New caps on debit card interchange fees that took effect Oct. 1 will reduce gross revenues by $4 million this quarter and by $17 million to $19 million per year, according to the chief executive at Associated Banc-Corp in Green Bay, Wis.
During an Oct. 20 conference call with investors and analysts to discuss third-quarter earnings, Philip B. Flynn said he expects increased mortgage refinancing activity to partially make up for the lost income in the short term, but he said the $21.9 billion-asset company needs a long-term plan to mitigate overall pressure on fee revenues.
"We need to figure out an appropriate way to get paid for the services we're providing, and we will do that," Flynn said, noting Associated will provide more detail on its strategies later this quarter.
Buoyed by improved asset quality and moderate loan growth, Associated reported net income of $34 million for the quarter ended Sept. 30, up nearly 400% from the same period last year.
