Wisconsin Bank Sells Servicing Rights on $2.8B Portfolio

Associated Banc-Corp here sold mortgage servicing rights on $2.8 billion of home loans in March, the company said in its quarterly earnings report.

That portfolio accounted for 28% of the banking company's MSR portfolio.

The sale resulted in a gain of $7.8 million, which was reduced by $1.2 million due to a valuation reserve expense. Thus the sale added $6.6 million to Associated Banc-Corp's $9.6 million in first-quarter net mortgage banking income.

At the end of the first quarter, Associated valued its remaining MSR portfolio at $48.3 million.

In the first quarter of last year, Associated reported $4.4 million of mortgage banking income, which included $1.4 million of valuation reserve recovery from the MSR portfolio.

Associated said it periodically considers sales of portions of its mortgage servicing portfolio to effectively manage earnings volatility risk.

Removing the impact of the bulk servicing sale and MSR valuation adjustments, the company said that first-quarter 2007 mortgage banking income and first-quarter 2006 mortgage banking income were the same.

Overall, Associated earned $73.4 million of net income during the first quarter, or $0.57 per share. That was down from $81.7 million, or $0.60 per share, for the first quarter of 2006.

Associated is a diversified bank holding company with $21 billion of assets. The company has a branch presence in Wisconsin, Illinois and Minnesota.

Snapshot: Associated's Servicing portfolio

Serviced for Others 3/31/07 $6.1 Billion

Serviced for Others 12/31/06 $8.3 Billion

Source: Associated Banc-Corp (c) 2007 Mortgage Servicing News and SourceMedia, Inc. All Rights Reserved. http://www.mortgageservicingnews.com http://www.sourcemedia.com

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