Associated Banc-Corp Is Starting To Convince Its Skeptics Through Good Execution

For many years, Associated Banc-Corp (NYSE:ASB) was basically an also-ran bank with an okay deposit base, but a poor record relative to peers in terms of net interest margin, efficiency ratio, PPNR growth and margin, and credit quality. New management has brought in new strategies, though, and Associated Banc-Corp ("Associated") is starting to build credibility around the idea that this new approach will drive sustainably better results over the long term.

I'd describe valuation today as more "okay" than compelling, as long-term growth on the high-end of the mid-single digits supports a mid-$20s fair value. That said, as the company executes, it will argue for lower discount rates and outperformance could be reinvested in the growth of the business, leading to a long-term compounding effect that makes today's valuation look quite a bit more compelling.

 

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Associated Banc-Corp Is Starting To Convince Its Skeptics Through Good Execution