Associated Bank reports lower profits

By Don Walker
Milwaukee Journal Sentinel

Profits fell in the second quarter for the parent of Associated Bank, but the Green Bay-based bank is planning a 32 cents a share dividend.

Associated Banc-Corp (ASBC) posted net income of $47.4 million, or 37 cents a share, down from almost $75.8 million, or 59 cents a share, in the second quarter of 2007.

Net income through June 30 was $113.8 million, or 89 cents a share, compared with net income of $149.2 million, or $1.16 a share for the first half of 2007.

The bank’s board of directors, however, declared a regular cash dividend of 32 cents a share, payable on Aug. 15. It is the bank’s 154th consecutive quarterly cash dividend.

As is the case with other banks, bank directors said the variance between the first and second quarter financial results was due to loan losses. The provision for the second quarter was $59 million (30 cents per share), compared with $23 million (12 cents per share) in the first quarter.

“Non-performing loans increased $81 million during the quarter to $289 million at June 30, attributable primarily to six commercial credits all related to the housing industry, including five construction credits totaling $51 million and a $20 million commercial credit,” the bank said in a statement.

“The increase in allowance for loan losses was principally due to deterioration of collateral losses in a number of commercial real estate and other commercial credits related to and affected by the downtown of the housing industry,” added Associated Chairman and CEO Paul S. Beideman. “For the remainder of 2008, we expect non-performing loans to stabilize at the quarter end levels and net charge offs to continue at levels experienced in the second quarter.”

Associated, with $22 billion in assets, is the second-largest bank based in Wisconsin, trailing only Marshall & Ilsley Corp. of Milwaukee.