Associated Earns 56 Cents Per Share in Third Quarter 2007.

GREEN BAY, Wis. -- Associated Banc-Corp (NASDAQ:ASBC):

* Net income of $71.7 million

* Continued growth in core fee-based income

* Net interest margin of 3.62% for third quarter

* Commercial nonperforming loans down 21% from second quarter

Associated Banc-Corp (NASDAQ: ASBC) earned $71.7 million, or $.56 per share, in the third quarter of 2007. Comparatively, net income was $75.8 million ($.59 per share) for the second quarter of 2007 and $76.9 million ($.58 per share) for the third quarter of 2006.

Return on average assets (ROA) was 1.38 percent, 1.48 percent and 1.46 percent for the third quarter of 2007, the second quarter of 2007 and the third quarter of 2006, respectively. The return on average equity (ROE) for the same quarters was 12.69 percent, 13.49 percent and 13.36 percent, respectively. Return on average tangible equity (which is a non-GAAP measure that excludes average goodwill and other intangible assets from average equity) was 22.42 percent in the third quarter of 2007, versus 23.14 percent in the second quarter of 2007 and 22.32 percent in the third quarter of 2006.

Net income was $221.0 million, or $1.72 per share, for the nine months ended Sept. 30, 2007, compared to net income of $242.1 million, or $1.81 per share, for the comparable nine-month period of 2006, which was positively impacted by $.09 per share related to tax matters.

Loans were $15.2 billion at Sept. 30, 2007. Loan growth since June 30 came from home equity (up $86 million) and real estate construction loans (up $78 million), offset partly by declines in all other commercial loans (down $63 million combined) and in residential mortgages (down $82 million). On average, loans were $15.2 billion for the third quarter of 2007, up $101 million or 3 percent annualized over the second quarter of 2007.

Deposits were $14.2 billion at Sept. 30, 2007, up $81 million or 2 percent annualized since June 30, after removing $42 million in branch deposits sold during the third quarter. On average, deposits were $13.9 billion, up $238 million or 7 percent annualized over the second quarter of 2007.

Net interest income for the third quarter of 2007 was $163.1 million, compared to $157.5 million for the second quarter of 2007 and $168.2 million for the third quarter of 2006. The net interest margin for the quarter was 3.62 percent, up 9 basis points over the second quarter of 2007 and down 1 basis point from the margin for the third quarter of last year. Contributing to the net interest margin for third quarter was the growth in average deposits as a percentage of total funding, as well as an improved interest rate spread.

Net charge offs to average loans were 38 basis points for the quarter and 22 basis points for the nine months ended Sept. 30, 2007. The third quarter's net charge offs of $14.7 million included a $6 million charge off related to an individual commercial credit. Commercial nonperforming loans decreased by $29 million or 21 percent from June 30, 2007. Total nonperforming loans declined to 0.99 percent of total loans compared to 1.19 percent of loans at June 30.

"We have been working diligently to lower the amount of commercial nonperforming and other criticized loans to reduce future exposure," Associated Chairman and CEO Paul S. Beideman said. "Our efforts have been very successful in the third quarter, and our intention is to continue such efforts. Consumer losses and foreclosure metrics remain relatively stable to 2006 levels. We believe that our losses going forward will stabilize around our historical loan loss levels. After our provision of $8.7 million this quarter we remain adequately reserved at 1.32 percent of total loans."

Noninterest income was $84.9 million for the third quarter of 2007, down $6.6 million compared to the second quarter of 2007, largely the result of $6.7 million lower net mortgage banking income and $2.4 million lower investment and asset sale gains, partially offset by $2.5 million growth in all other noninterest income categories combined. Core fee-based revenues for the quarter were $65.4 million, up $1.7 million or 3 percent higher than second quarter and up 14 percent over the third quarter of 2006. On a year-to-date basis, core fee-based revenue was $189.3 million, up $16.8 million or 10 percent over the nine-month period last year, with solid growth in deposit service charges (12 percent), trust service fees (16 percent), card-based and other fees (13 percent) and a 1 percent increase in retail commissions.

Net mortgage banking income was $3.0 million, compared to $9.7 million for the second quarter of 2007. The quarterly results were affected in part by lower secondary mortgage production (down 23 percent) and by lower valuation reserve recoveries (that is, a $0.1 million recovery in third quarter versus a $3.8 million recovery in second quarter). On a year-to-date basis, excluding valuation reserve changes and bulk servicing gains, core net mortgage banking income was $11.0 million for the first nine months of 2007, 9 percent higher than the $10.0 million for the first nine-month period of 2006.

Noninterest expenses remain controlled, with an efficiency ratio of 53.44 percent and 52.97 percent for the three and nine months ending Sept. 30, 2007, respectively. Noninterest expense was up $1.4 million or 1 percent over the second quarter of 2007. On a year-to-date basis, noninterest expense was up $23.0 million or 6 percent, with a 5 percent increase in personnel costs and a 7 percent increase in non-personnel costs, both impacted by the integration of First National Bank of Hudson.

During the third quarter, Associated paid a dividend of 31 cents per share, up 7 percent from the third-quarter dividend in 2006.

Associated will host a conference call for investors and analysts at 3 p.m. CDT today. The toll-free dial-in number for the live call is 800-459-5609. The number for international callers is 973-321-1024. Participants should ask the operator for the Associated Banc-Corp third quarter 2007 earnings call, or for call ID number 9288058. A replay of the call will be available starting at 6 p.m. CDT on Oct. 18 through Nov. 8, 2007, by calling 877-519-4471 (toll-free) domestically or 973-341-3080 internationally. The call ID number, 9288058, 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 approximately 300 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 filed on Form 10-K.

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