ASB

MKT CAP $5.5BP/E 10.2DIV YIELD —FCF YIELD —REV TTM —NET INCOME $505.1M +262.5%NET CASH $55.3M52W 24.13 – 32.33SEC XBRL · TTM TO Invalid Date

How ASB rewrote its risk factors

10-K ITEM 1A · FY2024 → FY2025

Text kept

40%

of sentences unchanged

Added

213

new sentences

Dropped

297

sentences removed

Length

−3,086

words, now 16,934

New in FY2025

Additional risks and uncertainties that management is not aware of or focused on or that management currently deems immaterial may impair our business operations.
The FOMC continued to lower the federal funds rate several times in 2025, with the federal funds rate reaching a target range of 3.50% to 3.75% at the FOMC’s December 10, 2025 meeting.
The FOMC maintained these rates at its January 28, 2026 meeting.
As of December 31, 2025, various economic indicators suggested that real GDP had expanded solidly throughout 2025.
Consumer price inflation, as measured by the 12-month change in the price index for personal consumption expenditures, decreased compared to its peak level in 2023, approaching the Federal Reserve’s two percent inflation objective.
The U.S. economy had strong GDP growth, loosening of tight labor markets and slowed inflation in 2025.
While this positive growth may continue in 2026, external factors such as stricter immigration policies, tariffs, and other trade policies, sanctions, geopolitical tensions, high unemployment, civil unrest, and other political or trade-related policies affecting domestic and global markets may cause greater economic uncertainty.
Such conditions may adversely affect our asset quality, deposit levels, loan demand and results of operations.
As a result of the economic and geopolitical factors discussed above, financial institutions face heightened credit risk, among other forms of risk.
The outlook for CRE is dependent on the economic environment and how major subsectors respond to the interest rate environment and continued higher prices for commodities, goods and services.
Credit performance over the medium- and long-term is susceptible to economic and market forces and therefore forecasts remain uncertain; however, some degree of instability in the CRE markets is expected in the coming quarters as loans continue to be refinanced in markets with higher vacancy rates.
The Trump Administration, during its second term beginning 2025, imposed tariffs against goods imported from U.S. trading partners, including Canada, Mexico and China.
The tariffs have resulted in threats of retaliatory tariffs against U.S. goods, discussions with the countries which have delayed many of the U.S. imposed tariffs while discussions with each trading partner continue and litigation in the U.S. courts.
Tariffs and trade restrictions may cause the prices of our customers' products to increase, which could reduce demand for such products, or reduce our customers' margins, and adversely impact their revenues, financial results, and ability to service debt.
To the extent changes in the political environment have a negative impact on us or on the markets in which we operate our business, our results of operations and financial condition could be materially and adversely impacted in the future.
At this time, it remains unclear what the U.S. government or foreign governments will or will not do in response to additional tariffs that may be imposed or international trade agreements and policies.
Bank regulatory agencies periodically review our ACLL and may require an increase in the provision for credit losses or the recognition of additional loan charge offs, based on judgments different than those of management.
As of December 31, 2025, 65% of our loan portfolio consisted of commercial and industrial, real estate construction, and CRE loans (collectively, "commercial loans").
At December 31, 2025, CRE loans, including owner occupied, investor, and real estate construction loans, totaled $8.4 billion, or 27%, of our total loan portfolio and 183% of total risk-based capital.
Because payments on loans secured by CRE depend upon the successful operation and management of the properties and the businesses that operate from within them, repayment of such loans can be affected by factors outside the borrower’s control, such as adverse conditions in the real estate market or the economy or changes in government regulation.
Although CRE markets have shown signs of stabilization since 2024, the federal banking agencies have issued guidance on the sound risk management practices regarding CRE lending and regulatory scrutiny may increase depending on the concentration in CRE lending and changing economic conditions for the CRE markets.
Our failure to adequately maintain appropriate risk management policies, procedures and controls could adversely affect our ability to increase this portfolio and could result in an increased rate of delinquencies in, and increased losses from, this portfolio as well as enhanced regulatory scrutiny and regulatory expectations for increased capital.
At December 31, 2025, nonaccrual CRE loans totaled $8.7 million, or less than 1% of our total portfolio of CRE loans.
In deciding whether to extend credit or enter into other transactions, we rely on information furnished by or on behalf of customers and counterparties, including financial statements, credit reports, and other financial information.
We may rely on representations of those customers, counterparties, or other third parties, such as independent auditors, as to the accuracy and completeness of that information.
If the continuity of operations or integrity of processing were compromised, it could result in a financial loss to us.
We may issue credit to consumers, financial institutions or other businesses as part of the funds settlement.
Future laws or more stringent interpretations or enforcement policies with respect to existing laws may increase our exposure to environmental liability.
In the event of financial distress, uninsured depositors historically have been more likely to withdraw their deposits.
The Corporation had approximately $17.0 billion of uninsured deposits at December 31, 2025.
Estimated uninsured and uncollateralized deposits, excluding intercompany deposits, were $9.4 billion or 26.5% of total deposits at December 31, 2025.
The ease and speed of the electronic withdrawals may accelerate this process.
If a significant portion of our deposits were to be withdrawn within a short period such that additional sources of funding would be required to meet withdrawal demands, the Corporation may be unable to obtain funding at favorable terms, which may have an adverse effect on our net interest margin.
Because our AFS investment securities lose value when interest rates rise, after-tax proceeds resulting from the sale of such assets may be diminished during periods when interest rates are elevated.
Under such circumstances, we may be required to access funding from sources such as the Federal Reserve’s discount window and the FHLB system in order to manage our liquidity risk.
Credit ratings are subject to review by rating agencies, which consider a number of factors, including our financial strength, performance, prospects and operations as well as factors not under our control.
In August 2023, Moody’s and S&P Global Ratings each downgraded our long-term issuer credit ratings, and the ratings remained unchanged as of December 31, 2025.
Credit rating downgrades or negative watch warnings could negatively impact our reputation and the perception of the Corporation by lenders, investors and other third parties, which could impair our ability to compete in certain markets or engage in certain transactions.
Changes in monetary policy, including changes in interest rates, could influence not only the interest we receive on loans and investments and the amount of interest we pay on deposits and borrowings, but such changes could affect (i) our ability to originate loans and obtain deposits; (ii) the fair value of our financial assets and liabilities; and (iii) the average duration of our mortgage portfolio and other interest-earning assets.
As of January 28, 2026, the date of the FOMC's most recent meeting, the target range for the federal funds rate was 3.50% to 3.75%, which is down from the peak of 5.25% to 5.50% prior to the FOMC meeting in September 2024.

and 173 more.

Gone since FY2024

Additional risks and uncertainties that management is not aware of or focused on or that management currently deems immaterial may also impair our business operations.
At its January 29, 2025 meeting, the FOMC decided to maintain the target range for the federal funds rate at 4.25% to 4.50%.
As of December 31, 2024, various economic indicators suggested that real GDP had expanded solidly throughout 2024.
Consumer price inflation, as measured by the 12-month change in the price index for personal consumption expenditures, had moved lower compared to its peak level in 2023, approaching the Federal Reserve’s 2 percent inflation objective.
Against the backdrop of restrictive monetary policy, the U.S. economy had stronger-than-expected GDP growth, loosing of tight labor markets and falling inflation in 2024.
While this positive growth may continue in 2025, some economists are projecting that, due to emerging policy risks such as stricter immigration policies and trade tariffs, the U.S. economy may be flat or experience a modest decrease in gross domestic output in 2025.
Bureau of Economic Analysis projects that real GDP will decrease modestly in 2025.
Any such downturn in economic output, especially domestically and in the regions in which we operate, may adversely affect our asset quality, deposit levels, loan demand and results of operations.
As a result of the economic and geopolitical factors discussed above, financial institutions also face heightened credit risk, among other forms of risk.
According to the Federal Reserve's November 2024 Financial Stability Report, several economic indicators suggest that CRE prices still remain high relative to fundamentals while market delinquency rates are elevated.
However, the outlook for CRE remains dependent on the broader economic environment and, specifically, how major subsectors respond to a high interest rate environment and continued higher prices for commodities, goods and services.
In any case, credit performance over the medium- and long-term is susceptible to economic and market forces and therefore forecasts remain uncertain; however, some degree of instability in the CRE markets is expected in the coming quarters as loans continue to be refinanced in markets with higher vacancy rates under current economic conditions.
Instability and uncertainty in the commercial and residential real estate markets, as well as in the broader commercial and retail credit markets, could have a material adverse effect on our financial condition and results of operations.
The Trump Administration, during its first term from 2017 to 2021, imposed certain tariffs and retaliatory tariffs, as well as other trade restrictions on products and materials that our customers import or export.
President Trump again has signaled that his new Administration will impose tariffs and retaliatory tariffs against U.S. trading partners.
During his election campaign, President Trump indicated that he would impose a 25% tariff against all goods imported from Canada and Mexico, a 60% tariff on goods from China and a blanket tariff of 10% to 20% on other imports to the U.S.
On February 1, 2025, President Trump issued an Executive Order imposing tariffs at various levels on imports from Canada, Mexico, and China.
The newly imposed tariffs have resulted in immediate threats of retaliatory tariffs against U.S. goods and resulted in discussions with the countries which have delayed many of the U.S. imposed tariffs while discussions with each trading partner continue.
The above and other potential tariffs and trade restrictions may cause the prices of our customers' products to increase, which could reduce demand for such products, or reduce our customers' margins, and adversely impact their revenues, financial results, and ability to service debt.
In addition, to the extent changes in the political environment have a negative impact on us or on the markets in which we operate our business, our results of operations and financial condition could be materially and adversely impacted in the future.
At this time, it remains unclear what the U.S. government or foreign governments will or will not do with respect to additional tariffs that may be imposed or international trade agreements and policies.
In addition, bank regulatory agencies periodically review our ACLL and may require an increase in the provision for credit losses or the recognition of additional loan charge offs, based on judgments different than those of management.
As of December 31, 2024, approximately 64% of our loan portfolio consisted of commercial and industrial, real estate construction, and CRE loans (collectively, "commercial loans").
At December 31, 2024, CRE loans, including owner occupied, investor, and real estate construction loans, totaled $8.4 billion, or 28%, of our total loan portfolio and 195% of total risk-based capital.
As a result of our growth in this portfolio over the past several years and planned future growth, these loans require more ongoing evaluation and monitoring and we are continuously enhancing risk management policies, procedures and controls as needed.
Because payments on loans secured by CRE often depend upon the successful operation and management of the properties and the businesses that operate from within them, repayment of such loans may be affected by factors outside the borrower’s control, such as adverse conditions in the real estate market or the economy or changes in government regulation.
CRE markets have been facing downward pressure since 2022 due in large part to increased interest rates and declining property values.
Although CRE markets showed signs of stabilization in 2024, the prospects for the CRE markets and property valuation remain uncertain.
Accordingly, the federal banking agencies have continued to express concerns about weaknesses in the current CRE market and have applied increased regulatory scrutiny to institutions with CRE loan portfolios that are fast growing or large relative to the institutions' total capital.
Our failure to adequately maintain appropriate risk management policies, procedures and controls in response to regulatory expectations could adversely affect our ability to increase this portfolio going forward and could result in an increased rate of delinquencies in, and increased losses from, this portfolio as well as enhanced regulatory scrutiny and regulatory expectations for increased capital.
At December 31, 2024, nonaccrual CRE loans totaled $18 million, or less than 1% of our total portfolio of CRE loans.
In deciding whether to extend credit or enter into other transactions, we may rely on information furnished by or on behalf of customers and counterparties, including financial statements, credit reports, and other financial information.
We may also rely on representations of those customers, counterparties, or other third parties, such as independent auditors, as to the accuracy and completeness of that information.
If the continuity of operations or integrity of processing were compromised, this could result in a financial loss to us due to a failure in payment facilitation.
In addition, we may issue credit to consumers, financial institutions or other businesses as part of the funds settlement.
In addition, future laws or more stringent interpretations or enforcement policies with respect to existing laws may increase our exposure to environmental liability.
The agencies concluded that a significant contributing factor to the failures of the institutions in 2023 was the proportion of the deposits held by each institution that exceeded FDIC insurance limits.
Noting that uninsured deposits accounted for nearly 47 percent of domestic deposits in 2021, the FDIC stated that large concentrations of uninsured deposits increase the potential for bank runs and can threaten financial stability.
In the months preceding and following these failures, many large depositors withdrew deposits in excess of applicable deposit insurance limits and deposited these funds in other financial institutions and, in many instances, moved these funds into money market mutual funds or other similar securities accounts in an effort to diversify the risk of further bank failure(s).
Uninsured deposits historically have been viewed by the FDIC as less stable than insured deposits.

and 257 more.

Sentence-level comparison of Item 1A in the two most recent 10-Ks (FY2024 ↗, FY2025 ↗). A reworded sentence counts as one dropped and one added, so heavy edits read as low “kept”. Headings and page furniture are stripped; nothing is summarised by a model.

Watch ASB. Know when insiders buy.

One email the day a filing lands. Free.