We issued an updated research report on Associated Banc-Corp (ASBC) on Jul 1, 2014. The company’s better-than-expected first-quarter 2014 results, considerable organic growth prospects and efficient capital deployment activities are impressive. However, mounting expenses and an overall subdued economic scenario keep us apprehensive.

Associated Banc-Corp has been witnessing consistent growth in deposits and net interest income over the last few years. Moreover, the continuous change in deposit mix backed by rise in non-interest bearing deposits will likely reduce the company’s funding cost. Again, the capital generated from these accounts will aid further organic growth in the quarters ahead.

Following robust first-quarter results, the Zacks Consensus Estimate for 2014 inched up 1.0% to $1.13 per share over the last 60 days. For 2015, the Zacks Consensus Estimate advanced 1.0% to $1.22 per share over the same time period.

Nonetheless, rising expenses and persistent pressure on net interest margin (NIM) continue to drag Associated Banc-Corp’s financials. While NIM will be subdued in the near term, given the still low interest rate scenario; expenses will likely rise primarily due to a stringent regulatory landscape and subsequent compliance costs.

Currently, Associated Banc-Corp has a Zacks Rank #2 (Buy).

Stocks That Warrant a Look

Other Midwest banks worth considering include Huntington Bancshares Incorporated (HBAN), 1st Source Corporation (SRCE) and German American Bancorp Inc. (GABC). All these stocks carry the same Zacks Rank as Associated Banc-Corp.

Read the Full Research Report on HBAN
Read the Full Research Report on ASBC
Read the Full Research Report on GABC
Read the Full Research Report on SRCE


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