Associated Bank will get $530 million from federal bailout program
Green Bay-based Associated Banc-Corp has received preliminary approval to sell $530 million of its preferred stock and related common warrants to the U.S. Treasury Department as part of the federal bailout program for the American banking industry.
Associated is the second Wisconsin-based bank to receive support from the Capital Purchase Program of the $700 billion Emergency Economic Stabilization Act approved by Congress and signed into law by President George W. Bush last month.
Milwaukee-based Marshall & Ilsley Corp. announced recently that the Treasury Department will purchase $1.7 billion in M&I stock as part of the bailout package.
With the program, the Treasury Department agrees to buy preferred stock and related common warrants in qualifying U.S. controlled banks, savings associations and certain bank and savings and loan holding companies.
"The Treasury’s action is an indication of the soundness of our bank and our capital plan," said Associated Banc-Corp chairman and chief executive officer Paul Beideman. "Our participation in the Capital Purchase Program will further strengthen the company’s balance sheet by increasing capital levels that already meet the government’s definition of well capitalized. In fact, the additional capital will further strengthen the company’s Tier 1 capital ratio to 12.25 percent from 9.22 percent at Sept. 30, 2008, and increase the total capital ratio to 14.11 percent, compared to 11.08 percent at Sept. 30, 2008."
"I am proud of our Associated colleagues who are helping us manage through these challenging times," said Associated president and chief operating officer Lisa Binder, who is based in Milwaukee. "Our company’s strong capital position has allowed us to continue to support our customers’ borrowing needs. We will utilize the additional capital from the Capital Purchase Program to continue our disciplined growth.”
Associated has total assets of $22 billion and operates approximately 300 banking offices serving 180 communities in Wisconsin, Illinois and Minnesota.
Two Chicago-based banks with Milwaukee-area branches also have announced that they will receive funds from the U.S. Treasury. Northern Trust Corp. has agreed to sell $1.5 billion worth of its preferred stock to the treasury, and Midwest Bank Holdings Inc., will receive about $85.5 million from the treasury. The deadline for other banks to request funds from the Treasury is Friday.
