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Item 2.06. Material Impairments
On December 20, 2017, the United States Senate and House of Representatives passed the Tax Cuts and Jobs Act (the “Act”) of 2017, and it is anticipated that President Trump will sign the Act into law on or before January 3, 2018. Based on its analysis of the Act in its current form, Associated Banc-Corp (the “Company”) has reached a preliminary conclusion that it expects to record a valuation allowance with respect to its deferred tax assets in the quarterly period in which the Act becomes law. While the exact amount of the valuation allowance is uncertain at this time, the Company currently estimates the amount will be in the range of $14 million to $16 million. The anticipated valuation allowance, and the amount of any such valuation allowance, will be contingent upon the final passage and content of the Act. Company will provide further information about the potential valuation allowance as and to the extent required under applicable law.
Item 8.01. Other Events
In connection with and contingent upon the anticipated final passage of the Act, on December 21, 2017, the Company announced that it expects to pay a one-time cash bonus payment of $500 to all hourly, non-commissioned employees of the Company. The Company expects that the one-time bonus payments will be distributed during the first pay cycle of 2018. The Company anticipates that the cost of the one-time bonus payments will be approximately $1 million, and is expected to be recorded in the fourth quarter of 2017.
Also on December 21, 2017, the Company announced its intention to raise the minimum hourly wage it pays to certain employees from $10 per hour to $15 per hour. The anticipated wage increase, which is contingent upon the final passage of the Act, would be effective in January 2018. The Company anticipates that the impact of the wage increase on its compensation expense run rate will be approximately $2 million in 2018 (including the expected impact of the Bank Mutual acquisition).
Forward-Looking Statements
Statements made in this Current Report on Form 8-K which are not purely historical areforward-looking statements, as defined in the Private Securities Litigation Reform Act of 1995. This includes any statements regarding management’s plans, objectives, or goals for future operations, products or services, and forecasts of its revenues, earnings or other measures of performance. Suchforward-looking statements may be identified by the use of words such as “believe”, “expect”, “anticipate”, “plan”, “estimate”, “should”, “will”, “intend”, “outlook”, or similar expressions. Forward-looking statements are based on current management expectations and, by their nature, are subject to risks and uncertainties. Actual results may differ materially from those contained in theforward-looking statements. Factors which may cause actual results to differ materially from those contained in suchforward-looking statements include changes to the Company’s anticipated timing of the final passage of the Act, changes to the Company’s anticipated provisions of the final Act and their effect on the Company, and those identified in the company’s most recent Form 10-K and subsequent SEC filings. Such factors are incorporated herein by reference.
