ASSOCIATED BANC-CORP (ASB): what the price requires

At today's price, ASSOCIATED BANC-CORP (ASB) is priced for 11.4% return on equity. boothcheck doesn't publish a fair value or a price target; it shows what the price assumes, so you can judge whether that bar is too high.

Generated: 2026-07-19 · Source: https://boothcheck.com/report/ASB

Headline

FieldValue
TickerASB
CompanyASSOCIATED BANC-CORP
Current price$30.76/sh
CompositionCorporate and Commercial Specialty 38% / Community, Consumer and Business 62%

What The Price Requires (Inversion)

The assumption today's price embeds, recovered by inverting the valuation.

FieldValue
Inversion basisfinancials
Return on equity needed11.4%
Return on equity now9.7%
ROE gap+1.7pp
Price-to-book1.06x

Solve inputs: computed at a 10.9% cost of equity with 4% terminal growth over a 5-year stage, on common book equity (FY2026); each 1pp of cost of equity moves the implied ROE ~1.1pp.

Reconcile: at the x-ray's 9.3% required return this reads ~9.6%; the models below use their own rates.

How unusual the bet is: within-range

ReferenceValue
vs own history+2.07σ
cohort percentile (of 119 peers)14
sustained it ~10 years at this level72%
implied end-window share0%

Valuation X-Ray

The price is supported by asset-based and earnings-power and relative-multiple and growth-DCF value. A value/asset-supported name, not a pure growth bet.

How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.

FamilyMedian price/FVModelsReads
Asset0.93x3justifies
Earnings0.66x2justifies
Relative0.31x3justifies
Growth0.84x2justifies

Families that justify the price: Asset, Earnings, Relative, Growth

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 10.6%); the inversion above states its own rate.

Per-Model Detail (n=10)

ModelFamilyFVPrice/FVApplicableMethodology
DCF Perpetual GrowthGrowth——no—
Bank Fair Value (P/TBV)—$26.581.16xyesTBVPS $23.25 × 1.14x (ROE (TTM) 9.9% / CoE 9.3%, g=5.0% (sustainable: 65% retention × ROE, 5% cap; not the terminal-growth assumption))
Relative ValuationRelative$35.500.87xyesP/E 10x (static sector reference · 2026-04), scenarios: 8.0x / 10.0x / 12.0x (bear / base = reference held flat / bull), EV/EBITDA N/Ax
Simple DDMGrowth——no—
Two-Stage DDMGrowth$34.120.90xyesStage 1: 20% for 5yr, Stage 2: 3.5% perpetual
Simple Excess ReturnAsset$31.980.96xyesBV/sh $30.01, ROE (TTM) 9.9%, ke 9.3%
Two-Stage Excess ReturnAsset$32.990.93xyes5yr excess ROE then converge to ke=9.3%
Discounted Future Market CapGrowth$39.900.77xyesRev $1.2B, growth 30% (input: historical growth; tapered), Terminal P/S: 3.4x / 4.2x / 5.0x (bear / base = today's held flat / bull, cap 12x)
Peter Lynch Fair ValueRelative$100.800.31xyesEPS $2.88, growth 35% (input: historical EPS growth), PEG=0.30 (Undervalued)
Margin TrajectoryGrowth——no—
Earnings Power ValueEarnings——no—
Residual IncomeAsset——no—
Graham NumberAsset$44.100.70xyes√(22.5 × EPS $2.88 × BVPS $30.01) — Graham's conservative floor
EV/EBITDA RelativeRelative——no—
FCF YieldEarnings——no—
SBC-Adj FCF YieldEarnings——no—
Ben Graham FormulaEarnings$92.930.33xyesEPS $2.88 × (8.5 + 2×15.0%) × (4.4 / 5.3%)
ROIC-Justified P/BAsset——no—
P/Sales SectorRelative——no—
PEG Fair ValueRelative$108.000.28xyesEPS $2.88 × (PEG 1.5 × growth 25.0% (input: historical EPS growth)) → PE 37.5x
Earnings YieldEarnings$31.140.99xyesEPS $2.88 / required return 9.3% (Rf 4.3% + ERP 5.0%)
Funds From Operations MultipleRelative——no—
Clinical Phase NPVGrowth——no—
MertonAsset——no—
V5 Mechanical———no—

Solvency

FieldValue
Share count CAGR (dilution)2.6%

Deposit/float-funded balance sheet: debt is funding, not corporate leverage, and GAAP operating cash flow follows loan flows. Net-debt, interest-coverage, and cash-burn lenses do not apply. The solvency frame for a financial is regulatory capital and payout capacity (CET1, stress buffer, dividends plus buybacks against earnings).

Bullet Takeaways

Bull Case

The balance sheet is where the Associated story is improving, and it reveals a bank deliberately remixing toward higher-quality growth. Total loans grew 5% year over year to $31.8 billion, but the composition matters more than the headline: commercial and industrial balances rose 13%, the kind of relationship-based lending that brings deposits and fee income alongside the loan. On the funding side, core customer deposits rose 4.5% to $30.4 billion, the cheap, sticky money that makes a bank's margin durable. A bank growing high-quality loans funded by growing core deposits is doing the fundamental thing right.

The profitability is following the mix shift. Net income available to common rose to $116.8 million, or $0.70 a share, from $0.59 a year earlier, an 18% increase, while the net interest margin held at 3.03%, up 6 basis points from a year ago. Holding the margin steady in a shifting rate environment while growing the loan book is what drives the earnings forward, and it is the mechanical reason the return on equity is climbing toward the level the price requires.

Credit quality, the thing that destroys bank equity when it goes wrong, is currently pristine. Net charge-offs ran at just 0.07% of average loans on an annualized basis, and the bank carries an allowance for credit losses equal to 1.34% of total loans, a cushion many times the current loss rate. The bank's funding has also been actively managed, with the filing noting it paid off emergency facility advances and shifted toward stable wholesale funding. Management guided to 8% to 10% income growth for 2026. The bull case is a clean, conservatively reserved regional bank growing its commercial franchise and its core deposits, trading at roughly book value while its returns improve.

Bear Case

The structural truth a holder has to sit with is that Associated still earns a return on equity below what its own shareholders require. The bank earns roughly 10% on its common equity, while the cost of that equity is closer to 11%. A bank that earns less than its cost of capital is, in the cold arithmetic of finance, destroying value at the margin even while it grows, and it explains why the stock trades at only about book value rather than the premium a clearly high-return bank commands. The price is asking for an improvement to about 11% that has not yet been demonstrated.

The margin is the second uncomfortable fact. At 3.03%, the net interest margin is thin and slipped 3 basis points from the prior quarter. A regional bank's profitability lives and dies on that spread between what it earns on loans and pays on deposits, and it is largely at the mercy of the rate environment and deposit competition, neither of which the bank controls. If rates fall and asset yields reprice faster than deposit costs, the margin compresses, and the earnings growth the price assumes stalls. The bank also leans on wholesale funding sources that are more expensive and less stable than core deposits, a reliance the filing makes explicit.

The deeper risk is credit, precisely because it looks so good right now. Net charge-offs of 0.07% are near a cyclical floor, and a 1.34% allowance is comfortable today, but bank losses are cyclical and arrive suddenly. A regional bank with meaningful commercial real estate and commercial lending exposure is one downturn away from charge-offs that climb several-fold, and the current pristine credit is therefore the optimistic end of the range, not a permanent state. At roughly book value the stock is not expensive, but it is priced for the return on equity to rise and credit to stay benign at the same time. If either reverses, a bank earning below its cost of capital with a thin margin is worth book value or less, not more, and the modest discount the asset methods show is the honest read.

Valuation

A bank is worth the return it earns on its capital, so Associated is read off price-to-book, not an operating multiple. At $29.20 (June 27, 2026) against a book value of about $30 a share, the stock trades right around one times book. Inverted, that price assumes the bank sustains a return on equity of roughly 11%, modestly above the roughly 10% it has recently earned. Keep those figures approximate; they are one solve under fixed assumptions. The plain reading is that the price is not demanding a transformation, it is asking the bank to close a small gap between what it earns and what its capital costs.

The methods that fit a bank cluster tightly around the price. The asset-based excess-return approaches, anchored on book value and the current return on equity, land near $32 to $33, slightly above the price. The dedicated bank model, which values the franchise off tangible book value and the spread between return on equity and cost of equity, lands near $26.50, slightly below. The sector price-to-earnings comparison, around 10 times, lands near $34. Read together, the methods bracket the current price closely, which marks this as a fairly valued, asset-supported name rather than a clear bargain or an obvious overpayment. The high single-method outliers are artifacts of formulas built for growth companies, not banks, and should be set aside.

The solvency frame for a bank is regulatory capital, credit reserves, and dividend capacity, not net debt. On those, Associated is sound: a 1.34% allowance against 0.07% annualized charge-offs is a large cushion, and core deposit growth supports the funding base. The decisive question the valuation poses is the return on equity itself. At one times book, the stock is priced for the modest improvement management is guiding toward; the return depends on whether the commercial-lending mix shift and margin discipline lift the return on equity above its cost of capital, or whether a thinner margin and a credit turn keep it stuck below.

Catalysts

The first quarter of 2026 showed steady improvement across the franchise. Net income available to common equity was $116.8 million, or $0.70 a share, up from $0.59 a year earlier, on net interest income of $307 million and a net interest margin of 3.03%. Total loans reached $31.8 billion, up 5%, led by 13% growth in commercial and industrial balances, while period-end deposits rose 2% to $35.7 billion with core customer deposits up 4.5%.

The forward catalysts are loan growth, margin, and the rate path. Management guided to 8% to 10% income growth for 2026, which depends on continuing the commercial-loan momentum while protecting the margin. Credit quality is the swing factor in the other direction: net charge-offs of 0.07% and a 1.34% allowance are the current reading, and any deterioration in commercial or commercial real estate exposure would feed straight into provisions. The metrics to watch over the coming quarters are whether the net interest margin holds above 3% as rates move, whether the C&I-led loan growth continues, and whether the return on equity climbs toward the level the price requires.

Peer Cohorts (Per Segment, With Filing Citations)

Corporate and Commercial Specialty / Community, Consumer and Business / Risk Management and Shared Services (reported)

Methodology Note

Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.

Sources

Q1 2026 results, April 2026 · FY2025 10-K

View the full interactive ASB report on boothcheck