Associated Banc-Corp announced it intends to redeem the remaining portion of its debts to the Troubled Asset Relief Program (TARP) on Sept. 28.
The Green Bay-based parent company of Associated Bank announced plans to issue a Series A Preferred stock offering of $262.5 million, conditioned upon a public offering with proceeds of $65 million and senior notes with proceeds of $132 million.
The company has no plans to issue any common stock in connection with the redemption.
"We are pleased to be able to announce this plan." said Associated president and chief executive officer Philip Flynn. "Redeeming the TARP this month, funded with a preferred stock raise and a favorable mix of senior debt and cash on hand, is consistent with our plans to repay the TARP funds as soon as possible and in the most shareholder-friendly manner possible. We believe the regulatory approval of this final repayment is further indication of the company’s financial strength. Our capital ratios following the offerings and the repayment will continue to exceed the requirements of our regulators and the standards for well-capitalized banks. We are pleased with the work we have done to strengthen our regulatory relations, asset quality metrics, operating results, and profitability trends so that we can comfortably exit the TARP program.”
The company has been advised by its primary regulator, the Office of the Comptroller of the Currency (OCC), that the memorandum of understanding entered into in November 2009 has been terminated.
“While Associated Banc-Corp is well-capitalized by regulatory standards, this modest capital raise will facilitate our exit and allow us to continue to pursue opportunities for revenue growth and earnings expansion,” Flynn said. “We believe this approach to the repayment of the CPP funds is in the best interest of the company and our shareholders.”
