ASB - Associated Banc-Corp to report Q4 net loss after deal to sell securities mortgage loans

2023-11-09 17:24:39 ET

Associated Banc-Corp ( NYSE: ASB ) on Thursday said it had sold about $0.8B of investment securities and had agreed to sell around $1B in mortgage loans in order to reposition its balance sheet.

The company also said it would make several changes to its consumer lending strategy, while identifying $25M to $30M in noninterest expense reductions for 2024.

The sale of the mortgage loans is expected to close by the end of the year, and the transaction is expected to result in an after-tax loss of ~$157M which will cause ASB to report a net loss for Q4 2023.

Meanwhile, the changes to the strategy include limiting construction lending to customers with Associated Bank deposit relationships and reducing portfolio lending to private wealth, mass affluent and CRA customers only.

ASB also said that a team in partnership with a third-party consultant had identified the expense reductions, which would primarily comprise of FTE reductions, branch consolidations and decreased discretionary spending.

"In connection with these expense reduction initiatives, the Company expects to incur a one-time charge of approximately $5M in severance and other expenses in the fourth quarter of 2023," ASB said in a statement .

Additionally, ASB said that in 2024 it would develop an artificial intelligence enabled chatbot for its digital banking platform.

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