Fitch downgrades ratings on Associated Banc-Corp

AP News
Posted: Dec 15, 2009 5:40 PM

Fitch Ratings on Tuesday downgraded its ratings on Associated Banc-Corp, citing growing stress in the regional bank's commercial real estate portfolio.

The long-term and short-term issuer default ratings were lowered to "BB+" and "B," from "BBB" and "F2", respectively. The long-term and short-term issuer default ratings for its principal banking subsidiaries were dropped to "BBB-" and "F3" from "BBB" and "F2," respectively.

Fitch also downgraded the individual ratings for all entities to "C/D" from "C" and said the outlook is negative.

Given the dismal prospects for Associated's credit portfolio and its low loan loss reserves, Fitch said it anticipates the bank's provisioning needs to remain elevated.

Fitch also noted the bank's recent announcement that regulators were increasing its capital requirements.

Fitch said its ratings factored in Associated's solid core deposit base, good liquidity, sound net interest margin and management of interest-rate risk and good expense control. The ratings agency also applauded the recent appointment of a successor to the retiring president and CEO.

Associated Banc-Corp operates about 300 offices in Wisconsin, Illinois and Minnesota.

Shares of Associated slipped a penny in after-hours trading to $10.67, after climbing 19 cents to $10.68 during the regular session Tuesday.