Wisconsin-based regional bank, Associated Banc Corp. on Monday reported that it is facing a net loss of $161.2 million to the common shareholders for the year ending December 31, 2009. This would mean that the shareholders have to bear a loss of $1.26 per share.
For the fourth quarter ending December, the company has posted a loss of $180.6 million. This means a loss of $1.41 per common share to the shareholders. Also it has declared a dividend cut and six-fold rise in its allowances as part of the loan reduction. The loss has been due to the large portion of bad debts in its balance sheet.
Commenting on the loss posted by the diversified regional bank, its President and CEO, Philip B. Flynn said, “Given the persistent challenging operating conditions in the banking industry, my priority during my first several weeks as CEO was to ensure that reserves and capital are at levels we believe are appropriate to manage through the downturn and to position Associated to take advantage of opportunities as they arise.”
As for the plans he said, “We are working diligently to respond to these conditions by aggressively identifying and addressing current challenges and the impact on our loan portfolio. The dividend reduction and the significant addition to the allowance that we have announced are important parts of addressing these priorities.”
He further added, “We believe that getting out in front of our credit issues will put us on a path to accomplish this. I am confident that our strong market positions, business mix and management team will drive strong results as we emerge from the credit cycle.”
Associated has already seen Fitch downgrading its ratings because of the growing stress on its commercial real-estate portfolio and low loan-loss reserves. It, however, said that the foundations of the bank are strong in its deposits base and liquidity.
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