UPDATE 2-Associated Banc-Corp Q2 profit lags Wall Street
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July 14 (Reuters) - Associated Banc-Corp ASBC.O, a U.S. Midwest banking company, reported quarterly profit well below Wall Street estimates, weighed down by an eleven-fold increase in provision for bad loans, sending its shares down as much as 14 percent to their lowest levels in more than seven years.
The Green Bay, Wisconsin-based company said second-quarter net income was $47.4 million, or 37 cents a share, compared with $75.8 million, or 59 cents a share, in the year ago period.
Analysts expected earnings of 47 cents a share, excluding items, according to Reuters Estimates.
The increase in provision for loan losses was mainly due to deterioration of collateral values in a number of commercial real estate and other commercial credits, Chief Executive Paul Beideman said.
Provision for loan losses rose to $59.0 million from $5.2 million, offsetting the 10 percent increase in net interest income that was $172.7 million for the quarter.
Associated Banc-Corp, which competes with Marshall & Ilsley Corp MI.N, and TCF Financial TCB.N, said net charge-offs for the quarter were $37 million and nonperforming loans stood at $289 million at the end of June.
Six housing-related commercial credits accounted for $21 million of the quarter's $37 million in net charge offs.
Net interest margins, a measure of a bank's profitability, was 3.65 percent, up from 3.53 percent in the year-ago period. Net interest margin benefited from improved loan growth and lower funding costs, the company said. Continuación...