Associated Banc-Corp Profit Rises

Shares fall.
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Associated Banc-Corp (ASBC) said its profit rose 5.5% for the first quarter, driven by growth in home equity and commercial loans.

The company earned $81.7 million, or 60 cents a share, compared with $77.5 million, or 59 cents a share, in the year ago period. Analysts polled by Thomson First Call were expecting earnings of 61 cents a share.

First-quarter net interest margin was 3.48% compared with 3.68% last year. Net interest income rose marginally to $166.9 million. The company said the net interest income and the net interest margin were pressurized by the interest rate environment, resulting in a rising cost of funds that exceeded the increased yield on earning assets.

Non-interest income slipped to $70.8 million from $71.4 million in the quarter. Non-interest expense in the most recent quarter rose 1.8% to $123.5 million.

Nonperforming assets were 0.57% as on March 31 compared with 0.52% in the corresponding period last year.

Loans at the end of the quarter were $15.5 billion, up 12%.

"Core deposit growth remains a top priority, and we are beginning to see progress from our improved deposit product line, sales results, and investments in core markets," the company said. "However, competitive pricing pressures, along with the shifting of deposits to higher-priced products or to alternatives outside of the banking industry, continue to challenge deposit growth."

Shares fell $1.16 to $33.19.

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