Executives at Associated Banc-Corp in Green Bay, Wis., have spent the last six weeks on the road looking for possible merger and acquisition opportunities, Chief Executive Philip Flynn said Thursday.

The $27 billion-asset company is keen to review efficiency-driven acquisition opportunities, Flynn said during an earnings call after the market close on Thursday.

"We are looking for opportunities in local markets," he said.

The bank in recent years has signaled its interest in pursuing deals. Associated announced this week that it had agreed to pay as much as $56 million for  insurance brokerage firm Ahmann & Martin. Flynn has described the company's attitude toward M&A as cautious, though analysts believe there is potential for a large deal, possibly in Chicago. 

Bank M&A activity gained steam in the second half of last year and sellers are fetching better prices. The median price to tangible book value for deals announced last year, according to FIG Partners, was 133.5%, versus 121% in 2013. 

Royal Bank of Canada announced on Thursday plans to buy Los Angeles-based City National for $5.4 billion, in a move designed to scoop up a bigger share in U.S. wealth management. That deal would be the largest whole-bank acquisition in more than three years.

Other banks are voicing an appetite for dealmaking. The $6 billion-asset Pinnacle Financial Partners in Nashville, Tenn., is open to more M&A activity as well, CEO Terry Turner told investors Wednesday, hinting that his company may already be in preliminary discussions for a deal.

Meanwhile, Associated reported Thursday fourth-quarter net income of $47.5 million, 2.2% higher than a year earlier.

Average loans grew to $16.8 billion, up 8% from 2013. Commercial loans (up 10%) and residential mortgage lending (up 13%) led the bank's growth year over year.

Net interest income after the provision for credit losses was $170 million in the fourth quarter, up 2.9% from the same period in 2013. The net interest margin was 3.04%, 19 basis points lower than a year earlier.

The bank's total noninterest income in the fourth quarter was $70 million, down 8.2% from a year earlier.

Mortgage banking net income fell to $3 million in the fourth quarter from $7 million in the previous quarter and $8.3 million a year earlier. It was $21.3 million for the full year, down 56.4%.

"Clearly we had lower gain on sale in mortgage banking," Chief Financial Officer Christopher Del Moral-Niles said.

Noninterest expense was $172 million, down 4.1% from year earlier.

The bank took special note to calm any fear regarding oil and gas loan losses.

Associated is holding firm to a little-to-no-loss forecast, Flynn said.

The outstanding balance of energy credits as a portion of the bank's portfolio is 4% of total outstandings, executives reported. At $50 per barrel for the next five years, only eight credits face potential losses, they said.

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