Press Release Details

Associated Announces Second Quarter 2009 Results

07/16/2009

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

Associated Banc-Corp (NASDAQ: ASBC):

    --  Net loss to common shareholders of $24.7 million for the second quarter
        compared to net income of $35.4 million for the first quarter of 2009
    --  Net income available to common shareholders of $10.7 million for the six
        months ended June 30, 2009
    --  Provision for loan losses of $155.0 million exceeded net charge offs of
        $61.1 million by $93.9 million, increasing the allowance for loan losses
        to 2.66% of loans at June 30, 2009, up from 1.97% at March 31, 2009
    --  FDIC special assessment expense of $11.3 million was recorded during the
        quarter
    --  Total deposits grew by 7.7% to $16.3 billion at June 30, 2009 compared
        to $15.2 billion at December 31, 2008 and were up 22.0% from $13.4
        billion at June 30, 2008
    --  Tangible common equity ratio of 6.09% compared to 6.10% at March 31,
        2009

Associated Banc-Corp (NASDAQ: ASBC) today reported a 2009 second quarter net loss to common shareholders of $24.7 million, or $0.19 per common share after including a $7.3 million dividend to preferred shareholders. This compares to net income of $35.4 million, or $0.28 per common share for the first quarter of 2009, and net income of $47.4 million, or $0.37 per common share, for the second quarter of 2008.

Net income available to common shareholders was $10.7 million, or $0.08 per common share, for the six months ended June 30, 2009, compared to net income of $113.8 million, or $0.89 per common share, for the first half of 2008.

The provision for loan losses for the quarter was $155.0 million compared to $105.4 million for the first quarter of 2009, and $59.0 million for the same period one year ago. Net charge offs for the quarter were $61.1 million compared to $57.6 million for the first quarter of 2009, and $37.0 million for the second quarter of 2008. Nonperforming loans were $733.4 million at June 30, 2009 compared to $452.2 million at March 31, 2009. The higher provision is primarily due to further deterioration of existing construction and commercial real estate credits and declining commercial real estate collateral values.

"The higher than anticipated provision is a result of the continued weakness in the economy and related stress on our customers," said Associated Chairman and CEO Paul S. Beideman. "While we believe loan loss provisions and charge offs will remain elevated, we expect the pace of deterioration to moderate in future quarters."

Net interest income for the quarter was $179.1 million compared to $189.3 million for the first quarter of 2009 and $172.7 million for the same quarter a year ago. The company's net interest margin was 3.40% compared to 3.59% at March 31, 2009 and 3.65% at June 30, 2008. The challenging economic climate had a negative impact on the company's net interest margin during the quarter. Specifically, the lower net interest margin was due to an increase in the level of nonperforming loans along with lower loan balances and higher investment securities prepayments which were reinvested at lower spreads. These factors were partially offset by improved deposit pricing and higher spreads on new and renewed loans.

On average, loans were $16.1 billion for the second quarter of 2009 compared to $16.4 billion for the first quarter of 2009 as the company continues to experience declines in both commercial and retail balances. Deposits, on average, were $16.1 billion for the second quarter of 2009, up $1.1 billion compared to first quarter 2009 and up $2.6 billion for the same period one year ago.

Mortgage loans originated for sale during the second quarter continued to be strong at $1.3 billion, an increase of $255.4 million from the first quarter of 2009 and up $903.4 million from the second quarter of 2008. For the second quarter 2009, net mortgage banking income was $28.3 million compared to $4.3 million for the first quarter of 2009. Second quarter mortgage banking results included a $9.6 million valuation recovery related to mortgage servicing rights, compared to a $12.3 million valuation charge in the first quarter of 2009.

Core fee-based revenue was $64.9 million for the second quarter of 2009 compared to $61.4 million for the first quarter of 2009 and $68.5 million in second quarter 2008. Year-over-year reductions occurred in consumer fee-based revenue due to weaker consumer activity, and equity market declines resulted in lower asset management and brokerage revenue.

Total noninterest expenses were $170.0 million, up $28.8 million from $141.3 million in the first quarter 2009. Second quarter 2009 noninterest expenses were higher in several categories, including FDIC insurance costs which increased $12.3 million largely due to an $11.3 million special assessment imposed by the Federal Deposit Insurance Corporation (FDIC). Other significant increases include foreclosure and OREO expenses, up $8.6 million primarily due to a $7 million write-down on a foreclosed property, and a $1.3 million increase in legal expenses due to an increased level of loan work outs. The efficiency ratio increased to 58.65% in the second quarter of 2009, up from 51.31% in the previous quarter and 50.75% in the second quarter 2008.

Total income tax benefit was $26.6 million for the second quarter of 2009, an increase of $15.5 million from the $11.1 million benefit in the first quarter of 2009. The increase in income tax benefit is primarily due to the level of pretax income (loss) between quarters. In addition, the company recorded a $17.0 million net decrease in the valuation allowance on and changes to State deferred tax assets in the first quarter of 2009. In the second quarter, the company recorded a $5 million decrease in the valuation allowance on deferred tax assets.

Associated Banc-Corp (NASDAQ: ASBC) will host a conference call for investors and analysts at 3 p.m. Central Time (CT) Thursday, July 16, 2009. The toll-free dial-in number for the live call is 800-762-8779. The number for international callers is 480-248-5081. Participants should ask the operator for the Associated Banc-Corp second quarter 2009 earnings call, or for call ID number 4102400. A replay of the call will be available starting at 6 p.m. CT on July 16, 2009 through 12:00 midnight CT on August 16, 2009 by calling 800-406-7325 (toll-free) domestically or 303-590-3030 internationally. The call ID number (replay pin number), 4102400, is required to access the replay.

Associated Banc-Corp, headquartered in Green Bay, Wis., is a diversified bank holding company with total assets of $24 billion. Associated has approximately 300 banking offices serving approximately 160 communities in Wisconsin, Illinois, and Minnesota. The company offers a full range of traditional banking services and a variety of other financial products and services. More information about Associated Banc-Corp is available at www.associatedbank.com.

Statements made in this document that are not purely historical are forward-looking statements, as defined in the Private Securities Litigation Reform Act of 1995. This includes any statements regarding management's plans, objectives, or goals for future operations, products or services, and forecasts of its revenues, earnings, or other measures of performance. Forward-looking statements are based on current management expectations and, by their nature, are subject to risks and uncertainties. These statements may be identified by the use of words such as "believe," "expect," "anticipate," "plan," "estimate," "should," "will," "intend," or similar expressions. Outcomes related to such statements are subject to numerous risk factors and uncertainties including those listed in the company's Annual Report filed on Form 10-K.

Consolidated Balance Sheets (Unaudited)

Associated                                       Jun09 vs                Jun09 vs
Banc-Corp                                        Dec08                   Jun08

                     June 30,      December 31,            June 30,

(in thousands)       2009          2008          % Change  2008          % Change

Assets

Cash and due from    $ 463,477     $ 533,338     (13.1 %)  $ 600,972     (22.9  %)
banks

Interest-bearing
deposits in other    12,910        12,649        2.1   %   24,448        (47.2  %)
financial
institutions

Federal funds sold
and securities
purchased under      34,679        24,741        40.2  %   35,852        (3.3   %)
agreements to
resell

Securities
available for sale,  6,000,491     5,349,417     12.2  %   3,574,373     67.9   %
at fair value

Loans held for sale  424,833       87,084        387.8 %   52,058        716.1  %

Loans                15,310,107    16,283,908    (6.0  %)  16,149,327    (5.2   %)

Allowance for loan   (407,167   )  (265,378   )  53.4  %   (229,605   )  77.3   %
losses

Loans, net           14,902,940    16,018,530    (7.0  %)  15,919,722    (6.4   %)

Premises and         185,794       190,942       (2.7  %)  191,634       (3.0   %)
equipment, net

Goodwill             929,168       929,168       0.0   %   929,168       0.0    %

Other intangible     91,588        80,165        14.2  %   92,621        (1.1   %)
assets, net

Other assets         967,687       966,033       0.2   %   881,856       9.7    %

Total assets         $             $             (0.7  %)  $             7.7    %
                     24,013,567    24,192,067              22,302,704

Liabilities and
Stockholders'
Equity

Noninterest-bearing  $             $             1.2   %   $             9.4    %
deposits             2,846,570     2,814,079               2,602,026

Interest-bearing
deposits, excluding  12,543,239    11,551,181    8.6   %   10,378,285    20.9   %
Brokered CDs

Brokered CDs         930,582       789,536       17.9  %   398,423       133.6  %

Total deposits       16,320,391    15,154,796    7.7   %   13,378,734    22.0   %

Short-term           2,712,962     3,703,936     (26.8 %)  4,923,462     (44.9  %)
borrowings

Long-term funding    1,761,580     1,861,647     (5.4  %)  1,436,349     22.6   %

Accrued expenses
and other            344,866       595,185       (42.1 %)  210,277       64.0   %
liabilities

Total liabilities    21,139,799    21,315,564    (0.8  %)  19,948,822    6.0    %

Stockholders'
Equity

Preferred equity     509,535       508,008       0.3   %   -             N/M

Common stock         1,284         1,281         0.2   %   1,279         0.4    %

Surplus              1,078,633     1,073,218     0.5   %   1,048,158     2.9    %

Retained earnings    1,262,047     1,293,941     (2.5  %)  1,324,476     (4.7   %)

Accumulated other
comprehensive        23,352        55            N/M       (20,031    )  (216.6 %)
income (loss)

Treasury stock       (1,083     )  -             N/M       -             N/M

Total stockholders'  2,873,768     2,876,503     (0.1  %)  2,353,882     22.1   %
equity

Total liabilities    $             $                       $
and stockholders'    24,013,567    24,192,067    (0.7  %)  22,302,704    7.7    %
equity

N/M = Not
meaningful.



Consolidated Statements of Income (Unaudited)

Associated Banc-Corp

                  For The Three Months             For The Six Months
                  Ended                            Ended,

                  June 30,              Quarter    June 30,              Year-to-Date

(in thousands,
except per share  2009       2008       % Change   2009       2008       % Change
amounts)

Interest Income

Interest and      $          $          (18.2  %)  $          $          (19.6  %)
fees on loans     194,352    237,727               396,377    492,780

Interest and
dividends on
investment
securities
and deposits in
other financial
institutions:

Taxable           46,688     31,878     46.5   %   97,591     63,230     54.3   %

Tax-exempt        8,819      9,776      (9.8   %)  18,313     20,035     (8.6   %)

Interest on
federal funds
sold and
securities

purchased under
agreements to     51         213        (76.1  %)  114        419        (72.8  %)
resell

Total interest    249,910    279,594    (10.6  %)  512,395    576,464    (11.1  %)
income

Interest Expense

Interest on       44,993     63,655     (29.3  %)  91,592     145,161    (36.9  %)
deposits

Interest on
short-term        5,088      24,363     (79.1  %)  10,242     52,536     (80.5  %)
borrowings

Interest on
long-term         20,691     18,844     9.8    %   42,145     40,918     3.0    %
funding

Total interest    70,772     106,862    (33.8  %)  143,979    238,615    (39.7  %)
expense

Net Interest      179,138    172,732    3.7    %   368,416    337,849    9.0    %
Income

Provision for     155,022    59,001     162.7  %   260,446    82,003     217.6  %
loan losses

Net interest
income after      24,116     113,731    (78.8  %)  107,970    255,846    (57.8  %)
provision for
loan losses

Noninterest
Income

Trust service     8,569      10,078     (15.0  %)  17,046     20,152     (15.4  %)
fees

Service charges
on deposit        29,671     30,129     (1.5   %)  56,876     53,813     5.7    %
accounts

Card-based and
other nondeposit  11,858     12,301     (3.6   %)  22,032     23,726     (7.1   %)
fees

Retail            14,829     16,004     (7.3   %)  30,341     32,119     (5.5   %)
commissions

Mortgage          28,297     5,395      424.5  %   32,564     12,340     163.9  %
banking, net

Treasury
management fees,  2,393      3,502      (31.7  %)  5,019      5,488      (8.5   %)
net

Bank owned life   3,161      4,997      (36.7  %)  8,933      9,858      (9.4   %)
insurance income

Asset sale        (1,287  )  (731    )  76.1   %   (2,394  )  (1,187  )  101.7  %
(losses), net

Investment
securities gains  (1,385  )  (718    )  92.9   %   9,211      (3,658  )  N/M
(losses), net

Other             5,835      5,668      2.9    %   11,290     16,602     (32.0  %)

Total
noninterest       101,941    86,625     17.7   %   190,918    169,253    12.8   %
income

Noninterest
Expense

Personnel         81,171     78,066     4.0    %   158,269    153,709    3.0    %
expense

Occupancy         12,341     12,026     2.6    %   25,222     25,290     (0.3   %)

Equipment         4,670      4,653      0.4    %   9,259      9,250      0.1    %

Data processing   8,126      8,250      (1.5   %)  15,723     15,371     2.3    %

Business
development and   4,943      5,137      (3.8   %)  9,680      10,178     (4.9   %)
advertising

Other intangible  1,385      1,568      (11.7  %)  2,771      3,137      (11.7  %)
amortization

Legal and
professional      5,586      2,944      89.7   %   9,827      5,717      71.9   %
fees

Foreclosure/OREO  13,576     2,573      427.6  %   18,589     4,542      309.3  %
expense

FDIC expense      18,090     397        N/M        23,865     803        N/M

Other             20,143     20,207     (0.3   %)  38,090     44,136     (13.7  %)

Total
noninterest       170,031    135,821    25.2   %   311,295    272,133    14.4   %
expense

Income (loss)
before income     (43,974 )  64,535     (168.1 %)  (12,407 )  152,966    (108.1 %)
taxes

Income tax
expense           (26,633 )  17,176     (255.1 %)  (37,791 )  39,142     (196.5 %)
(benefit)

Net income        (17,341 )  47,359     (136.6 %)  $          $          (77.7  %)
(loss)                                             25,384     113,824

Preferred stock
dividends and     7,331      -          N/M        14,652     -          N/M
discount

Net income        $          $                     $          $
(loss) available  (24,672 )  47,359     (152.1 %)  10,732     113,824    (90.6  %)
to common equity

Earnings (Loss)
Per Common
Share:

Basic             $ (0.19 )  $ 0.37     (151.4 %)  $ 0.08     $ 0.89     (91.0  %)

Diluted           $ (0.19 )  $ 0.37     (151.4 %)  $ 0.08     $ 0.89     (91.0  %)

Average Common
Shares
Outstanding:

Basic             127,861    127,433    0.3    %   127,850    127,365    0.4    %

Diluted           127,861    127,909    (0.0   %)  127,856    127,849    0.0    %

N/M = Not
meaningful.



Consolidated Statements of Income (Unaudited) - Quarterly Trend

Associated Banc-Corp

(in thousands,
except per share  2Q09       1Q09         4Q08         3Q08         2Q08
amounts)

Interest Income

Interest and      $          $ 202,025    $ 230,872    $ 229,001    $ 237,727
fees on loans     194,352

Interest and
dividends on
investment
securities
and deposits in
other financial
institutions:

Taxable           46,688     50,903       38,032       32,209       31,878

Tax-exempt        8,819      9,494        9,811        9,887        9,776

Interest on
federal funds
sold and
securities        51         63           154          279          213
purchased under
agreements to
resell

Total interest    249,910    262,485      278,869      271,376      279,594
income

Interest Expense

Interest on       44,993     46,599       56,402       61,743       63,655
deposits

Interest on
short-term        5,088      5,154        10,090       23,958       24,363
borrowings

Interest on
long-term         20,691     21,454       20,595       19,158       18,844
funding

Total interest    70,772     73,207       87,087       104,859      106,862
expense

Net Interest      179,138    189,278      191,782      166,517      172,732
Income

Provision for     155,022    105,424      65,044       55,011       59,001
loan losses

Net interest
income after      24,116     83,854       126,738      111,506      113,731
provision for
loan losses

Noninterest
Income

Trust service     8,569      8,477        8,248        10,020       10,078
fees

Service charges
on deposit        29,671     27,205       30,946       33,609       30,129
accounts

Card-based and
other nondeposit  11,858     10,174       12,297       12,517       12,301
fees

Retail            14,829     15,512       15,541       14,928       16,004
commissions

Total core
fee-based         64,927     61,368       67,032       71,074       68,512
revenue

Mortgage          28,297     4,267        (1,227    )  3,571        5,395
banking, net

Treasury
management fees,  2,393      2,626        (33       )  1,935        3,502
net

Bank owned life   3,161      5,772        4,711        5,235        4,997
insurance income

Asset sale gains  (1,287  )  (1,107    )  (1,054    )  573          (731      )
(losses), net

Investment
securities gains  (1,385  )  10,596       (35,298   )  (13,585   )  (718      )
(losses), net

Other             5,835      5,455        6,943        6,520        5,668

Total
noninterest       101,941    88,977       41,074       75,323       86,625
income

Noninterest
Expense

Personnel         81,171     77,098       77,374       78,395       78,066
expense

Occupancy         12,341     12,881       13,134       12,037       12,026

Equipment         4,670      4,589        4,785        5,088        4,653

Data processing   8,126      7,597        7,446        7,634        8,250

Business
development and   4,943      4,737        6,047        5,175        5,137
advertising

Other intangible  1,385      1,386        1,564        1,568        1,568
amortization

Legal and
professional      5,586      4,241        5,311        3,538        2,944
fees

Foreclosure/OREO  13,576     5,013        6,716        2,427        2,573
expense

FDIC expense      18,090     5,775        930          791          397

Other             20,143     17,947       25,443       19,924       20,207

Total
noninterest       170,031    141,264      148,750      136,577      135,821
expense

Income (loss)
before income     (43,974 )  31,567       19,062       50,252       64,535
taxes

Income tax
expense           (26,633 )  (11,158   )  2,203        12,483       17,176
(benefit)

Net income        (17,341 )  42,725       16,859       37,769       47,359
(loss)

Preferred stock
dividends and     7,331      7,321        3,250        -            -
discount

Net income        $
(loss) available  (24,672 )  $ 35,404     $ 13,609     $ 37,769     $ 47,359
to common equity

Earnings (Loss)
Per Common
Share:

Basic             $ (0.19 )  $ 0.28       $ 0.11       $ 0.30       $ 0.37

Diluted           $ (0.19 )  $ 0.28       $ 0.11       $ 0.30       $ 0.37

Average Common
Shares
Outstanding:

Basic             127,861    127,839      127,717      127,553      127,433

Diluted           127,861    127,845      127,810      127,622      127,909



Selected Quarterly Information

Associated Banc-Corp

(in thousands,
except per share
and full time     YTD 2009      YTD 2008      2nd Qtr 2009  1st Qtr 2009  4th Qtr 2008  3rd Qtr 2008  2nd Qtr 2008
equivalent
employee data)

Summary of
Operations

Net interest      $ 368,416     $ 337,849     $ 179,138     $ 189,278     $ 191,782     $ 166,517     $ 172,732
income

Provision for     260,446       82,003        155,022       105,424       65,044        55,011        59,001
loan losses

Asset sale gains  (2,394     )  (1,187     )  (1,287     )  (1,107     )  (1,054     )  573           (731       )
(losses), net

Investment
securities gains  9,211         (3,658     )  (1,385     )  10,596        (35,298    )  (13,585    )  (718       )
(losses), net

Noninterest
income
(excluding        184,101       174,098       104,613       79,488        77,426        88,335        88,074
securities &
asset gains)

Noninterest       311,295       272,133       170,031       141,264       148,750       136,577       135,821
expense

Income before     (12,407    )  152,966       (43,974    )  31,567        19,062        50,252        64,535
income taxes

Income tax
expense           (37,791    )  39,142        (26,633    )  (11,158    )  2,203         12,483        17,176
(benefit)

Net income        25,384        113,824       (17,341    )  42,725        16,859        37,769        47,359
(loss)

Net income
(loss) available  10,732        113,824       (24,672    )  35,404        13,609        37,769        47,359
to common equity

Taxable
equivalent        12,694        13,910        6,150         6,544         6,902         6,899         6,814
adjustment

Per Common Share
Data

Net income
(loss):

Basic             $ 0.08        $ 0.89        $ (0.19    )  $ 0.28        $ 0.11        $ 0.30        $ 0.37

Diluted           0.08          0.89          (0.19      )  0.28          0.11          0.30          0.37

Dividends         0.37          0.63          0.05          0.32          0.32          0.32          0.32

Market Value:

High              $ 21.39       $ 29.23       $ 19.00       $ 21.39       $ 24.21       $ 25.92       $ 29.23

Low               10.60         19.29         12.50         10.60         15.72         14.85         19.29

Close             12.50         19.29         12.50         15.45         20.93         19.95         19.29

Book value        18.49         18.46         18.49         18.68         18.54         18.52         18.46

Performance
Ratios
(annualized)

Earning assets    4.82       %  6.07       %  4.70       %  4.94       %  5.57       %  5.58       %  5.82       %
yield

Interest-bearing  1.59          2.86          1.57          1.61          2.00          2.44          2.53
liabilities rate

Net interest      3.49          3.61          3.40          3.59          3.88          3.48          3.65
margin

Return on         0.21          1.05          (0.29      )  0.71          0.30          0.68          0.87
average assets

Return on         1.76          9.67          (2.40      )  5.98          2.58          6.38          8.01
average equity

Return on
average tangible  1.51          16.36         (6.88      )  10.05         3.83          10.83         13.51
common equity
(1)

Efficiency ratio  55.08         51.75         58.65         51.31         53.87         52.18         50.75
(2)

Effective tax     304.59        25.59         60.57         (35.35     )  11.56         24.84         26.61
rate

Dividend payout   462.50        70.79         N/M           114.29        290.91        106.67        86.49
ratio (3)

Average Balances

Assets            $             $             $             $             $             $             $
                  24,159,647    21,712,707    24,064,567    24,255,783    22,646,421    22,072,948    21,975,451

Earning assets    21,902,825    19,515,429    21,847,191    21,959,077    20,436,483    19,884,434    19,754,651

Interest-bearing  18,290,716    16,801,778    18,125,389    18,457,879    17,363,481    17,107,551    16,992,508
liabilities

Loans             16,275,353    15,914,526    16,122,063    16,430,347    16,285,881    16,203,717    16,120,732

Deposits          15,576,244    13,568,535    16,100,686    15,045,976    14,395,626    13,710,297    13,493,511

Wholesale         5,484,245     5,622,248     4,876,970     6,098,266     5,496,248     5,876,051     5,950,699
funding

Common
stockholders'     2,396,020     2,367,799     2,400,664     2,391,325     2,376,639     2,353,606     2,377,841
equity

Stockholders'     2,904,679     2,367,799     2,909,700     2,899,603     2,602,917     2,353,606     2,377,841
equity

Common
stockholders'     9.92       %  10.91      %  9.98       %  9.86       %  10.49      %  10.66      %  10.82      %
equity/assets

Stockholders'     12.02      %  10.91      %  12.09      %  11.95      %  11.49      %  10.66      %  10.82      %
equity / assets

At Period End

Assets                                        $             $             $             $             $
                                              24,013,567    24,349,725    24,192,067    22,487,394    22,302,704

Loans                                         15,310,107    15,917,952    16,283,908    16,272,487    16,149,327

Allowance for                                 407,167       313,228       265,378       246,189       229,605
loan losses

Goodwill                                      929,168       929,168       929,168       929,168       929,168

Mortgage
servicing                                     59,762        39,754        45,568        53,977        54,725
rights, net

Other intangible                              31,826        33,211        34,597        36,161        37,896
assets

Deposits                                      16,320,391    15,873,189    15,154,796    14,245,667    13,378,734

Wholesale                                     4,474,542     5,326,734     5,565,583     5,667,737     6,359,811
funding

Stockholders'                                 2,873,768     2,897,169     2,876,503     2,364,247     2,353,882
equity

Stockholders'                                 11.97      %  11.90      %  11.89      %  10.51      %  10.55      %
equity / assets

Tangible common
equity /                                      6.09       %  6.10       %  6.05       %  6.50       %  6.50       %
tangible assets
(4)

Tangible
equity/tangible                               8.30       %  8.27       %  8.23       %  6.50       %  6.50       %
assets (5)

Shares
outstanding, end                              127,861       127,860       127,762       127,646       127,537
of period

Selected trend
information

Average full
time equivalent                               5,116         5,143         5,109         5,141         5,179
employees

Trust assets
under                                         $             $             $             $             $
management, at                                5,000,000     4,800,000     5,100,000     5,600,000     5,900,000
market value

Mortgage loans
originated for                                1,335,175     1,079,732     247,465       217,993       431,757
sale during
period

Mortgage
portfolio                                     6,904,000     6,582,000     6,606,000     6,596,000     6,584,000
serviced for
others

Mortgage
servicing
rights, net /                                 0.87       %  0.60       %  0.69       %  0.82       %  0.83       %
Portfolio
serviced for
others

N/M = Not meaningful.



    Return on average tangible common equity = Net income available to common
(1) equity divided by average common equity excluding average goodwill and other
    intangible assets. This is a non-GAAP financial measure.

    Efficiency ratio = Noninterest expense divided by sum of taxable equivalent
(2) net interest income plus noninterest income, excluding investment securities
    gains, net, and asset sales gains, net.

    This is a non-GAAP financial measure.

(3) Ratio is based upon basic earnings per common share.

    Tangible common equity to tangible assets = Common stockholders' equity
(4) excluding goodwill and other intangible assets divided by assets excluding
    goodwill and other intangible assets.

    This is a non-GAAP financial measure.

    Tangible equity to tangible assets = Stockholders' equity excluding goodwill
(5) and other intangible assets divided by assets excluding goodwill and other
    intangible assets.

    This is a non-GAAP financial measure.



Financial Summary and Comparison

Associated Banc-Corp

                  Three months ended                  Six months ended

                  June 30,                            June 30,

(in thousands)    2009         2008         % Change  2009         2008         % Change

Allowance for
Loan Losses

Beginning         $ 313,228    $ 207,602    50.9  %   $ 265,378    $ 200,570    32.3       %
balance

Provision for     155,022      59,001       162.7 %   260,446      82,003       217.6      %
loan losses

Charge offs       (63,325    ) (38,238    ) 65.6  %   (123,499   ) (57,732    ) 113.9      %

Recoveries        2,242        1,240        80.8  %   4,842        4,764        1.6        %

Net charge offs   (61,083    ) (36,998    ) 65.1  %   (118,657   ) (52,968    ) 124.0      %

Ending balance    $ 407,167    $ 229,605    77.3  %   $ 407,167    $ 229,605    77.3       %

Credit Quality                              Jun09 vs                                         Jun09 vs
                                            Mar09                                            Jun08

                  Jun 30, 2009 Mar 31, 2009 % Change  Dec 31, 2008 Sept 30,     Jun 30, 2008 % Change
                                                                   2008

Nonaccrual loans  $ 700,514    $ 433,246    61.7  %   $ 326,857    $ 290,039    $ 277,100    152.8 %

Loans 90 or more
days past due     19,785       16,002       23.6  %   13,811       14,631       11,762       68.2  %
and still
accruing

Restructured      13,089       2,927        347.2 %   -            -            -            N/M
loans

Total
nonperforming     733,388      452,175      62.2  %   340,668      304,670      288,862      153.9 %
loans

Other real
estate owned      51,633       54,883       (5.9  %)  48,710       46,473       46,579       10.9  %
(OREO)

Total
nonperforming     $ 785,021    $ 507,058    54.8  %   $ 389,378    $ 351,143    $ 335,441    134.0 %
assets

Provision for     155,022      105,424      47.0  %   65,044       55,011       59,001       162.7 %
loan losses

Net charge offs   61,083       57,574       6.1   %   45,855       38,427       36,998       65.1  %

Allowance for
loan losses /     2.66       % 1.97       %           1.63       % 1.51       % 1.42       %
loans

Allowance for
loan losses /     55.52        69.27                  77.90        80.81        79.49
nonperforming
loans

Nonperforming
loans / total     4.79         2.84                   2.09         1.87         1.79
loans

Nonperforming
assets / total    5.11         3.17                   2.38         2.15         2.07
loans plus OREO

Nonperforming
assets / total    3.27         2.08                   1.61         1.56         1.50
assets

Net charge offs
/ average loans   1.52         1.42                   1.12         0.94         0.92
(annualized)

Year-to-date net
charge offs /     1.47         1.42                   0.85         0.76         0.67
average loans

Nonperforming
loans by type:

Commercial,
financial &       $ 187,943    $ 102,257    83.8  %   $ 104,664    $ 85,995     $ 78,731     138.7 %
agricultural

Commercial real   165,929      100,838      64.6  %   62,423       52,875       42,280       292.5 %
estate

Real estate -     264,402      152,008      73.9  %   90,048       98,205       110,717      138.8 %
construction

Lease financing   1,929        1,707        13.0  %   187          83           522          269.5 %

Total commercial  620,203      356,810      73.8  %   257,322      237,158      232,250      167.0 %

Home equity       38,474       35,224       9.2   %   31,035       25,372       23,555       63.3  %

Installment       7,545        6,755        11.7  %   7,155        6,035        5,184        45.5  %

Total retail      46,019       41,979       9.6   %   38,190       31,407       28,739       60.1  %

Residential       67,166       53,386       25.8  %   45,156       36,105       27,873       141.0 %
mortgage

Total
nonperforming     $ 733,388    $ 452,175    62.2  %   $ 340,668    $ 304,670    $ 288,862    153.9 %
loans

Period End Loan                             Jun09 vs                                         Jun09 vs
Composition                                 Mar09                                            Jun08

                  Jun 30, 2009 Mar 31, 2009 % Change  Dec 31, 2008 Sept 30,     Jun 30, 2008 % Change
                                                                   2008

Commercial,       $            $                      $            $            $
financial &       3,904,925    4,160,274    (6.1  %)  4,388,691    4,343,208    4,423,192    (11.7 %)
agricultural

Commercial real   3,737,749    3,575,301    4.5   %   3,566,551    3,534,791    3,583,877    4.3   %
estate

Real estate -     1,963,919    2,228,090    (11.9 %)  2,260,888    2,363,116    2,351,401    (16.5 %)
construction

Lease financing   110,262      116,100      (5.0  %)  122,113      125,907      124,661      (11.6 %)

Total commercial  9,716,855    10,079,765   (3.6  %)  10,338,243   10,367,022   10,483,131   (7.3  %)

Home equity       2,656,747    2,784,248    (4.6  %)  2,883,317    2,892,952    2,757,684    (3.7  %)

Installment       844,065      853,214      (1.1  %)  827,303      842,741      826,895      2.1   %

Total retail      3,500,812    3,637,462    (3.8  %)  3,710,620    3,735,693    3,584,579    (2.3  %)

Residential       2,092,440    2,200,725    (4.9  %)  2,235,045    2,169,772    2,081,617    0.5   %
mortgage

Total loans       $            $            (3.8  %)  $            $            $            (5.2  %)
                  15,310,107   15,917,952             16,283,908   16,272,487   16,149,327

Period End                                  Jun09 vs                                         Jun09 vs
Deposit                                     Mar09                                            Jun08
Composition

                  Jun 30, 2009 Mar 31, 2009 % Change  Dec 31, 2008 Sept 30,     Jun 30, 2008 % Change
                                                                   2008

Demand            $            $            1.0   %   $            $            $            9.4   %
                  2,846,570    2,818,088              2,814,079    2,545,779    2,602,026

Savings           898,527      895,310      0.4   %   841,129      888,731      921,000      (2.4  %)

Interest-bearing  2,242,800    1,796,724    24.8  %   1,796,405    1,667,640    1,697,910    32.1  %
demand

Money market      5,410,498    5,410,095    0.0   %   4,926,088    4,608,686    3,917,505    38.1  %

Brokered CDs      930,582      922,491      0.9   %   789,536      579,607      398,423      133.6 %

Other time        3,991,414    4,030,481    (1.0  %)  3,987,559    3,955,224    3,841,870    3.9   %
deposits

Total deposits    $            $            2.8   %   $            $            $            22.0  %
                  16,320,391   15,873,189             15,154,796   14,245,667   13,378,734

Network
transaction
deposits
included above    $            $            (8.7  %)  $            $            $ 620,440    158.8 %
in                1,605,722    1,759,656              1,530,675    1,356,616
interest-bearing
demand and money
market

Customer repo     $ 269,809    $ 333,706    (19.1 %)  $ 505,788    $ 657,032    $ 667,720    (59.6 %)
sweeps (a)

(a) Included
within
short-term
borrowings.

N/M - Not meaningful.



Net Interest Income Analysis - Taxable Equivalent Basis

Associated Banc-Corp

                     Six months ended June 30,    Six months ended June 30, 2008
                     2009

                     Average    Interest Average  Average    Interest Average

(in thousands)       Balance    Income / Yield /  Balance    Income / Yield /
                                Expense  Rate                Expense  Rate

Earning assets:

Loans: (1) (2) (3)

Commercial           $          $        4.57 %   $          $        6.08 %
                     10,083,205 228,424           10,412,253 314,859

Residential          2,553,037  68,231   5.36     2,215,641  66,325   6.00
mortgage

Retail               3,639,111  101,428  5.61     3,286,632  113,484  6.93

Total loans          16,275,353 398,083  4.92     15,914,526 494,668  6.24

Investments and      5,627,472  127,006  4.51     3,600,903  95,706   5.32
other

Total earning        21,902,825 525,089  4.82     19,515,429 590,374  6.07
assets

Other assets, net    2,256,822                    2,197,278

Total assets         $                            $
                     24,159,647                   21,712,707

Interest-bearing
liabilities:

Savings deposits     $ 882,533  $ 681    0.16 %   $ 885,883  $ 2,091  0.47 %

Interest-bearing     1,836,187  1,867    0.21     1,802,280  9,765    1.09
demand deposits

Money market         5,178,848  23,977   0.93     3,919,573  42,000   2.15
deposits

Time deposits,
excluding Brokered   4,004,253  58,277   2.93     3,968,095  80,970   4.10
CDs

Total
interest-bearing     11,901,821 84,802   1.44     10,575,831 134,826  2.56
deposits, excluding
Brokered CDs

Brokered CDs         904,650    6,790    1.51     603,699    10,335   3.44

Total
interest-bearing     12,806,471 91,592   1.44     11,179,530 145,161  2.61
deposits

Wholesale funding    5,484,245  52,387   1.92     5,622,248  93,454   3.34

Total
interest-bearing     18,290,716 143,979  1.59     16,801,778 238,615  2.86
liabilities

Noninterest-bearing  2,769,773                    2,389,005
demand deposits

Other liabilities    194,479                      154,125

Stockholders'        2,904,679                    2,367,799
equity

Total liabilities    $                            $
and stockholders'    24,159,647                   21,712,707
equity

Net interest income             $        3.23 %              $        3.21 %
and rate spread (1)             381,110                      351,759

Net interest margin                      3.49 %                       3.61 %
(1)

Taxable equivalent              $ 12,694                     $ 13,910
adjustment

                     Three months ended June 30,  Three months ended June 30,
                     2009                         2008

                     Average    Interest Average  Average    Interest Average

                     Balance    Income / Yield /  Balance    Income / Yield /
                                Expense  Rate                Expense  Rate

Earning assets:

Loans: (1) (2) (3)

Commercial           $          $        4.51 %   $          $        5.75 %
                     9,940,732  111,760           10,501,226 150,134

Residential          2,605,638  34,363   5.28     2,195,007  32,530   5.94
mortgage

Retail               3,575,693  49,088   5.50     3,424,499  56,010   6.57

Total loans          16,122,063 195,211  4.85     16,120,732 238,674  5.95

Investments and      5,725,128  60,849   4.25     3,633,919  47,734   5.25
other

Total earning        21,847,191 256,060  4.70     19,754,651 286,408  5.82
assets

Other assets, net    2,217,376                    2,220,800

Total assets         $                            $
                     24,064,567                   21,975,451

Interest-bearing
liabilities:

Savings deposits     $ 907,677  $ 359    0.16 %   $ 910,930  $ 1,009  0.45 %

Interest-bearing     1,970,889  1,038    0.21     1,796,373  3,774    0.84
demand deposits

Money market         5,409,953  12,412   0.92     3,864,739  17,546   1.83
deposits

Time deposits,
excluding Brokered   4,015,230  28,220   2.82     3,892,910  37,229   3.85
CDs

Total
interest-bearing     12,303,749 42,029   1.37     10,464,952 59,558   2.29
deposits, excluding
Brokered CDs

Brokered CDs         944,670    2,964    1.26     576,857    4,097    2.86

Total
interest-bearing     13,248,419 44,993   1.36     11,041,809 63,655   2.32
deposits

Wholesale funding    4,876,970  25,779   2.12     5,950,699  43,207   2.92

Total
interest-bearing     18,125,389 70,772   1.57     16,992,508 106,862  2.53
liabilities

Noninterest-bearing  2,852,267                    2,451,702
demand deposits

Other liabilities    177,211                      153,400

Stockholders'        2,909,700                    2,377,841
equity

Total liabilities    $                            $
and stockholders'    24,064,567                   21,975,451
equity

Net interest income             $        3.13 %              $        3.29 %
and rate spread (1)             185,288                      179,546

Net interest margin                      3.40 %                       3.65 %
(1)

Taxable equivalent              $ 6,150                      $ 6,814
adjustment



    The yield on tax exempt loans and securities is computed on a taxable
(1) 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: Joseph B. Selner, Chief Financial Officer, 920-491-7120 or Media: Janet L. Ford, SVP of Public Relations, 414-207-5070