Investment Thesis
Associated Banc-Corp demonstrates solid profitability with strong revenue growth (+80.9% YoY) and respectable net margins (21.9%), supported by healthy free cash flow generation ($615.7M). However, concerning interest coverage ratio (0.1x) and moderate ROA (1.1%) suggest elevated leverage risk and asset efficiency challenges typical of regional banking stress, warranting cautious positioning.
Strengths
- Strong revenue growth of 80.9% year-over-year indicates expanding business activity
- Robust net profit margin of 21.9% demonstrates effective cost control and profitability
- Excellent free cash flow generation at $615.7M with 28.3% FCF margin provides operational strength
- Conservative debt-to-equity ratio of 0.20x shows manageable leverage levels
- Substantial asset base of $45.2B provides scale and diversification
Risks
- Critically low interest coverage ratio of 0.1x indicates severe debt service pressure and potential solvency concerns
- Modest return on assets (1.1%) suggests inefficient asset utilization for a regional bank
- Below-average ROE of 9.5% indicates suboptimal returns to shareholders relative to equity capital
- High insider activity with 87 Form 4 filings in 90 days raises governance and confidence concerns
- Diluted EPS surge of 284.7% appears disconnected from net income growth of 2.5%, suggesting significant share activity or accounting adjustments
Key Metrics to Watch
- Interest coverage ratio trend - critical indicator of debt sustainability
- Net interest margin and loan loss provisions - core banking profitability drivers
- Capital adequacy ratios and regulatory compliance status
- Asset quality metrics and non-performing loan trends
- ROA and ROE progression - efficiency and shareholder return improvement
Financial Metrics
Revenue
2.2B
Net Income
474.8M
EPS (Diluted)
$2.77
Free Cash Flow
615.7M
Total Assets
45.2B
Cash
1.7B
Profitability Ratios
Gross Margin
N/A
Operating Margin
5.9%
Net Margin
21.9%
ROE
9.5%
ROA
1.1%
FCF Margin
28.3%
Balance Sheet & Liquidity
Current Ratio
N/A
Quick Ratio
N/A
Debt/Equity
0.20x
Debt/Assets
89.0%
Interest Coverage
0.13x
Long-term Debt
1.0B
Disclaimer: This analysis is generated by AI based on publicly available SEC EDGAR filings.
It does not include stock price data and should not be considered financial advice.
All fundamental data is sourced from SEC public domain filings.
Always conduct your own research before making investment decisions.
Data Source: SEC EDGAR |
Analysis Date: 2026-03-20T05:12:12.477876 |
Data as of: 2025-12-31 |
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