Associated Banc-Corp in Green Bay, Wis., reported a 3.4% increase in profits in the first quarter as fee-income and loan growth helped offset lower margins and higher expenses.

Net income of $45.4 million, or 30 cents per share, exceed by one and a half cents the average estimate of analysts polled by Bloomberg.

Still, Chief Executive Philip Flynn sounded a cautious note. "We remain focused on our strategies to enhance efficiency and on opportunities for disciplined capital deployment," he said in a press release Thursday.

The $27 billion-asset company's noninterest income rose 9% year over year, to $80.1 million, fueled largely by a $7 million increase in insurance commissions.

Net interest income increased nearly 2%, to $168 million, as loans increased 10%, to $17.8 billion. That loan growth helped overcome a 23-basis-point drop in net interest margins, to 2.89%.

Noninterest expenses rose nearly 4%, to $174 million, partly thanks to higher personnel costs from the acquisition of benefits-consulting firm Ahmann & Martin this year and some office consolidation expenses in Chicago.

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