Associated Banc-Corp (ASB) 8-K Associated earns 37 cents per share in second quarter of 2008, and Board of Directors declares 32 cent dividend

Exhibit 99.1

 

NEWS RELEASE

For more information:

Investors: Joe Selner, Chief Financial Officer, 920-491-7120

Media: Janet L. Ford, VP of Public Relations, 414-278-1890

     Associated earns 37 cents per share in second quarter of 2008, and Board of Directors declares 32 cent dividend

• Net income of $47.4 million, or $0.37 per share

• Provision for loan losses of $59 million; net charge offs of $37 million

• Allowance for loan losses to loans ratio increased to 1.42% at June 30

• Loans up 9% annualized over March 31

• Net interest margin of 3.65%, up 7 basis points from first quarter

• Core fee-based revenue up 12% over first quarter

• Efficiency ratio improved to 50.75% for second quarter

• Tangible capital ratio of 6.50%

GREEN BAY, Wis.— July 14, 2008 — Associated Banc-Corp (NASDAQ: ASBC) reported net income of $47.4 million, or $0.37 per share, for the second quarter of 2008. Comparatively, net income was $66.5 million ($0.52 per share) for first quarter 2008 and $75.8 million ($0.59 per share) for the second quarter of 2007. Book value per share rose to $18.46 at June 30, 2008, up 5 percent over a year ago.

Net income was $113.8 million, or $0.89 per share, for the six months ending June 30, 2008, compared to net income of $149.2 million, or $1.16 per share, for the first half of 2007.

Associated’s Board of Directors declared a regular cash dividend of $0.32 per share, payable Aug. 15 to shareholders of record Aug. 7. It is the company’s 154^th consecutive quarterly cash dividend. During the second quarter, Associated paid a dividend of $0.32 cents per share, up 3 percent over the second quarter of last year.

A key variance between the 2008 second and first quarter financial results was the provision for loan losses. The provision for second quarter 2008 was $59 million (representing approximately $0.30 per share after tax), compared to $23 million for first quarter (or approximately $0.12 per share after tax). Net charge offs were $37 million for second quarter, compared to $16 million for first quarter, bringing net charge offs to 67 basis points of average loans for the first half of 2008. Six housing-related commercial credits accounted for $21 million of the quarter’s $37 million in net charge offs. The allowance for loan losses to total loans ratio increased to 1.42 percent at June 30, compared to 1.32 percent at March 31, 2008.

Nonperforming loans increased $81 million during the quarter to $289 million at June 30, attributable primarily to 6 commercial credits all related to the housing industry, including five construction credits totaling $51 million and a $20 million commercial credit.

“The increase in allowance for loan losses was principally due to deterioration of collateral values in a number of commercial real estate and other commercial credits related to and affected by the downturn of the housing industry,” said Associated Chairman and CEO Paul S. Beideman. “For the remainder of 2008, we expect nonperforming loans to stabilize at the quarter end levels and net charge offs to continue at levels experienced in the second quarter.”

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ASBC 2Q ’08page 2 of 2

Net interest income was $173 million for second quarter 2008, up from $165 million for first quarter 2008 and $157 million for the second quarter of 2007, and the net interest margin for the same quarters was 3.65 percent, 3.58 percent and 3.53 percent, respectively. The net interest margin benefited in second quarter 2008 largely from improved loan growth, lower funding costs, and higher average balances of noninterest-bearing demand deposits.

On average, loans were $16.1 billion for the second quarter of 2008, up $0.4 billion or 11 percent annualized over the first quarter of 2008, led by home equity growth (up $0.3 billion) and commercial loan growth (up $0.2 billion). At June 30, 2008, loans were $16.1 billion, up $0.4 billion (9 percent annualized) since March 31.

Deposits, on average, were $13.5 billion for the second quarter of 2008, down $0.2 billion compared to first quarter, primarily attributable to lower time deposits. Average second quarter noninterest-bearing demand deposits were $2.5 billion, up $0.1 billion over first quarter 2008 and $0.1 billion (4 percent) over second quarter 2007.

Core fee-based revenues were $69 million, up $7 million over the first quarter 2008, and up $5 million or 7 percent over the second quarter a year ago, led predominantly by increased service charges on deposit accounts for both comparable periods. Net mortgage banking income of $5 million was down nearly $2 million from first quarter 2008, primarily due to a $2 million increase in first quarter from the adoption of recent accounting standards related to fair value measurement.

Total quarterly noninterest expense was $136 million for both the second and first quarters of 2008 and $133 million for second quarter 2007. The efficiency ratio improved to 50.75% for the current quarter, benefiting from controlled expenses and growth in total revenues.

For 2008 second quarter, the effective tax rate was 26.61 percent, compared to 24.84 percent for first quarter which included a $4 million net reduction to income tax expense related to the resolution of certain tax matters, changes in estimated exposure of uncertain tax positions, and a valuation allowance adjustment on certain deferred tax assets.

“Our financial results show improved net interest income and core fee-based revenues, steady loan growth, and controlled expenses,” said Beideman. “We recognize the challenging environment in which we are operating. Given our revenue momentum and focus on managing credit risks, we believe we have the ability to generate earnings at levels that will contribute to capital.”

Associated will host a conference call for investors and analysts at 10 a.m. Central Time (CT) today, July 14, 2008, rather than as previously announced for July 17. The toll-free dial-in number for the live call is 800-762-8779. The number for international callers is 480-248-5081. Participants should ask the operator for the Associated Banc-Corp second quarter 2008 earnings call, or for call ID number 3901460. A replay of the call will be available starting at 1 p.m. CT July 14, 2008, through Aug. 4, 2008, by calling 800-406-7325 (toll-free) domestically or 303-590-3030 internationally. The call ID number, 3901460, is required to access the replay.

Associated Banc-Corp, headquartered in Green Bay, Wis., is a diversified bank holding company with total assets of $22 billion. Associated has approximately 300 banking offices serving 180 communities in Wisconsin, Illinois, and Minnesota. The company offers a full range of traditional banking services and a variety of other financial products and services. More information about Associated Banc-Corp is available atwww.associatedbank.com.

Statements made in this document that are not purely historical are forward-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. Forward-looking statements are based on current management expectations and, by their nature, are subject to risks and uncertainties. These statements may be identified by the use of words such as “believe,” “expect,” “anticipate,” “plan,” “estimate,” “should,” “will,” “intend,” or similar expressions. Outcomes related to such statements are subject to numerous risk factors and uncertainties including those listed in the company’s Annual Report filed on Form 10-K.

Six pages of tables follow.

Consolidated Balance Sheets (Unaudited)
Associated Banc-Corp

	June 30,			December 31,			Jun08 vs Dec07			June 30,			Jun08 vs Jun07
(in thousands)	2008			2007			% Change			2007			% Change
Assets
Cash and due from banks	$	600,972		$	553,031			8.7	%	$	432,887			38.8	%
Interest-bearing deposits in other financial institutions		24,448			11,671			109.5	%		10,828			125.8	%
Federal funds sold and securities purchased under agreements to resell		35,852			22,447			59.7	%		18,729			91.4	%
Investment securities available for sale, at fair value		3,574,373			3,543,019			0.9	%		3,373,700			5.9	%
Loans held for sale		52,058			94,441			(44.9	%)		75,135			(30.7	%)
Loans		16,149,327			15,516,252			4.1	%		15,154,232			6.6	%
Allowance for loan losses		(229,605	)		(200,570	)		14.5	%		(206,493	)		11.2	%
Loans, net		15,919,722			15,315,682			3.9	%		14,947,739			6.5	%
Premises and equipment, net		191,634			197,446			(2.9	%)		198,453			(3.4	%)
Goodwill		929,168			929,168			0.0	%		929,168			0.0	%
Other intangible assets, net		92,621			92,220			0.4	%		100,599			(7.9	%)
Other assets		881,856			832,958			5.9	%		761,902			15.7	%
Total assets	$	22,302,704		$	21,592,083			3.3	%	$	20,849,140			7.0	%
Liabilities and Stockholders’ Equity
Noninterest-bearing deposits	$	2,602,026		$	2,661,078			(2.2	%)	$	2,466,130			5.5	%
Interest-bearing deposits, excluding Brokered CDs		10,378,285			10,903,198			(4.8	%)		10,859,588			(4.4	%)
Brokered CDs		398,423			409,637			(2.7	%)		751,900			(47.0	%)
Total deposits		13,378,734			13,973,913			(4.3	%)		14,077,618			(5.0	%)
Short-term borrowings		4,923,462			3,226,787			52.6	%		2,416,371			103.8	%
Long-term funding		1,436,349			1,864,771			(23.0	%)		1,932,194			(25.7	%)
Accrued expenses and other liabilities		210,277			196,907			6.8	%		194,046			8.4	%
Total liabilities		19,948,822			19,262,378			3.6	%		18,620,229			7.1	%
Stockholders’ Equity
Preferred stock		—			—						—
Common stock		1,279			1,278			0.1	%		1,278			0.1	%
Surplus		1,048,158			1,040,694			0.7	%		1,038,517			0.9	%
Retained earnings		1,324,476			1,305,136			1.5	%		1,250,989			5.9	%
Accumulated other comprehensive loss		(20,031	)		(2,498	)		701.9	%		(38,714	)		(48.3	%)
Treasury stock, at cost		—			(14,905	)		(100.0	%)		(23,159	)		(100.0	%)
Total stockholders’ equity		2,353,882			2,329,705			1.0	%		2,228,911			5.6	%
Total liabilities and stockholders’ equity	$	22,302,704		$	21,592,083			3.3	%	$	20,849,140			7.0	%

Consolidated Statements of Income (Unaudited)
Associated Banc-Corp

	For The Three Months Ended								For The Six Months Ended
	June 30,					Quarter			June 30,					Year-to-Date
(in thousands, except per share amounts)	2008			2007		% Change			2008			2007		% Change
Interest Income
Interest and fees on loans	$	237,727		$	276,981		(14.2	%)	$	492,780		$	550,942		(10.6	%)
Interest and dividends on investment securities and deposits in other financial institutions
Taxable		31,878			30,583		4.2	%		63,230			61,109		3.5	%
Tax-exempt		9,776			9,785		(0.1	%)		20,035			19,579		2.3	%
Interest on federal funds sold and securities purchased under agreements to resell		213			324		(34.3	%)		419			507		(17.4	%)
Total interest income		279,594			317,673		(12.0	%)		576,464			632,137		(8.8	%)
Interest Expense
Interest on deposits		63,655			101,780		(37.5	%)		145,161			200,079		(27.4	%)
Interest on short-term borrowings		24,363			35,423		(31.2	%)		52,536			70,606		(25.6	%)
Interest on long-term funding		18,844			22,995		(18.1	%)		40,918			44,931		(8.9	%)
Total interest expense		106,862			160,198		(33.3	%)		238,615			315,616		(24.4	%)
Net Interest Income		172,732			157,475		9.7	%		337,849			316,521		6.7	%
Provision for loan losses		59,001			5,193		1036.2	%		82,003			10,275		698.1	%
Net interest income after provision for loan losses		113,731			152,282		(25.3	%)		255,846			306,246		(16.5	%)
Noninterest Income
Trust service fees		10,078			10,711		(5.9	%)		20,152			21,020		(4.1	%)
Service charges on deposit accounts		30,129			25,545		17.9	%		53,813			48,567		10.8	%
Card-based and other nondeposit fees		12,301			11,711		5.0	%		23,726			23,034		3.0	%
Retail commissions		16,004			15,773		1.5	%		32,119			31,252		2.8	%
Mortgage banking, net		5,395			9,696		(44.4	%)		12,340			19,246		(35.9	%)
Bank owned life insurance income		4,997			4,365		14.5	%		9,858			8,529		15.6	%
Asset sale gains (losses), net		(731	)		442		(265.4	%)		(1,187	)		2,325		(151.1	%)
Investment securities gains (losses), net		(718	)		6,075		(111.8	%)		(3,658	)		7,110		(151.4	%)
Other		9,170			7,170		27.9	%		22,090			13,105		68.6	%
Total noninterest income		86,625			91,488		(5.3	%)		169,253			174,188		(2.8	%)
Noninterest Expense
Personnel expense		78,066			76,277		2.3	%		153,709			150,324		2.3	%
Occupancy		12,026			11,321		6.2	%		25,290			22,908		10.4	%
Equipment		4,653			4,254		9.4	%		9,250			8,648		7.0	%
Data processing		8,250			7,832		5.3	%		15,371			15,510		(0.9	%)
Business development and advertising		5,137			5,068		1.4	%		10,178			9,473		7.4	%
Other intangible amortization		1,568			1,718		(8.7	%)		3,137			3,379		(7.2	%)
Other		26,121			26,174		(0.2	%)		55,198			50,538		9.2	%
Total noninterest expense		135,821			132,644		2.4	%		272,133			260,780		4.4	%
Income before income taxes		64,535			111,126		(41.9	%)		152,966			219,654		(30.4	%)
Income tax expense		17,176			35,301		(51.3	%)		39,142			70,434		(44.4	%)
Net Income	$	47,359		$	75,825		(37.5	%)	$	113,824		$	149,220		(23.7	%)
Earnings Per Share:
Basic	$	0.37		$	0.59		(37.3	%)	$	0.89		$	1.17		(23.9	%)
Diluted	$	0.37		$	0.59		(37.3	%)	$	0.89		$	1.16		(23.3	%)
Average Shares Outstanding:
Basic		127,433			127,606		(0.1	%)		127,365			127,796		(0.3	%)
Diluted		127,964			128,750		(0.6	%)		127,880			129,034		(0.9	%)

Consolidated Statements of Income (Unaudited) — Quarterly Trend
Associated Banc-Corp

(in thousands, except per share amounts)	2Q08			1Q08			4Q07			3Q07		2Q07
Interest Income
Interest and fees on loans	$	237,727		$	255,053		$	277,647		$	283,330	$	276,981
Interest and dividends on investment securities and deposits in other financial institutions
Taxable		31,878			31,352			30,712			31,140		30,583
Tax-exempt		9,776			10,259			10,394			9,924		9,785
Interest on federal funds sold and securities purchased under agreements to resell		213			206			214			214		324
Total interest income		279,594			296,870			318,967			324,608		317,673
Interest Expense
Interest on deposits		63,655			81,506			98,678			104,596		101,780
Interest on short-term borrowings		24,363			28,173			32,470			31,548		35,423
Interest on long-term funding		18,844			22,074			23,600			25,391		22,995
Total interest expense		106,862			131,753			154,748			161,535		160,198
Net Interest Income		172,732			165,117			164,219			163,073		157,475
Provision for loan losses		59,001			23,002			15,501			8,733		5,193
Net interest income after provision for loan losses		113,731			142,115			148,718			154,340		152,282
Noninterest Income
Trust service fees		10,078			10,074			10,723			10,886		10,711
Service charges on deposit accounts		30,129			23,684			25,866			26,609		25,545
Card-based and other nondeposit fees		12,301			11,425			12,088			12,436		11,711
Retail commissions		16,004			16,115			14,917			15,476		15,773
Total core fee-based revenue		68,512			61,298			63,594			65,407		63,740
Mortgage banking, net		5,395			6,945			498			3,006		9,696
Bank owned life insurance income		4,997			4,861			4,240			4,650		4,365
Asset sale gains (losses), net		(731	)		(456	)		11,062			2,220		442
Investment securities gains (losses), net		(718	)		(2,940	)		(815	)		1,879		6,075
Other		9,170			12,920			7,094			7,758		7,170
Total noninterest income		86,625			82,628			85,673			84,920		91,488
Noninterest Expense
Personnel expense		78,066			75,643			76,487			76,617		76,277
Occupancy		12,026			13,264			11,784			11,967		11,321
Equipment		4,653			4,597			4,820			4,440		4,254
Data processing		8,250			7,121			8,189			7,991		7,832
Business development and advertising		5,137			5,041			5,482			4,830		5,068
Other intangible amortization		1,568			1,569			1,758			1,979		1,718
Other		26,121			29,077			31,582			26,185		26,174
Total noninterest expense		135,821			136,312			140,102			134,009		132,644
Income before income taxes		64,535			88,431			94,289			105,251		111,126
Income tax expense		17,176			21,966			29,498			33,510		35,301
Net Income	$	47,359		$	66,465		$	64,791		$	71,741	$	75,825
Earnings Per Share:
Basic	$	0.37		$	0.52		$	0.51		$	0.57	$	0.59
Diluted	$	0.37		$	0.52		$	0.51		$	0.56	$	0.59
Average Shares Outstanding:
Basic		127,433			127,298			127,095			126,958		127,606
Diluted		127,964			127,825			127,835			127,847		128,750

Selected Quarterly Information
Associated Banc-Corp

(in thousands, except per share and full time equivalent employee data)	YTD 2008			YTD 2007			2nd Qtr 2008			1st Qtr 2008			4th Qtr 2007			3rd Qtr 2007			2nd Qtr 2007
Summary of Operations
Net interest income	$	337,849		$	316,521		$	172,732		$	165,117		$	164,219		$	163,073		$	157,475
Provision for loan losses		82,003			10,275			59,001			23,002			15,501			8,733			5,193
Asset sale gains (losses), net		(1,187	)		2,325			(731	)		(456	)		11,062			2,220			442
Investment securities gains (losses), net		(3,658	)		7,110			(718	)		(2,940	)		(815	)		1,879			6,075
Noninterest income (excluding securities & asset gains)		174,098			164,753			88,074			86,024			75,426			80,821			84,971
Noninterest expense		272,133			260,780			135,821			136,312			140,102			134,009			132,644
Income before income taxes		152,966			219,654			64,535			88,431			94,289			105,251			111,126
Income taxes		39,142			70,434			17,176			21,966			29,498			33,510			35,301
Net income		113,824			149,220			47,359			66,465			64,791			71,741			75,825
Taxable equivalent adjustment		13,910			13,284			6,814			7,096			7,119			6,856			6,724
Per Common Share Data (1)
Net income:
Basic	$	0.89		$	1.17		$	0.37		$	0.52		$	0.51		$	0.57		$	0.59
Diluted		0.89			1.16			0.37			0.52			0.51			0.56			0.59
Dividends		0.63			0.60			0.32			0.31			0.31			0.31			0.31
Market Value:
High	$	29.23		$	35.43		$	29.23		$	28.86		$	30.49		$	33.05		$	33.49
Low		19.29			32.14			19.29			22.60			25.23			26.86			32.14
Close		19.29			32.70			19.29			26.63			27.09			29.63			32.70
Book value		18.46			17.56			18.46			18.71			18.32			18.04			17.56
Performance Ratios (annualized)
Earning assets yield		6.07	%		7.01	%		5.82	%		6.33	%		6.88	%		7.05	%		6.99	%
Interest-bearing liabilities rate		2.86			4.04			2.53			3.19			3.82			4.02			4.06
Net interest margin		3.61			3.57			3.65			3.58			3.62			3.62			3.53
Return on average assets		1.05			1.47			0.87			1.25			1.23			1.38			1.48
Return on average equity		9.67			13.42			8.01			11.34			11.23			12.69			13.49
Return on tangible average equity (2)		16.36			22.89			13.51			19.26			19.50			22.42			23.14
Efficiency ratio (3)		51.75			52.73			50.75			52.79			56.78			53.44			53.23
Effective tax rate		25.59			32.07			26.61			24.84			31.28			31.84			31.77
Dividend payout ratio (4)		70.79			51.28			86.49			59.62			60.78			54.39			52.54
Average Balances
Assets	$	21,712,707		$	20,466,452		$	21,975,451		$	21,449,963		$	20,935,023		$	20,678,498		$	20,558,803
Earning assets		19,515,429			18,519,978			19,754,651			19,276,208			18,849,079			18,685,978			18,605,024
Interest-bearing liabilities		16,801,778			15,755,186			16,992,508			16,611,047			16,090,488			15,941,683			15,834,843
Loans		15,914,526			15,020,844			16,120,732			15,708,321			15,301,761			15,183,444			15,082,850
Deposits		13,568,535			13,630,815			13,493,511			13,643,559			13,760,991			13,940,970			13,702,872
Wholesale funding		5,622,248			4,472,630			5,950,699			5,293,797			4,750,471			4,386,354			4,482,437
Stockholders’ equity		2,367,799			2,241,460			2,377,841			2,357,757			2,289,522			2,242,665			2,253,872
Stockholders’ equity / assets		10.91	%		10.95	%		10.82	%		10.99	%		10.94	%		10.85	%		10.96	%
At Period End
Assets							$	22,302,704		$	21,903,753		$	21,592,083		$	20,940,007		$	20,849,140
Loans								16,149,327			15,785,283			15,516,252			15,174,758			15,154,232
Allowance for loan losses								229,605			207,602			200,570			200,560			206,493
Goodwill								929,168			929,168			929,168			929,168			929,168
Mortgage servicing rights, net								54,725			51,013			51,187			53,636			55,829
Other intangible assets								37,896			39,464			41,033			42,791			44,770
Deposits								13,378,734			13,882,174			13,973,913			14,158,369			14,077,618
Wholesale funding								6,359,811			5,388,923			5,091,558			4,283,396			4,348,565
Stockholders’ equity								2,353,882			2,382,418			2,329,705			2,291,182			2,228,911
Stockholders’ equity / assets								10.55	%		10.88	%		10.79	%		10.94	%		10.69	%
Tangible equity / tangible assets (5)								6.50	%		6.75	%		6.59	%		6.61	%		6.31	%
Shares outstanding, end of period								127,537			127,365			127,160			127,035			126,910
Shares repurchased during period, including settlements (6)								—			—			—			11			2,000
Average per share cost of shares repurchased during period (6)							$	—		$	—		$	—		$	—		$	32.81
YTD shares repurchased during period, including settlements (6)								—			—			3,920			3,920			3,909
YTD average per share cost of shares repurchased during period (6)							$	—		$	—		$	34.15		$	34.15		$	34.24
Selected trend information
Average full time equivalent employees								5,179			5,093			5,095			5,200			5,069
Trust assets under management, at market value							$	5,900,000		$	6,000,000		$	6,100,000		$	6,200,000		$	6,100,000
Mortgage loans originated for sale during period								431,757			516,780			333,331			353,233			455,928
Mortgage portfolio serviced for others								6,584,000			6,472,000			6,403,000			6,297,000			6,571,000
Mortgage servicing rights, net / Portfolio serviced for others								0.83	%		0.79	%		0.80	%		0.85	%		0.85	%

(1)	Per share data adjusted retroactively for stock splits and stock dividends.
(2)	Return on tangible average equity = Net income divided by average equity excluding average goodwill and other intangible assets. This is a non-GAAP financial measure.
(3)	Efficiency ratio = Noninterest expense divided by sum of taxable equivalent net interest income plus noninterest income, excluding investment securities gain, net, and asset sales gains, net.
(4)	Ratio is based upon basic earnings per share.
(5)	Tangible equity to tangible assets = Stockholders’ equity excluding goodwill and other intangible assets divided by assets excluding goodwill and other intangible assets. This is a non-GAAP financial measure.
(6)	Does not include shares repurchased for minimum tax withholding settlements on equity compensation.

Financial Summary and Comparison
Associated Banc-Corp 

	Three months ended									Six months ended
	June 30,									June 30,
(in thousands)	2008			2007			% Change			2008			2007			% Change
Allowance for Loan Losses
Beginning balance	$	207,602		$	203,495			2.0	%	$	200,570		$	203,481			(1.4	%)
Balance related to acquisition		—			2,991			N/M			—			2,991			N/M
Provision for loan losses		59,001			5,193			1036.2	%		82,003			10,275			698.1	%
Charge offs		(38,238	)		(7,258	)		426.8	%		(57,732	)		(14,127	)		308.7	%
Recoveries		1,240			2,072			(40.2	%)		4,764			3,873			23.0	%
Net charge offs		(36,998	)		(5,186	)		613.4	%		(52,968	)		(10,254	)		416.6	%
Ending balance	$	229,605		$	206,493			11.2	%	$	229,605		$	206,493			11.2	%

Credit Quality

							Jun08 vs Mar08												Jun08 vs Jun07
	Jun 30, 2008			Mar 31, 2008			% Change			Dec 31, 2007			Sept 30, 2007			Jun 30, 2007			% Change
Nonaccrual loans	$	277,100		$	197,498			40.3	%	$	152,528		$	142,509		$	171,303			61.8	%
Loans 90 or more days past due and still accruing		11,762			9,959			18.1	%		10,118			8,163			8,446			39.3	%
Restructured loans		—			—			0.0	%		—			—			—			0.0	%
Total nonperforming loans		288,862			207,457			39.2	%		162,646			150,672			179,749			60.7	%
Other real estate owned (OREO)		46,579			26,798			73.8	%		26,489			20,866			19,237			142.1	%
Total nonperforming assets	$	335,441		$	234,255			43.2	%	$	189,135		$	171,538		$	198,986			68.6	%
Provision for loan losses		59,001			23,002			156.5	%		15,501			8,733			5,193			1036.2	%
Net charge offs		36,998			15,970			131.7	%		15,491			14,666			5,186			613.4	%
Allowance for loan losses / loans		1.42	%		1.32	%					1.29	%		1.32	%		1.36	%
Allowance for loan losses / nonperforming loans		79.49			100.07						123.32			133.11			114.88
Nonperforming loans / total loans		1.79			1.31						1.05			0.99			1.19
Nonperforming assets / total loans plus OREO		2.07			1.48						1.22			1.13			1.31
Nonperforming assets / total assets		1.50			1.07						0.88			0.82			0.95
Net charge offs / average loans (annualized)		0.92			0.41						0.40			0.38			0.14
Year-to-date net charge offs / average loans (annualized)		0.67			0.41						0.27			0.22			0.14
Nonperforming loans by type:
Commercial, financial & agricultural	$	78,731		$	54,919			43.4	%	$	32,610		$	35,695		$	37,230			111.5	%
Commercial real estate		42,280			37,367			13.1	%		35,049			42,447			60,406			(30.0	%)
Real estate — construction		110,717			56,456			96.1	%		39,837			26,602			35,796			209.3	%
Lease financing		522			1,316			(60.3	%)		1,323			79			63			728.6	%
Total commercial		232,250			150,058			54.8	%		108,819			104,823			133,495			74.0	%
Home equity		23,555			18,488			27.4	%		16,209			13,529			13,662			72.4	%
Installment		5,184			4,184			23.9	%		3,881			3,290			3,043			70.4	%
Total retail		28,739			22,672			26.8	%		20,090			16,819			16,705			72.0	%
Residential mortgage		27,873			34,727			(19.7	%)		33,737			29,030			29,549			(5.7	%)
Total nonperforming loans	$	288,862		$	207,457			39.2	%	$	162,646		$	150,672		$	179,749			60.7	%

Period End Loan Composition

					Jun08 vs Mar08									Jun08 vs Jun07
	Jun 30, 2008		Mar 31, 2008		% Change			Dec 31, 2007		Sept 30, 2007		Jun 30, 2007		% Change
Commercial, financial & agricultural	$	4,423,192	$	4,458,639		(0.8	%)	$	4,281,091	$	3,935,976	$	3,958,911		11.7	%
Commercial real estate		3,583,877		3,585,779		(0.1	%)		3,635,365		3,656,937		3,703,464		(3.2	%)
Real estate — construction		2,351,401		2,273,125		3.4	%		2,260,766		2,215,264		2,137,276		10.0	%
Lease financing		124,661		118,613		5.1	%		108,794		95,644		88,967		40.1	%
Total commercial		10,483,131		10,436,156		0.5	%		10,286,016		9,903,821		9,888,618		6.0	%
Home equity (a)		2,757,684		2,387,223		15.5	%		2,269,122		2,230,640		2,144,357		28.6	%
Installment		826,895		842,564		(1.9	%)		841,136		866,185		865,474		(4.5	%)
Total retail		3,584,579		3,229,787		11.0	%		3,110,258		3,096,825		3,009,831		19.1	%
Residential mortgage		2,081,617		2,119,340		(1.8	%)		2,119,978		2,174,112		2,255,783		(7.7	%)
Total loans	$	16,149,327	$	15,785,283		2.3	%	$	15,516,252	$	15,174,758	$	15,154,232		6.6	%

(a) Home equity includes home equity lines and residential mortgage junior liens.

Period End Deposit Composition

					Jun08 vs Mar08									Jun08 vs Jun07
	Jun 30, 2008		Mar 31, 2008		% Change			Dec 31, 2007		Sept 30, 2007		Jun 30, 2007		% Change
Noninterest-bearing demand	$	2,602,026	$	2,516,265		3.4	%	$	2,661,078	$	2,407,026	$	2,466,130		5.5	%
Savings		921,000		891,806		3.3	%		853,618		919,891		966,673		(4.7	%)
Interest-bearing demand		1,697,910		1,788,404		(5.1	%)		1,947,551		1,881,235		1,900,227		(10.6	%)
Money market		3,917,505		3,972,080		(1.4	%)		3,923,063		3,770,487		3,564,539		9.9	%
Brokered CDs		398,423		731,398		(45.5	%)		409,637		800,422		751,900		(47.0	%)
Other time deposits		3,841,870		3,982,221		(3.5	%)		4,178,966		4,379,308		4,428,149		(13.2	%)
Total deposits	$	13,378,734	$	13,882,174		(3.6	%)	$	13,973,913	$	14,158,369	$	14,077,618		(5.0	%)
Network transaction deposits included above in interest-bearing demand and money market	$	620,440	$	610,351		1.7	%	$	664,982	$	483,100	$	536,448		15.7	%
Customer repo sweeps (b)	$	667,720	$	789,218		(15.4	%)	$	844,414	$	874,737	$	900,964		(25.9	%)

(b)	Included within short-term borrowings.
N/M — Not meaningful.

Net Interest Income Analysis — Taxable Equivalent Basis
Associated Banc-Corp

	Six months ended June 30, 2008							Six months ended June 30, 2007
	Average		Interest		Average			Average		Interest		Average
(in thousands)	Balance		Income / Expense		Yield / Rate			Balance		Income / Expense		Yield / Rate
Earning assets:
Loans: (1) (2) (3)
Commercial	$	10,412,253	$	314,859		6.08	%	$	9,697,338	$	360,976		7.51	%
Residential mortgage		2,215,641		66,325		6.00			2,345,020		71,331		6.10
Retail		3,286,632		113,484		6.93			2,978,486		120,172		8.10
Total loans		15,914,526		494,668		6.24			15,020,844		552,479		7.41
Investments and other		3,600,903		95,706		5.32			3,499,134		92,942		5.31
Total earning assets		19,515,429		590,374		6.07			18,519,978		645,421		7.01
Other assets, net		2,197,278							1,946,474
Total assets	$	21,712,707						$	20,466,452
Interest-bearing liabilities:
Savings deposits	$	885,883	$	2,091		0.47	%	$	905,620	$	1,911		0.43	%
Interest-bearing demand deposits		1,802,280		9,765		1.09			1,816,668		17,684		1.96
Money market deposits		3,919,573		42,000		2.15			3,771,053		71,265		3.81
Time deposits, excluding Brokered CDs		3,968,095		80,970		4.10			4,325,023		97,001		4.52
Total interest-bearing deposits, excluding Brokered CDs		10,575,831		134,826		2.56			10,818,364		187,861		3.50
Brokered CDs		603,699		10,335		3.44			464,192		12,218		5.31
Total interest-bearing deposits		11,179,530		145,161		2.61			11,282,556		200,079		3.58
Wholesale funding		5,622,248		93,454		3.34			4,472,630		115,537		5.20
Total interest-bearing liabilities		16,801,778		238,615		2.86			15,755,186		315,616		4.04
Noninterest-bearing demand deposits		2,389,005							2,348,259
Other liabilities		154,125							121,547
Stockholders’ equity		2,367,799							2,241,460
Total liabilities and stockholders’ equity	$	21,712,707						$	20,466,452
Net interest income and rate spread (1)			$	351,759		3.21	%			$	329,805		2.97	%
Net interest margin (1)						3.61	%						3.57	%
Taxable equivalent adjustment			$	13,910						$	13,284

	Three months ended June 30, 2008							Three months ended June 30, 2007
	Average		Interest		Average			Average		Interest		Average
	Balance		Income / Expense		Yield / Rate			Balance		Income / Expense		Yield / Rate
Earning assets:
Loans: (1) (2) (3)
Commercial	$	10,501,226	$	150,134		5.75	%	$	9,811,861	$	182,536		7.46	%
Residential mortgage		2,195,007		32,530		5.94			2,333,225		35,948		6.17
Retail		3,424,499		56,010		6.57			2,937,764		59,351		8.09
Total loans		16,120,732		238,674		5.95			15,082,850		277,835		7.38
Investments and other		3,633,919		47,734		5.25			3,522,174		46,562		5.29
Total earning assets		19,754,651		286,408		5.82			18,605,024		324,397		6.99
Other assets, net		2,220,800							1,953,779
Total assets	$	21,975,451						$	20,558,803
Interest-bearing liabilities:
Savings deposits	$	910,930	$	1,009		0.45	%	$	928,207	$	1,110		0.48	%
Interest-bearing demand deposits		1,796,373		3,774		0.84			1,833,762		9,097		1.99
Money market deposits		3,864,739		17,546		1.83			3,723,407		35,172		3.79
Time deposits, excluding Brokered CDs		3,892,910		37,229		3.85			4,339,520		49,407		4.57
Total interest-bearing deposits, excluding Brokered CDs		10,464,952		59,558		2.29			10,824,896		94,786		3.51
Brokered CDs		576,857		4,097		2.86			527,510		6,994		5.32
Total interest-bearing deposits		11,041,809		63,655		2.32			11,352,406		101,780		3.60
Wholesale funding		5,950,699		43,207		2.92			4,482,437		58,418		5.23
Total interest-bearing liabilities		16,992,508		106,862		2.53			15,834,843		160,198		4.06
Noninterest-bearing demand deposits		2,451,702							2,350,466
Other liabilities		153,400							119,622
Stockholders’ equity		2,377,841							2,253,872
Total liabilities and stockholders’ equity	$	21,975,451						$	20,558,803
Net interest income and rate spread (1)			$	179,546		3.29	%			$	164,199		2.93	%
Net interest margin (1)						3.65	%						3.53	%
Taxable equivalent adjustment			$	6,814						$	6,724

(1)	The yield on tax exempt loans and securities is computed on a taxable equivalent basis using a tax rate of 35% for all periods presented and is net of the effects of certain disallowed interest deductions.
(2)	Nonaccrual loans and loans held for sale have been included in the average balances.
(3)	Interest income includes net loan fees.