various financial regulations. The bank's effective tax rate was reported at 8.79% for the third quarter of 2024, down from 20.43% in the same quarter of the previous year, reflecting strategic tax planning in alignment with regulatory frameworks.
In addition, ASB actively participates in community development initiatives, supported by relationships with local government agencies, which enhance its reputation and customer loyalty in the markets it serves.
| Partnership Type | Description | Financial Impact |
|---|---|---|
| Financial Institutions | Collaborations with FHLB for liquidity management | Advances of $1.9 billion as of September 30, 2024 |
| Technology Providers | Partnerships to enhance digital banking services | Noninterest income of $67 million for Q3 2024 |
| Government Bodies | Compliance and community engagement initiatives | Effective tax rate at 8.79% for Q3 2024 |
Associated Banc-Corp (ASB) - Business Model: Key Activities
Providing diverse banking and financial services
Associated Banc-Corp offers a comprehensive range of banking and financial services, including commercial and retail banking, wealth management, and investment services. As of September 30, 2024, total loans were reported at $30.0 billion, an increase of $775 million or 3% from December 31, 2023. The composition of loans includes:
| Loan Type | Amount ($ in billions) | % of Total |
|---|---|---|
| Commercial and industrial | 10.26 | 34% |
| Residential mortgage | 7.94 | 26% |
| Auto finance | 2.51 | 8% |
| Other retail | 0.85 | 3% |
| Commercial real estate | 1.12 | 4% |
The bank’s total deposits reached $33.6 billion as of September 30, 2024, which reflects a slight increase of $108 million from the end of 2023. This growth is attributed to a rise in interest-bearing demand deposits, as well as time deposits.
Risk management and compliance efforts
Risk management is a critical component of Associated Banc-Corp's operations. The provision for credit losses for the nine months ended September 30, 2024, was reported at $68 million, an increase from $62 million in the same period of 2023. The bank employs a rigorous framework to assess credit risk, which includes evaluating:
- Changes in the size and character of the loan portfolio
- Historical losses and delinquencies
- Economic conditions and forecasts
Furthermore, the bank's noninterest expense increased by $20 million or 3% from the previous year, primarily due to higher personnel and technology costs.
Customer service and relationship management
Associated Banc-Corp emphasizes strong customer service and relationship management to enhance client satisfaction and retention. The bank reported noninterest income of $197 million for the nine months ended September 30, 2024, which is an increase of $3 million or 2% compared to the same period in 2023. Key components of noninterest income include:
| Noninterest Income Source | Amount ($ in thousands) |
|---|---|
| Wealth management fees | 68,466 |
| Service charges and deposit account fees | 38,410 |
| Card-based fees | 34,973 |
| Other fee-based revenue | 14,316 |
These figures reflect the bank's efforts to diversify its revenue streams while maintaining a strong focus on customer relationships and service quality.
Associated Banc-Corp (ASB) - Business Model: Key Resources
Strong capital base
As of September 30, 2024, Associated Banc-Corp reported total stockholders' equity of $4.413 billion, an increase from $4.174 billion at the end of 2023. The corporation's capital ratios reflect a strong capital base, with a Common Equity Tier 1 (CET1) ratio of 10.1% and a Total Capital ratio of 12.5%. This strong capital position enables the bank to absorb potential losses and support growth initiatives.
Experienced banking professionals
Associated Banc-Corp employs a workforce of approximately 2,400 banking professionals, many of whom have extensive experience in various banking sectors. The bank’s leadership team includes individuals with decades of experience in the financial services industry, contributing to the institution's strategic direction and operational efficiency.
Advanced technology infrastructure
In 2024, Associated Banc-Corp invested $80.6 million in technology enhancements. This investment focuses on upgrading digital banking platforms and improving cybersecurity measures. The bank's technology infrastructure supports over 1 million online banking users, facilitating seamless transactions and enhancing customer engagement.
| Key Resource | Details |
|---|---|
| Capital Base | Total Stockholders' Equity: $4.413 billion |
| Capital Ratios | CET1: 10.1%, Total Capital: 12.5% |
| Employee Count | Approximately 2,400 banking professionals |
| Technology Investment | $80.6 million in technology enhancements for 2024 |
| Online Banking Users | Over 1 million active online banking users |
Associated Banc-Corp (ASB) - Business Model: Value Propositions
Comprehensive banking solutions tailored to clients
Associated Banc-Corp offers a wide range of banking solutions that cater to both individual and commercial clients. As of September 30, 2024, the total assets of Associated Banc-Corp stood at $42.2 billion, marking a 3% increase from the end of 2023. The company’s loan portfolio totaled $30.0 billion, with a significant portion allocated to commercial and business lending.
| Loan Type | Outstanding Balance (in billions) | Percentage of Total Loans |
|---|---|---|
| Commercial and Business Lending | 17.6 | 58.67% |
| Residential Mortgage | 7.9 | 26.33% |
| Other Loans | 4.5 | 15% |
Commitment to customer service excellence
Associated Banc-Corp places a strong emphasis on customer service, reflected in its net income of $284.8 million for the first nine months of 2024, up from $273.8 million in the same period of 2023. The effective tax rate for the first nine months of 2024 was notably low at 8.79%, further enhancing net income available to common equity, which amounted to $276.1 million. This focus on customer service has resulted in increased customer satisfaction and loyalty, contributing to a solid customer base.
| Financial Metric | 2024 (YTD) | 2023 (YTD) |
|---|---|---|
| Net Income (in millions) | 284.8 | 273.8 |
| Net Income Available to Common Equity (in millions) | 276.1 | 265.1 |
| Effective Tax Rate | 8.79% | 20.43% |
Competitive interest rates and fees
Associated Banc-Corp offers competitive interest rates across its lending products. The net interest income for the first nine months of 2024 was reported at $777 million, with a net interest margin of 2.77%. This margin is competitive in the current market, allowing the bank to attract customers looking for favorable borrowing conditions. Furthermore, the noninterest income increased to $197 million, driven by higher wealth management fees and service charges.
| Income Type | Amount (in millions) | YTD Change |
|---|---|---|
| Net Interest Income | 777 | -1% |
| Noninterest Income | 197 | +2% |
| Wealth Management Fees | 68.5 | +11% |
Associated Banc-Corp (ASB) - Business Model: Customer Relationships
Personalized banking experiences
Associated Banc-Corp emphasizes personalized banking experiences to enhance customer satisfaction and loyalty. The bank offers tailored services to both individual and commercial clients, focusing on understanding their unique financial needs.
For instance, in Q3 2024, total revenue from the Community, Consumer, and Business segment amounted to $218.4 million, reflecting a shift in strategy to offer more personalized banking solutions.
Active customer support channels
Associated Banc-Corp maintains active customer support channels to address client inquiries and concerns. The bank utilizes multiple platforms for customer engagement, including phone support, online chat, and in-person consultations. As of September 30, 2024, the bank reported a net income of $88 million, indicating a healthy financial position that enables investment in customer service capabilities.
The bank's noninterest income for Q3 2024 reached $67 million, showing a 3% increase from the previous quarter, driven partly by improved customer service initiatives that enhance client satisfaction and retention.
Loyalty programs and rewards for customers
Associated Banc-Corp has implemented loyalty programs and rewards to incentivize customer retention and encourage increased usage of its services. The bank offers various rewards for account holders, which has contributed to a stable growth in deposits. As of September 30, 2024, total deposits were reported at $33.6 billion, up $108 million from December 31, 2023.
In Q3 2024, the bank's wealth management fees increased by 11% year-over-year to $68.5 million, reflecting the success of its loyalty programs in attracting and retaining high-value clients.
| Metric | Q3 2024 | Q2 2024 | Q3 2023 | Year-over-Year Change (%) |
|---|---|---|---|---|
| Net Income | $88 million | $116 million | $83 million | 6% |
| Total Revenue (Community, Consumer, and Business) | $218.4 million | $220.7 million | $623.6 million | 4% |
| Noninterest Income | $67 million | $65 million | $64 million | 3% |
| Total Deposits | $33.6 billion | $33.5 billion | $32.2 billion | 4% |
| Wealth Management Fees | $68.5 million | $22.6 million | $61.5 million | 11% |
Associated Banc-Corp (ASB) - Business Model: Channels
Branch network across key regions
Associated Banc-Corp operates a comprehensive branch network with over 200 branches spread across key regions in Wisconsin, Illinois, and Minnesota. This extensive presence allows the bank to provide personalized banking services and strengthen customer relationships.
| Region | Number of Branches | Deposits (as of Q3 2024) |
|---|---|---|
| Wisconsin | 120 | $20.5 billion |
| Illinois | 50 | $8.2 billion |
| Minnesota | 30 | $5.0 billion |
Online and mobile banking platforms
ASB has invested significantly in its online and mobile banking platforms, offering customers a seamless digital banking experience. As of Q3 2024, the bank reported approximately 1.5 million active online banking users, reflecting a growth of 15% year-over-year. Mobile banking transactions accounted for 65% of total transactions in the same period.
| Metric | Q3 2024 | Q3 2023 | Year-over-Year Growth |
|---|---|---|---|
| Active Online Users | 1.5 million | 1.3 million | 15% |
| Mobile Transactions as % of Total | 65% | 60% | 5% |
Direct sales teams for business clients
Associated Banc-Corp employs dedicated sales teams focused on business clients, primarily in commercial lending and treasury management services. This team structure has enabled the bank to achieve a 10% increase in commercial loan originations in the first nine months of 2024, reaching a total of $10.3 billion in outstanding commercial loans.
| Metric | Q3 2024 | Q3 2023 | Year-over-Year Growth |
|---|---|---|---|
| Commercial Loan Originations | $10.3 billion | $9.3 billion | 10% |
| Number of Direct Sales Teams | 25 | 20 | 25% |
Associated Banc-Corp (ASB) - Business Model: Customer Segments
Individual consumers seeking banking services
Associated Banc-Corp provides a range of banking services tailored for individual consumers, including personal banking, mortgages, and auto loans. For the third quarter of 2024, average loans to individual consumers amounted to $11.3 billion, reflecting a decrease of 4% compared to the previous year, primarily due to reduced residential mortgage lending. The bank's total deposits reached $33.6 billion, with a significant portion attributed to consumer deposits.
Small to medium-sized enterprises
The Community, Consumer, and Business segment of Associated Banc-Corp serves small to medium-sized enterprises (SMEs) by offering business loans, deposit accounts, and treasury management services. For nine months ended September 30, 2024, total revenue from this segment was $649.8 million, up 4% from the same period in 2023. Average loans to SMEs decreased by $412 million from the previous quarter, largely due to declines in residential mortgage lending, while average deposits increased by $370 million, supported by higher time and savings deposits.
Large corporations and institutions
Associated Banc-Corp also caters to large corporations and institutions through its Corporate and Commercial Specialty segment. This segment reported total revenue of $563.8 million for the nine months ended September 30, 2024, an increase of 8% from the previous year. Average loans to this sector rose by $163 million from the last quarter, driven by higher commercial and business lending. The provision for credit losses for this segment was $48.9 million, reflecting an 18% increase year-over-year, indicating a proactive approach to managing credit risk.
| Customer Segment | Average Loans ($ in millions) | Total Revenue ($ in millions) | Provision for Credit Losses ($ in millions) |
|---|---|---|---|
| Individual Consumers | 11,300 | N/A | N/A |
| Small to Medium-sized Enterprises | 11,325 | 649.8 | 17.6 |
| Large Corporations and Institutions | 17,778 | 563.8 | 48.9 |
Associated Banc-Corp (ASB) - Business Model: Cost Structure
Operational costs including personnel and technology
For the nine months ended September 30, 2024, Associated Banc-Corp reported total noninterest expenses of $594 million, which increased by $20 million, or 3%, from the same period in 2023. Key components of these operational costs include:
| Expense Category | Amount ($ in thousands) | Year-over-Year Change (%) |
|---|---|---|
| Personnel | 362,012 | 4 |
| Technology | 80,579 | 9 |
| Occupancy | 40,297 | (6) |
| Business Development and Advertising | 20,735 | 3 |
| Equipment | 13,702 | (8) |
| Legal and Professional | 14,740 | 12 |
| Loan and Foreclosure Costs | 6,519 | 35 |
Marketing and customer acquisition expenses
Marketing and customer acquisition expenses are reflected in the business development and advertising costs, which totaled $20.735 million for the nine months ended September 30, 2024. This represents a 3% increase compared to the previous year. The firm continues to invest in marketing to enhance customer engagement and acquisition efforts.
Provision for credit losses and loan defaults
For the nine months ending September 30, 2024, Associated Banc-Corp recorded a provision for credit losses of $68 million, compared to $62 million for the same period in 2023. This increase is attributed to nominal credit movement and general macroeconomic trends impacting loan performance.
The allowance for credit losses (ACL) as a percentage of total loans was 1.29%, reflecting the company's proactive measures to mitigate potential loan defaults. The breakdown of the provision for credit losses is as follows:
| Loan Category | Provision for Credit Losses ($ in thousands) |
|---|---|
| Commercial and Industrial | 141,582 |
| Commercial Real Estate | 67,858 |
| Residential Mortgage | 37,808 |
| Auto Finance | 24,961 |
| Home Equity | 15,403 |
| Other Consumer | 12,638 |
Associated Banc-Corp (ASB) - Business Model: Revenue Streams
Net interest income from loans and deposits
For the nine months ended September 30, 2024, Associated Banc-Corp reported net interest income of $776.96 million, compared to $786.17 million for the same period in 2023, reflecting a decrease of 1% year-over-year. The net interest margin was 2.77%, down from 2.86% in the prior year. Average loans for the period were $29.53 billion, with an average yield of 6.23%.
Average deposits increased by 6% to $33.1 billion, driven by increases in time deposits and interest-bearing demand deposits, while noninterest-bearing demand deposits decreased. The average interest-bearing liabilities rose by 6% compared to the previous year.
Noninterest income from fees and services
The noninterest income for the nine months ended September 30, 2024, totaled $197.37 million, which represents an increase of 2% from $194.20 million in the same period of 2023. Key components of noninterest income included:
| Noninterest Income Component | 2024 (YTD) | 2023 (YTD) | Change (%) |
|---|---|---|---|
| Wealth Management Fees | $68.47 million | $61.50 million | 11% |
| Service Charges and Deposit Account Fees | $38.41 million | $38.23 million | 0% |
| Card-Based Fees | $34.97 million | $33.49 million | 4% |
| Other Fee-Based Revenue | $14.32 million | $13.25 million | 8% |
These figures indicate a strong performance in wealth management and fee-based services, contributing significantly to the company’s overall revenue.
Investment income from securities and other assets
Investment income, which includes gains and losses from securities, was impacted by the sale of the Corporation's remaining Visa B shares in the first quarter of 2024. The investment income for the nine months ended September 30, 2024, was recorded at $229.05 million, reflecting an increase from $182.62 million in the same period of 2023. This growth was driven by higher balances of available-for-sale (AFS) investment securities.
The total earning assets as of September 30, 2024, stood at $37.93 billion, with average earning assets yielding 5.66%.
Article updated on 8 Nov 2024
Resources:
- Associated Banc-Corp (ASB) Financial Statements – Access the full quarterly financial statements for Q3 2023 to get an in-depth view of Associated Banc-Corp (ASB)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Associated Banc-Corp (ASB)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.