Associated Banc-Corp in Green Bay, Wis., plans to raise more than $200 million in fresh capital and will use the proceeds to repay the balance of its debt to the Treasury Department's Troubled Asset Relief Program.
The $22 billion-asset company received $525 million from the program in late 2008 and paid down roughly half the balance earlier this year after issuing with the proceeds of a $300 million debt offering.
In a news release late Tuesday, Associated said it intends to pay the remaining $262.5 million on Sept. 28 by raising $32 million through a sale of preferred shares and another $132 million by issuing senior notes. The company said it has no plans to issue any common stock to pay down the TARP balance.
Philip B. Flynn, Associated's president and chief executive officer, said in the release that the company's recent performance is allowing it to "comfortably exit the TARP program." In the second quarter, Associated swung to a $25.6 million profit from a loss of $10.2 million in the same quarter in 2010, thanks largely to an 84% decline its provision for loan losses.
Associated also announced Tuesday that a memorandum of understanding it entered into with the Office of the Comptroller of the Currency in November 2009 has been terminated.
In early morning trading, Associated's shares were up more than 4%, to $10.50.
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