Associated-First Federal deal OK'ed, layoffs announced

Northwestern Financial Review, Oct 1-Oct 14, 2004

Within weeks of receiving regulatory approval to proceed with its acquisition of First Federal Capital Corp, Green Bay-based Associated BancCorp announced it would eliminate 425 jobs from the combined company.

Associated announced Sept. 15 that it will lay off 225 people in the La Crosse, Wis., area, where First Federal Capital Corp. is based. After the layoffs, which are expected to occur in February 2005, the company will have about 200 employees in La Crosse.

The remainder of the layoffs will occur in First Federal operational centers in other locations in Wisconsin and Minnesota.

La Crosse, however, will be the headquarters for the bank's newly created Western Wisconsin Region, to be headed by Mark Carpenter. The bank announced on Sept. 13 that the longtime La Crosse banker will be president of the region. Carpenter had been senior vice president of business banking in La Crosse. He has 18 years of business banking experience, 15 of those in La Crosse. Carpenter has been with First Federal for two years. Previously, he was with Norwest Bank for 12 years and with M&I Marshall & Ilsley Bank for five years.

The Western Wisconsin Region will consist of 15 branches, including seven formerly in Associated's South Central and North regions.

The company said its branch networks will not be significantly affected by the layoffs, and that every effort will be made to achieve any job reductions in the branches through attrition.

The company said the integration of Associated with First Federal will create approximately 130 new positions, primarily in Green Bay and Stevens Point, Wis.

"We recognize the impact of these job losses on the La Crosse area," said Paul Beideman, president and CEO of Associated Bank. "Moving forward, we will do all we can to support the economic health and development of the community."

The companies have scheduled a meeting with First Federal shareholders on Oct. 20 to approve the proposed transaction.

Sept. 1, Associated reported that the transaction had been approved by the Federal Reserve, the Securities and Exchange Commission, and the Wisconsin Department of Financial Institutions.

"Our integration planning activities to date have reinforced our confidence in the benefits of this combination," Beideman said. "First Federal and Associated are both solid companies, and each brings significant strengths to the combined organization."

Associated Banc-Corp, with $15.5 billion in assets, announced last April that it planned to acquire First Federal. Upon completion of the acquisition, Associated will have 300 offices in Wisconsin, Minnesota and Illinois.