Associated Banc-Corp Cautious

Bank holding company Associated Banc-Corp(ASBC Quote) said that the interest rate environment and resultant competitive pressures in the first half of 2006 will make it challenging to achieve consensus earnings estimates.

The company's board also authorized a buyback of up to 6.8 million, or 5% of its outstanding shares.

On Monday, the company repurchased 4 million shares at $33.89 a share, for a total cost of $135.6 million. After the accelerated repurchase, the 2003 authorization is complete and about 5.4 million shares remain available under the current repurchase authorization, the company said.

The company also added that it plans to increase its wholesale funding reduction to $2 billion, up from $1 billion to $1.5 billion. It also expects to sell about $700 million of investments in March.

"We are continuing to actively manage our balance sheet to reduce the level of wholesale funding. When this initiative is completed, we expect to reduce our ratio of wholesale funding to total funding from 34% at Sept. 30, 2005, to a percentage level in the upper twenties. The accelerated repurchase of shares keeps the initiative accretive to shareholders," the company said.