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DATE

Thursday, Oct. 22, 2026

CALL PARTICIPANTS

• President and CEO - Andrew J. Harmening
• Chief Financial Officer - Derek S. Meyer
• Chief Credit Officer - Patrick Ahern

TAKEAWAYS

• Adjusted EPS -- $0.81, excluding $13 million in nonrecurring acquisition-related expenses recognized during the quarter.
• Net Interest Margin -- 3.20%, reflecting a 3-basis-point expansion from the prior quarter driven by balance sheet remixing and core deposit growth.
• Net Interest Income -- $377 million, representing 2% growth from the prior quarter and 24% year over year.
• Total Loans -- $36.5 billion at period end, increasing 18% year over year due to the American National acquisition and organic growth.
• Core Customer Deposits -- $34.8 billion at period end, growing 2% from the prior quarter and 21% year over year.
• Noninterest Income -- $87 million, up 8% from the prior quarter led by performance in capital markets and asset gains.
• Commercial Pipeline -- 36% to 40% growth compared to the same period a year ago, supporting future loan production expectations.
• Share Repurchases -- $100 million executed during the quarter, comprising 3.2 million shares at a weighted average price of $30.88.
• C&I Loan Guidance -- 20% to 22% growth for the full year 2026 compared to 2025 standalone results.
• Total Deposit Guidance -- 17% to 19% period end growth for the full year 2026.
• Noninterest Expense -- $260 million, representing a $12 million decrease from the prior quarter as acquisition-related costs declined.
• Net Charge-offs -- 19 basis points (annualized), decreasing from 26 basis points in the prior quarter.
• Provision for Credit Losses -- $14 million, a decrease from $19 million in the second quarter of 2026.
• Nonaccrual Loans -- $183 million, an increase of $33 million from the prior quarter primarily driven by the reclassification of one $30 million C&I credit.
• CRE Production -- 50% year-to-date increase, although this growth was partially offset by a similar 50% rise in payoffs and paydowns.
• CET1 Ratio -- 10.38% at quarter end, remaining within the company's target range of 10% to 10.75%.
• Interest Rate Sensitivity -- 1.8% NIM impact in a 100-basis-point upward rate ramp scenario and 1.1% in a downward 100-basis-point scenario.
• Acquisition Expense Guidance -- $48.5 million for the full year 2026, revised downward from the previous forecast of $52.5 million.
• Treasury Management Sales -- 37% increase year to date compared to the same period in 2025.
• Efficiency Ratio -- 51.27% on an adjusted basis for the third quarter.
• Consumer Household Growth -- seven consecutive quarters of net growth, which management identified as a key driver of fee and deposit momentum.
• Securities Portfolio -- $10 billion at quarter end, representing 22.6% of total assets.

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RISKS

• Ahern warned that the company's forward-looking assumptions include "increasing concerns of energy market disruptions elevated levels of inflation for longer, a restrictive monetary policy," which could impact credit quality.
• Harmening stated, "We continue to expect elevated payoffs in CRE in the near term," which may pressure net loan growth in the commercial real estate segment.
• Ahern noted that total delinquencies increased during the quarter because of the "temporary impact of a systems conversion of our auto portfolio requiring a segment of customers to reenroll in ACH payments."

SUMMARY

Associated Banc-Corp (ASB +1.34%) reported third quarter results that focused on the completion of its systems conversion for the American National Corporation acquisition and the advancement of its organic growth strategy. Management reported that the integration of the American National branches in Omaha and the Twin Cities provides a significant lever for metropolitan market expansion. The company reported a sustainable profitability profile, evidenced by its net interest margin expansion and the resumption of its share repurchase program for the first time since 2021. The bank is currently finalizing its "Phase 3" strategic initiatives, which will focus on deepening customer relationships and improving return profiles through 2027.

• The company completed the systems and branch conversion of American National Corporation in early Oct., which included nearly 150,000 accounts and 33 branches.
• CEO Harmening stated, "The torrid pace of C&I growth in the first half of the year was expected to slow somewhat in the back half," noting that third quarter flows were impacted by elevated payoffs despite solid production.
• Treasury management sales grew 37% year to date, which management indicated is a precursor to improved liquidity and commercial relationship deepening.
• Management identified Omaha as a high-priority market, reporting that checking account openings in the first week following the conversion were 121% higher than previous averages.
• The company reduced its wholesale funding levels during the quarter, utilizing $700 million in core customer deposit growth to optimize its funding mix.
• CFO Meyer noted that the bank is maintaining a relatively neutral interest rate position, utilizing $2.45 billion in fixed-rate swaps to protect its variable-rate loan portfolio.

INDUSTRY GLOSSARY

• ACLL: Allowance for Credit Losses on Loans, a reserve held to cover estimated losses in the loan portfolio.
• AOCI: Accumulated Other Comprehensive Income, which includes unrealized gains and losses on certain investments.
• C&I: Commercial and Industrial loans made to businesses for working capital or capital expenditures.
• CET1 Ratio: Common Equity Tier 1 Ratio, a measure of a bank's core equity capital compared to its total risk-weighted assets.
• CRE: Commercial Real Estate lending.
• NIM: Net Interest Margin, the difference between interest income generated and interest paid to lenders, relative to the amount of interest-earning assets.
• PCD: Purchased Credit Deteriorated, an accounting designation for loans acquired with more-than-insignificant credit deterioration since origination.
• ROTCE: Return on Average Tangible Common Equity, a financial ratio measuring a bank's profitability relative to its tangible common equity.
• SNC: Shared National Credit, a large loan or formal credit facility that is shared by three or more supervised institutions.

Full Conference Call Transcript

Operator: Good afternoon, everyone, and welcome to Associated Banc-Corp's Third Quarter 26 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 2, during the course of this discussion today, management may make statements that constitute projections expectations, beliefs or similar forward-looking statements. Associated's 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 in 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 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.

Andrew J. Harmening: Well, good afternoon, and welcome to our third quarter earnings call. I am Andy Harmening, and I am joined by our Chief Financial Officer, Derek S. Meyer and our Chief Credit Officer, Patrick Ahern. I will 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, improve our return profile. Through the third quarter, we have maintained our momentum. Improving our profitability by growing and remixing our loan portfolio.

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 are growing our customer base and funding loan growth primarily with core deposits. We have grown our customer household base for 7 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 3 basis points to 3.2%. Our second best quarter in over a decade. And our focus on relationship deepening is also contributing to emerging noninterest income growth. In Q3, we posted total non interest income of $87 million an 8% increase versus the prior quarter, which 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 is repeatable and sustainable. As a result of our improved profitability profile, we can now support growth and contemplate other uses of capital. Simultaneously.

With that in mind, we are pleased to return capital to our shareholders with $100 million in share repurchases during the quarter. The first major share buyback we have since I joined the bank in 2021. We expect to execute on the remainder of our existing repurchase authorization here in the fourth quarter. With that said, organic growth remains our primary focus. Earlier this month, we reached an important milestone by completing the systems and branch conversion of American National Corporation with nearly 150 thousand loan and deposit accounts, 33 branches, 70, 80. And 70 ATMs converted over the course of a 3-day weekend. Reaching this milestone took months of planning, collaboration, and care, from colleagues across our bank.

From preparing systems and processes to helping customers and teams navigate change, their focus and dedication made this milestone possible. I would like to congratulate the project team and thank our colleagues transitioning from American National Bank who have taken the change in stride. This partnership gives us a powerful lever to attract and deepen relationships in markets like Omaha, the Twin Cities, and beyond. And I am excited for what we will continue to accomplish together as 1 Associated Bank team. As we have discussed previously, our leadership team is currently finalizing plans for the next wave of strategic initiatives to sustain our growth momentum into 2027 and beyond. With areas of focus including growing our customer base.

Competing in major metro markets, outperforming in deposit gathering, driving relationship commercial growth, remixing the balance sheet, expanding margins, and improving our return profile. We look forward to sharing additional details in the coming months. In summary, Associated Bank is on an upward trajectory with a proven plan to drive sustainable growth over time. And as always, our growth will be balanced with a conservative approach to expenses, credit, and risk management that serves as the foundation of our company. With that, let's walk through our third quarter financial highlights beginning on Slide 4. We reported GAAP EPS of $0.76 in Q3 or $0.81 after adjusting for nonrecurring acquisition costs recognized during the quarter.

Total loans of $36.5 billion grew by $53 million from the prior quarter. We were faced with elevated payoffs in our commercial business during the quarter, but pipelines remained strong. And we remain confident in both our full year loan growth outlook and the sustainability of our growth strategy more broadly. Core customer deposits grew by 2% during the quarter, driven by a combination of organic growth initiatives and seasonal inflows. This growth in customer deposits helped us reduce our wholesale funding levels in Q3. Shifting to the income statement. Net interest income increased $7 million or 2% versus the prior quarter. While our net interest margin expanded by 3 basis points to 3.2%.

Noninterest income also increased by $7 million versus the prior quarter, led by growth in capital markets, asset gains, service charges and deposit account fees and other fee based income. Total non interest expense of $260 million decreased by $12 million versus the prior quarter Our Q3 expenses included $13 million in onetime expenses tied to the American National acquisition, which was down from $24 million recognized in Q2. Capital trends remain solid. Credit trends remain solid with $14 million of provision a 2-basis-point decrease in our ACLL ratio, a decrease in criticized loans and 19 basis points of annualized net charge offs recognized during the quarter.

Finally, we executed on $100 million in share repurchases during the quarter and finished with an adjusted ROTCE ratio north of 15%. On Slide 5, we reiterate the core elements of our organic growth strategy and why we expect to sustain our momentum into 2027 and beyond. First, put in more than 5 years of work to build an organic growth engine that focuses on attracting and deepening relationship as a means to grow and remix both sides of our balance sheet. We bolstered leadership across all areas of the organization to set ourselves up for growth. We have modernized our digital banking experience, enhanced our product set, improved our marketing acquisition capabilities, and developed a successful mass affluent program.

All of which are key to growth. Particularly in major metro markets. As a result, we have turned a shrinking customer base into a net growth story. With 7 consecutive quarters of net growth in customer households. As we grow these primary relationships, it is also translated into deposit growth, fee growth, and other business. And in commercial, we have increased RMs by nearly 50% in key metros, sharpened our relationship focus across the team, expanded our offering, with new verticals and deposit gathering capabilities, and launched new and C&I offices in Kansas City and Dallas, with very promising initial results.

In addition to loan growth, we are collaborating to drive deposit growth, TM, Capital Markets, HSA and other business in a steady increasing manner. And as we have discussed previously, the renewed focus on relationships and collaboration across the bank presents natural connections in private wealth. To facilitate this connectivity at the local level and across the footprint, we have added several talented executives to our private wealth leadership team, upgraded our product suite, and are currently working through additional enhancements to the digital experience for wealth clients. Shifting to the middle of the page, the American National partnership has been as advertised. Serving as a natural complement to our organic growth story.

Going forward, we see a significant opportunity to pair American strong legacy in Omaha and the Twin Cities with Associated with Associated's proven model to track and deepen relationships in metro markets. This gives us another level to drive organic growth into 2027. And finally, in order to sustain our growth momentum in the future, our leadership team is currently mapping out what we want the next 3 years to look like for Associated. We are still finalizing our plans, and you can expect a continuation of the sustainable organic growth that has become a defining characteristic of our company.

A focus on growing our customer base, competing in major metro markets, outperforming in deposit gathering, and commercial loan growth, remixing the balance sheet, expanding margins, improving our return profile. We look forward to sharing more details in the near future. On Slide 6, we highlight our quarterly loan trends through Q3. Average quarterly loans grew by 1% as we continue to remix the balance sheet by driving growth in commercial categories and working down our lower yielding noncustomer resi mortgage balances. We had previously mentioned that the torrid pace of C&I growth in the first half of the year was expected to slow somewhat in the back half. In Q3, our underlying C&I production was solid.

But balance flows were impacted by an elevated level of payoffs and paydowns. We remain confident in the overall trajectory of our C&I business due to the strong trends we continue to see in our commercial pipelines, which are up nearly 40% versus the same period a year ago. CRE was a similar story. Where the team drove high quality relationship loan production that outpaced elevated payoffs during the quarter. We continue to expect elevated payoffs in CRE in the near term, our team is among the best in the country. At growing high quality relationship business with proven players across our markets.

For the combined company, we continue to expect period end loan growth of 18% to 20% in 2026 and C&I loan growth of 20% to 22% as compared to associated stand alone results for the year ended December 31, 2025. On slide 7, core customer deposits grew by 2% versus the prior quarter driven by a combination of seasonal inflows in our efforts to drive sustainable relationship deposit growth across the bank. During the quarter, we saw growth across most key markets. Led by nearly $400 million of growth in the interest bearing demand category. This growth in the. In customer deposits helped drive a reduction in our wholesale funding levels during the quarter.

We continue to expect 2026 period end total deposit growth of 17% to 19%. And period end core customer deposit growth of 19 to 21% as compared to associated stand alone results for the year ended December 31, 2025. And with that, I will pass it to Derek to discuss our income statement and capital trends.

Derek S. Meyer: Thanks, Andy. I will start with yield trends on Slide 8. During Q3, overall asset yields improved by 2 basis points with slight increases in commercial and business loans, investments and resi mortgage loans, partially offset by slight decreases in CRE and auto. On the other side of the balance sheet, total interest bearing deposit costs have remained largely flat throughout 2026, and we finished the third quarter at 2.46%. More broadly, total interest bearing liability costs increased by 1 basis point to 2.67%.

On Slide 9 third quarter net interest income increased by $7 million from the prior quarter to $377 million After posting a 14 basis point increase in our net interest margin in Q2, an increase largely driven by the addition of American National to our balance sheet and the resulting purchase accounting accretion, our margin expanded by an additional 3 basis points in Q3 to finish at 3.20%. This Q3 increase came despite a reduced accretion benefit during the quarter, a reflection of our efforts to grow and remix our balance sheet simultaneously.

We continue to expect total 2026 net interest income to grow by 19% to 21% as compared to associated standalone results for the year ended December 31, 2025. Given recent volatility in the rate environment, slide 10 provides a reminder of the steps we have taken to put ourselves in a more neutral interest rate position. We are keeping our funding obligations short to maintain repricing flexibility. We are protecting our variable rate loan portfolio by maintaining received fixed swap balances of approximately $2.45 billion and we are maintaining a $4 billion fixed rate auto book with low prepayment risk.

An up 100 ramp scenario now represents a 1.8% impact to our NIM as of Q3, while a down 100 scenario now represents a 1.1% impact. We expect to maintain this relatively neutral position going forward. Moving to Slide 11, total investment security balances finished at $10 billion in Q3, down slightly from the prior quarter. Our securities plus cash to total assets ratio finished at 22.6% as of Q3, down slightly relative to the prior quarter but squarely in line with our target range of between 22-24% for the year. We expect to stick within that target range going forward. Next I will walk through non interest income trends on Slide 12.

Total noninterest income of $87 million was up 8% from the prior quarter and up 7% from the same period a year ago. The increase was broad based, but was led by capital markets and asset gains. We also saw growth in service charges and deposit account fees and card based fees, while wealth management fees remained stable versus the prior quarter. Year to date through September, we have seen encouraging trends start emerging wealth management, capital markets, and several other fee income categories that are influenced by our efforts to attract and deepen relationships across the bank.

Additionally, as we have discussed previously, American National has not historically focused on wealth management and capital markets, so we see additional opportunities in those areas as we get into 2027. In 2026, we now expect total noninterest income growth of 12 to 14% as compared to associated standalone results for the year ended December 31, 2025. Moving to slide 13 total non interest expense of $260 million decreased by $12 million versus the prior quarter as we saw increases in technology occupancy and FDIC assessment costs more than offset by decreases in legal and professional, and other expense categories.

During the quarter, we recognized $13 million of nonrecurring costs in connection with the American National acquisition, a decrease from the $24 million recognized in Q2. Year to date, we have recognized $39 million in acquisition related expenses, and we now expect the total amount of acquisition related expenses to land at approximately $48.5 million, a reduction from the $52.5 million forecast we shared in July. We expect all remaining acquisition related expenses to be recognized by the year-end of 2026. As we move forward, we will continue to invest in the growth of our franchise but we are anchored on delivering positive operating leverage.

Based on our latest forecast, we now expect non interest expense to grow by 19% to 20% in 2026 as compared to associated standalone results for the year ended December 31, 2025. This figure includes nonrecurring costs incurred as part of the American National acquisition. Shifting to Slide 14, we are pleased to execute on $100 million of share repurchases at a weighted average share price of $30.88 in the third quarter. Our CET1 ratio finished at 10.38%. This figure was down 9 basis points from the prior quarter, but up 5 basis points relative to Q3 of 25.

Our TCE ratio was down 24 basis points from the prior quarter and down 15 basis points from the same period a year ago landing at 8.03%. Our tangible book value per share finished at $21.67, $0.48 lower than the prior quarter, but up $0.31 relative to Q3 of 25. Going forward, we expect to maintain our CET1 target range of between 10-10.75%. I will now hand it over to our chief credit officer, Patrick Ahern, to provide an update on credit.

Patrick Ahern: Thanks, Derek. I will start with an allowance update on Slide 15. Our CECL forward looking assumptions utilize the Moody's August 2026 baseline forecast. The forecast remains consistent with a resilient economy containing a more optimistic GDP outlook despite increasing concerns of energy market disruptions elevated levels of inflation for longer, a restrictive monetary policy. In Q3, our ACLL decreased by $4 million to $491 million with the decrease driven by an equal mix of loan growth and normal credit movements. Our ACL ratio as a percent of total loans decreased to 1.34%, down 2 basis points from the prior quarter and flat versus Q3 of 25.

On Slide 16, key credit quality metrics have remained solid through the third quarter. Total delinquencies increased relative to the prior quarter and the increase was driven not by credit quality issues, but by the temporary impact of a systems conversion of our auto portfolio requiring a segment of customers to reenroll in ACH payments. The vast majority of these customers had never been late on their payments and we are actively working with them to complete the reconnection process. This process is moving quickly, with the expectation of normalized delinquency levels in the near term. Nonaccrual balances increased by $183 million in Q3, up $33 million versus Q2.

The vast majority of the increase was driven by the reclass of a $30 million C&I credit following the recent SNC exam. We remain comfortable with the underlying asset quality and full resolution of that specific credit, our nonaccrual trends were essentially flat otherwise. And despite the increase in nonaccruals, total criticized loans still decreased by 7% or $121 million versus the prior quarter. Q3 net charge-offs of $18 million were down 24% or $6 million versus the prior quarter. And we posted a net charge off ratio of just 19 basis points for the quarter.

And finally, we booked $14 million of provision in Q3, down $5 million from the prior quarter and down $2 million from Q3 of 25. In summary, we continue to feel comfortable with the credit performance of both our core portfolio and the credits inherited from American National. With that said, our teams remain vigilant in reviewing our portfolios and staying in regular contact with customers to stay ahead of any emerging risks. We will also remain diligent in monitoring credit stressors in the macro economy 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. We expect any future provision adjustments will reflect changes to risk grades economic conditions, loan volumes, and other indications of credit quality. With that, I will now pass it back to Andy for closing remarks.

Andrew J. Harmening: Patrick. On Slide 17, we provided an update to our outlook following a Q3 marked by continued organic momentum deposit growth, margin expansion, enhanced profitability and an improving return profile. We are well positioned to finish this year strong, and we look forward to providing additional color on our expectations for 2027 and beyond on our fourth quarter earnings call in January. With that, let's open it up for questions.

Operator: Thank you. Our first question is from Casey Haire with Autonomous Research. Please proceed.

Casey Haire: Great, thanks. Good afternoon, everyone. Wanted to start on Slide 5, the strategic plan. So just some of the initiatives obviously look like they are going to put some pressure on the expenses next year. I know we are not it is too early for 2027, but just broad strokes are. Is positive operating leverage still the goal for next year even with all these investments on the comp?

Andrew J. Harmening: Yeah, Casey. I mean, always a good question. I would say a couple things to that. This we are gonna come up with a really creative name for this third plan. it is gonna call. Be called phase 3. And in Phase 1 and Phase 2, we got the same question on expenses. And I think probably the best indicator of future results is what you have done. And so I look at phase 2. that is wrapping up in 2026. And had a ROTCE target of mid teens. We have achieved that. We had a margin expectation 3% plus. We achieved that. We had an efficiency ratio target of 55 to 60.

We are operating at an adjusted efficiency ratio of 51%. Net charge offs target of less than 35 basis points, and we are well under that. And having positive operating leverage. You can probably expect some of the similar categories, And the way that we approach any new initiative, even the fancy name phase 3, is we will go into our expense base and we will find. We will make difficult decisions on where to cut. Order to reinvest to drive our profitability profile. So the answer is that we will have we will expand on what we know, which increases the certainty of execution.

1 of those key points will be looking at expenses, driving those down to reinvest in areas that we have proven in the past we can get results.

Casey Haire: Okay. Great. Then just switching to capital. It sounds like you are going to exhaust the remaining $100 in the fourth quarter here. But just looking ahead, yes, I know you guys are within your CET1 range. But does the. Do you guys manage to the TCE ratio Just wondering, with that at 8% and more rate hikes coming, is that. Is there a level there that you wanna hold to? As you contemplate buybacks in the 2027?

Andrew J. Harmening: Yes, the short answer to that is no. We are managing to our CET1 at 10% to 10.75%. And the reason that we are comfortable with that range is because we have a conservative risk profile and we have an ACLL that is at the peer median with the risk profile that is lower than that. So we have put ourselves in a pretty good position there, and so that is how we have operated. that is how we expect to operate. I do not know if you have any further comments, Derek, on TCE or not.

Derek S. Meyer: No. I think I think you said it well. We are trying to get our rots to where it should be, and the binding constraint for us as we do that is looking for CET1. And we have been reinvesting our securities portfolio pretty short so that any AOCI risk is relatively low anyways. Even though that is not included in our CET 1.

Casey Haire: Gotcha. Thank you.

Operator: Thank you. Our next question is from Daniel Tamayo with Raymond James. Please proceed.

Daniel Tamayo: Thank you. Good afternoon, Andy. Good afternoon, Derek. Maybe just yeah, maybe just starting on the, on the credit side.

Patrick Ahern: So criticized loans were down, which was nice to see. NPLs were up a bit. Curious if you see any of that increase on the NPLs flowing through on near term charge offs. And maybe just kind of a reminder if everything's still seems the same or any update on the credit outlook? No. We do not see any near term things flowing through the charge offs. We remain the increase this quarter something we were already kind of in discussions with clients so we feel good about that resolution. And then as far as the outlook overall, feel pretty confident in how we are looking at right now in the continued trajectory of the metrics.

Daniel Tamayo: Okay. Great. Thanks for that. And then maybe, Andy, for you, on the new markets, any color on kind of early trends from a balance sheet growth perspective in terms of what they are putting up? Just curious how kind of the pricing out there from a loan deposit perspective compares to your the rest of your portfolio or your footprint?

Andrew J. Harmening: Yeah. Well, you are asking probably 1 of the most impatient CEOs in America what trends he sees, which is pretty funny because I have been asking that question 8 days in to the systems conversion. And, you know, in the way too early trend category, what I would say is I am really, really pleased with what we have done on the consumer side of the bank And just a quick answer is we are almost fully activated on our debit card portfolio to what their activation level was pre conversion. And that happened in a week and so as that. What that means is then you have the people that wanna get in digital banking logging in already.

And the most interesting stat that I have seen is more of a precursor in 2027. My question is on account opening. What happened immediately. So you are going through a conversion. You are getting a lot of questions. We are issuing debit cards. You have people coming in the first 7 days, and lo and behold, the number of checking accounts we opened in the first 7 days versus a period from June to August was up 121%. So I cannot take that number and forecast 2027, in the category of welcome surprise, we have a consumer bank that just has products and services that are significant.

Layering it on top of a team that was ready for it with a conversion that quickly got people up and running. And activated on digital and on their debit cards. So the very, very early, answer to that is we were excited about Omaha. There is reason to be excited. We won best in Omaha. We will invest from a charitable standpoint. We will invest from a marketing standpoint. We will invest from a people standpoint. And so we will let the dust settle here over the next 30 days as you should for any conversion. But the very early indication to me is it is what we had hoped it is. Would be for us.

Daniel Tamayo: Thanks. I. And also, sorry, the Dallas and Kansas City markets, I know it is really early in Dallas, but curious if there is anything you could tell us there.

Andrew J. Harmening: Yeah. We are booking loans in Dallas, and that is a good sign. That means that the people we have brought over are consistent with what our strategy has been, which is we bring seasoned bankers. We are not training them how to be bankers. They are very good. They are opting for us, and they have followings on the customer and community side. So if you do not have to introduce somebody to the community, you can immediately get down to business. And that is what they have done there. Kansas City, you know, the. They have exceeded every projection we put out for them.

And we hired there, and, you know, we say it is early. it is not even early in Kansas City anymore. We are almost 2 years into that. Is frankly, 1 of the strongest teams that we have, and I would say 1 of the strongest teams in that market. I could not be more pleased with what they do and how they do it. So those 2 early indicators to us tell us that we can move into major metro markets. We have a blueprint for it, and it is really key on hiring people. Those people are going to want to know that we have that allow them to go to market.

So when we come out with our strategic plan in the first quarter, you can count on seeing increase in infrastructure on treasury management so that we can compete with regional and national players. We also just are completing, this coming weekend, our transition to a new commercial platform, as well, which allows us to plug additional capabilities into it. So feeling pretty good on the 2 markets. And really feeling good about our leadership team in commercial across the company, including in the Omaha market with our new market president, Jason Hansen. Great. Thank you for that color, Andy. Good talking to you, Daniel.

Operator: Our next question is from Terry McEvoy with Wells Fargo. Please proceed.

Terry McEvoy: Hi. Good afternoon, everybody. Maybe first question is the 18% to 20% loan growth range largely a function of uncertainty around the timing and magnitude of loan payoffs And then maybe while you are thinking about loans, could you just expand on kind of commercial loan pipelines and overall business sentiment among your customers?

Andrew J. Harmening: Yeah. I am not sure that I caught uncertainty on payoffs. What I would say is on the. Just starting with the big picture on loans, we are in a we are in a very good place. Regardless of some Q3 company sales that led to payoffs. We would be at the top of the original ASB guide. We are very likely to meet the full bank guide, and we are growing in areas that are allowing the remix and an increased profitability profile. The commercial pipeline, you know, we pressure test this, and it. we look at this from a dollar amount an overall commitment amount. We look at it from a funded debt standpoint.

And so when I say it is around this, I try to be conservative, and it is a little hard to believe. The pipeline's up 36 to 40%. It could even be higher if we look at funded cape-- So what we are what we are finding is a customer base and a community base that is seeing good business results and they are starting to convert on that. When we look at CRE, that is a really interesting 1. We are up 50% in production this year to date, roughly. We are we are up roughly 50% in payoffs, which so is the industry, and thank goodness we are. that means deals are flowing through.

But when you increase that production, half of that is construction lending. So our unfunded construction commitments are up as well. When you net all that out, it means we have a pretty good view into the 12 months that we are going to grow. And we believe that we will grow responsibly here in the low mid single digits in CRE. So good pipeline in commercial, good unfunded construction balances with an increase in production to quality borrowers, And so when I look at that, Terry, that is. You know, does it happen in November, early December, January 2? I. You know, I do not know.

But I but I do will say that we feel pretty strongly we can achieve the range that we have. And we have a durable, sustainable period coming after that.

Terry McEvoy: And then just as a follow-up, just curious, average non interest bearing deposits look to be about $500 million kind of above the period end. And I am just curious, timing related? Am I reading too much into it? Because it did catch my eye.

Derek S. Meyer: Yeah. This is Derek. So I would say all of our non maturity deposits are growing nicely and both this quarter and looking into the next quarter that is where you see most of the growth including in non interest bearing. So that is been a strong story for us the back half of the year both from a production standpoint and a tailwind standpoint, and it supports our outlook on NIM also.

Terry McEvoy: Okay. Thanks for taking my questions.

Andrew J. Harmening: Thanks, Terry.

Operator: Our next question is from Brandon Rood with Stephens Inc. Please proceed.

Brandon Rood: Hi for taking my questions.

Andrew J. Harmening: Sure.

Brandon Rood: If I can start on the expense guide. I am just kind of backing into kind of what that implies for the fourth quarter here. And it seems like that suggests a fairly large step up in expenses from 3Q to 4Q. I guess, 1, am I reading that correctly? You know, 5, 6% or so? And I guess, what is what is driving that?

Derek S. Meyer: So there. We had an OREO recovery in third quarter. That was. That may have affected what you are looking at. But overall, we are within our guide, and we would expect to be.

Brandon Rood: Got it. Okay. Thank you for that. And then maybe just on the NIM, the good core expansion here, the third quarter, just maybe your expectations for that going forward? Given the strong trends on the deposit side and the loan side as well?

Derek S. Meyer: Yeah. I think our story is staying the same, which it would. that which started, before the acquisition. Then we took a nice step up with the acquisition and we expect it to continue after the acquisition, which is a basis point or 2 quarter of organic expansion. We expect to do that in spite of runoff of the accretion. And so, we believe that is a reflection of our business model working and its sustainability of it overall.

So that is how we are thinking about it, and we think planning that way and relying on organic growth to drive our outlook so that we can invest in a responsible way and drive operating leverage is the winning formula for us.

Andrew J. Harmening: And, Brandon Rood, just some color behind that. It is the same idea that we have had for a few years now, but we continue to get sustained performance behind it. So if you look behind that, what I would say gives me some comfort that we can continue on is 7 consecutive quarters of growing our customer base. I looked at TM sales this week. Year to date, our treasury management sales are up 37% from the same period the prior year. We do not get rich on TM sales. However, that is a good indication we are talking about liquidity management.

And that is where I am starting to see a real movement in our commercial team and what they are doing. We have 1 of the largest HSA businesses in the country. We have fed that business, and we have had either high single digits or double digit growth in deposits in that. Pretty regularly for the last 5 years. So as we look to continue to invest in what we are doing in those categories, we have very good stable momentum going into the year end. And likely, additional initiatives that will kind of feed to that. I know that is a long way around town when you talk about NIM.

But for us, funding and deposit funding is something that is significant. They are not new strategies. And they are proving to be repeatable.

Brandon Rood: Got it. Okay. I appreciate all the color. it is-- Thank you. Thanks, Brandon Rood.

Operator: Our next question is from Jared David Shaw with Barclays. Please proceed.

Jared David Shaw: Hey, good afternoon. Thanks. I guess sticking with the deposit conversation, maybe looking at time deposits. You had some good pricing declines there given the rate environment. How are you thinking about pricing time deposits? And can you give us an update on what is coming due and sort of the roll on, roll off impact of that?

Derek S. Meyer: Yeah. That. So the way we are thinking about it, it is we are-- This quarter and next quarter, we do not see that as a key driver of deposit growth. So while the pricing is a little bit below, our back book is a little bit below the marginal rates you see now. So I think we are under 4% in the rates that are out there are all over 4%. That rollover is not gonna drive a lot of our NIM going forward. Most of it is. Most of our growth in fourth quarter, again, is non maturity deposits. And interest bearing demand deposits. Are the biggest chunk of that.

So that is going to outpace any role pricing impact on the CD book for the rest of this year. Then we will give a fresh view next year.

Jared David Shaw: As we as we you know, look at that dynamic of growth with good growth coming from non maturity deposits, how are you thinking about the cumulative beta through the cycle then if the structure of funding is improved, should we expect that betas could be better, this time around?

Derek S. Meyer: Right now, we are about 55%. I still think we are. We. You know, it could still get a roll around between 52-57%. But as you know, even watching the competitive environment or the interest rate environment like we saw today, versus a couple weeks ago, I do not wanna get too anchored on an outlook with the macro environment changing so much. What I do have a lot of confidence in is that we can offset that pricing with our asset pricing. And still get improving deposit. Overall margin.

Jared David Shaw: Okay. Thanks. And if I could just sneak 1 more in on capital markets. Should we expect that growth in that line is a little more stable and steady now given of the success you are saying you are having with treasury management and other areas? How should we think about capital markets? Going forward?

Andrew J. Harmening: Jared, you know that is a yes and no question. Right? I mean, you can have a lumpy quarter, but when we look year to year, I would expect to consent to see progress on that. You can get a nice deal in there that gives it a pop. But as we have added commercial bankers, as we continue to believe we can, as we have expanded into the Omaha market where they do not have it, it is certainly my expectation that year over year over year will continue to get better in improving capital markets. But I would be very careful to predict quarter by quarter in that category.

Derek S. Meyer: We think about it as we should have higher highs and higher lows of that category.

Jared David Shaw: Okay. Thanks.

Andrew J. Harmening: I could have saved time by just saying that, Jared.

Operator: Our next question is from Nathan Race with Piper Sandler. Please proceed.

Nathan Race: Hi, guys. Good afternoon. Thanks for taking the questions. Just going back to the deposit discussion, to get to the guide for the full year that implies a decent ramp in the fourth quarter. So just curious kind of apart from the momentum you guys described in terms of new client acquisition, household growth and so forth, Is there any other seasonality we should be thinking about into the fourth quarter to help on the deposit growth front? To that end, I mean, how much more do you expect kind of wholesale funding to come down after some good success on that front over the last couple quarters?

Derek S. Meyer: I think the end of the fourth quarter is really where you see a lot of our seasonality kick in, which also gives us relief on the wholesale funding. And that comes through again, in the non maturity deposits, both on the wealth side and the commercial side.

Andrew J. Harmening: And Nathan, we. In the early quarters, we often show a year over year growth in deposits. So we do not get confused. We do not just benefit from seasonality. From same period prior year. We have been squarely in the 56% growth range on deposits. So from this near term to your question and the impact on NIM from funding sources, yes, we do expect to grow. And, yes, that could lead to decreases in wholesale funding. But seasonality to me is not the full story. The full story is if you look at 1 period the prior year, have you gone up and are you ahead of the market on your funding?

And the answer pretty consistently for us has been yes.

Nathan Race: Okay. that is helpful. 1 more for me. Just curious what you are seeing in terms of kind of the weighted average rate on new loan pricing today and if you have kind of like the spot rate on loan yields at the end of September?

Andrew J. Harmening: Yeah. Getting a spot rate on the end of September, I think, is the road to nowhere. I think about the idea of what can happen with your deposits, what can happen with a particular loan. So do not really guide to that. What I will tell you is that our. The asset yields that we are putting on commercial C&I is a little higher than CRE, and we grow it a little bit faster. I will tell you the things that we are doing is leading to that lift. But I. I would be very careful modeling something on a 1 day point. Margin into the fourth quarter as a directional thing.

So we try to stay away from that.

Nathan Race: Understandable. Yeah. Just trying to get a sense for how much momentum loan yields have just given all those hires and with rates going up over the course of the kind of early part of 3Q just in advance of the rate hike But I appreciate it. That, though, Andy.

Andrew J. Harmening: Yeah. that is fair. 1 thing I would say, though, Nathan, that we Not sure what happened there, but we have a pretty big variable rate book on the commercial side. So going in, you know, going into the quarter based on the date, effective date of change, We are slightly asset sensitive. We will see a little bit of benefit going into October from that.

Nathan Race: Okay. Great. I appreciate the color. Thanks, guys.

Operator: Thank you. Our next question is from Christopher McGratty with KBW. Please proceed.

Andrew Leishner: Hey, how's it going? This is Andrew Leishner on for Christopher McGratty. Just going back to fee income, because in the quarter and the guidance update, is this a good run rate to use as we go in-- I think it was like an $85 million core number. Is that a good run rate to use as we go into 2027? And then from there, factor in the additional opportunities you spoke about given the wealth and American National synergies Or were there certain items that were outsized or seasonally higher in the quarter? Thanks.

Derek S. Meyer: No. I mean, I. We are not gonna give guidance yet for next year until we go through it. Do I guess our Phase 3 strategic plan. But you do start to see, you know, we had a really good second half of the year last year. Now, put up a really good third quarter this year. So you are starting to see a higher level run rate. It is still lumpy. You have nice performance in debit card and customer service charges and wealth, but it really is what is the, you know, rolling 4 quarter view that we can start to expect out of capital markets, and we have not settled in on that yet.

Other than we are very interested in it like everyone else is because it is it is really been a highlight for us, and there is opportunity as a result of the ANB acquisition. And all the RM hires.

Andrew J. Harmening: I am more comfortable, Andrew, now with the direction we have than I have been in 5 years. And the reason I am is that when you start to grow your customer base, we went from a negative 1% to 2% to 0% We celebrated that and got absolutely no tailwind. We went up to 1%, but was for part of a year and got very little tailwind. And now you know, we have been playing around in the 1.5 percent range for a while.

And that is giving us a tailwind on fees, whether that is debit card fees, whether that is new customers that are bringing more money whether that is people that are getting a card, And so on the consumer side of it, it is the first time I felt a tailwind in our company. And we will have that heading into 2027. As Derek said, we do not have the forecast for 2027 yet. But we have nice momentum in areas that would lead you to believe that your fee income has an opportunity to go up.

As you increase that number on the customer side and that goes through Mass Affluent, that Mass Affluent will start to go into your private wealth business. And so when you expand your commercial base, that starts to go into your private wealth business. So we are seeing some increases. We highlight there, some of those numbers. We will certainly come up with a forecast for 2027. The plan is to do that in January, but the fundamentals of our business right now are as strong as they have been in a decade.

Andrew Leishner: Okay. Great. Thank you for all that color. And then going back to buybacks, just given you are in the midpoint of your CET1 range, is the $100 million quarter a good pace for 2027? Or should we expect a little moderation? Thanks.

Andrew J. Harmening: I would put that in the category we have not forecasted that 1 just yet. We saw an opportunity right now. And pretty comfortable in that 10% to 10.75% area because I just remind you and you can see some pages on this, the quality of our super prime business, which should matter. And the allowance that we have today. What I would say is it is an option open to us that we have not had before, and it is 1 that will be in our decision matrix for capital spend in 2027.

Andrew Leishner: Understood. Thank you for the questions. Alright.

Andrew J. Harmening: Thank you.

Operator: Our next question is from Jon Arfstrom with RBC Capital Markets. Please proceed.

Jon Arfstrom: Thanks. Good afternoon. Andy, can you talk about that commercial pipeline comment again? I think I heard something like 35% to 40% up And you hedged a little bit on that. But is that right, and is that up materially? And if so, when, or how does that pull through?

Andrew J. Harmening: My only hedge on that is I did not wanna give you a bigger number. The number is 36 to 40%. In commitments, and it is higher than that when we look at funded portion of that. So, you know, when you start to get into those numbers, you say, hey, what is the real pull through? I think the takeaway for me in that is when I see a pipeline going up like that, from a year over year standpoint, it does lead me to believe that the production is going to be there. It has been my whole career. And I will say Phil Trier and the commercial team are very diligent.

In tracking their pipeline through the different levels So the answer is it is not a hedge. It is a 36 to 40% increase. And with that, we expect pretty solid production in the fourth quarter, and we expect C&I growth in the fourth quarter.

Jon Arfstrom: Okay. Good on that. And then most of the questions have been handled, but I am not asking for phase 3 yet. But what are you pushing your people on right now? what is bothering you? And then what. Is there anything left undone from phase 2 that will carry over? Thanks.

Andrew J. Harmening: Yeah. I we have worked pretty darn hard to get to a 15% ROTCE. We have worked really hard to get to a 1.5 plus percent customer growth and the message now is after you go through a conversion, you go through a couple platform changes, hey, catch your breath, but catch it fast. And what I wanna make sure of. I really do not have to do much convincing on this is we wanna-- we want to be 2%, 2.5%, 3% in-house growth. That does not happen by wishing for it. So we have plans, and we are just determining what the right timing of that is going to be.

And I think the continued growth in major metropolitan markets, do you go, and how do you get launched there? And do you use the plan that you have had in the past But right now, I am think it is, it is. it is it is the things that are not fancy. it is discipline. And our team has it, and I like it. And it is making sure that you are not complacent because there is a clear next step for us. We have worked hard to get where. To where we are, but there is another step for us from a business standpoint and a performance standpoint.

And then it is make sure we give enough attention to Omaha. that is a really good market, and these people are going through a conversion, and that is hard. However, we will put our money where our mouth is in that market. We believe in that team. And so I think those are some of the things on my mind right now heading into the end of the year and into 2027. Yeah.

Operator: Thank you. There are no further questions at this time. I would like to turn the conference back over to management for closing remarks.

Andrew J. Harmening: Yes. So I want to thank everyone for the-- I will just highlight the fact I am pleased that we continue to expand NIM. I am pleased that we have controlled expenses grown revenue, maintain credit quality, improve our ROTCE. And I am quite optimistic on the. Not just fourth quarter, but going into the next year based on the pipeline growth that I have seen. So thank you for the continued interest. And I will say Go Brewers This is the eve of the world series and the first time in Milwaukee in 44 years. Thank you all.

Operator: This will conclude today's conference. You may disconnect your lines at this time and thank you for your participation.