Shares of Amcore Financial sank as much as 42 percent Tuesday after the Rockford, Ill.-based parent of Amcore Bank reported a net loss of $156.4 million, or $6.81 a share, for the third quarter. That's significantly wider than the $18 million loss, or 79 cents a share, from the 2008 third quarter.

Amcore chairman and chief executive William McManaman said the loss was due mainly to a $60 million provision for loan losses and a $92 million net tax provision involving tax assets that had been deferred during the previous six quarterly losses.

"On a net basis after charge-offs and settlements, delinquencies and non-performing loans have remained about flat with second quarter's level," McManaman said.

The loan-loss provision increased from $48 million in the 2008 third quarter. Meanwhile, non-performing loans - at least 90 days overdue - stood at $431 million as of Sept. 30, more than twice the $191 million reported a year ago.

Amcore has said many of its current financial problems stem from defaults in commercial loans for residential subdivisions.

Amcore stock dipped to a low of 72 cents a share during the day Tuesday, a 42 percent drop from its close Monday at $1.25 a share. The stock closed at 77 cents, down 38 percent. Shares had traded as high as $5.22 in early November 2008.

Amcore has five branches in Madison. In November, Amcore is expected to finalize the sale of branches in New Glarus, Belleville, Monroe and Argyle. The bank was ordered by federal regulators in June to raise capital or risk being forced to merge, sell or liquidate.

"We have had, and continue to have, discussions with numerous sources for capital. Currently, however, capital markets remain largely inaccessible to small and midsize banks with our profile," said McManaman. "Nevertheless, we will continue to pursue all capital raising activities, including exploring additional government programs recently announced targeting small and midsize banks."

Amcore has assets of $4.4 billion with 73 locations in Illinois and Wisconsin.

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