Associated Banc-Corp. swung to a loss in the fourth-quarter as the Wisconsin regional bank also announced it had begun a offering of up to $400 million of its common stock, about one-quarter of its current market capitalization.
The company also announced a dividend reduction and the sixfold increase to its allowance for loan losses.
Last month, Fitch Ratings downgraded Associated because of growing stress on its commercial real-estate portfolio and low loan-loss reserves. But Fitch said the bank has a solid foundation in its deposit base and liquidity, plus the appointment of a successor to now retired Chief Executive Paul Beideman helped to relieve uncertainty.
The new chief, Philip B. Flynn, on Monday said that in his few month at the helm, his priority was to ensure reserves and capital are at appropriate levels to manage through the downturn and to position the company to take advantage of any opportunities. He said the dividend cut - to a penny per share quarterly from a nickel - and the loan-loss allowance boost served those ends.
Associated Banc reported a loss of $173.2 million, or $1.41 a share, compared with year-earlier profit of $16.9 million, or 11 cents a share. A survey of analysts by Thomson Reuters predicted a 3-cent profit.
Meanwhile, the company said proceeds from the share offering would be used to capitalize Associated Bank, National Association for continued growth, in addition to working capital and other general corporate purposes. The company has a market cap of about $1.58 billion.
Associated Banc shares closed Friday at $12.34 and weren't active premarket.