When Green Bay, Wis.-based Associated Banc-Corp announced last May it was buying in-state rival First Financial Inc., it estimated merger charges would be at least $40 million.

But in its fourth-quarter earnings report, Associated said its merger- related charges were actually more than twice as high-$90 million after taxes.

However, the charges speak more to Associated's conservative nature than to its having miscalculated the costs of buying First Financial, analysts said. They also illustrate the additional work a bank, in this case Associated, must do after buying a large savings and loan such as Stevens Point, Wis.-based First Financial.

Associated, a $10.7 billion-asset company, more than doubled in size by merging with First Financial in October. Some of the fourth-quarter costs for the $1.4 billion deal were related to increasing a provision for loan losses and disposing of some securities on First Financial's books.

The largest disposition was of a $131 million mortgage-backed security that First Financial owned. In a Securities and Exchange Commission filing in September, Associated said it would take a loss on the sale of the security. Moving that security into "assets available for sale" in the fourth quarter, the company recorded a loss of $32.5 million. Associated hopes to sell the investment this year.

Wayne R. Bopp, an analyst at Robert W. Baird & Co. in Milwaukee, said Associated was being prudent in recording a loss even though it has not yet sold the security.

Company officials were "kind of upset over the bids they were getting," Mr. Bopp said, because offers were coming in well below what First Financial had paid. "They want to sell, but they want to get the best price," he said.

Other merger-related charges included $18 million related to an increased provision for loan losses in First Financial's portfolio, $2.5 million related to the sale of other securities, and $37 million for other merger expenses.

The expenses wiped out fourth-quarter earnings. The company reported a $54 million quarterly loss, compared with earnings of $34 million in the fourth quarter of 1996. Last year Associated earned $52 million, a 51% decline from 1996.

Analysts are willing to overlook the fourth quarter, which included a balance-sheet cleanup and restructuring. But they said they will be closely watching the company's revenue growth and its success in integrating the merger later this year. "All indications are positive," said Mr. Bopp, "but it's too early to tell. We probably need another quarter or two" to assess the deal.

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