Associated Banc-Corp (ASB) 8-K Associated earns $2.23 per share in 2007, 51 cents in fourth quarter

NEWS RELEASE For more information:
Investors: Joe Selner, Chief Financial Officer, 920-491-7120
Media: Cindy Moon-Mogush, Corporate Communications, 920-431-8034
 

Associated earns $2.23 per share in 2007, 51 cents in fourth quarter

• Net income of $286 million for 2007

• Core fee-based income up 9% for 2007

• Strong fourth quarter loan growth

• Fourth quarter net interest margin of 3.62%

• Fourth quarter tangible capital ratio at 6.59%

GREEN BAY, Wis. —January 17, 2008 — Associated Banc-Corp (NASDAQ: ASBC) reported net income of $64.8 million, or $.51 per share, for the fourth quarter of 2007. Earnings for 2007 were $285.8 million, or $2.23 per share.

Fourth quarter results included several notable items. Noninterest revenue included $10 million in net investment and asset sale gains, principally related to the sale of deposits in 14 branch locations, and $2.4 million unfavorable valuation and other expense in net mortgage banking income. Noninterest expense included $2.3 million of severance, $2.3 million reserve for unfavorable litigation losses related to Visa Inc. anti-trust matters (to which Associated and other Visa member banks have direct and potential obligations to share in with Visa), and elevated levels of various other expense items of approximately $3 million. Finally, the provision for loan losses for fourth quarter 2007 was $15.5 million (up $6.8 million over third quarter 2007), approximating net charge offs for the quarter.

Net interest income was $164 million for the fourth quarter, up from $163 million for the third quarter of 2007, and net interest margin was 3.62 percent for both quarters. Net interest income in the fourth quarter benefited from stronger average loan growth and improved spreads.

On average, loans were $15.3 billion for the fourth quarter of 2007, up $118 million or 3 percent annualized over the third quarter of 2007, led by 5 percent annualized growth in commercial loans and 11 percent annualized growth in home equity loans.

Deposits were on average $13.8 billion for the fourth quarter of 2007, down $0.2 billion compared to the third quarter, primarily affected by the timing of the branch deposits sold during the second half of 2007. Associated completed the sale of $224 million of branch deposits in 19 branch locations during the second half of 2007.

Net charge offs to average loans were 40 basis points for the fourth quarter and 27 basis points for the year. Commercial nonperforming loans were elevated during the first half of 2007, but declined to $109 million at year end, similar to $110 million at year-end 2006. Total consumer nonperforming loans of $54 million were up $21 million between year ends, as a result of deteriorating real estate conditions and the impact of the economy on these customers. The ratio of total nonperforming loans to total loans was 1.05 percent and 0.96 percent at year-end 2007 and 2006, respectively. Total nonperforming assets represented 0.88 percent of total assets at year-end 2007, compared to 0.75 percent at year-end 2006.

Core fee-based revenues for 2007 were $253 million, up $20 million or 9 percent higher than 2006, with solid growth in deposit service charges (10 percent), trust service fees (14 percent), card-based and other fees (11 percent), and a 1 percent increase in retail commissions.

Noninterest expense for the fourth quarter versus third quarter of 2007 was up $6.1 million, primarily as a result of previously mentioned items.

“We have invested to establish strong positions in attractive markets and in the management team to improve the growth dynamics of our core businesses,” Associated Chairman and CEO Paul S. Beideman said. “Our margin for the second half of 2007, as well as the growth we are seeing in commercial loans, home equity loans and our core fee based businesses, are reflective of those efforts.”

“We have managed risk conservatively to minimize exposure to those business segments that are causing significant turbulence in financial markets. While our charge offs are elevated in the fourth quarter of 2007, we continue to aggressively manage our distressed credits to mitigate risks in this challenging environment,” Beideman added. “While our asset quality will be driven by the economic conditions of our markets and resulting impacts on our customers, at year-end 2007 our commercial nonperforming loans were flat to last year end, we are adequately reserved and our capital ratios are strong.”

During the fourth quarter, Associated paid a dividend of 31 cents per share, bringing the 2007 dividend per share to $1.22, up 7 percent from 2006.

Associated will host a conference call for investors and analysts at 3 p.m. CT today. The toll-free dial-in number for the live call is 800-762-8795. The number for international callers is 480-629-9031. Participants should ask the operator for the Associated Banc-Corp fourth quarter 2007 earnings call, or for call ID number 3828541. A replay of the call will be available starting at 6 p.m. CT on Jan. 17 through Feb. 7, 2008, by calling 800-406-7325 (toll-free) domestically or 303-590-3030 internationally. The call ID number, 3828541, 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 at www.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.

— 30 —

Consolidated Balance Sheets (Unaudited)

Associated Banc-Corp

	December 31,			December 31,			Dec07 vs Dec06
(in thousands)	2007			2006			% Change
Assets
Cash and due from banks	$	553,031		$	458,344			20.7	%
Interest-bearing deposits in other financial institutions		11,671			10,505			11.1	%
Federal funds sold and securities purchased under agreements to resell		22,447			13,187			70.2	%
Investment securities available for sale, at fair value		3,543,019			3,436,621			3.1	%
Loans held for sale		94,441			370,758			(74.5	%)
Loans		15,516,252			14,881,526			4.3	%
Allowance for loan losses		(200,570	)		(203,481	)		(1.4	%)
Loans, net		15,315,682			14,678,045			4.3	%
Premises and equipment, net		197,446			196,007			0.7	%
Goodwill		929,168			871,629			6.6	%
Other intangible assets, net		92,220			109,234			(15.6	%)
Other assets		832,958			717,054			16.2	%
Total assets	$	21,592,083		$	20,861,384			3.5	%
Liabilities and Stockholders’ Equity
Noninterest-bearing deposits	$	2,661,078		$	2,756,222			(3.5	%)
Interest-bearing deposits, excluding Brokered CDs		10,903,198			10,922,274			(0.2	%)
Brokered CDs		409,637			637,575			(35.8	%)
Total deposits		13,973,913			14,316,071			(2.4	%)
Short-term borrowings		3,226,787			2,042,685			58.0	%
Long-term funding		1,864,771			2,071,142			(10.0	%)
Accrued expenses and other liabilities		196,907			185,993			5.9	%
Total liabilities		19,262,378			18,615,891			3.5	%
Stockholders’ Equity
Preferred stock		—			—
Common stock		1,278			1,304			(2.0	%)
Surplus		1,040,694			1,120,934			(7.2	%)
Retained earnings		1,305,136			1,189,658			9.7	%
Accumulated other comprehensive loss		(2,498	)		(16,453	)		(84.8	%)
Treasury stock, at cost		(14,905	)		(49,950	)		(70.2	%)
Total stockholders’ equity		2,329,705			2,245,493			3.8	%
Total liabilities and stockholders’ equity	$	21,592,083		$	20,861,384			3.5	%

Consolidated Statements of Income (Unaudited)
Associated Banc-Corp

	For The Three Months Ended									For The Year Ended
	December 31,						Quarter			December 31,				Year-to-date
(in thousands, except per share amounts)	2007			2006			% Change			2007		2006		% Change
Interest Income
Interest and fees on loans	$	277,647		$	282,918			(1.9	%)	$	1,111,919	$	1,106,903		0.5	%
Interest and dividends on investment securities and deposits in other financial institutions
Taxable		30,712			29,962			2.5	%		122,961		131,952		(6.8	%)
Tax-exempt		10,394			9,794			6.1	%		39,897		39,434		1.2	%
Interest on federal funds sold and securities purchased under agreements to resell		214			292			(26.7	%)		935		1,090		(14.2	%)
Total interest income		318,967			322,966			(1.2	%)		1,275,712		1,279,379		(0.3	%)
Interest Expense
Interest on deposits		98,678			98,757			(0.1	%)		403,353		363,953		10.8	%
Interest on short-term borrowings		32,470			31,971			1.6	%		134,624		129,791		3.7	%
Interest on long-term funding		23,600			26,174			(9.8	%)		93,922		116,086		(19.1	%)
Total interest expense		154,748			156,902			(1.4	%)		631,899		609,830		3.6	%
Net Interest Income		164,219			166,064			(1.1	%)		643,813		669,549		(3.8	%)
Provision for loan losses		15,501			7,068			119.3	%		34,509		19,056		81.1	%
Net interest income after provision for loan losses		148,718			158,996			(6.5	%)		609,304		650,493		(6.3	%)
Noninterest Income
Trust service fees		10,723			9,941			7.9	%		42,629		37,484		13.7	%
Service charges on deposit accounts		25,866			24,214			6.8	%		101,042		91,593		10.3	%
Card-based and other nondeposit fees		12,088			11,267			7.3	%		47,558		42,661		11.5	%
Retail commissions		14,917			15,053			(0.9	%)		61,645		61,256		0.6	%
Mortgage banking, net		498			1,735			(71.3	%)		22,750		14,801		53.7	%
Bank owned life insurance income		4,240			5,102			(16.9	%)		17,419		16,155		7.8	%
Asset sale gains, net		11,062			91			N/M			15,607		304		N/M
Investment securities gains (losses), net		(815	)		(436	)		86.9	%		8,174		4,722		73.1	%
Other		7,094			7,568			(6.3	%)		27,957		26,525		5.4	%
Total noninterest income		85,673			74,535			14.9	%		344,781		295,501		16.7	%
Noninterest Expense
Personnel expense		76,487			68,315			12.0	%		303,428		283,431		7.1	%
Occupancy		11,784			10,971			7.4	%		46,659		43,825		6.5	%
Equipment		4,820			4,300			12.1	%		17,908		17,466		2.5	%
Data processing		8,189			8,033			1.9	%		31,690		31,451		0.8	%
Business development and advertising		5,482			4,365			25.6	%		19,785		16,857		17.4	%
Other intangible amortization		1,758			1,999			(12.1	%)		7,116		8,903		(20.1	%)
Other		31,582			26,415			19.6	%		108,305		94,282		14.9	%
Total noninterest expense		140,102			124,398			12.6	%		534,891		496,215		7.8	%
Income before income taxes		94,289			109,133			(13.6	%)		419,194		449,779		(6.8	%)
Income tax expense		29,498			34,632			(14.8	%)		133,442		133,134		0.2	%
Net Income	$	64,791		$	74,501			(13.0	%)	$	285,752	$	316,645		(9.8	%)
Earnings Per Share:
Basic	$	0.51		$	0.58			(12.1	%)	$	2.24	$	2.40		(6.7	%)
Diluted	$	0.51		$	0.57			(10.5	%)	$	2.23	$	2.38		(6.3	%)
Average Shares Outstanding:
Basic		127,095			129,202			(1.6	%)		127,408		132,006		(3.5	%)
Diluted		127,835			130,366			(1.9	%)		128,428		133,132		(3.5	%)

N/M — Not meaningful.

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

					��
(in thousands, except per share amounts)	4Q07			3Q07		2Q07		1Q07		4Q06
Interest Income
Interest and fees on loans	$	277,647		$	283,330	$	276,981	$	273,961	$	282,918
Interest and dividends on investment securities and deposits in other financial institutions
Taxable		30,712			31,140		30,583		30,526		29,962
Tax-exempt		10,394			9,924		9,785		9,794		9,794
Interest on federal funds sold and securities purchased under agreements to resell		214			214		324		183		292
Total interest income		318,967			324,608		317,673		314,464		322,966
Interest Expense
Interest on deposits		98,678			104,596		101,780		98,299		98,757
Interest on short-term borrowings		32,470			31,548		35,423		35,183		31,971
Interest on long-term funding		23,600			25,391		22,995		21,936		26,174
Total interest expense		154,748			161,535		160,198		155,418		156,902
Net Interest Income		164,219			163,073		157,475		159,046		166,064
Provision for loan losses		15,501			8,733		5,193		5,082		7,068
Net interest income after provision for loan losses		148,718			154,340		152,282		153,964		158,996
Noninterest Income
Trust service fees		10,723			10,886		10,711		10,309		9,941
Service charges on deposit accounts		25,866			26,609		25,545		23,022		24,214
Card-based and other nondeposit fees		12,088			12,436		11,711		11,323		11,267
Retail commissions		14,917			15,476		15,773		15,479		15,053
Mortgage banking, net		498			3,006		9,696		9,550		1,735
Bank owned life insurance income		4,240			4,650		4,365		4,164		5,102
Asset sale gains, net		11,062			2,220		442		1,883		91
Investment securities gains (losses), net		(815	)		1,879		6,075		1,035		(436	)
Other		7,094			7,758		7,170		5,935		7,568
Total noninterest income		85,673			84,920		91,488		82,700		74,535
Noninterest Expense
Personnel expense		76,487			76,617		76,277		74,047		68,315
Occupancy		11,784			11,967		11,321		11,587		10,971
Equipment		4,820			4,440		4,254		4,394		4,300
Data processing		8,189			7,991		7,832		7,678		8,033
Business development and advertising		5,482			4,830		5,068		4,405		4,365
Other intangible amortization		1,758			1,979		1,718		1,661		1,999
Other		31,582			26,185		26,174		24,364		26,415
Total noninterest expense		140,102			134,009		132,644		128,136		124,398
Income before income taxes		94,289			105,251		111,126		108,528		109,133
Income tax expense		29,498			33,510		35,301		35,133		34,632
Net Income	$	64,791		$	71,741	$	75,825	$	73,395	$	74,501
Earnings Per Share:
Basic	$	0.51		$	0.57	$	0.59	$	0.57	$	0.58
Diluted	$	0.51		$	0.56	$	0.59	$	0.57	$	0.57
Average Shares Outstanding:
Basic		127,095			126,958		127,606		127,988		129,202
Diluted		127,835			127,847		128,750		129,299		130,366

Selected Quarterly Information
Associated Banc-Corp

(in thousands, except per share and full time equivalent employee data)	YTD 2007			YTD 2006			4th Qtr 2007			3rd Qtr 2007			2nd Qtr 2007			1st Qtr 2007			4th Qtr 2006
Summary of Operations
Net interest income	$	643,813		$	669,549		$	164,219		$	163,073		$	157,475		$	159,046		$	166,064
Provision for loan losses		34,509			19,056			15,501			8,733			5,193			5,082			7,068
Asset sale gains, net		15,607			304			11,062			2,220			442			1,883			91
Investment securities gains (losses), net		8,174			4,722			(815	)		1,879			6,075			1,035			(436	)
Noninterest income (excluding securities & asset gains)		321,000			290,475			75,426			80,821			84,971			79,782			74,880
Noninterest expense		534,891			496,215			140,102			134,009			132,644			128,136			124,398
Income before income taxes		419,194			449,779			94,289			105,251			111,126			108,528			109,133
Income taxes		133,442			133,134			29,498			33,510			35,301			35,133			34,632
Net income		285,752			316,645			64,791			71,741			75,825			73,395			74,501
Taxable equivalent adjustment		27,259			26,233			7,119			6,856			6,724			6,560			6,568
Per Common Share Data (1)
Net income:
Basic	$	2.24		$	2.40		$	0.51		$	0.57		$	0.59		$	0.57		$	0.58
Diluted		2.23			2.38			0.51			0.56			0.59			0.57			0.57
Dividends		1.22			1.14			0.31			0.31			0.31			0.29			0.29
Market Value:
High	$	35.43		$	35.13		$	30.49		$	33.05		$	33.49		$	35.43		$	35.13
Low		25.23			30.27			25.23			26.86			32.14			33.16			32.13
Close		27.09			34.88			27.09			29.63			32.70			33.60			34.88
Book value		18.32			17.44			18.32			18.04			17.56			17.54			17.44
Performance Ratios (annualized)
Earning assets yield		6.99	%		6.79	%		6.88	%		7.05	%		6.99	%		7.03	%		6.95	%
Interest-bearing liabilities rate		3.98			3.71			3.82			4.02			4.06			4.02			3.93
Net interest margin		3.60			3.62			3.62			3.62			3.53			3.62			3.64
Return on average assets		1.38			1.50			1.23			1.38			1.48			1.46			1.43
Return on average equity		12.68			13.89			11.23			12.69			13.49			13.35			13.19
Return on tangible average equity (2)		21.91			23.31			19.50			22.42			23.14			22.63			22.31
Efficiency ratio (3)		53.92			50.31			56.78			53.44			53.23			52.22			50.26
Effective tax rate		31.83			29.60			31.28			31.84			31.77			32.37			31.73
Dividend payout ratio (4)		54.46			47.50			60.78			54.39			52.54			50.88			50.00
Average Balances
Assets	$	20,638,005		$	21,162,099		$	20,935,023		$	20,678,498		$	20,558,803		$	20,373,075		$	20,635,203
Earning assets		18,644,770			19,229,849			18,849,079			18,685,978			18,605,024			18,433,986			18,713,784
Interest-bearing liabilities		15,886,710			16,434,947			16,090,488			15,941,683			15,834,843			15,674,645			15,765,774
Loans		15,132,634			15,370,090			15,301,761			15,183,444			15,082,850			14,958,148			15,233,207
Deposits		13,741,803			13,623,703			13,760,991			13,940,970			13,702,872			13,557,958			13,748,444
Wholesale funding		4,520,916			5,161,192			4,750,471			4,386,354			4,482,437			4,462,713			4,547,042
Stockholders’ equity		2,253,878			2,279,376			2,289,522			2,242,665			2,253,872			2,228,909			2,240,143
Stockholders’ equity / assets		10.92	%		10.77	%		10.94	%		10.85	%		10.96	%		10.94	%		10.86	%
At Period End
Assets							$	21,592,083		$	20,940,007		$	20,849,140		$	20,507,413		$	20,861,384
Loans								15,516,252			15,174,758			15,154,232			14,856,003			14,881,526
Allowance for loan losses								200,570			200,560			206,493			203,495			203,481
Goodwill								929,168			929,168			929,168			871,629			871,629
Mortgage servicing rights, net								51,187			53,636			55,829			48,342			66,620
Other intangible assets								41,033			42,791			44,770			40,953			42,614
Deposits								13,973,913			14,158,369			14,077,618			13,980,967			14,316,071
Wholesale funding								5,091,558			4,283,396			4,348,565			4,075,919			4,113,827
Stockholders’ equity								2,329,705			2,291,182			2,228,911			2,236,134			2,245,493
Stockholders’ equity / assets								10.79	%		10.94	%		10.69	%		10.90	%		10.76	%
Tangible equity / tangible assets (5)								6.59	%		6.61	%		6.31	%		6.75	%		6.67	%
Shares outstanding, end of period								127,160			127,035			126,910			127,497			128,747
Shares repurchased during period, including settlements								—			11			2,000			1,909			1,957
Average per share cost of shares repurchased during period							$	—		$	—		$	32.81		$	35.74		$	33.11
YTD shares repurchased during period, including settlements								3,920			3,920			3,909			1,909			8,018
YTD average per share cost of shares repurchased during period							$	34.15		$	34.15		$	34.24		$	35.74		$	32.83
Selected trend information
Average full time equivalent employees								5,095			5,200			5,069			5,089			5,084
Trust assets under management, at market value							$	6,100,000		$	6,200,000		$	6,100,000		$	5,900,000		$	5,800,000
Mortgage loans originated for sale during period								333,331			353,233			455,928			338,802			374,427
Mortgage portfolio serviced for others								6,403,000			6,297,000			6,571,000			6,087,000			8,330,000
Mortgage servicing rights, net / Portfolio serviced for others								0.80	%		0.85	%		0.85	%		0.79	%		0.80	%

(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.

Financial Summary and Comparison
Associated Banc-Corp

	Three months ended									Year ended
	December 31,									December 31,
(in thousands)	2007			2006			% Change			2007			2006			% Change
Allowance for Loan Losses
Beginning balance	$	200,560		$	203,442			(1.4	%)	$	203,481		$	203,404			0.0	%
Balance related to acquisition		—			—			0.0	%		2,991			—			N/M
Provision for loan losses		15,501			7,068			119.3	%		34,509			19,056			81.1	%
Charge offs		(17,156	)		(10,574	)		62.2	%		(47,249	)		(30,507	)		54.9	%
Recoveries		1,665			3,545			(53.0	%)		6,838			11,528			(40.7	%)
Net charge offs		(15,491	)		(7,029	)		120.4	%		(40,411	)		(18,979	)		112.9	%
Ending Balance	$	200,570		$	203,481			(1.4	%)	$	200,570		$	203,481			(1.4	%)

							Dec07vsSept07												Dec07vsDec06
Credit Quality	Dec 31,2007			Sept 30, 2007			% Change			Jun 30, 2007			Mar 31, 2007			Dec 31, 2006			% Change
Nonaccrual loans	$	152,528		$	142,509			7.0	%	$	171,303		$	146,864		$	136,734			11.6	%
Loans 90 or more days past due and still accruing		10,118			8,163			23.9	%		8,446			6,131			5,725			76.7	%
Restructured loans		—			—			0.0	%		—			25			26			(100.0	%)
Total nonperforming loans		162,646			150,672			7.9	%		179,749			153,020			142,485			14.1	%
Other real estate owned (OREO)		26,489			20,866			26.9	%		19,237			16,439			14,417			83.7	%
Total nonperforming assets	$	189,135		$	171,538			10.3	%	$	198,986		$	169,459		$	156,902			20.5	%
Provision for loan losses		15,501			8,733			77.5	%		5,193			5,082			7,068			119.3	%
Net charge offs		15,491			14,666			5.6	%		5,186			5,068			7,029			120.4	%
Allowance for loan losses / loans		1.29	%		1.32	%					1.36	%		1.37	%		1.37	%
Allowance for loan losses /
nonperforming loans		123.32			133.11						114.88			132.99			142.81
Nonperforming loans / total loans		1.05			0.99						1.19			1.03			0.96
Nonperforming assets / total loans plus OREO		1.22			1.13						1.31			1.14			1.05
Nonperforming assets / total assets		0.88			0.82						0.95			0.83			0.75
Net charge offs / average loans (annualized)		0.40			0.38						0.14			0.14			0.18
Year-to-date net charge offs / average loans		0.27			0.22						0.14			0.14			0.12

					Dec07vsSept07									Dec07vsDec06
Period End Loan Composition	Dec 31, 2007		Sept 30, 2007		% Change			Jun 30, 2007		Mar 31, 2007		Dec 31, 2006		% Change
Commercial, financial & agricultural	$	4,281,091	$	3,935,976		8.8	%	$	3,958,911	$	3,788,800	$	3,677,573		16.4	%
Commercial real estate		3,635,365		3,656,937		(0.6	%)		3,703,464		3,723,289		3,789,480		(4.1	%)
Real estate — construction		2,260,766		2,215,264		2.1	%		2,137,276		2,084,883		2,047,124		10.4	%
Lease financing		108,794		95,644		13.7	%		88,967		89,524		81,814		33.0	%
Commercial		10,286,016		9,903,821		3.9	%		9,888,618		9,686,496		9,595,991		7.2	%
Home equity (a)		2,269,122		2,230,640		1.7	%		2,144,357		2,042,284		2,164,758		4.8	%
Installment		841,136		866,185		(2.9	%)		865,474		869,719		915,747		(8.1	%)
Retail		3,110,258		3,096,825		0.4	%		3,009,831		2,912,003		3,080,505		1.0	%
Residential mortgage		2,119,978		2,174,112		(2.5	%)		2,255,783		2,257,504		2,205,030		(3.9	%)
Total loans	$	15,516,252	$	15,174,758		2.3	%	$	15,154,232	$	14,856,003	$	14,881,526		4.3	%

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

					Dec07vsSept07									Dec07vsDec06
Period End Deposit Composition	Dec 31, 2007		Sept 30, 2007		% Change			Jun 30, 2007		Mar 31, 2007		Dec 31, 2006		% Change
Demand	$	2,661,078	$	2,407,026		10.6	%	$	2,466,130	$	2,425,248	$	2,756,222		(3.5	%)
Savings		853,618		919,891		(7.2	%)		966,673		903,738		890,380		(4.1	%)
Interest-bearing demand		1,947,551		1,881,235		3.5	%		1,900,227		1,805,658		1,875,879		3.8	%
Money market		3,923,063		3,770,487		4.0	%		3,564,539		3,880,744		3,822,928		2.6	%
Brokered CDs		409,637		800,422		(48.8	%)		751,900		650,084		637,575		(35.8	%)
Other time deposits		4,178,966		4,379,308		(4.6	%)		4,428,149		4,315,495		4,333,087		(3.6	%)
Total deposits	$	13,973,913	$	14,158,369		(1.3	%)	$	14,077,618	$	13,980,967	$	14,316,071		(2.4	%)
Customer Repo Sweeps (b)	$	844,414	$	874,737		(3.5	%)	$	900,964	$	945,019	$	875,099		(3.5	%)

(b) Included within short-term borrowings.

N/M — Not meaningful.

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

	Year ended December 31, 2007							Year ended December 31, 2006
	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	$	9,807,964	$	730,712		7.45	%	$	9,527,264	$	707,405		7.43	%
Residential mortgage		2,292,606		141,127		6.16			2,760,454		160,758		5.82
Retail		3,032,064		243,401		8.03			3,082,372		241,313		7.83
Total loans		15,132,634		1,115,240		7.37			15,370,090		1,109,476		7.22
Investments and other		3,512,136		187,731		5.35			3,859,759		196,136		5.08
Total earning assets		18,644,770		1,302,971		6.99			19,229,849		1,305,612		6.79
Other assets, net		1,993,235							1,932,250
Total assets	$	20,638,005						$	21,162,099
Interest-bearing liabilities:
Savings deposits	$	913,143	$	4,494		0.49	%	$	1,012,966	$	3,824		0.38	%
Interest-bearing demand deposits		1,844,274		35,585		1.93			1,997,355		34,895		1.75
Money market deposits		3,752,199		138,924		3.70			3,324,362		119,506		3.59
Time deposits, excluding Brokered CDs		4,340,473		197,262		4.54			4,388,147		177,860		4.05
Total interest-bearing deposits, excluding Brokered CDs		10,850,089		376,265		3.47			10,722,830		336,085		3.13
Brokered CDs		515,705		27,088		5.25			550,925		27,868		5.06
Total interest-bearing deposits		11,365,794		403,353		3.55			11,273,755		363,953		3.23
Wholesale funding		4,520,916	��	228,546		5.06			5,161,192		245,877		4.76
Total interest-bearing liabilities		15,886,710		631,899		3.98			16,434,947		609,830		3.71
Noninterest-bearing demand deposits		2,376,009							2,349,948
Other liabilities		121,408							97,828
Stockholders’ equity		2,253,878							2,279,376
Total liabilities and stockholders’ equity	$	20,638,005						$	21,162,099
Net interest income and rate spread (1)			$	671,072		3.01	%			$	695,782		3.08	%
Net interest margin (1)						3.60	%						3.62	%
Taxable equivalent adjustment			$	27,259						$	26,233

	Three months ended December 31, 2007							Three months ended December 31, 2006
	Average		Interest		Average			Average		Interest		Average
	Balance		Income / Expense		Yield / Rate			Balance		Income / Expense		Yield / Rate
Earning assets:
Loans: (1) (2) (3)
Commercial	$	9,983,063	$	182,789		7.27	%	$	9,505,699	$	182,086		7.50	%
Residential mortgage		2,206,003		34,283		6.19			2,628,382		38,753		5.87
Retail		3,112,695		61,459		7.86			3,099,126		62,771		8.06
Total loans		15,301,761		278,531		7.23			15,233,207		283,610		7.33
Investments and other		3,547,318		47,555		5.36			3,480,577		45,924		5.27
Total earning assets		18,849,079		326,086		6.88			18,713,784		329,534		6.95
Other assets, net		2,085,944							1,921,419
Total assets	$	20,935,023						$	20,635,203
Interest-bearing liabilities:
Savings deposits	$	898,780	$	1,259		0.56	%	$	940,041	$	903		0.38	%
Interest-bearing demand deposits		1,816,676		8,353		1.82			1,729,355		7,945		1.82
Money market deposits		3,772,661		32,746		3.44			3,727,175		35,420		3.77
Time deposits, excluding Brokered CDs		4,317,752		49,506		4.55			4,356,474		48,243		4.39
Total interest-bearing deposits, excluding Brokered CDs		10,805,869		91,864		3.37			10,753,045		92,511		3.41
Brokered CDs		534,148		6,814		5.06			465,687		6,246		5.32
Total interest-bearing deposits		11,340,017		98,678		3.45			11,218,732		98,757		3.49
Wholesale funding		4,750,471		56,070		4.69			4,547,042		58,145		5.02
Total interest-bearing liabilities		16,090,488		154,748		3.82			15,765,774		156,902		3.93
Noninterest-bearing demand deposits		2,420,974							2,529,712
Other liabilities		134,039							99,574
Stockholders’ equity		2,289,522							2,240,143
Total liabilities and stockholders’ equity	$	20,935,023						$	20,635,203
Net interest income and rate spread (1)			$	171,338		3.06	%			$	172,632		3.02	%
Net interest margin (1)						3.62	%						3.64	%
Taxable equivalent adjustment			$	7,119						$	6,568

(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.