1
EXHIBIT 99.1
ASSOCIATED BANC-CORP AND FIRST FINANCIAL CORPORATION
AGREE TO MERGE
GREEN BAY, WISC. AND STEVENS POINT, WISC., MAY 14, 1997 -- H. B. Conlon,
chairman and chief executive officer for Associated Banc-Corp (NASDAQ/NMS), and
John C. Seramur, president and chief executive officer for First Financial
Corporation, today announced the signing of a definitive agreement to merge in a
stock-for-stock transaction. This merger of equals will result in an institution
with combined assets of $10.5 billion, equity capital of approximately $900
million, and a network of over 220 full-service banking locations throughout
Wisconsin and Illinois.
The merger agreement, which has been approved by the boards of directors
of both institutions, provides for each share of First Financial Corporation
common stock to be exchanged for .765 shares of Associated Banc-Corp common
stock on a tax-free basis. Based on Tuesday's (5/13/97) closing price for
Associated Banc-Corp common stock, the market value of the combined companies
would be approximately $2 billion.
The merger which requires approval by shareholders of both companies and
regulatory authorities, is expected to be completed later in 1997. The merger
will be accounted for as a pooling-of-interests.
The merged company will retain the Associated Banc-Corp name. Headquarters
has been designated to be in Green Bay, and it is anticipated that significant
operations will remain in both Stevens Point and Green Bay. Associated Banc-Corp
Chief Executive Officer H. B. Conlon will be Chairman and CEO of the combined
companies. John C. Seramur, First Financial Corporation's chief executive
officer, will be named Vice Chairman and will remain president of First
Financial during the integration period. Robert C. Gallagher will remain as Vice
Chairman of Associated. The board of directors of the combined institutions will
consist of seven of the existing directors from each company. Pursuant to the
execution of the definitive agreement to merge, both companies executed a stock
option agreement providing for the purchase of 19.9% of each other's common
stock under specified circumstances.
-more-
2
Associated - First Financial / Page 2
Conlon, chairman and chief executive officer of Associated Banc-Corp,
said, "This transaction joins two institutions which have had a distinguished
track record serving their respective markets and creating value for their
shareholders. The resources and expertise of these two premier financial
institutions are highly complementary. This merger will further serve the best
interests of the customers and shareholders of the combined institution. It is
based on an enhanced ability to provide a wide range of high quality financial
services to consumers and businesses in the communities which our banks serve.
The merger will considerably expand our collective reach and market share, and
is consistent with the long-term strategic plans of both companies. We are
enthusiastic about the prospects for this transaction."
"Both of our companies have been successful in terms of overall
performance and return to shareholders. Our future prospects as a combined
company far exceed what we could accomplish on an individual basis," said
Seramur, president and chief executive officer of First Financial. "Early in our
conversations, we realized that both of our companies focus on the customer
through the provision of superior customer service by outstanding employees.
This will be the foundation of our future success as a combined company.
The proposed transaction is expected to be earnings accretive during
fiscal year 1998, the first full year of consolidation. The combined company
anticipates taking a material one-time charge and one-time conforming accounting
adjustments of at least $40,000,000, net of taxes, in connection with the
transaction, the exact amount of which has not yet been determined. It is
further anticipated that transactional economies will result in pre-tax savings
totaling approximately $10 million in the first full year of consolidation and
is expected to increase in future years.
The complementary financial products and services offered by these two
institutions is expected to contribute to the future performance of the combined
institution. The financial statements of the combined companies will have
capital levels materially in excess of regulatory
-more-
3
Associated - First Financial / Page 3
minimums. Pursuant to this announcement, First Financial Corporation indicated
that it is immediately terminating its previously announced stock buyback
program.
The branch systems of the two companies have only minimal geographic
overlap. Therefore, the combined company will have a much stronger branch
franchise throughout Wisconsin and Illinois. For example, the company will now
be the third largest bank in Wisconsin in terms of deposit market share. In
addition, it will be the only bank in Illinois to have office representation in
the state's four top banking markets - Chicago, Peoria, Rockford, and the
Illinois portion of the St. Louis metropolitan area.
"The compatibility of our two companies is just tremendous in terms of the
broad array of banking services that we can bring to our community markets,"
emphasized Conlon. "Associated will add trust and asset management services and
business banking to the product mix currently offered at the First Financial
offices. First Financial brings a strong and profitable credit card operation to
combined company, along with a sizable and growing home equity loan portfolio.
In addition, both of our companies are strong mortgage originators."
"Our shared focus on the customer will be greatly enhanced as a result of
this merger," noted Seramur. "Both Associated and First Financial are focusing
on technology to improve customer service. The combined organization will have
greater critical mass to invest in ways to improve our delivery of products and
financial services."
"We realize that mergers can be disruptive and we are committed to making
this a smooth transition," stated Seramur. "Both of our companies have been
involved in numerous acquisitions, and we have the experience to make this a
positive transition for our customers and employees."
-more-
4
Associated - First Financial / Page 4
"Our customers will have access to over 220 branch offices and 150 ATMs,"
added Conlon. "Existing and new business customers will be provided with a wider
variety of products and services, supported by decision making at the local
level."
Both companies are very active participants in their local community
markets, and this commitment will be continued by the combined bank. Every
effort will be made to promote community development and reinvestment
opportunities in these markets.
Associated Banc-Corp is headquartered in Green Bay, WI. The diversified
multi-bank holding company currently has $4.4 billion in assets with more than
2,000 employees and over 98 banking locations in Wisconsin and northern
Illinois. Associated offers a variety of financially related products and
services to complement its traditional line of banking products.
First Financial Corporation is one of the largest thrift holding companies
in the country and provides a broad range of financial products, including
commercial and residential mortgages, appraisals, consumer and home equity
loans, insurance, and credit cards. First Financial has assets of $5.8 billion,
1,775 employees, and 128 banking offices in Wisconsin and Illinois.
* * * * *
This news release contains forward-looking statements, including estimates
of future operating results and other forward-looking financial information for
Associated, First Financial, and the combined company. These estimates
constitute forward-looking statements (within the meaning of the Private
Securities Litigation Reform Act of 1995), which involve significant risks and
uncertainties. Actual results and other financial information may differ
materially from the results and financial information discussed in the
forward-looking statements. Factors that might cause such a difference include,
but are not limited to: (1) expected cost savings from the merger cannot be
fully realized or realized within the expected time frame; (2) revenues
following the merger are lower than expected; (3) competitive pressures among
financial institutions increase significantly; (4) costs or difficulties related
to the integration of the businesses of Associated and First Financial are
greater than expected; (5) general economic conditions are less favorable than
expected; and (6) legislation or regulatory changes adversely affect the
business in which the combined company will be engaged.
5
Associated - First Financial / Page 5
# # #