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F&M ADDS TO BALANCE SHEET STRENGTH PRIOR TO MERGER CONSUMMATION

 F&M ADDS TO BALANCE SHEET STRENGTH PRIOR TO MERGER CONSUMMATION
 MENOMONEE FALLS, Wis., Dec. 30 /PRNewswire/ -- F&M Financial Services Corp. (NASDAQ: FMFS) announced today it will take special charges against fourth 1991 earnings in anticipation of the consummation of its merger with Associated Banc-Corp (NASDAQ: ASBC).
 Richard P. Klug, F&M chairman and chief executive officer, said that F&M will take a $13.5 million loan loss provision, increasing its reserves from 1.39 percent of total loans outstanding as of Sept. 30, 1991, to approximately 2.34 percent. This special provision will be in addition to the corporation's normal scheduled provisions and will build loss reserves to approximately $10.3 million. In addition, Klug said a special $2.5 million pretax charge would be taken to cover costs associated with and related to the merger transaction. The special chages will result in a net loss for the quarter and the year.
 "We decided to do some significant house cleaning in our portfolio and continue to strengthen our balance sheet prior to the consummation of the merger," said Klug. "Our capital position remains above regulatory requirements. Our board felt it prudent to take these steps so that F&M could enter its merger affiliation and the new year with an even cleaner and stronger balance sheet."
 Klug added that the special charges will not alter the merger agreement which provides for each share of F&M common stock to exchanged for 0.80 shares of Associated common stock on a tax-free basis.
 F&M Financial Services Corp. is a diversified multibank holding company headquartered in Menomonee Falls, Wis., with 34 banking locations throughout the state. F&M also has four nonbank subsidiaries: F&M Trust Co., Inc.; Leasenu, Inc., a full-line leasing company; F&M Insurance Services, Ltd.; and F&M Realty, Inc. On Aug. 19, 1991, F&M announced its intention to merge with Associated Banc-Corp, a $1.9 billion holding company headquarted in Green Bay, Wis. The merger is projected to be completed during the first quarter of 1992. The combined company will have $2.8 billion in assets and 75 banking locations throughout Wisconsin and Illinois.
 -0- 12/30/91
 /CONTACT: David Loomis, 414-253-2400, or Mary Magyar, 414-253-2313, both of F&M Financial Services/
 (FMFS) CO: F&M Financial Services Corp. ST: Wisconsin IN: FIN SU:


AL -- MN006 -- 5780 12/30/91 18:17 EST
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Publication:PR Newswire
Date:Dec 30, 1991
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