Associated Bank launches stock offering to cover losses; Amcore stock regains Nasdaq compliance; Marine Bank’s parent company completes bankruptcy reorganization; Wisconsin bankers foresee murky 2010
Associated Bank launches stock offering to cover losses
Facing a fourth-quarter net loss of $180.6 million, Associated Banc-Corp has commenced an underwritten public offering of up to $400 million of its common stock.
The Green Bay-based parent company of Associated Bank said it intends to use the net proceeds of the offering to generate additional capital and other general corporate purposes.
The company’s quarterly net loss to common shareholders was $180.6 million, or $1.41 per common share, compared with net income of $13.6 million, or 11 cents per share, for the same period of 2008.
Associated Banc-Corp said it incurred fourth quarter credit-related charges of $405.1 million, including provision for loan losses of $394.8 million, with net charge offs of $233.8 million; an increase in reserve for unfunded commitments of $10.3 million; and a decrease in the quarterly cash dividend from 5 cents to 1 cent per share
Commenting on the company’s results, Philip Flynn, newly appointed president and chief executive officer of Associated Banc-Corp., said, "Given the persistent challenging operating conditions in the banking industry, my priority during my first several weeks as CEO of Associated 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. 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 today are important parts of addressing these priorities. Our board of directors and management team are committed to creating value for Associated’s shareholders. 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."
Credit Suisse Securities (USA) LLC is the sole bookrunning manager for the stock offering. Robert W. Baird & Co. Inc., Citi, Keefe, Bruyette & Woods Inc., RBC Capital Markets Corp., Sandler O’Neill & Partners L.P. and UBS Securities LLC will serve as co-managers for the offering.
Amcore stock regains Nasdaq compliance
Amcore Financial, Inc. announced it has received notice from the Nasdaq Stock Market that it has regained compliance with the exchange’s minimum bid price rule.
Nasdaq previously had notified Amcore that its common stock failed to maintain a minimum bid price of $1 during 30 consecutive business days as required by Nasdaq rule. The company was given 180 days to regain compliance.
As of Jan. 4, the closing bid price of the company’s common stock had been at $1 per share or greater for at least 10 consecutive business days, so Amcore is now back in full compliance with NASDAQ rules.
"We are pleased to be back in compliance with Nasdaq’s bid rule," said William McManaman, Amcore chairman and chief executive officer. "It is encouraging to see investors reacting favorably to some recent announcements we have made to rebuild Amcore and improve our capital position."
Rockford, Ill.-based Amcore operates 66 bank locations in Illinois and Wisconsin.
The Amcore common stock is traded on Nasdaq under the symbol "AMFI.”
Marine Bank’s parent company completes bankruptcy reorganization
CIB Marine Bancshares Inc., the Pewaukee-based parent company of Marine Bank, has completed its financial restructuring and emerged last week from its pre-packaged Chapter 11 bankruptcy reorganization plan.
“We have successfully completed our reorganization, and we have emerged as a much stronger bank holding company,” said John Hickey Jr., chairman and chief executive officer of CIB Marine Bancshares. “We have significantly reduced our future interest obligations, improved our capital position and added approximately $106 million to our consolidated shareholder equity. The restructuring positions us to pursue our previously-announced capital plan free of the significant debt we incurred in conjunction with the trust preferred securities offerings. We are very pleased with the speed and efficiency with which our plan was approved and implemented. By working extensively with our trust preferred securities holders, we were able to submit a pre-approved plan to the court, which proved critical to our success in this process.”
In September 2009, CIB Marine Bancshares filed the pre-packaged plan of reorganization after having obtained the consent of the holding company’s trust preferred securities holders and the bankruptcy court confirmed the plan in October 2009. The plan’s effective date was December 30, 2009. Under the plan, the former trust preferred securities holders received shares of preferred stock in exchange for their trust preferred securities.
“The emergence from reorganization concludes a very long restructuring and recovery process for the company. We are pleased that we were able to endure the difficulties experienced by the holding company over the past several years and emerge as a stronger company. Special thanks goes to our loyal employees for their dedicated service through this process,” Hickey said.
CIB Marine Bancshares is the parent holding company of CIBM Bank, an Illinois-chartered commercial bank that operates as Central Illinois Bank in mid-state Illinois and as Marine Bank in the Milwaukee area, Indianapolis and Scottsdale.
Wisconsin bankers foresee murky 2010
Demand for business loans is weak throughout Wisconsin and is expected to stay that way through the first six months of the New Year, according to the latest Wisconsin Bank CEO Economic Conditions Survey.
On the bright side, bank leaders predict that interest rates will remain low during the first half of 2010 and fewer think the Wisconsin economy is still weakening compared with their responses six months ago.
Eighty-eight percent of the 118 bank CEOs who completed the biannual survey, conducted by the Wisconsin Bankers Association (WBA), rated current demand for business loans in the markets they serve as “fair” (40.8 percent) or “poor” (47.8 percent). Just 11 percent said demand is “good,” and no one completing the survey rated demand as “excellent.”
While 95.6 percent of the survey participants rate the current health of the overall Wisconsin economy as either “fair” (69.8 percent) or “poor” (27.8 percent), the number of bank CEOs who believe the economy is still weakening dropped from 70 percent six months ago to 59 percent today.
Just 4 percent rated the Wisconsin economy as “good” and none rated it as “excellent.”
The employment outlook continues to improve from a year ago when 54 percent of survey participants said local businesses would lay off workers. That percentage dropped to 38 percent in June and dropped again to 19 percent in the most recent survey.
When asked to predict business loan demand for the first six months of 2010, 69 percent said it would stay the same, 21 percent said demand would rise and 9.6 percent said it would drop.
The three biggest obstacles to business lending, bankers said, are low demand, regulatory pressure on banks and fewer qualified borrowers.
“Customers are not borrowing funds right now and (bank) regulators are being much more critical of our underwriting decisions than they have been in the past,” according to one banker who completed the survey. Another said, “It is very hard to lend when (borrower) cash flows are so hard to predict and profits are nearly non-existent.”
Bankers used words such as “overzealous,” “excessive” and “unnecessarily aggressive” to describe regulators in the survey.
Another banker responded, “The regulators are causing the contractions in the banking industry at a time when customers need their banks most.”
Wisconsin bankers are frustrated by the mixed messages they are receiving from different arms of government, according to Kurt Bauer, WBA president and chief executive officer. “On the one hand, you have elected officials scolding banks for not lending enough. On the other, you have regulators threatening costly penalties if banks make anything but the safest loans.”
