One month after raising nearly $331 million in a common stock offering, Associated Banc-Corp (NYSE:ASB) in Green Bay, Wisconsin, has announced plans to put its new capital to work. The $42 billion-asset Associated disclosed that it plans to sell a $2 billion block of low-yielding mortgage loans and securities, freeing up balance-sheet space for more valuable assets. "The repositioning further reduces our exposure to low-yielding, longer-duration assets and provides capacity to drive more profitable organic growth," CEO Andy Harmening said December 4, 2024 on a conference call with analysts.

Associated said it has already sold $1.3 billion of investment securities. A follow-on transaction involving $700 million of mortgages is expected to close in January. Associated plans to use proceeds to pay down $600 million of Federal Home Loan Bank advances and to purchase $1.5 billion of securities, which have a weighted-average yield more than double that of those it sold.

The weighted-average yield of the mortgages being sold is 2.99%. Most of the loans represent single-product relationships, the bank said. "As we continue to execute on our plan going forward, we feel well-positioned to attract and deepen customer relationships, take market share in key commercial markets, and enhance the value of our franchise," Harmening said in a press release.