New hires boost commercial advancement at Associated Bank
Associated Bank, a leading financial institution in the Midwest, is embarking on an ambitious expansion of its commercial banking segment. The strategy, which focuses on sharpened commercial deposit growth, asset portfolio repositioning, and strong core deposit growth, is supported by talent acquisitions and positive growth projections toward 2025.
Emphasis on Commercial Deposits
The bank has increased its emphasis on commercial deposits, as evidenced by growing pipelines, expiring relationship manager non-competes, and newly launched deposit verticals. This initiative is gaining momentum and is expected to contribute to reducing reliance on wholesale funding sources.
Shift Toward Higher-Yielding Loans
Associated Bancorp strategically pivoted its balance sheet by replacing lower-yielding residential mortgages with higher-yielding Commercial & Industrial (C&I) loans. In the first half of 2025, it added $706 million in C&I loans, including $356 million in Q2 alone, highlighting an intentional move toward relationship-based commercial lending.
Positive Growth Projections
The bank projects core deposit growth of 4% to 5% in 2025, supported by strong household checking account growth — the strongest organic growth in over a decade — and back-half-year weighting consistent with historical trends.
Talent Acquisitions
While specific hires were not detailed explicitly, mention of expiring noncompete clauses for relationship managers suggests strategic retention and addition of experienced commercial banking talent, a common growth lever in the industry.
Financial Impact
These initiatives have resulted in net interest margin expansion to 3.04% in Q2 2025, driven by higher earning asset yields and lower deposit costs, with commercial loan yields leading the uptick. This repositioning supports improved profitability and solid capital accretion.
Geographical Expansion
Dallas, Houston, and Cincinnati could be areas for further expansion on the commercial side. Recently, Associated Bank hired three relationship managers for its commercial banking team in Kansas City, Missouri, and plans to expand its footprint in newer markets.
Uncertain Economic Environment
For the bank's commercial clients, uncertainty is the major theme currently, leading some to pause business operations and move away from certain acquisition targets. Despite this, executives believe commercial loan growth in a low gross domestic product market is possible by taking market share.
In conclusion, Associated Bank is executing a focused commercial banking expansion, combining deposit gathering innovations, disciplined credit growth in commercial loans, and underlying talent management, all underpinning its optimistic growth outlook for 2025.
- The bank's recent focus on commercial deposits is supported by growing pipelines, expiring relationship manager non-competes, and newly launched deposit verticals, aiming to reduce reliance on wholesale funding sources for its business.
- Associated Bank strategically shifted its balance sheet by replacing lower-yielding residential mortgages with higher-yielding Commercial & Industrial (C&I) loans, a move toward relationship-based commercial lending and investing to support improved profitability.
