Press Release Details

Associated Banc-Corp 2004 Earnings $2.25 Per Share, up 10 Percent

01/20/2005

GREEN BAY, Wis.--(BUSINESS WIRE)--Jan. 20, 2005--Associated Banc-Corp (Nasdaq:ASBC) earned $2.25 per diluted share in 2004, up 10 percent from 2003. Net income for 2004 was $258.3 million, up 13 percent from $228.7 million in 2003.

Associated's acquisition of First Federal Capital Corp. on Oct. 29, 2004, affects comparisons to past periods, adding the balance sheet of a $4 billion thrift and two months of operations in 2004. Additionally, the acquisitions of Jabas Group, Inc., an employee benefits firm, on April 1, 2004, and of CFG Insurance Services, Inc., on April 1, 2003, also affect the comparison of retail commission income and noninterest expenses.

Net income for the fourth quarter of 2004 was $70.9 million, up 27 percent from $55.6 million in the fourth quarter of 2003. Fourth quarter earnings per diluted share were 57 cents, up 14 percent from the 50 cents per diluted share earned in the fourth quarter of 2003.

Return on average assets (ROA) and equity (ROE) for 2004 were 1.58 percent and 17.22 percent, respectively. This compares to ROA of 1.53 percent and ROE of 17.58 percent in 2003. Book value per share rose to $15.55 as of Dec. 31, 2004, up 27 percent compared to a year earlier.

Return on average tangible equity (which is a non-GAAP measure that excludes the average of goodwill and other intangible assets from average equity) was 22.11 percent for 2004 compared to 21.56 percent for 2003.

"We are pleased with our results in 2004, both organizationally and in terms of EPS growth, which is in line with our long-term goal," said Paul S. Beideman, president and CEO of Associated Banc-Corp. "We have made investments in our people to improve customer service. We continue to make progress on our strategy to diversify revenue by optimizing performance across our businesses. In 2004 we overcame the industry-wide decline in mortgage banking revenue relative to 2003, and posted our seventh consecutive year of record earnings," Beideman said.

Associated's net interest income for 2004, which includes two months' contribution from First Federal, was $552.6 million, up 8 percent from 2003's $510.8 million. Net interest margin for 2004 was 3.80 percent, compared to 3.84 percent for 2003.

For the fourth quarter of 2004 the net interest margin was 3.74 percent versus 3.81 percent for the comparable quarter of 2003, and down 2 basis points from the third quarter of 2004. While the Federal Reserve raised rates five times since mid-year 2004, the longer-term rates have increased at a slower pace. This flattening of the yield curve put downward pressure on the margin especially in the second half of 2004.

Period end loans at Dec. 31, 2004 were $13.9 billion, up 35 percent over year-end 2003. Excluding First Federal, total loans grew 8 percent, despite residential mortgage loans declining 2 percent. Commercial loans and home equity were strategically emphasized in 2004 and, excluding First Federal, grew 11 percent and 22 percent, respectively, between year-end 2004 and 2003, with strong momentum in the second half of the year.

The mix of loans at Dec. 31, 2004, including First Federal, was 59 percent commercial (versus 63 percent last year), 20 percent residential mortgage (versus 19 percent last year), 13 percent home equity (compared to 11 percent) and 8 percent installment loans (versus 7 percent last year).

Period end deposits at year-end 2004 were $12.8 billion, up 31 percent over the prior year end, with minimal shift in deposit mix. Excluding First Federal, deposits grew 3 percent.

In 2004 net charge-offs were $17.3 million or 0.15 percent of average loans, as compared to $31.7 million or 0.30 percent of average loans for 2003. Nonperforming loans at Dec. 31, 2004 were $115.0 million or 0.83 percent of loans, as compared to $121.5 million or 1.18 percent of loans a year ago. The provision for loan losses for 2004 was $14.7 million, compared to $46.8 million for 2003. The provision for loan losses was reduced given improved asset quality trends and the favorable resolution of problem credits in 2004.

The allowance for loan losses was $189.8 million, or 1.37 percent of total loans at Dec. 31, 2004, and covered 165 percent of nonperforming loans. At Dec. 31, 2003 the allowance was $177.6 million, or 1.73 percent of total loans, and covered 146 percent of nonperforming loans.

The comparison of noninterest income between 2004 and 2003 was affected by significantly less net mortgage banking income (down $33.2 million or 62 percent between 2004 and 2003). Secondary mortgage production was $1.6 billion for 2004, down 62 percent compared to 2003, influencing a $46.0 million or 55 percent decline in gross mortgage banking income between the years. Netted against gross mortgage banking income is mortgage servicing rights expense which was down $12.8 million. The favorable change to this expense was due to slower loan prepayment speeds in 2004, a key valuation factor, increasing the recorded value of the mortgage servicing asset and requiring less valuation reserve. At Dec. 31, 2004, the net mortgage servicing rights asset represented 0.80 percent of the $9.5 billion mortgage portfolio serviced for others.

Noninterest income excluding net mortgage banking income was $189.9 million for 2004, up $26.5 million, or 16 percent, compared to $163.4 million for 2003. Retail commissions of $47.2 million led the increase, up $21.6 million compared to last year, predominantly from both organic and acquired growth in insurance revenues. Service charges on deposits of $56.2 million were up $5.8 million (12 percent), aided by fee increases in early 2004 and the addition of First Federal. Trust income of $31.8 million and credit card and other nondeposit fees of $26.2 million also grew, up $2.2 million (7 percent) and $2.5 million (11 percent), respectively, over last year.

Included in net investment securities losses for fourth quarter 2004 was an other-than-temporary impairment charge of $2.2 million taken on Associated's holdings of FHLMC preferred stock securities (bringing their carrying value to $8.4 million), offset partially by gains on sales of Sallie Mae stock of $1.5 million.

Noninterest expenses were a critical focus during 2004 and remained well-controlled, rising $18.8 million or 5 percent year-over-year to $377.9 million, including the CFG, Jabas and First Federal acquisitions. Excluding only First Federal, noninterest expense for 2004 would have been approximately $359 million, unchanged from last year.

"Associated is well-positioned for sustained growth, through our diverse revenue sources. We now have the opportunity to leverage our increased distribution capacity as a result of the acquisition of First Federal. We are on track to consolidate the First Federal operating systems in February," Beideman said.

He added, "We are confident that we can meet or exceed consensus earnings estimates for 2005, assuming a stable or growing economy. Positive loan growth momentum and anticipated rate increases by the Federal Reserve with a steepening of the yield curve are expected to improve net interest income. Full year contributions in 2005 from the Jabas and First Federal acquisitions will enhance the bottom line. We also expect to realize further cost efficiencies following our first quarter 2005 integration of First Federal into Associated."

The company paid dividends of 98 cents per share in 2004, up from 89 cents in 2003, making 2004 Associated's 34th consecutive year of increasing dividends.

Associated repurchased approximately 1.1 million shares of its common stock in 2004 at an average cost of $30.43 per share during 2004, compared to 3.1 million shares at $24.11 average cost per share during 2003. Associated starts 2005 with authorizations to repurchase approximately 6 million shares.

Associated will host a conference call for investors and analysts at 3 p.m. CST today. The toll-free dial-in number is 877-654-5513. Participants should ask the operator for the Associated Banc-Corp earnings call, or for call ID number 3275588. A taped play-back of the call will be available through Feb. 3 by calling 800-642-1687.

Associated Banc-Corp, headquartered in Green Bay, Wis., is a diversified multibank holding company with total assets of $20.5 billion. Associated has more than 300 banking offices serving more than 150 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 to be filed on Form 10-K.

 Consolidated Balance Sheets (Unaudited)
 Associated Banc-CorpDecember 31, December 31,
 (in thousands)                        2004         2003     % Change
 ----------------------------------------------------------- ---------
 Assets
 Cash and due from banks           $   389,311  $   389,140       0.0%
 Interest-bearing deposits in
  other financial institutions          13,321        7,434      79.2%
 Federal funds sold and securities
  purchased under agreements
  to resell                             55,440        3,290    1585.1%
 Securities available for sale, at
  fair value                         4,815,344    3,773,784      27.6%
 Loans held for sale                    64,964      104,336    (37.7%)
 Loans                              13,881,887   10,291,810      34.9%
 Allowance for loan losses            (189,762)    (177,622)      6.8%
                                   ------------ ------------
     Loans, net                     13,692,125   10,114,188      35.4%
 Premises and equipment                184,944      131,315      40.8%
 Goodwill                              685,378      224,388     205.4%
 Intangible assets                     119,440       63,509      88.1%
 Other assets                          499,869      436,510      14.5%
                                   ------------ ------------
     Total assets                  $20,520,136  $15,247,894      34.6%
                                   ============ ============

 Liabilities and
  Stockholders' Equity
 Noninterest-bearing deposits      $ 2,347,611  $ 1,814,446      29.4%
 Interest-bearing deposits,
  excluding Brokered CDs            10,077,069    7,813,267      29.0%
 Brokered CDs                          361,559      165,130     119.0%
                                   ------------ ------------
     Total deposits                 12,786,239    9,792,843      30.6%
 Short-term borrowings               2,926,716    1,928,876      51.7%
 Long-term funding                   2,604,540    2,034,160      28.0%
 Accrued expenses and other
  liabilities                          185,222      143,588      29.0%
                                   ------------ ------------
     Total liabilities              18,502,717   13,899,467      33.1%
 Stockholders' Equity
   Preferred stock                           -            -
   Common stock                          1,300          734      77.1%
   Surplus                           1,127,205      575,975      95.7%
   Retained earnings                   858,847      724,356      18.6%
   Accumulated other comprehensive
    income                              41,205       52,089    (20.9%)
   Deferred compensation                (2,122)      (1,981)      7.1%
   Treasury stock, at cost              (9,016)      (2,746)    228.3%
                                   ------------ ------------
     Total stockholders' equity      2,017,419    1,348,427      49.6%
                                   ------------ ------------
     Total liabilities and
      stockholders' equity         $20,520,136  $15,247,894      34.6%
                                   ============ ============


----------------------------------------------------------------------

Consolidated Statements of Income (Unaudited)
Associated Banc-Corp

                    For The Three              For The Year
                    Months Ended,                 Ended,
                     December 31,              December 31,
                 -------------------        -------------------
(in thousands, except
 per share amounts)                     %                          %
                   2004      2003    Change   2004      2003    Change
----------------------------------------------------------------------
Interest Income
Interest and
 fees on loans   $179,612  $137,289   30.8% $594,702  $578,816    2.7%
Interest and
 dividends on
 investment
 securities
 and deposits
 with other
 financial
 institutions
  Taxable          37,631    29,194   28.9%  131,020   108,624   20.6%
  Tax-exempt       10,047     9,939    1.1%   40,804    39,761    2.6%
Interest on
 federal funds
 sold and
 securities
 purchased under
 agreements to
 resell               260        36  622.2%      596       163  265.6%
                 --------- ---------        --------- ---------
   Total interest
    income        227,550   176,458   29.0%  767,122   727,364    5.5%
Interest Expense
Interest on
 deposits          36,835    29,247   25.9%  118,236   123,122  (4.0%)
Interest on
 short-term
 borrowings        14,898     5,390  176.4%   38,940    29,156   33.6%
Interest on
 long-term
 funding           17,360    14,684   18.2%   57,319    64,324 (10.9%)
                 --------- ---------        --------- ---------
   Total interest
    expense        69,093    49,321   40.1%  214,495   216,602  (1.0%)
                 --------- ---------        --------- ---------
Net Interest
 Income           158,457   127,137   24.6%  552,627   510,762    8.2%
Provision for
 loan losses        3,603     9,603 (62.5%)   14,668    46,813 (68.7%)
                 --------- ---------        --------- ---------
Net interest
 income after
 provision for
 loan losses      154,854   117,534   31.8%  537,959   463,949   16.0%
Noninterest Income
Trust service fees  8,107     8,150  (0.5%)   31,791    29,577    7.5%
Service charges
 on deposit
 accounts          16,943    12,735   33.0%   56,153    50,346   11.5%
Mortgage banking,
 net                6,045     9,018 (33.0%)   20,331    53,484 (62.0%)
Credit card and
 other nondeposit
 fees               8,183     5,646   44.9%   26,181    23,669   10.6%
Retail
 commissions       12,727     8,031   58.5%   47,171    25,571   84.5%
Bank owned life
 insurance
 income             2,525     3,417 (26.1%)   13,101    13,790  (5.0%)
Asset sale
 gains, net           432     1,366 (68.4%)    1,181     1,569 (24.7%)
Investment
 securities gains
 (losses), net       (719)        -    N/M       637       702  (9.3%)
Other               4,793     3,379   41.8%   13,701    18,174 (24.6%)
                 --------- ---------        --------- ---------
   Total
    noninterest
    income         59,036    51,742   14.1%  210,247   216,882  (3.1%)
Noninterest Expense
Personnel
 expense           65,193    54,391   19.9%  224,548   208,040    7.9%
Occupancy           8,297     6,710   23.7%   29,572    28,077    5.3%
Equipment           3,855     3,206   20.2%   12,754    12,818  (0.5%)
Data processing     5,966     5,731    4.1%   23,632    23,273    1.5%
Business
 development and
 advertising        4,271     4,165    2.5%   14,975    15,194  (1.4%)
Stationery and
 supplies           1,567     1,741 (10.0%)    5,436     6,705 (18.9%)
Other intangible
 amortization       1,699       870   95.3%    4,350     2,961   46.9%
Loan expense        2,328     1,446   61.0%    6,536     7,550 (13.4%)
Other              16,791    15,125   11.0%   56,066    54,497    2.9%
                 --------- ---------        --------- ---------
   Total
    noninterest
    expense       109,967    93,385   17.8%  377,869   359,115    5.2%
                 --------- ---------        --------- ---------
Income before
 income taxes     103,923    75,891   36.9%  370,337   321,716   15.1%
Income tax
 expense           33,069    20,282   63.0%  112,051    93,059   20.4%
                 --------- ---------        --------- ---------
Net Income       $ 70,854  $ 55,609   27.4% $258,286  $228,657   13.0%
                 ========= =========        ========= =========

Earnings Per Share:
  Basic          $   0.57  $   0.51   11.8% $   2.28  $   2.07   10.1%
  Diluted        $   0.57  $   0.50   14.0% $   2.25  $   2.05    9.8%
Average Shares
 Outstanding:
  Basic           123,509   109,965   12.3%  113,532   110,617    2.6%
  Diluted         125,296   111,499   12.4%  115,025   111,761    2.9%

N/M - Not meaningful.



----------------------------------------------------------------------

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

(in thousands, except
 per share amounts)     4Q04      3Q04      2Q04      1Q04      4Q03
----------------------------------------------------------------------
Interest Income
Interest and fees on
 loans               $179,612  $142,389  $137,449  $135,252  $137,289
Interest and
 dividends on
 investment
 securities
 and deposits in
 other financial
 institutions:
  Taxable              37,631    31,590    30,767    31,032    29,194
  Tax-exempt           10,047    10,255    10,267    10,235     9,939
Interest on federal
 funds sold and
 securities
 purchased under
 agreements to
 resell                   260       241        68        27        36
                     --------- --------- --------- --------- ---------
    Total interest
     income           227,550   184,475   178,551   176,546   176,458
Interest Expense
Interest on deposits   36,835    27,191    26,656    27,554    29,247
Interest on short-term
 borrowings            14,898    10,262     7,241     6,539     5,390
Interest on long-term
 funding               17,360    13,806    12,775    13,378    14,684
                     --------- --------- --------- --------- ---------
    Total interest
     expense           69,093    51,259    46,672    47,471    49,321
                     --------- --------- --------- --------- ---------
Net Interest Income   158,457   133,216   131,879   129,075   127,137
Provision for loan
 losses                 3,603         -     5,889     5,176     9,603
                     --------- --------- --------- --------- ---------
Net interest income
 after provision for
 loan losses          154,854   133,216   125,990   123,899   117,534
Noninterest Income
Trust service fees      8,107     7,773     8,043     7,868     8,150
Service charges on
 deposit accounts      16,943    13,672    13,141    12,397    12,735
Mortgage banking, net   6,045       619    11,414     2,253     9,018
Credit card and
 other nondeposit
 fees                   8,183     6,253     6,074     5,671     5,646
Retail commissions     12,727    11,925    13,162     9,357     8,031
Bank owned life
 insurance income       2,525     3,580     3,641     3,355     3,417
Asset sale gains, net     432       309       218       222     1,366
Investment
 securities gains
 (losses), net           (719)       (6)     (569)    1,931         -
Other                   4,793     3,034     2,742     3,132     3,379
                     --------- --------- --------- --------- ---------
    Total
     noninterest
     income            59,036    47,159    57,866    46,186    51,742
Noninterest Expense
Personnel expense      65,193    53,467    53,612    52,276    54,391
Occupancy               8,297     6,939     6,864     7,472     6,710
Equipment               3,855     3,022     2,878     2,999     3,206
Data processing         5,966     5,865     6,128     5,673     5,731
Business development
 and advertising        4,271     3,990     4,057     2,657     4,165
Stationery and
 supplies               1,567     1,214     1,429     1,226     1,741
Other intangible
 amortization           1,699       935       934       782       870
Loan expense            2,328     1,152     1,670     1,386     1,446
Other                  16,791    12,447    14,415    12,413    15,125
                     --------- --------- --------- --------- ---------
    Total
     noninterest
     expense          109,967    89,031    91,987    86,884    93,385
                     --------- --------- --------- --------- ---------
Income before income
 taxes                103,923    91,344    91,869    83,201    75,891
Income tax expense     33,069    27,977    27,363    23,642    20,282
                     --------- --------- --------- --------- ---------
Net Income           $ 70,854  $ 63,367  $ 64,506  $ 59,559  $ 55,609
                     ========= ========= ========= ========= =========

Earnings Per Share:
  Basic              $   0.57  $   0.58  $   0.59  $   0.54  $   0.51
  Diluted            $   0.57  $   0.57  $   0.58  $   0.53  $   0.50
Average Shares
 Outstanding:
  Basic               123,509   110,137   110,116   110,294   109,965
  Diluted             125,296   111,699   111,520   111,830   111,499


----------------------------------------------------------------------
Selected Quarterly Information
Associated Banc-Corp
----------------------------------------------------------------------
(in thousands, except
 per share & full
 time equivalent
 employee data)     YTD 2004     YTD 2003   4th Qtr 2004 3rd Qtr 2004
----------------------------------------------------------------------
Summary of Operations
Net interest
 income              552,627      510,762       158,457      133,216
Provision for
 loan losses          14,668       46,813         3,603            -
Asset sale
 gains, net            1,181        1,569           432          309
Investment
 securities
 gains (losses),
 net                     637          702          (719)          (6)
Noninterest income
 (excluding
 securities &
 asset gains)        208,429      214,611        59,323       46,856
Noninterest
 expense             377,869      359,115       109,967       89,031
Income before
 income taxes        370,337      321,716       103,923       91,344
Income taxes         112,051       93,059        33,069       27,977
Net income           258,286      228,657        70,854       63,367
Taxable equivalent
 adjustment           25,528       24,903         6,342        6,395

----------------------------------------------------------------------
Per Common Share Data (1)
Net income:
  Basic             $   2.28     $   2.07      $   0.57     $   0.58
  Diluted               2.25         2.05          0.57         0.57
Dividends             0.9767       0.8867        0.2500       0.2500

Market Value:
  High              $  34.85     $  28.75      $  34.85     $  32.19
  Low                  27.09        21.43         32.08        28.81
  Close                33.23        28.53         33.23        32.07
Book value             15.55        12.26         15.55        13.18

----------------------------------------------------------------------
Performance Ratios
 (annualized)
Net interest margin     3.80%        3.84%         3.74%        3.76%
Return on average
 assets                 1.58         1.53          1.49         1.60
Return on average
 equity                17.22        17.58         15.46        17.76
Return on tangible
 average equity (2)    22.11        21.56
Efficiency ratio (3)   48.04        47.86         49.07        47.75
Effective tax rate     30.26        28.93         31.82        30.63
Dividend payout
 ratio (4)             42.84        42.83         43.86        43.10

----------------------------------------------------------------------
Average Balances
Assets           $16,365,762  $14,969,860   $18,956,445  $15,730,451
Earning assets    15,202,892   13,946,832    17,437,476   14,688,914
Interest-bearing
 liabilities      12,868,370   11,855,236    14,761,878   12,381,407
Loans             11,174,856   10,622,499    12,858,394   10,708,701
Deposits          10,144,528    9,299,506    11,658,646    9,621,557
Stockholders'
 equity            1,499,606    1,300,990     1,822,715    1,419,600
Stockholders'
 equity / assets        9.16%        8.69%         9.62%        9.02%
Goodwill and
 other intangible
 assets          $   331,638  $   240,445

----------------------------------------------------------------------
At Period End
Assets                                      $20,520,136  $16,135,761
Loans                                        13,881,887   10,830,627
Allowance for
 loan losses                                    189,762      175,007
Goodwill                                        685,378      232,564
Mortgage
 servicing
 rights, net                                     76,247       45,555
Other intangible
 assets                                          43,193       24,308
Deposits                                     12,786,239    9,677,273
Stockholders'
 equity                                       2,017,419    1,453,465
Stockholders'
 equity / assets                                   9.83%        9.01%
Shares outstanding,
 end of period                                  129,770      110,281
Shares repurchased
 during period                                      376            -
Average per share
 cost of shares
 repurchased
 during period                              $     33.25  $         -
Year-to-date
 shares repurchased
 during period                                    1,073          697
YTD average per
 share cost of
 shares repurchased
 during period                              $     30.43  $     28.91

----------------------------------------------------------------------
Selected trend information
Average full time
 equivalent employees                             4,746        3,979
Trust assets under
 management, at
 market value                                $4,600,000   $4,400,000
Mortgage loans
 originated for sale                            427,951      253,917
Portfolio serviced for
 others                                       9,543,000    6,011,000
Mortgage servicing
 rights, net /
 Portfolio
 serviced for
 others                                            0.80%        0.76%


----------------------------------------------------------------------
Selected Quarterly Information
Associated Banc-Corp
----------------------------------------------------------------------
(in thousands, except per share
 & full time equivalent
 employee data)                 2nd Qtr 2004 1st Qtr 2004 4th Qtr 2003
----------------------------------------------------------------------
Summary of Operations
Net interest income                 131,879      129,075      127,137
Provision for loan losses             5,889        5,176        9,603
Asset sale gains, net                   218          222        1,366
Investment securities gains
 (losses), net                         (569)       1,931            -
Noninterest income (excluding
 securities & asset gains)           58,217       44,033       50,376
Noninterest expense                  91,987       86,884       93,385
Income before income taxes           91,869       83,201       75,891
Income taxes                         27,363       23,642       20,282
Net income                           64,506       59,559       55,609
Taxable equivalent adjustment         6,387        6,404        6,230

----------------------------------------------------------------------
Per Common Share Data (1)
Net income:
  Basic                            $   0.59     $   0.54     $   0.51
  Diluted                              0.58         0.53         0.50
Dividends                            0.2500       0.2267       0.2267

Market Value:
  High                             $  30.13     $  30.37     $  28.75
  Low                                 27.09        28.08        25.87
  Close                               29.63        29.86        28.53
Book value                            12.53        12.67        12.26

----------------------------------------------------------------------
Performance Ratios (annualized)
Net interest margin                    3.80%        3.80%        3.81%
Return on average assets               1.67         1.57         1.49
Return on average equity              18.87        17.37        16.85
Efficiency ratio (3)                  46.82        48.40        50.82
Effective tax rate                    29.78        28.42        26.73
Dividend payout ratio (4)             42.37        41.98        44.44

----------------------------------------------------------------------
Average Balances
Assets                          $15,498,005  $15,261,277  $14,852,390
Earning assets                   14,480,701   14,185,569   13,828,992
Interest-bearing liabilities     12,231,733   12,083,003   11,637,646
Loans                            10,685,542   10,433,411   10,354,726
Deposits                          9,701,945    9,585,074    9,679,789
Stockholders' equity              1,374,632    1,378,804    1,309,167
Stockholders' equity / assets          8.87%        9.03%        8.81%
----------------------------------------------------------------------
At Period End
Assets                          $15,502,556  $15,510,868  $15,247,894
Loans                            10,556,603   10,486,610   10,291,810
Allowance for loan losses           177,980      177,717      177,622
Goodwill                            232,528      224,388      224,388
Mortgage servicing rights, net       48,735       39,649       42,477
Other intangible assets              25,242       20,250       21,032
Deposits                          9,583,592    9,702,758    9,792,843
Stockholders' equity              1,378,894    1,395,293    1,348,427
Stockholders' equity / assets          8.89%        9.00%        8.84%
Shares outstanding, end of
 period                             110,048      110,168      109,966
Shares repurchased during
 period                                 205          492          212
Average per share cost of
 shares repurchased during
 period                         $     27.93  $     29.32  $     28.18
Year-to-date shares repurchased
 during period                          697          492        3,091
YTD average per share cost of
 shares repurchased during
 period                         $     28.91  $     29.32  $     24.11

----------------------------------------------------------------------
Selected trend information
Average full time equivalent
 employees                            4,010        4,024        4,098
Trust assets under management,
 at market value                 $4,300,000   $4,300,000   $4,100,000
Mortgage loans originated for
 sale                               579,020      359,791      524,118
Portfolio serviced for others     6,010,000    5,904,000    5,928,000
Mortgage servicing rights,
 net / Portfolio serviced for
 others                                0.81%        0.67%        0.72%

----------------------------------------------------------------------



(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 gains, net, and asset sales gains, net.

(4) Ratio is based upon basic earnings per share.



----------------------------------------------------------------------
Financial Summary and Comparison
Associated Banc-Corp                         Three months ended
                                                December 31,
                                        -----------------------------
(in thousands)                              2004      2003  % Change
--------------------------------------- -----------------------------
Allowance for Loan Losses
Beginning balance                       $175,007  $176,223     (0.7%)
Balance related to acquisition            14,750         -       N/M
Provision for loan losses                  3,603     9,603    (62.5%)
Charge offs                               (5,710)  (10,476)   (45.5%)
Recoveries                                 2,112     2,272     (7.0%)
                                        -------------------
Net charge offs                           (3,598)   (8,204)   (56.1%)
                                        -------------------
Ending Balance                          $189,762  $177,622       6.8%
                                        ===================

                                                Year ended
                                                December 31,
                                        -----------------------------
(in thousands)                              2004      2003  % Change
--------------------------------------- -----------------------------
Allowance for Loan Losses
Beginning balance                       $177,622  $162,541       9.3%
Balance related to acquisition            14,750         -       N/M
Provision for loan losses                 14,668    46,813    (68.7%)
Charge offs                              (22,202)  (37,107)   (40.2%)
Recoveries                                 4,924     5,375     (8.4%)
                                        -------------------
Net charge offs                          (17,278)  (31,732)   (45.6%)
                                        -------------------
Ending Balance                          $189,762  $177,622       6.8%
                                        ===================



----------------------------------------------------------------------
Credit Quality
                                                              4Q04
                                        Dec 31,   Sept 30,  vs 3Q04
                                          2004      2004   % Change
                                        -----------------------------
Nonaccrual loans                        $112,761   $81,124      39.0%
Loans 90 or more days past due and
 still accruing                            2,153    10,309    (79.1%)
Restructured loans                            37        39     (5.1%)
                                        -------------------
    Total nonperforming loans            114,951    91,472      25.7%
Other real estate owned                    3,915     4,526    (13.5%)
                                        -------------------
    Total nonperforming assets           118,866    95,998      23.8%
                                        ===================
Provision for loan losses                  3,603         -       N/M
Net charge offs                            3,598     2,973      21.0%

Allowance for loan losses / loans           1.37%     1.62%
Allowance for loan losses /
 nonperforming loans                      165.08    191.32
Nonperforming loans / total loans           0.83      0.84
Nonperforming assets / total assets         0.58      0.59
Net charge offs / average loans
 (annualized)                               0.11      0.11
Year-to-date net charge offs / average
 loans                                      0.15      0.17


                                                               4Q04
                              June 30,  Mar 31,   Dec 31,     vs 4Q03
                                2004      2004      2003     % Change
                              ----------------------------------------
Nonaccrual loans               $80,622   $88,313  $113,944      (1.0%)
Loans 90 or more days past
 due and still accruing          5,207     5,258     7,495     (71.3%)
Restructured loans                  40        42        43     (14.0%)
                              -----------------------------
    Total nonperforming loans   85,869    93,613   121,482      (5.4%)
Other real estate owned          6,613     7,199     5,457     (28.3%)
                              -----------------------------
    Total nonperforming
     assets                     92,482   100,812   126,939      (6.4%)
                              =============================
Provision for loan losses        5,889     5,176     9,603     (62.5%)
Net charge offs                  5,626     5,081     8,204     (56.1%)

Allowance for loan losses /
 loans                            1.69%     1.69%     1.73%
Allowance for loan losses /
 nonperforming loans            207.27    189.84    146.21
Nonperforming loans / total
 loans                            0.81      0.89      1.18
Nonperforming assets / total
 assets                           0.60      0.65      0.83
Net charge offs / average
 loans (annualized)               0.21      0.20      0.31
Year-to-date net charge offs /
 average loans                    0.20      0.20      0.30


----------------------------------------------------------------------

Period End Loan Composition
                                                               4Q04
                                    Dec 31,       Sept 30,   vs 3Q04
                                     2004           2004     % Change
                                  ------------------------------------
Commercial, financial &
 agricultural                      $2,803,333   $2,479,764      13.0%
Real estate - construction          1,459,629    1,152,990      26.6%
Commercial real estate              3,933,131    3,242,009      21.3%
Lease financing                        50,718       49,423       2.6%
                                  ------------ ------------
  Commercial                        8,246,811    6,924,186      19.1%
  Residential mortgage              2,714,580    1,943,199      39.7%
Home equity (1)                     1,866,485    1,290,436      44.6%
Installment                         1,054,011      672,806      56.7%
                                  ------------ ------------
  Retail                            2,920,496    1,963,242      48.8%
                                  ------------ ------------
  Total loans                     $13,881,887  $10,830,627      28.2%
                                  ============ ============


Period End Loan Composition
                                                                4Q04
                        June 30,      Mar 31,     Dec 31,     vs 4Q03
                          2004         2004         2003      % Change
                      ------------------------------------------------
Commercial, financial
 & agricultural        $2,247,779   $2,123,846   $2,116,463      32.5%
Real estate -
 construction           1,118,284    1,094,597    1,077,731      35.4%
Commercial real estate  3,292,783    3,368,660    3,246,954      21.1%
Lease financing            48,979       45,998       38,968      30.2%
                      --------------------------------------
  Commercial            6,707,825    6,633,101    6,480,116      27.3%
  Residential
   mortgage             1,951,396    1,969,065    1,975,661      37.4%
Home equity (1)         1,231,077    1,204,541    1,138,311      64.0%
Installment               666,305      679,903      697,722      51.1%
                      --------------------------------------
  Retail                1,897,382    1,884,444    1,836,033      59.1%
                      --------------------------------------
  Total loans         $10,556,603  $10,486,610  $10,291,810      34.9%
                      ======================================

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


----------------------------------------------------------------------

Period End Deposit Composition
                                                                4Q04
                                      Dec 31,     Sept 30,    vs 3Q04
                                       2004         2004      % Change
                                   -----------------------------------
Demand                              $2,347,611  $1,867,905      25.7%
Savings                              1,116,158     936,975      19.1%
Interest-bearing demand              2,854,880   2,334,072      22.3%
Money market                         2,083,717   1,516,423      37.4%
Brokered CDs                           361,559     186,326      94.0%
Other time deposits                  4,022,314   2,835,572      41.9%
                                   ------------------------
  Total deposits                   $12,786,239  $9,677,273      32.1%
                                   ========================


Period End Deposit
 Composition                                                    4Q04
                          June 30,     Mar 31,     Dec 31,    vs 4Q03
                            2004        2004        2003    % Change
                         ---------------------------------------------
Demand                   $1,822,716  $1,755,485  $1,814,446      29.4%
Savings                     948,755     918,608     890,092      25.4%
Interest-bearing demand   2,355,287   2,375,492   2,330,478      22.5%
Money market              1,477,513   1,542,875   1,573,678      32.4%
Brokered CDs                263,435     230,983     165,130     119.0%
Other time deposits       2,715,886   2,879,315   3,019,019      33.2%
                         -----------------------------------
  Total deposits         $9,583,592  $9,702,758  $9,792,843      30.6%
                         ===================================

N/M - Not meaningful.


----------------------------------------------------------------------
Net Interest Income Analysis -
 Taxable Equivalent Basis
Associated Banc-Corp                  Year ended December 31, 2004
                                   -----------------------------------
                                      Average     Interest    Average
(in thousands)                        Balance     Income /    Yield /
                                                  Expense      Rate
                                   -----------------------------------

Earning assets:
 Loans: (1) (2) (3)
    Commercial                     $ 6,928,494 $  350,889        5.06%
    Residential mortgage             2,170,600    122,453        5.64
    Retail                           2,075,762    122,406        5.90
                                   -----------------------
       Total loans                  11,174,856    595,748        5.33
 Investments and other               4,028,036    196,902        4.89
                                   -----------------------
Total earning assets                15,202,892    792,650        5.21
 Other assets, net                   1,162,870
                                   ------------
Total assets                       $16,365,762
                                   ============

Interest-bearing liabilities:
 Savings deposits                  $   967,930  $   3,487        0.36%
 Interest-bearing demand deposits    2,406,280     19,874        0.83
 Money market deposits               1,628,208     14,259        0.88
 Time deposits, excluding Brokered
  CDs                                3,042,933     76,930        2.53
                                   -----------------------
    Total interest-bearing deposits,
     excluding Brokered CDs          8,045,351    114,550        1.42
 Brokered CDs                          232,066      3,686        1.59
                                   -----------------------
    Total interest-bearing
     deposits                        8,277,417    118,236        1.43
 Wholesale funding                   4,590,953     96,259        2.10
                                   -----------------------
Total interest-bearing liabilities  12,868,370    214,495        1.67
 Noninterest-bearing demand          1,867,111
 Other liabilities                     130,675
 Stockholders' equity                1,499,606
                                   ------------
Total liabilities and
 stockholders' equity              $16,365,762
                                   ============

                                                ----------
Net interest income and rate
 spread (1)                                     $ 578,155        3.54%
                                                ==========
Net interest margin (1)                                          3.80%
Taxable equivalent adjustment                   $  25,528
                                                ==========



                                       Year ended December 31, 2003
                                   -----------------------------------
                                      Average    Interest    Average
(in thousands)                        Balance    Income /    Yield /
                                                  Expense      Rate
                                   -----------------------------------

Earning assets:
 Loans: (1) (2) (3)
    Commercial                     $ 6,450,523  $ 329,695        5.11%
    Residential mortgage             2,377,438    142,359        5.99
    Retail                           1,794,538    107,808        6.01
                                   ------------ ----------
       Total loans                  10,622,499    579,862        5.46
 Investments and other               3,324,333    172,405        5.19
                                   ------------ ----------
Total earning assets                13,946,832    752,267        5.39
 Other assets, net                   1,023,028
                                   ------------
Total assets                       $14,969,860
                                   ============

Interest-bearing liabilities:
 Savings deposits                  $   928,147  $   4,875        0.53%
 Interest-bearing demand deposits    1,827,304     15,348        0.84
 Money market deposits               1,623,438     15,085        0.93
 Time deposits, excluding Brokered
  CDs                                3,063,873     84,957        2.77
                                   -----------------------
    Total interest-bearing deposits,
     excluding Brokered CDs          7,442,762    120,265        1.62
 Brokered CDs                          178,853      2,857        1.60
                                   -----------------------
    Total interest-bearing
     deposits                        7,621,615    123,122        1.62
 Wholesale funding                   4,233,621     93,480        2.21
                                   -----------------------
Total interest-bearing liabilities  11,855,236    216,602        1.83
 Noninterest-bearing demand          1,677,891
 Other liabilities                     135,743
 Stockholders' equity                1,300,990
                                   ------------
Total liabilities and
 stockholders' equity              $14,969,860
                                   ============

                                                ----------
Net interest income and rate
 spread (1)                                     $ 535,665        3.56%
                                                ==========
Net interest margin (1)                                          3.84%
Taxable equivalent adjustment                   $  24,903
                                                ==========



----------------------------------------------------------------------
                                    Three months ended December 31,
                                                   2004
                                   -----------------------------------
                                      Average    Interest    Average
                                      Balance    Income /    Yield /
                                                  Expense      Rate
                                   -----------------------------------

Earning assets:
 Loans: (1) (2) (3)
    Commercial                     $ 7,702,801  $ 104,124        5.29%
    Residential mortgage             2,552,396     36,050        5.63
    Retail                           2,603,197     39,751        6.07
                                   -----------------------
       Total loans                  12,858,394    179,925        5.52
 Investments and other               4,579,082     53,967        4.71
                                   -----------------------
Total earning assets                17,437,476    233,892        5.31
 Other assets, net                   1,518,969
                                   ------------
Total assets                       $18,956,445
                                   ============

Interest-bearing liabilities:
 Savings deposits                  $ 1,087,220  $     959        0.35%
 Interest-bearing demand deposits    2,525,312      5,688        0.90
 Money market deposits               1,918,149      5,012        1.04
 Time deposits, excluding Brokered
  CDs                                3,634,972     23,703        2.59
                                   -----------------------
    Total interest-bearing
     deposits, excluding Brokered
     CDs                             9,165,653     35,362        1.53
 Brokered CDs                          278,812      1,473        2.10
                                   -----------------------
    Total interest-bearing
     deposits                        9,444,465     36,835        1.55
 Wholesale funding                   5,317,413     32,258        2.38
                                   -----------------------
Total interest-bearing liabilities  14,761,878     69,093        1.85
 Noninterest-bearing demand          2,214,181
 Other liabilities                     157,671
 Stockholders' equity                1,822,715
                                   ------------
Total liabilities and
 stockholders' equity              $18,956,445
                                   ============

                                                ----------
Net interest income and rate
 spread (1)                                      $164,799        3.46%
                                                ==========
Net interest margin (1)                                          3.74%
Taxable equivalent adjustment                      $6,342
                                                ==========



                                    Three months ended December 31,
                                                   2003
                                   -----------------------------------
                                      Average    Interest    Average
                                      Balance     Income /   Yield /
                                                   Expense     Rate
                                   -----------------------------------

Earning assets:
 Loans: (1) (2) (3)
    Commercial                       $6,436,734   $80,185        4.88%
    Residential mortgage              2,105,442    31,045        5.86
    Retail                            1,812,550    26,325        5.75
                                   -----------------------
       Total loans                   10,354,726   137,555        5.23
 Investments and other                3,474,266    45,133        5.19
                                   -----------------------
Total earning assets                 13,828,992   182,688        5.22
 Other assets, net                    1,023,398
                                   -------------
Total assets                        $14,852,390
                                   =============

Interest-bearing liabilities:
 Savings deposits                      $922,336      $878        0.38%
 Interest-bearing demand deposits     2,179,546     4,353        0.79
 Money market deposits                1,572,197     3,391        0.86
 Time deposits, excluding Brokered
  CDs                                 3,067,720    20,132        2.60
                                   -----------------------
    Total interest-bearing
     deposits, excluding Brokered
     CDs                              7,741,799    28,754        1.47
 Brokered CDs                           162,116       493        1.21
                                   -----------------------
    Total interest-bearing
     deposits                         7,903,915    29,247        1.47
 Wholesale funding                    3,733,731    20,074        2.12
                                   -----------------------
Total interest-bearing liabilities   11,637,646    49,321        1.68
 Noninterest-bearing demand           1,775,874
 Other liabilities                      129,703
 Stockholders' equity                 1,309,167
                                   -------------
Total liabilities and
 stockholders' equity               $14,852,390
                                   =============

                                                 ---------
Net interest income and rate
 spread (1)                                      $133,367        3.54%
                                                 =========
Net interest margin (1)                                          3.81%
Taxable equivalent adjustment                      $6,230
                                                 =========

----------------------------------------------------------------------

(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.


Selected Data on First Federal Acquisition
Associated Banc-Corp

    On October 29, 2004, the Corporation consummated its acquisition
of First Federal Capital Corp, based in La Crosse, Wisconsin. The
acquisition was accounted for under the purchase method; thus, the
results of operations of First Federal prior to the consummation date
were not included in the accompanying consolidated financial
statements. As of acquisition, First Federal operated a $4 billion
savings bank with over 90 banking locations serving more than 40
communities in Wisconsin, northern Illinois, and southern Minnesota,
building upon and complimenting the Corporation's footprint.

    Per the definitive agreement First Federal shareholders received
0.9525 shares (restated for the Corporation's 3-for-2 stock split in
May 2004) of the Corporation's common stock for each share of First
Federal common stock held, an equivalent amount of cash, or a
combination thereof. The Merger Agreement provided that the aggregate
consideration paid by the Corporation for the First Federal
outstanding common stock must be equal to 90% stock and 10% cash, with
the cash consideration based upon the Corporation's closing stock
price on the effective date of the merger. The Corporation's closing
stock price on October 29, 2004 was $34.69 per share. The value of the
common stock consideration was based upon the Corporation's average
market price surrounding the date of signing and announcing the
definitive agreement. Based upon the aforementioned values for the 90%
stock/10% cash, the Corporation issued approximately 19.4 million
shares of common stock (valued at approximately $535 million) and $75
million in cash.

    To record the transaction, the Corporation assigned estimated fair
values to the assets acquired and liabilities assumed. The excess cost
of the acquisition over the estimated fair value of the net assets
acquired was allocated to identifiable intangible assets with the
remainder then allocated to goodwill. The following table summarizes
the estimated fair value of the assets acquired and liabilities
assumed of First Federal at the date of the acquisition.

       (In millions, except shares issued)
       Investment securities available for sale       $       665
       Loans                                                2,742
       Allowance for loan losses                              (15)
       Other assets                                           256
       Mortgage servicing rights                               32
       Intangible assets                                       21
       Goodwill                                               452
                                                 -----------------
          Total assets acquired                             4,153
                                                 -----------------
       Deposits                                             2,701
       Borrowings                                             768
       Other liabilities                                       56
          Total liabilities acquired                        3,525
                                                 -----------------
          Net assets acquired                         $       628
                                                 =================

       Cash consideration                             $        90
       Stockholders' equity addition                          538
                                                 -----------------
                                                      $       628
                                                 =================
       Shares issued (actual)                          19,446,813
                                                 =================
       Loans:
       Commercial                                     $     1,075
       Residential mortgage                                   786
       Home equity                                            475
       Installment                                            406
                                                 -----------------
          Total loans                                 $     2,742
                                                 =================
       Deposits:
       Noninterest-bearing demand deposits            $       475
       Interest-bearing demand deposits                       239
       Savings deposits                                       187
       Money market deposits                                  573
       Time deposits                                        1,227
                                                 -----------------
          Total deposits                              $     2,701
                                                 =================

    CONTACT: Associated Banc-Corp
             Investors:
             Joe Selner, 920-491-7120
             or
             Media:
             Jon Drayna, 920-491-7006

    SOURCE: Associated Banc-Corp