Press Release Details

Associated Banc-Corp Earns $2.38 Per Diluted Share in 2006, 57 Cents in Fourth Quarter

01/18/2007

GREEN BAY, Wis.--(BUSINESS WIRE)--

Associated Banc-Corp (NASDAQ: ASBC):

    --  Net income $316.6 million for 2006

    --  Net charge offs 12 basis points of average loans for the year

    --  Margin of 3.62% for 2006

    --  Deposits up 5% over prior year end

    --  Accelerated stock buyback executed in fourth quarter

Associated Banc-Corp (NASDAQ: ASBC) earned $0.57 per diluted share in the fourth quarter of 2006, compared to $0.64 in the fourth quarter of 2005. Net income for the fourth quarter of 2006 was $74.5 million, compared to $87.6 million for the fourth quarter of 2005.

The fourth quarters of both years included certain items that impact comparability between the year-over-year quarters. The fourth quarter of 2006 included a $2.1 million market valuation loss on the transfer of $0.3 billion of residential mortgages to loans held for sale and $1.8 million of severance expense, while the fourth quarter of 2005 included a $5.3 million gain on the sale of $1.5 billion of its mortgage portfolio serviced for others. Excluding these items, as well as asset and investment sales gains (losses) from both quarters, earnings per share were essentially level on a comparable quarter basis.

Associated earned $2.38 per diluted share in 2006, versus $2.43 in 2005. Net income for 2006 was $316.6 million, versus $320.2 million in 2005.

"While the operating environment in 2006 was challenging, we made meaningful progress toward improving the quality of earnings and executing our strategic objectives. We reduced wholesale funding by nearly $2 billion, realigned resources to increase focus on markets with more potential, improved fee income contribution and sustained credit quality. In addition, we aggressively managed expenses while continuing to focus on core deposit growth," Associated Chairman and CEO Paul S. Beideman said.

Return on average assets (ROA) and return on average equity (ROE) for 2006 were 1.50 percent and 13.89 percent, respectively. This compares to an ROA of 1.53 percent and an ROE of 15.24 percent in 2005. 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 23.31 percent for 2006 compared to 23.47 percent in 2005. Book value per share rose to $17.44 as of Dec. 31, 2006, compared to $17.15 a year earlier.

Deposits at Dec. 31, 2006, were $14.3 billion, up 5 percent over year-end 2005, with growth in noninterest-bearing demand, money market, and time deposits overcoming declines in savings and interest-bearing demand deposits. Average deposits for 2006 were up 9 percent over 2005.

At Dec. 31, 2006, loans were $14.9 billion (impacted by a $0.3 billion transfer of residential mortgages to loans held for sale in December) compared to loans of $15.2 billion at year-end 2005. Without the transfer, loans were unchanged between year-end 2006 and 2005. Commercial, financial and agricultural loans grew $260 million, or 8 percent, and home equity loans grew $140 million, or 7 percent during 2006. These increases helped offset decreases in residential mortgages and installment loans, while commercial real estate loans were level. Average loan balances in 2006 were up 7 percent compared to 2005. At year-end 2006, the ratio of loans to deposits was 104 percent compared to 112 percent at year-end 2005.

In 2006 net charge offs were 0.12 percent of average loans compared to net charge offs of 0.09 percent of average loans in 2005. The allowance for loan losses at Dec. 31, 2006, was 1.37 percent of total loans compared to 1.34 percent at Dec. 31, 2005.

Associated's net interest income for 2006 was $669.5 million, versus $672.3 million for 2005. Net interest margin was 3.62 percent for 2006, versus 3.64 percent for 2005. The company's wholesale funding reduction strategy decreased the amount of lower-yielding securities in the investment portfolio and reduced the level of higher-costing wholesale borrowings. This, coupled with growth in average deposits, contributed to the company improving its margin in each of the last three quarters of 2006, despite the unfavorable yield curve.

Total noninterest income was $295.5 million for 2006, up 2 percent from $291.1 million for 2005. Core fee-based revenues (including trust service fees, service charges on deposit accounts, card-based and other non-deposit fees, and retail commissions) totaled $233.0 million, up 8 percent over $215.8 million for 2005, due to a combination of increased volumes and improved pricing.

Net mortgage banking income was $14.8 million for 2006, compared to $36.4 million in 2005. The majority of this decrease was attributable to the $2.1 million loss on market valuation associated with the fourth quarter 2006 transfer of $0.3 billion of portfolio loans to loans held for sale, the $5.3 million gain on the bulk servicing sale in fourth quarter 2005, and less favorable valuation recoveries on the mortgage servicing rights asset in 2006.

Noninterest expense grew a modest 3 percent between 2006 and 2005, including the full year impact of the acquisition of State Financial.

The effective tax rate for 2006 was 29.60 percent, versus 31.86 percent for 2005. The decline was primarily due to the resolution of certain multi-jurisdictional tax issues, as well as changes in exposure of uncertain tax positions in 2006, both resulting in the reduction of tax liabilities and income tax expense.

The company paid dividends of $1.14 per share in 2006, up 8 percent from $1.06 in 2005, making 2006 Associated's 36th consecutive year of increasing dividends.

Associated repurchased approximately 8 million shares of its common stock in 2006 at an average cost of $32.83 per share. Associated starts 2007 with an authorization to repurchase approximately 1.4 million additional shares.

Associated will host a live conference call for investors and analysts at 3 p.m. CST today. The toll-free dial-in number for the live call is 888-694-4769. The number for international callers is 973-582-2757. Participants should ask the operator for the Associated Banc-Corp 2006 earnings call, or for call ID number 8298239. A replay of the call will be available from 6 p.m. CDT today through Feb. 1 by calling 877-519-4471 (toll-free) domestically or 973-341-3080 internationally. The call ID number, 8298239, is required to access the replay.

Associated Banc-Corp, headquartered in Green Bay, Wis., is a diversified bank holding company with total assets of $21 billion. Associated has more than 315 banking offices serving more than 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 to be filed on Form 10-K.

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

Consolidated Balance Sheets (Unaudited)
Associated Banc-Corp
                                   December 31  December 31
(in thousands)                        2006         2005      % Change
----------------------------------------------------------------------
Assets
Cash and due from banks               $458,344     $460,230     (0.4%)
Interest-bearing deposits in other
 financial institutions                 10,505       14,254    (26.3%)
Federal funds sold and securities
 purchased
 under agreements to resell             13,187       17,811    (26.0%)
Securities available for sale, at
 fair value                          3,436,621    4,711,605    (27.1%)
Loans held for sale                    370,758       57,710     542.5%
Loans                               14,881,526   15,206,464     (2.1%)
Allowance for loan losses             (203,481)    (203,404)      0.0%
                                   ------------ ------------
    Loans, net                      14,678,045   15,003,060     (2.2%)
Premises and equipment, net            196,007      206,153     (4.9%)
Goodwill                               871,629      877,680     (0.7%)
Other intangible assets, net           109,234      120,358     (9.2%)
Other assets                           717,054      631,221      13.6%
                                   ------------ ------------
    Total assets                   $20,861,384  $22,100,082     (5.6%)
                                   ============ ============

Liabilities and Stockholders'
 Equity
Noninterest-bearing deposits        $2,756,222   $2,504,926      10.0%
Interest-bearing deposits,
 excluding Brokered CDs             10,922,274   10,538,856       3.6%
Brokered CDs                           637,575      529,307      20.5%
                                   ------------ ------------
    Total deposits                  14,316,071   13,573,089       5.5%
Short-term borrowings                2,042,685    2,666,307    (23.4%)
Long-term funding                    2,071,142    3,348,476    (38.1%)
Accrued expenses and other
 liabilities                           185,993      187,232     (0.7%)
                                   ------------ ------------
    Total liabilities               18,615,891   19,775,104     (5.9%)
Stockholders' Equity
  Preferred stock                            -            -
  Common stock                           1,304        1,357     (3.9%)
  Surplus                            1,120,934    1,301,004    (13.8%)
  Retained earnings                  1,189,658    1,029,247      15.6%
  Accumulated other comprehensive
   loss                                (16,453)      (3,938)    317.8%
  Deferred compensation                      -       (2,081)  (100.0%)
  Treasury stock                       (49,950)        (611)      N/M
                                   ------------ ------------
    Total stockholders' equity       2,245,493    2,324,978     (3.4%)
                                   ------------ ------------
    Total liabilities and
     stockholders' equity          $20,861,384  $22,100,082     (5.6%)
                                   ============ ============

N/M = Not Meaningful.
----------------------------------------------------------------------

Consolidated Statements of
 Income (Unaudited)
Associated Banc-Corp
                                For The Three Months Ended,
                                       December 31,
                                ---------------------------
(in thousands, except per share
 amounts)                                  2006       2005  % Change
----------------------------------------------------------------------
Interest Income
Interest and fees on loans             $282,918   $252,443      12.1%
Interest and dividends on
 investment securities and
 deposits in other financial
 institutions
  Taxable                                29,962     41,486    (27.8%)
  Tax-exempt                              9,794     10,325     (5.1%)
Interest on federal funds sold
 and securities purchased under
 agreements to resell                       292        289       1.0%
                                ---------------- ----------
    Total interest income               322,966    304,543       6.0%
Interest Expense
Interest on deposits                     98,757     66,934      47.5%
Interest on short-term
 borrowings                              31,971     26,828      19.2%
Interest on long-term funding            26,174     35,186    (25.6%)
                                ---------------- ----------
    Total interest expense              156,902    128,948      21.7%
                                ---------------- ----------
Net Interest Income                     166,064    175,595     (5.4%)
Provision for loan losses                 7,068      3,676      92.3%
                                ---------------- ----------
Net interest income after
 provision for loan losses              158,996    171,919     (7.5%)
Noninterest Income
Trust service fees                        9,941      9,055       9.8%
Service charges on deposit
 accounts                                24,214     23,073       4.9%
Mortgage banking, net                     1,735     12,166    (85.7%)
Card-based and other nondeposit
 fees                                    11,267     10,033      12.3%
Retail commissions                       15,053     13,624      10.5%
Bank owned life insurance income          5,102      3,022      68.8%
Asset sale gains, net                        91      2,766       N/M
Investment securities gains
 (losses), net                             (436)     1,179       N/M
Other                                     7,568      6,126      23.5%
                                ---------------- ----------
    Total noninterest income             74,535     81,044     (8.0%)
Noninterest Expense
Personnel expense                        68,315     68,619     (0.4%)
Occupancy                                10,971     10,287       6.6%
Equipment                                 4,300      4,361     (1.4%)
Data processing                           8,033      7,972       0.8%
Business development and
 advertising                              4,365      4,999    (12.7%)
Stationery and supplies                   1,737      1,869     (7.1%)
Other intangible amortization             1,999      2,418    (17.3%)
Other                                    24,678     25,014     (1.3%)
                                ---------------- ----------
    Total noninterest expense           124,398    125,539     (0.9%)
                                ---------------- ----------
Income before income taxes              109,133    127,424    (14.4%)
Income tax expense                       34,632     39,783    (12.9%)
                                ---------------- ----------
Net Income                              $74,501    $87,641    (15.0%)
                                ================ ==========

Earnings Per Share:
  Basic                                   $0.58      $0.65    (10.8%)
  Diluted                                 $0.57      $0.64    (10.9%)
Average Shares Outstanding:
  Basic                                 129,202    135,684     (4.8%)
  Diluted                               130,366    137,005     (4.8%)

N/M - Not meaningful.


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

Consolidated Statements of Income
 (Unaudited)
Associated Banc-Corp
                                       For The Year Ended,
                                          December 31,
                                     -----------------------
(in thousands, except per share
 amounts)                                   2006       2005  % Change
----------------------------------------------------------------------
Interest Income
Interest and fees on loans            $1,106,903   $889,374      24.5%
Interest and dividends on investment
 securities and deposits in other
 financial institutions
  Taxable                                131,952    164,404    (19.7%)
  Tax-exempt                              39,434     39,310       0.3%
Interest on federal funds sold and
 securities purchased under
 agreements to resell                      1,090        937      16.3%
                                     ------------ ----------
    Total interest income              1,279,379  1,094,025      16.9%
Interest Expense
Interest on deposits                     363,953    213,052      70.8%
Interest on short-term borrowings        129,791     89,356      45.3%
Interest on long-term funding            116,086    119,362     (2.7%)
                                     ------------ ----------
    Total interest expense               609,830    421,770      44.6%
                                     ------------ ----------
Net Interest Income                      669,549    672,255     (0.4%)
Provision for loan losses                 19,056     13,019      46.4%
                                     ------------ ----------
Net interest income after provision
 for loan losses                         650,493    659,236     (1.3%)
Noninterest Income
Trust service fees                        37,484     35,017       7.0%
Service charges on deposit accounts       91,593     86,783       5.5%
Mortgage banking, net                     14,801     36,395    (59.3%)
Card-based and other nondeposit fees      42,661     37,439      13.9%
Retail commissions                        61,256     56,604       8.2%
Bank owned life insurance income          16,155      9,942      62.5%
Asset sale gains, net                        304      3,945       N/M
Investment securities gains (losses),
 net                                       4,722      4,116       N/M
Other                                     26,525     20,845      27.2%
                                     ------------ ----------
    Total noninterest income             295,501    291,086       1.5%
Noninterest Expense
Personnel expense                        283,431    274,941       3.1%
Occupancy                                 43,825     38,961      12.5%
Equipment                                 17,466     16,792       4.0%
Data processing                           31,451     29,534       6.5%
Business development and advertising      16,857     17,661     (4.6%)
Stationery and supplies                    7,082      6,956       1.8%
Other intangible amortization              8,903      8,607       3.4%
Other                                     87,200     87,011       0.2%
                                     ------------ ----------
    Total noninterest expense            496,215    480,463       3.3%
                                     ------------ ----------
Income before income taxes               449,779    469,859     (4.3%)
Income tax expense                       133,134    149,698    (11.1%)
                                     ------------ ----------
Net Income                              $316,645   $320,161     (1.1%)
                                     ============ ==========

Earnings Per Share:
  Basic                                    $2.40      $2.45     (2.0%)
  Diluted                                  $2.38      $2.43     (2.1%)
Average Shares Outstanding:
  Basic                                  132,006    130,554       1.1%
  Diluted                                133,132    131,931       0.9%

N/M - Not meaningful.
----------------------------------------------------------------------

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

(in thousands,         4Q06      3Q06      2Q06      1Q06      4Q05
 except per share
 amounts)
----------------------------------------------------------------------
Interest Income
Interest and fees on
 loans               $282,918  $284,397  $278,573  $261,015  $252,443
Interest and
 dividends on
 investment
 securities
 and deposits with
  other financial
  institutions
  Taxable              29,962    30,225    32,649    39,116    41,486
  Tax-exempt            9,794     9,691     9,786    10,163    10,325
Interest on federal
 funds sold and
 securities
 purchased under
  agreements to
  resell                  292       260       289       249       289
                     --------- --------- --------- --------- ---------
    Total interest
     income           322,966   324,573   321,297   310,543   304,543
Interest Expense
Interest on deposits   98,757    99,242    88,076    77,878    66,934
Interest on short-
 term borrowings       31,971    30,450    34,126    33,244    26,828
Interest on long-
 term funding          26,174    26,664    30,696    32,552    35,186
                     --------- --------- --------- --------- ---------
    Total interest
     expense          156,902   156,356   152,898   143,674   128,948
                     --------- --------- --------- --------- ---------
Net Interest Income   166,064   168,217   168,399   166,869   175,595
Provision for loan
 losses                 7,068     3,837     3,686     4,465     3,676
                     --------- --------- --------- --------- ---------
Net interest income
 after provision for
 loan losses          158,996   164,380   164,713   162,404   171,919
Noninterest Income
Trust service fees      9,941     9,339     9,307     8,897     9,055
Service charges on
 deposit accounts      24,214    23,438    22,982    20,959    23,073
Mortgage banking,
 net                    1,735     2,833     5,829     4,404    12,166
Card-based and other
 nondeposit fees       11,267    10,461    11,047     9,886    10,033
Retail commissions     15,053    14,360    16,365    15,478    13,624
Bank owned life
 insurance income       5,102     4,390     3,592     3,071     3,022
Asset sale gains
 (losses), net             91        89       354      (230)    2,766
Investment
 securities gains
 (losses), net           (436)    1,164     1,538     2,456     1,179
Other                   7,568     6,911     6,194     5,852     6,126
                     --------- --------- --------- --------- ---------
    Total
     noninterest
     income            74,535    72,985    77,208    70,773    81,044
Noninterest Expense
Personnel expense      68,315    71,321    74,492    69,303    68,619
Occupancy              10,971    10,442    10,654    11,758    10,287
Equipment               4,300     4,355     4,223     4,588     4,361
Data processing         8,033     7,668     7,711     8,039     7,972
Business development
 and advertising        4,365     4,142     4,101     4,249     4,999
Stationery and
 supplies               1,737     1,787     1,784     1,774     1,869
Other intangible
 amortization           1,999     2,280     2,281     2,343     2,418
Other                  24,678    21,691    19,414    21,417    25,014
                     --------- --------- --------- --------- ---------
    Total
     noninterest
     expense          124,398   123,686   124,660   123,471   125,539
                     --------- --------- --------- --------- ---------
Income before income
 taxes                109,133   113,679   117,261   109,706   127,424
Income tax expense     34,632    36,791    33,712    27,999    39,783
                     --------- --------- --------- --------- ---------
Net Income            $74,501   $76,888   $83,549   $81,707   $87,641
                     ========= ========= ========= ========= =========

Earnings Per Share:
  Basic                 $0.58     $0.58     $0.63     $0.60     $0.65
  Diluted               $0.57     $0.58     $0.63     $0.60     $0.64
Average Shares
 Outstanding:
  Basic               129,202   131,520   132,259   135,114   135,684
  Diluted             130,366   132,591   133,441   136,404   137,005
Selected Quarterly Information
Associated Banc-Corp


----------------------------------------------------------------------
(in thousands,
 except per share &
 full time
 equivalent
 employee data)      YTD 2006     YTD 2005   4th Qtr 2006 3rd Qtr 2006
----------------------------------------------------------------------
Summary of
 Operations
Net interest income    669,549      672,255      166,064      168,217
Provision for loan
 losses                 19,056       13,019        7,068        3,837
Asset sale gains
 (losses), net             304        3,945           91           89
Investment
 securities gains
 (losses), net           4,722        4,116         (436)       1,164
Noninterest income
 (excluding
 securities & asset
 gains)                290,475      283,025       74,880       71,732
Noninterest expense    496,215      480,463      124,398      123,686
Income before
 income taxes          449,779      469,859      109,133      113,679
Income taxes           133,134      149,698       34,632       36,791
Net income             316,645      320,161       74,501       76,888
Taxable equivalent
 adjustment             26,233       25,509        6,568        6,495

----------------------------------------------------------------------
Per Common Share
 Data (1)
Net income:
  Basic                  $2.40        $2.45        $0.58        $0.58
  Diluted                 2.38         2.43         0.57         0.58
Dividends                 1.14         1.06         0.29         0.29
Market Value:
  High                  $35.13       $34.74       $35.13       $32.58
  Low                    30.27        29.09        32.13        30.27
  Close                  34.88        32.55        34.88        32.50
Book value               17.44        17.15        17.44        17.44

----------------------------------------------------------------------
Performance Ratios
 (annualized)
Earning assets
 yield                    6.79%        5.84%        6.95%        6.89%
Interest-bearing
 liabilities rate         3.71         2.57         3.93         3.84
Net interest margin       3.62         3.64         3.64         3.63
Return on average
 assets                   1.50         1.53         1.43         1.46
Return on average
 equity                  13.89        15.24        13.19        13.36
Return on tangible
 average equity (2)      23.31        23.47        22.31        22.32
Efficiency ratio
 (3)                     50.31        48.99        50.26        50.19
Effective tax rate       29.60        31.86        31.73        32.36
Dividend payout
 ratio (4)               47.50        43.27        50.00        50.00

----------------------------------------------------------------------
Average Balances
Assets             $21,162,099  $20,921,575  $20,635,203  $20,891,001
Earning assets      19,229,849   19,181,630   18,713,784   18,968,584
Interest-bearing
 liabilities        16,434,947   16,410,899   15,765,774   16,070,975
Loans               15,370,090   14,347,707   15,233,207   15,404,223
Deposits            13,623,703   12,462,981   13,748,444   13,884,404
Wholesale funding    5,161,192    6,207,846    4,547,042    4,636,853
Stockholders'
 equity              2,279,376    2,101,389    2,240,143    2,283,933
Stockholders'
 equity / assets         10.77%       10.04%       10.86%       10.93%


----------------------------------------------------------------------
At Period End
Assets                                       $20,861,384  $20,926,523
Loans                                         14,881,526   15,284,608
Allowance for loan
 losses                                          203,481      203,442
Goodwill                                         871,629      871,629
Mortgage servicing
 rights, net                                      66,620       67,931
Other intangible
 assets, net                                      42,614       44,613
Deposits                                      14,316,071   14,208,545
Wholesale funding                              4,113,827    4,277,636
Stockholders'
 equity                                        2,245,493    2,270,380
Stockholders'
 equity / assets                                   10.76%       10.85%
Tangible equity /
 tangible assets
 (5)                                                6.67%        6.77%
Shares outstanding,
 end of period                                   128,747      130,216
Shares repurchased
 during period                                     1,957        2,000
Average per share
 cost of shares
 repurchased during
 period                                           $33.11       $31.43
Year-to-date shares
 repurchased during
 period                                            8,018        6,061
YTD average per
 share cost of
 shares repurchased
 during period                                    $32.83       $32.74

----------------------------------------------------------------------
Selected trend
 information
Average full time
 equivalent
 employees                                         5,084        5,117
Trust assets under
 management, at
 market value                                 $5,800,000   $5,500,000
Mortgage loans
 originated for
 sale                                            374,427      388,914
Portfolio serviced
 for others                                    8,330,000    8,226,000
Mortgage servicing
 rights, net /
 Portfolio serviced
 for others                                         0.80%        0.83%

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


----------------------------------------------------------------------
(in thousands,
 except per share &
 full time
 equivalent
 employee data)                 2nd Qtr 2006 1st Qtr 2006 4th Qtr 2005
----------------------------------------------------------------------
Summary of
 Operations
Net interest income                 168,399      166,869      175,595
Provision for loan
 losses                               3,686        4,465        3,676
Asset sale gains
 (losses), net                          354         (230)       2,766
Investment
 securities gains
 (losses), net                        1,538        2,456        1,179
Noninterest income
 (excluding
 securities & asset
 gains)                              75,316       68,547       77,099
Noninterest expense                 124,660      123,471      125,539
Income before
 income taxes                       117,261      109,706      127,424
Income taxes                         33,712       27,999       39,783
Net income                           83,549       81,707       87,641
Taxable equivalent
 adjustment                           6,503        6,667        6,766

----------------------------------------------------------------------
Per Common Share
 Data (1)
Net income:
  Basic                               $0.63        $0.60        $0.65
  Diluted                              0.63         0.60         0.64
Dividends                              0.29         0.27         0.27
Market Value:
  High                               $34.45       $34.83       $33.23
  Low                                 30.69        32.75        29.09
  Close                               31.53        33.98        32.55
Book value                            17.20        16.98        17.15

----------------------------------------------------------------------
Performance Ratios
 (annualized)
Earning assets
 yield                                 6.74%        6.38%        6.12%
Interest-bearing
 liabilities rate                      3.65         3.37         2.98
Net interest margin                    3.59         3.48         3.59
Return on average
 assets                                1.58         1.52         1.58
Return on average
 equity                               14.86        14.16        14.99
Return on tangible
 average equity (2)                   25.18        23.48        22.70
Efficiency ratio
 (3)                                  49.82        51.00        48.38
Effective tax rate                    28.75        25.52        31.22
Dividend payout
 ratio (4)                            46.03        45.00        41.54

----------------------------------------------------------------------
Average Balances
Assets                          $21,266,792  $21,871,969  $22,022,165
Earning assets                   19,342,628   19,910,420   20,080,758
Interest-bearing
 liabilities                     16,717,761   17,204,860   17,090,134
Loans                            15,515,789   15,327,803   15,154,225
Deposits                         13,534,725   13,319,664   13,282,910
Wholesale funding                 5,391,108    6,092,275    6,280,793
Stockholders'
 equity                           2,254,933    2,339,539    2,320,134
Stockholders'
 equity / assets                      10.60%       10.70%       10.54%


----------------------------------------------------------------------
At Period End
Assets                          $21,128,354  $21,518,860  $22,100,082
Loans                            15,405,630   15,539,187   15,206,464
Allowance for loan
 losses                             203,411      203,408      203,404
Goodwill                            875,727      875,727      877,680
Mortgage servicing
 rights, net                         69,282       68,116       68,841
Other intangible
 assets, net                         46,893       49,174       51,517
Deposits                         13,646,408   13,616,870   13,573,089
Wholesale funding                 5,033,961    5,496,039    6,014,783
Stockholders'
 equity                           2,274,860    2,244,695    2,324,978
Stockholders'
 equity / assets                      10.77%       10.43%       10.52%
Tangible equity /
 tangible assets
 (5)                                   6.69%        6.41%        6.59%
Shares outstanding,
 end of period                      132,283      132,167      135,602
Shares repurchased
 during period                           31        4,030          974
Average per share
 cost of shares
 repurchased during
 period                                  $-       $33.63       $30.82
Year-to-date shares
 repurchased during
 period                               4,061        4,030        3,496
YTD average per
 share cost of
 shares repurchased
 during period                       $33.38       $33.63       $32.43

----------------------------------------------------------------------
Selected trend
 information
Average full time
 equivalent
 employees                            5,112        5,147        5,113
Trust assets under
 management, at
 market value                    $5,200,000   $5,200,000   $5,000,000
Mortgage loans
 originated for
 sale                               359,361      246,724      356,280
Portfolio serviced
 for others                       8,134,000    8,050,000    8,028,000
Mortgage servicing
 rights, net /
 Portfolio serviced
 for others                            0.85%        0.85%        0.86%

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


(1) Per share data adjusted retroactively for stock splits & stock
 dividends.
(2) Return on tangible average equity = Net income divided by average
 equity excluding average goodwill & 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, & asset sales gains, net.
(4) Ratio is based upon basic earnings per share.
(5) Tangible equity to tangible assets = Stockholders' equity
 excluding goodwill & other intangible assets divided by assets
 excluding goodwill & other intangible assets. This is a non-GAAP
 financial measure.
----------------------------------------------------------------------

Financial Summary and Comparison
Associated Banc-Corp
                                          Three months ended
                                             December 31,
                                          ---------------------------
(in thousands)                              2006      2005   % Change
----------------------------------------- ----------------------------
Allowance for Loan Losses
Beginning balance                         $203,442  $190,080     7.0%
Balance related to acquisition                   -    13,283 (100.0%)
Provision for loan losses                    7,068     3,676    92.3%
Charge offs                                (10,574)  (11,142)  (5.1%)
Recoveries                                   3,545     7,507  (52.8%)
                                          -------------------
Net charge offs                             (7,029)   (3,635)   93.4%
                                          -------------------
Ending Balance                            $203,481  $203,404     0.0%
                                          ===================



                                              Year Ended
                                             December 31,
                                          ----------------------------
(in thousands)                              2006      2005   % Change
----------------------------------------------------------------------
Allowance for Loan Losses
Beginning balance                         $203,404  $189,762      7.2%
Balance related to acquisition                   -    13,283  (100.0%)
Provision for loan losses                   19,056    13,019     46.4%
Charge offs                                (30,507)  (27,743)    10.0%
Recoveries                                  11,528    15,083   (23.6%)
                                          -------------------
Net charge offs                            (18,979)  (12,660)    49.9%
                                          -------------------
Ending Balance                            $203,481  $203,404      0.0%
                                          ===================
----------------------------------------------------------------------


Credit Quality                                               4Q06 vs
                                                                3Q06
                                          Dec 31,   Sept 30,
                                             2006      2006  % Change
                                          ----------------------------
Nonaccrual loans                          $136,734  $123,743     10.5%
Loans 90 or more days past due and still
 accruing                                    5,725     4,826     18.6%
Restructured loans                              26        28    (7.1%)
                                          -------------------
    Total nonperforming loans              142,485   128,597     10.8%
Other real estate owned                     14,417    13,866      4.0%
                                          -------------------
    Total nonperforming assets             156,902   142,463     10.1%
                                          ===================
Provision for loan losses                    7,068     3,837     84.2%
Net charge offs                              7,029     3,806     84.7%

Allowance for loan losses / loans             1.37%     1.33%
Allowance for loan losses / nonperforming
 loans                                      142.81    158.20
Nonperforming loans / total loans             0.96      0.84
Nonperforming assets / total assets           0.75      0.68
Net charge offs / average loans
 (annualized)                                 0.18      0.10
Year-to-date net charge offs / average
 loans                                        0.12      0.10


Credit Quality                                               4Q06 vs
                                                                4Q05
                                  June 30, March 31, Dec 31,
                                    2006      2006     2005  % Change
                                  ------------------------------------
Nonaccrual loans                  $95,426  $102,824  $95,313     43.5%
Loans 90 or more days past due and
 still accruing                     7,591     7,068    3,270     75.1%
Restructured loans                     29        31       32   (18.8%)
                                  ---------------------------
    Total nonperforming loans     103,046   109,923   98,615     44.5%
Other real estate owned            14,947    11,676   11,336     27.2%
                                  ---------------------------
    Total nonperforming assets    117,993   121,599  109,951     42.7%
                                  ===========================
Provision for loan losses           3,686     4,465    3,676     92.3%
Net charge offs                     3,683     4,461    3,635     93.4%

Allowance for loan losses / loans    1.32%     1.31%    1.34%
Allowance for loan losses /
 nonperforming loans               197.40    185.05   206.26
Nonperforming loans / total loans    0.67      0.71     0.65
Nonperforming assets / total
 assets                              0.56      0.57     0.50
Net charge offs / average loans
 (annualized)                        0.10      0.12     0.10
Year-to-date net charge offs /
 average loans                       0.11      0.12     0.09
----------------------------------------------------------------------


Period End Loan Composition                                  4Q06 vs
                                                                3Q06
                                      Dec 31,     Sept 30,
                                        2006         2006    % Change
                                    ----------------------------------
Commercial, financial &
 agricultural                        $3,677,573   $3,549,216      3.6%
Real estate - construction            2,047,124    2,186,810    (6.4%)
Commercial real estate                3,789,480    3,755,037      0.9%
Lease financing                          81,814       79,234      3.3%
                                    -------------------------
  Commercial                          9,595,991    9,570,297      0.3%
Home equity (a)                       2,164,758    2,166,312    (0.1%)
Installment                             915,747      940,139    (2.6%)
                                    -------------------------
  Retail                              3,080,505    3,106,451    (0.8%)
  Residential mortgage                2,205,030    2,607,860   (15.4%)
                                    -------------------------
  Total loans                       $14,881,526  $15,284,608    (2.6%)
                                    =========================



Period End Loan                                              4Q06 vs
 Composition                                                    4Q05
                        June 30,     March 31,     Dec 31,
                           2006         2006         2005    % Change
                       -----------------------------------------------
Commercial, financial &
 agricultural           $3,505,819   $3,571,835   $3,417,343      7.6%
Real estate -
 construction            2,122,136    1,981,473    1,783,267     14.8%
Commercial real estate   3,872,819    4,024,260    4,064,327    (6.8%)
Lease financing             74,919       62,600       61,315     33.4%
                       --------------------------------------
  Commercial             9,575,693    9,640,168    9,326,252      2.9%
Home equity (a)          2,151,858    2,121,601    2,025,055      6.9%
Installment                945,123      957,877    1,003,938    (8.8%)
                       --------------------------------------
  Retail                 3,096,981    3,079,478    3,028,993      1.7%
  Residential mortgage   2,732,956    2,819,541    2,851,219   (22.7%)
                       --------------------------------------
  Total loans          $15,405,630  $15,539,187  $15,206,464    (2.1%)
                       ======================================


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


Period End Deposit Composition                               4Q06 vs
                                                                3Q06
                                      Dec 31,     Sept 30,
                                        2006         2006    % Change
                                    ------------ ---------------------
Demand                               $2,756,222   $2,534,686      8.7%
Savings                                 890,380      959,650    (7.2%)
Interest-bearing demand               1,875,879    1,712,833      9.5%
Money market                          3,822,928    3,959,719    (3.5%)
Brokered CDs                            637,575      630,637      1.1%
Other time deposits                   4,333,087    4,411,020    (1.8%)
                                    ------------ ------------
  Total deposits                    $14,316,071  $14,208,545      0.8%
                                    ============ ============


Customer Repo Sweeps (b)               $875,099     $895,766    (2.3%)



Period End Deposit                                           4Q06 vs
 Composition                                                    4Q05
                           June 30,   March 31,    Dec 31,
                             2006        2006        2005    % Change
                         ---------------------------------------------
Demand                    $2,276,463  $2,319,075  $2,504,926     10.0%
Savings                    1,031,993   1,074,938   1,079,851   (17.5%)
Interest-bearing demand    1,975,364   2,347,104   2,549,782   (26.4%)
Money market               3,434,288   2,863,174   2,629,933     45.4%
Brokered CDs                 518,354     567,660     529,307     20.5%
Other time deposits        4,409,946   4,444,919   4,279,290      1.3%
                         ------------------------------------
  Total deposits         $13,646,408 $13,616,870 $13,573,089      5.5%
                         ====================================


Customer Repo Sweeps (b)    $885,503    $917,380    $822,221     6.43%


(b) Included within short-term borrowings.

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

Net Interest Income Analysis -
 Taxable Equivalent Basis
Associated Banc-Corp                    Year ended December 31, 2006
                                      --------------------------------

                                                   Interest   Average
(in thousands)                          Average     Income /   Yield /
                                         Balance     Expense    Rate
                                      --------------------------------

Earning assets:
   Loans: (1) (2) (3)
      Commercial                       $9,527,264   $707,405     7.43%
      Residential mortgage              2,760,454    160,758     5.82
      Retail                            3,082,372    241,313     7.83
                                      -----------------------
         Total loans                   15,370,090  1,109,476     7.22
   Investments and other                3,859,759    196,136     5.08
                                      -----------------------
Total earning assets                   19,229,849  1,305,612     6.79
   Other assets, net                    1,932,250
                                      ------------
Total assets                          $21,162,099
                                      ============

Interest-bearing liabilities:
   Savings deposits                    $1,012,966     $3,824     0.38%
   Interest-bearing demand deposits     1,997,355     34,895     1.75
   Money market deposits                3,324,362    119,506     3.59
   Time deposits, excluding Brokered
    CDs                                 4,388,147    177,860     4.05
                                      -----------------------
      Total interest-bearing
       deposits, excluding Brokered
       CDs                             10,722,830    336,085     3.13
   Brokered CDs                           550,925     27,868     5.06
                                      -----------------------
      Total interest-bearing deposits  11,273,755    363,953     3.23
   Wholesale funding                    5,161,192    245,877     4.76
                                      -----------------------
Total interest-bearing liabilities     16,434,947    609,830     3.71
   Noninterest-bearing demand           2,349,948
   Other liabilities                       97,828
   Stockholders' equity                 2,279,376
                                      ------------
Total liabilities and stockholders'
 equity                               $21,162,099
                                      ============

                                                   ----------
Net interest income and rate spread
 (1)                                                $695,782     3.08%
                                                   ==========
Net interest margin (1)                                          3.62%
Taxable equivalent adjustment                        $26,233
                                                   ==========

Net Interest Income Analysis -
 Taxable Equivalent Basis
Associated Banc-Corp                   Year ended December 31, 2005
                                     ---------------------------------

                                                   Interest   Average
(in thousands)                          Average     Income /   Yield /
                                         Balance     Expense    Rate
                                     ---------------------------------

Earning assets:
   Loans: (1) (2) (3)
      Commercial                       $8,574,996   $532,116     6.21%
      Residential mortgage              2,875,438    161,095     5.60
      Retail                            2,897,273    198,086     6.84
                                     ------------------------
         Total loans                   14,347,707    891,297     6.21
   Investments and other                4,833,923    228,237     4.72
                                     ------------------------
Total earning assets                   19,181,630  1,119,534     5.84
   Other assets, net                    1,739,945
                                     -------------
Total assets                          $20,921,575
                                     =============

Interest-bearing liabilities:
   Savings deposits                    $1,125,417     $3,877     0.34%
   Interest-bearing demand deposits     2,337,462     26,611     1.14
   Money market deposits                2,262,369     45,626     2.02
   Time deposits, excluding Brokered
    CDs                                 4,083,500    123,550     3.03
                                     ------------------------
      Total interest-bearing
       deposits, excluding Brokered
       CDs                              9,808,748    199,664     2.04
   Brokered CDs                           394,305     13,388     3.40
                                     ------------------------
      Total interest-bearing deposits  10,203,053    213,052     2.09
   Wholesale funding                    6,207,846    208,718     3.36
                                     ------------------------
Total interest-bearing liabilities     16,410,899    421,770     2.57
   Noninterest-bearing demand           2,259,928
   Other liabilities                      149,359
   Stockholders' equity                 2,101,389
                                     -------------
Total liabilities and stockholders'
 equity                               $20,921,575
                                     =============

                                                   ----------
Net interest income and rate spread
 (1)                                                $697,764     3.27%
                                                   ==========
Net interest margin (1)                                          3.64%
Taxable equivalent adjustment                        $25,509
                                                   ==========
----------------------------------------------------------------------


                                             Three months ended
                                              December 31, 2006
                                      --------------------------------

                                                   Interest   Average
                                        Average     Income /   Yield /
                                         Balance     Expense    Rate
                                      ------------ ---------- --------

Earning assets:
   Loans: (1) (2) (3)
      Commercial                       $9,505,699   $182,086     7.50%
      Residential mortgage              2,628,382     38,753     5.87
      Retail                            3,099,126     62,771     8.06
                                      ------------ ----------
         Total loans                   15,233,207    283,610     7.33
   Investments and other                3,480,577     45,924     5.27
                                      ------------ ----------
Total earning assets                   18,713,784    329,534     6.95
   Other assets, net                    1,921,419
                                      ------------
Total assets                          $20,635,203
                                      ============

Interest-bearing liabilities:
   Savings deposits                      $940,041       $903     0.38%
   Interest-bearing demand deposits     1,729,355      7,945     1.82
   Money market deposits                3,727,175     35,420     3.77
   Time deposits, excluding Brokered
    CDs                                 4,356,474     48,243     4.39
                                      ------------ ----------
      Total interest-bearing
       deposits, excluding Brokered
       CDs                             10,753,045     92,511     3.41
   Brokered CDs                           465,687      6,246     5.32
                                      ------------ ----------
      Total interest-bearing deposits  11,218,732     98,757     3.49
   Wholesale funding                    4,547,042     58,145     5.02
                                      ------------ ----------
Total interest-bearing liabilities     15,765,774    156,902     3.93
   Noninterest-bearing demand           2,529,712
   Other liabilities                       99,574
   Stockholders' equity                 2,240,143
                                      ------------
Total liabilities and stockholders'
 equity                               $20,635,203
                                      ============

                                                   ----------
Net interest income and rate spread
 (1)                                                $172,632     3.02%
                                                   ==========
Net interest margin (1)                                          3.64%
Taxable equivalent adjustment                         $6,568
                                                   ==========



                                            Three months ended
                                             December 31, 2005
                                     ---------------------------------

                                                   Interest   Average
                                        Average     Income /   Yield /
                                         Balance     Expense    Rate
                                     ---------------------------------

Earning assets:
   Loans: (1) (2) (3)
      Commercial                       $9,222,512   $156,412     6.64%
      Residential mortgage              2,905,463     41,482     5.68
      Retail                            3,026,250     55,120     7.25
                                     ------------------------
         Total loans                   15,154,225    253,014     6.58
   Investments and other                4,926,533     58,295     4.73
                                     ------------------------
Total earning assets                   20,080,758    311,309     6.12
   Other assets, net                    1,941,407
                                     -------------
Total assets                          $22,022,165
                                     =============

Interest-bearing liabilities:
   Savings deposits                    $1,150,777       $800     0.28%
   Interest-bearing demand deposits     2,210,056      7,082     1.27
   Money market deposits                2,623,223     17,121     2.59
   Time deposits, excluding Brokered
    CDs                                 4,342,185     37,004     3.38
                                     ------------------------
      Total interest-bearing
       deposits, excluding Brokered
       CDs                             10,326,241     62,007     2.38
   Brokered CDs                           483,100      4,927     4.05
                                     ------------------------
      Total interest-bearing deposits  10,809,341     66,934     2.46
   Wholesale funding                    6,280,793     62,014     3.87
                                     ------------------------
Total interest-bearing liabilities     17,090,134    128,948     2.98
   Noninterest-bearing demand           2,473,569
   Other liabilities                      138,328
   Stockholders' equity                 2,320,134
                                     -------------
Total liabilities and stockholders'
 equity                               $22,022,165
                                     =============

                                                   ----------
Net interest income and rate spread
 (1)                                                $182,361     3.14%
                                                   ==========
Net interest margin (1)                                          3.59%
Taxable equivalent adjustment                         $6,766
                                                   ==========



(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.

Source: Associated Banc-Corp

Contact: Associated Banc-Corp Investors: Joe Selner, Chief Financial Officer 920-491-7120 or Media: Cindy Moon-Mogush, Corporate Communications 920-431-8034