Associated Banc-Corp in Green Bay, Wis., reported fourth-quarter earnings of $42.8 million, a 12.2% drop from a year earlier as the company set aside a significantly higher amount of money to address potential problems in its energy portfolio.

The $27.4 billion-asset company's loan-loss provision was $20 million, up from $8 million in the third quarter and about $5 million in the fourth quarter of 2014.

Associated earlier this month had warned investors about the higher provision and that it would shave off 3 cents from its earnings per share. Still, Associated's EPS of 27 cents beat analysts' expectations by a penny.

The company attributed the increase to the low and volatile price of oil and gas and the subsequent pressure on borrowers in that industry. The higher provision has mainly gone to beefing up Associated's reserves – it reported a 5.6% reserve against its energy portfolio at yearend, compared with 3.8% at the end of the third quarter and 2.3% a year earlier.

Its nonaccrual loans rose 21% from the third quarter, to $178 million. Additionally, potential problem loans increased 14% to $302 million over the same period of time.

Energy-related business contributed to Associated's rebound from the housing crisis of 2008.

"Over the past five years, we have rebuilt and diversified our loan portfolio," Chief Executive Philip B. Flynn said in a news release. "We grew several specialized commercial lending businesses, including an oil-and-gas business focused entirely on reserve-secured lending."

"Despite the recent energy price volatility, we remain committed to the energy business and we will continue to proactively manage the risk of our portfolio throughout this current cycle," Flynn said.

The hit taken by the reserve building was somewhat softened by a 17.6% increase in noninterest income, which totaled $81.9 million in the quarter. The company attributed the increase to its mortgage business and the acquisition of the insurance brokerage firm Ahmann & Martin, which it announced in January 2014.

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