Associated of Wisconsin Goes After Another Chicago Bank

If you're from Green Bay, Wis., you're not likely to get a lot of respect from Chicagoans. Yet a small bank from Green Bay is trying to make a dent in the fragmented Chicago market.

Associated Bank-Corp, with $3.7 billion in assets, has been building a Chicago presence deal by deal.

In the most recent deal, announced late last month, it's to buy $39 million-asset Mid-America National Bancorp. The price was not disclosed.

Associated called off a takeover of Mid-America three years ago, after due diligence turned up potential problem loans. In recent interviews, Associated officials said they believe Mid-America has since cleaned up its portfolio.

The Wisconsin bank closed its first two Chicago-area takeovers last fall, buying $130 million-asset GN Bancorp of Chicago and Great Northern Mortgage Co., of Rolling Meadows, Ill.

Associated now has $413 million in Chicago assets, and the Mid-America transaction would hardly make it a threat to giants like $122 billion-asset First Chicago NBD Corp.

But George McCarthy, president and chief executive of Associated Bank Chicago, said he believes his small bank can appeal to middle-market businesses and private banking customers turned off by larger institutions.

He noted that Associated is a niche player in his area, catering to high-income individuals, especially lawyers, accountants, and other professionals.

Mr. McCarthy, who was president of Chicago Bank of Commerce before Associated took it over in 1987, said larger banks buy a franchise and a customer base and then "totally disregard them for the first two years, while they whack away at the efficiency."

"That might not be important in Los Angeles or New York," he said, "but in the Midwest relationship banking is still important."

Associated is also trying to build its market share in Milwaukee and Madison, Wis.

Formed in 1970 in the merger of three community banks - Kellogg-Citizens National Bank of Green Bay, Manitowoc Savings Bank, and First National Bank of Neenah - Associated, now the third-largest bank based in Wisconsin, is often mentioned as a target for takeover.

When it closes the Mid-America deal and two other pending transactions, Associated's assets will reach $4.2 billion, making it even more attractive.

Bank analysts said they generally approved of the Mid-America merger deal, noting that the urban location provides access to a large and affluent market.

Of course, there have been concerns that the long-running football rivalry between the Green Bay Packers and the Chicago Bears might make the merger culturally difficult.

But Associated has a solution. "We force newly acquired bank officers in Chicago to wear Packer paraphernalia," said Brian R. Bodager, general counsel and corporate secretary.

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