Associated Banc-Corp in Green Bay, Wis., reported first-quarter net income of $40 million Thursday, an 11% drop from the same period in 2015. In doing so the $28 billion-asset company joined the lengthening list of banks whose bottom lines fell victim to ongoing tumult in the energy market.

For a second consecutive quarter, Associated recorded a $20 million provision for loan losses, due almost entirely to problems in its energy book. By contrast the provision for the January — March quarter in 2015 was $4 million. The oversized provisions the past two quarters have driven the company’s allowance for loan losses to $277 million, or 1.44% of loans. The allowance totaled $265 million in the year-earlier period.

Though Associated’s energy portfolio — which totaled $756 million on March 31 — amounts to just four 4% of total loans, it is the source of most of the company’s current credit quality issues. Energy loans made up $13 million of the $17 million Associated charged off in the first quarter. It has classified another $150 million as potential problem credits.

"Absent oil and gas, this would have been a pretty sound quarter," President and Chief Executive Phillip B. Flynn said Thursday in a conference call with investors.

Looking past energy matters, Flynn said he was encouraged by "several positive trends." Total loans of $18.9 billion rose 6% compared with the first quarter of 2015, and the company projected growth in the high single digits for the remainder of 2016. Deposits grew 7% year over year to $20.6 billion.

Associated is also keeping a tight lid on costs. Noninterest expense of $173 million fell 2% on a linked-quarter basis and was flat compared with the first quarter of 2015.

"We continue to be expense-disciplined as we manage through the current low interest rate environment and the energy price cycle," Flynn said. While pressures in the oil and gas portfolio contributed to an elevated provision, overall the quarter benefited from higher revenues, lower expenses and solid underlying trends."

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