Monday, July 14, 2008

Regional banks in the cross-hair of the real estate downturn

Associated Banc-Corp reported declining second quarter earnings. The company said that six housing-related commercial real estate loans accounted for the majority of the big loan losses. One glimmer of hope: Regional bank Associated Banc-Corp said Monday its board of directors declared a regular dividend of 32 cents.

The Business Journal of Milwaukee:
The Green Bay-based parent of Associated Bank (NASDAQ: ASBC) said Monday its second-quarter net income was $47.4 million, or 37 cents per share, compared with $75.8 million, or 59 cents per share, for the second quarter of 2007.

Associated executives said the bank’s provision for second-quarter loan losses was $59 million, or approximately 30 cents per share after tax, compared with $23 million for first quarter, or approximately 12 cents per share after tax. Net charge offs were $37 million for the second quarter, which ended June 30, compared with $16 million for first quarter.

The company said that six housing-related commercial credits accounted for $21 million of the quarter’s $37 million in net charge offs. The allowance for loan losses to total loans ratio increased to 1.42 percent at June 30, compared to 1.32 percent as of March 31.

Associated’s nonperforming loans increased $81 million during the quarter to $289 million, which bank executives attributed primarily to six commercial credits all related to the housing industry, including five construction credits totaling $51 million and a $20 million commercial credit.

source: Housing, real estate woes sink Associated’s 2Q profit
The Business Journal of Milwaukee

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