ASSOCIATED BANC-CORP - FORM 8-K - EX-99.1 - EXHIBIT 99.1

Attached files

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EX-99.2 - EXHIBIT 99.2 - ASSOCIATED BANC-CORP	asb4q16presentationfinal.htm
8-K - FORM 8-K - ASSOCIATED BANC-CORP	asb-12312016form8xkpr.htm

Exhibit 99.1



	NEWS RELEASE Investor Contact: Teresa Gutierrez, Senior Vice President, Director of Investor Relations 920-491-7059 Media Contact: Jennifer Kaminski, Vice President, Manager of Public Relations 920-491-7576

Associated Banc-Corp Reports 2016 Earnings of $1.26 per share

Record loan levels and improved operating leverage drive bottom line growth

GREEN BAY, Wis. -- January 19, 2017 -- Associated Banc-Corp (NYSE: ASB) today reported net income available to common equity of $191 million, or $1.26 per common share for the year ended December 31, 2016. This compares to net income available to common equity of $181 million, or $1.19 per common share for the year ended December 31, 2015. The Company reported earnings of $0.34 per common share for the quarter ended December 31, 2016, compared to $0.27 per common share for the quarter ended December 31, 2015.

“We are pleased to report full year results in line with our guidance. We delivered loan, revenue, and bottom line growth in 2016. We ended the year with over $20 billion of loans, a new high-water mark for us, reflecting 8% annual average loan growth. Our commercial real estate, residential lending, and capital markets businesses, in particular, performed well,” said President and CEO Philip B. Flynn. “We grew earnings throughout the year and finished strong driven by higher revenues in the second half of the year. We improved our efficiency ratio for the fifth consecutive year. With another successful year now behind us, we remain committed to delivering quality solutions for our customers and communities.”

2016 HIGHLIGHTS


•	Average loans of $19.7 billion grew $1.4 billion, or 8% from a year ago


•	Total commercial lending accounted for 62% of average loan growth


•	Average deposits of $21.0 billion grew $1.1 billion, or 6% from a year ago


•	Noninterest-bearing demand deposits accounted for 51% of average deposit growth


•	Net interest income of $707 million increased $31 million, or 5% from last year


•	Net interest margin of 2.80% declined from 2.84% in 2015


•	Provision for credit losses of $70 million increased $33 million from last year


•	Noninterest income of $353 million increased $24 million, or 7% from last year


•	Noninterest expense of $703 million increased $4 million, or 1% from last year


•	During the year, the Company repurchased $20 million, or approximately 1.2 million shares, of common stock at an average cost of $17.10 per share


•	Return on average common equity Tier 1 (CET1) was 9.9%


•	Total dividends per common share of $0.45 were up 10% from last year


•	Capital ratios remain strong with a CET1 ratio of 9.5% at year end

2016 AND FOURTH QUARTER FINANCIAL RESULTS

Loans

Full year average loans of $19.7 billion were up 8%, or $1.4 billion from 2015.

With respect to full year average balances as compared to 2015:


•	Commercial real estate lending was up 12%, or $502 million to $4.7 billion.


•	Consumer lending was up 8%, or $536 million to $7.5 billion.


•	Commercial and business lending was up 5%, or $360 million to $7.4 billion.

Fourth quarter average loans of $20.0 billion were down $0.1 billion from the third quarter, and were up 8%, or $1.4 billion from the year ago quarter.

With respect to fourth quarter average balances:


•	Commercial real estate lending was up 1%, or $59 million from the third quarter to $4.9 billion. Commercial real estate lending was up 12%, or $541 million from the year ago quarter.


•	Consumer lending was up $36 million from the third quarter to $7.7 billion. Consumer lending was up 5%, or $379 million from the year ago quarter.


•	Commercial and business lending was down 2%, or $171 million from the third quarter to $7.4 billion, with the decline primarily driven by seasonally lower line utilization. Commercial and business lending was up 7%, or $515 million from the year ago quarter.

For the year ended December 31, 2016, total loans of $20.0 billion were up 7%, or $1.3 billion from December 31, 2015, and were up 1%, or $0.2 billion from September 30, 2016.

With respect to period end balances:


•	Commercial real estate lending was up 14%, or $611 million from the prior year end to $5.0 billion. Commercial real estate lending was up 3%, or $162 million from the prior quarter end.


•	Consumer lending was up 6%, or $431 million from the prior year end to $7.6 billion. Consumer lending was up 3%, or $255 million from the prior quarter end.


•	Commercial and business lending was up 4%, or $278 million from the prior year end to $7.4 billion. Commercial and business lending was down 3%, or $227 million from the prior quarter end.

Deposits

Full year average deposits of $21.0 billion were up 6%, or $1.1 billion from 2015.

With respect to full year average balances as compared to 2015:


•	Interest-bearing demand deposits were up 18%, or $589 million to $3.8 billion.


•	Noninterest-bearing demand deposits were up 12%, or $565 million to $5.1 billion.


•	Time and savings deposits, combined, were up 1%, or $31 million to $3.0 billion.


•	Money market deposits were down 1%, or $82 million to $9.1 billion.

Fourth quarter average deposits of $21.7 billion were up 2%, or $0.3 billion from the third quarter, and were up 5%, or $1.1 billion from the year ago quarter.

With respect to fourth quarter average balances:


•	Noninterest-bearing demand deposits were up 3%, or $132 million from the third quarter to $5.3 billion, and were up 7%, or $326 million from the year ago quarter.


•	Money market deposits were up 2%, or $207 million from the third quarter to $9.3 billion, and were down 2%, or $238 million from the year ago quarter.


•	Time and savings deposits were up modestly from the third quarter to $3.0 billion. Time and savings deposits, combined, were up 2%, or $49 million from the year ago quarter.


•	Interest-bearing demand deposits were down slightly from the third quarter to $4.1 billion, and were up 31%, or $989 million from the year ago quarter.

For the year ended December 31, 2016, total deposits of $21.9 billion were up 4%, or $0.9 billion from December 31, 2015, and were up 1%, or $0.1 billion from September 30, 2016.

With respect to period end balances:


•	Interest-bearing demand deposits were up 36%, or $1.2 billion from the prior year end to $4.7 billion, and were up 3%, or $139 million from the prior quarter end.


•	Time and savings deposits, combined, were up 5%, or $140 million from the prior year end to $3.0 billion, and were up 2%, or $70 million from the prior quarter end.


•	Noninterest-bearing demand deposits were down 3%, or $170 million from the prior year end to $5.4 billion, and were up 1%, or $55 million from the prior quarter end.


•	Money market deposits were down 4%, or $332 million to $8.8 billion from the prior year end, and were down 1%, or $123 million from the prior quarter end.

Net Interest Income and Net Interest Margin

Full year net interest income of $707 million was up $31 million, or 5% from 2015. Net interest margin of 2.80% was down 4 basis points from the prior year.


•	Interest and fees on loans increased $44 million, or 7% from the prior year. The total loan yield of 3.38% decreased 2 basis points from the prior year.


•	Total interest expense increased $7 million, or 9% from the prior year. The total cost of interest-bearing liabilities of 0.42% increased 2 basis points from the prior year.

Fourth quarter net interest income of $180 million was up $1.5 million, or 1% from the third quarter, and was up $9 million, or 5% from the year ago quarter. Net interest margin of 2.80% was up 3 basis points from the third quarter.


•	Interest and fees on loans increased $2 million, or 1% from the third quarter. The total loan yield of 3.40% increased 5 basis points from the prior quarter and accounted for the majority of the margin expansion in the quarter.


•	Interest expense on deposits increased $1 million, or 5% from the third quarter. The cost of total interest-bearing deposits increased 1 basis point from the prior quarter.


•	Lower investment income was more than offset by lower cost of short and long-term funding for the fourth quarter, driven by noninterest-bearing deposit growth.

Noninterest Income

Full year total noninterest income of $353 million was up $24 million, or 7% from 2015.


•	Capital market fees of $22 million increased significantly from the prior year on higher customer hedging transactions and higher loan syndication activity.


•	Mortgage banking income increased $6 million, or 18% from the prior year primarily attributable to portfolio loan sales.


•	Insurance commissions increased $5 million, or 7% from the prior year.


•	All other noninterest income categories, collectively, increased $5 million from the prior year.

Noninterest Income cont.

Fourth quarter total noninterest income of $92 million was down $3 million, or 3% from the third quarter, and was up $9 million, or 11% from the year ago quarter.


•	Mortgage banking income decreased $7 million in the fourth quarter, principally related to portfolio sales generating $9 million of gross gains in the prior quarter.


•	Investment securities gains increased $3 million in the fourth quarter, and reflected the Company’s continued shift away from Agency MBS investments and net reduced investment positions.


•	All other noninterest income categories, collectively, increased $1 million from the prior quarter.

Noninterest Expense

Full year noninterest expense of $703 million was up $4 million, or 1% from the prior year.


•	Personnel increased $10 million from the prior year, and included severance of $5 million, principally related to the restructuring of the Company's commercial and business lending areas.


•	Year over year increases in FDIC expense, legal and professional fees, and business development and advertising were more than offset by decreases in all other expense categories.

Fourth quarter total noninterest expense of $179 million was up $4 million, or 2% from the third quarter, and was up $3 million, or 2% from the year ago quarter.


•	Personnel expense increased $4 million from the third quarter, and included severance of $3 million, principally related to the restructuring of the Company's commercial and business lending areas.


•	Quarter over quarter decreases in occupancy, foreclosure / OREO expense, and loan expense were offset by increases in all other expense categories.

Taxes

Full year income tax expense was $87 million and was up $6 million from 2015. The effective tax rate was 30% in 2016 and 2015.

Fourth quarter income tax expense was $24 million with an effective tax rate of 30%, compared to $24 million and 31% in the third quarter, and $16 million and 27% in the year ago quarter.

Credit

Full year provision for credit losses of $70 million was up $33 million from the prior year, principally related to a $35 million increase in net charge offs year over year, primarily related to oil and gas loans.

Fourth quarter provision for credit losses of $15 million was down $6 million from the prior quarter.


•	Potential problem loans of $351 million were down $90 million from the prior quarter, and were up $49 million from the prior year quarter.


•	Nonaccrual loans of $275 million were down $15 million from the prior quarter, and were up $97 million from the prior year quarter. The nonaccrual loans to total loans ratio was 1.37% in the fourth quarter, compared to 1.46% in the prior quarter, and 0.95% in the prior year quarter.


•	Fourth quarter net charge offs of $9 million were down $9 million from the prior quarter. Full year net charge offs of $65 million were up $35 million year over year, primarily related to oil and gas loans.


•	The allowance for loan losses of $278 million was up $9 million from the prior quarter, and was up $4 million from the prior year quarter. The allowance for loan losses to total loans ratio was 1.39% in the fourth quarter, compared to 1.36% in the prior quarter, and 1.47% in the prior year quarter.

•

The allowance related to the oil and gas portfolio was $38 million at December 31, 2016, compared to $38 million at September 30, 2016, and $42 million at December 31, 2015. Full year charge offs related to the oil and gas portfolio were $59 million. The allowance represented 5.7% of total oil and gas loans at December 31, 2016, compared to 5.5% at September 30, 2016, and 5.6% at December 31, 2015.

Capital

The Company’s capital position remains strong, with a CET1 ratio of 9.5% at December 31, 2016. The Company’s capital ratios continue to be in excess of the Basel III “well-capitalized” regulatory benchmarks on a fully phased in basis.

FOURTH QUARTER 2016 EARNINGS RELEASE CONFERENCE CALL

The Company will host a conference call for investors and analysts at 4:00 p.m. Central Time (CT) today, January 19, 2017. Interested parties can access the live webcast of the call through the Investor Relations section of the Company's website, http://investor.associatedbank.com. Parties may also dial into the call at 877-407-8037 (domestic) or 201-689-8037 (international) and request the Associated Banc-Corp fourth quarter 2016 earnings call. The fourth quarter and full year 2016 financial tables with an accompanying slide presentation will be available on the Company's website just prior to the call. An audio archive of the webcast will be available on the Company's website approximately fifteen minutes after the call is over.

ABOUT ASSOCIATED BANC-CORP

Associated Banc-Corp (NYSE: ASB) has total assets of $29 billion and is one of the top 50 publicly traded U.S. bank holding companies. Headquartered in Green Bay, Wisconsin, Associated is a leading Midwest banking franchise, offering a full range of financial products and services from over 200 banking locations serving more than 100 communities throughout Wisconsin, Illinois and Minnesota, and commercial financial services in Indiana, Michigan, Missouri, Ohio, and Texas. Associated Bank, N.A. is an Equal Housing Lender, Equal Opportunity Lender and Member FDIC. More information about Associated Banc-Corp is available at www.associatedbank.com.

FORWARD LOOKING STATEMENTS

Statements made in this document which 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. Such forward-looking statements may be identified by the use of words such as “believe,” “expect,” “anticipate,” “plan,” “estimate,” “should,” “will,” “intend,” “outlook,” or similar expressions. Forward-looking statements are based on current management expectations and, by their nature, are subject to risks and uncertainties. Actual results may differ materially from those contained in the forward-looking statements. Factors which may cause actual results to differ materially from those contained in such forward-looking statements include those identified in the Company’s most recent Form 10-K and subsequent SEC filings. Such factors are incorporated herein by reference.

NON-GAAP FINANCIAL MEASURES

This press release and related materials may contain references to measures which are not defined in generally accepted accounting principles (“GAAP”). Information concerning these non-GAAP financial measures can be found in the financial tables.

# # #



Associated Banc-Corp Consolidated Balance Sheets (Unaudited)
(in thousands)	Dec 31, 2016			Sep 30, 2016			Seql Qtr $ Change			Jun 30, 2016			Mar 31, 2016			Dec 31, 2015			Comp Qtr $ Change
Assets
Cash and due from banks	$	446,558		$	356,047		$	90,511		$	333,000		$	287,183		$	374,921		$	71,637
Interest-bearing deposits in other financial institutions	149,175			240,010			(90,835		)	131,680			68,025			79,764			69,411
Federal funds sold and securities purchased under agreements to resell	46,500			14,250			32,250			13,200			20,200			19,000			27,500
Investment securities held to maturity, at amortized cost	1,273,536			1,253,494			20,042			1,236,140			1,176,821			1,168,230			105,306
Investment securities available for sale, at fair value	4,680,226			4,846,088			(165,862		)	4,801,766			4,905,841			4,967,414			(287,188		)
Federal Home Loan Bank and Federal Reserve Bank stocks, at cost	140,001			140,215			(214		)	194,501			181,853			147,240			(7,239		)
Loans held for sale	141,383			230,795			(89,412		)	284,376			128,339			124,915			16,468
Loans	20,033,817			19,844,005			189,812			19,815,286			19,227,240			18,714,343			1,319,474
Allowance for loan losses	(278,335		)	(269,540		)	(8,795		)	(267,780		)	(277,370		)	(274,264		)	(4,071		)
Loans, net	19,755,482			19,574,465			181,017			19,547,506			18,949,870			18,440,079			1,315,403
Premises and equipment, net	330,315			329,726			589			331,427			331,711			267,606			62,709
Goodwill	971,951			971,951			—			971,951			971,951			968,844			3,107
Mortgage servicing rights, net	61,476			58,414			3,062			57,474			59,414			61,341			135
Other intangible assets, net	15,377			15,902			(525		)	16,427			16,966			16,458			(1,081		)
Trading assets	52,398			60,780			(8,382		)	77,112			53,087			32,192			20,206
Other assets	1,074,937			1,060,627			14,310			1,042,139			1,027,606			1,043,831			31,106
Total assets	$	29,139,315		$	29,152,764		$	(13,449	)	$	29,038,699		$	28,178,867		$	27,711,835		$	1,427,480
Liabilities and Stockholders’ Equity
Noninterest-bearing demand deposits	$	5,392,208		$	5,337,677		$	54,531		$	5,039,336		$	5,272,685		$	5,562,466		$	(170,258	)
Interest-bearing deposits	16,496,240			16,410,035			86,205			15,253,514			15,412,775			15,445,199			1,051,041
Total deposits	21,888,448			21,747,712			140,736			20,292,850			20,685,460			21,007,665			880,783
Federal funds purchased and securities sold under agreements to repurchase	508,347			698,772			(190,425		)	509,150			583,247			431,438			76,909
Other short-term funding	583,688			541,321			42,367			1,402,407			834,161			402,978			180,710
Long-term funding	2,761,795			2,761,635			160			3,511,475			2,861,316			2,676,164			85,631
Trading liabilities	51,103			62,301			(11,198		)	79,466			55,223			33,430			17,673
Accrued expenses and other liabilities	254,622			243,908			10,714			213,204			176,962			222,914			31,708
Total liabilities	26,048,003			26,055,649			(7,646		)	26,008,552			25,196,369			24,774,589			1,273,414
Stockholders’ Equity
Preferred equity	159,929			159,929			—			120,201			120,347			121,379			38,550
Common equity:
Common stock	1,630			1,630			—			1,630			1,630			1,642			(12		)
Surplus	1,459,498			1,459,161			337			1,453,285			1,447,368			1,458,522			976
Retained earnings	1,695,764			1,662,778			32,986			1,629,915			1,599,835			1,593,239			102,525
Accumulated other comprehensive income (loss)	(54,679		)	(1,254		)	(53,425		)	13,453			2,167			(32,616		)	(22,063		)
Treasury stock, at cost	(170,830		)	(185,129		)	14,299			(188,337		)	(188,849		)	(204,920		)	34,090
Total common equity	2,931,383			2,937,186			(5,803		)	2,909,946			2,862,151			2,815,867			115,516
Total stockholders’ equity	3,091,312			3,097,115			(5,803		)	3,030,147			2,982,498			2,937,246			154,066
Total liabilities and stockholders’ equity	$	29,139,315		$	29,152,764		$	(13,449	)	$	29,038,699		$	28,178,867		$	27,711,835		$	1,427,480

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Associated Banc-Corp Consolidated Statements of Income (Unaudited)
						Comp Qtr					YTD			YTD		Comp YTD
(in thousands, except per share data)	4Q16		4Q15			$ Change			% Change		Dec 2016			Dec 2015		$ Change			% Change
Interest Income
Interest and fees on loans	$	169,473	$	155,602		$	13,871		9	%	$	659,538		$	615,627	$	43,911		7	%
Interest and dividends on investment securities:
Taxable	22,418		26,395			(3,977		)	(15	)%	95,152			100,292		(5,140		)	(5	)%
Tax-exempt	8,184		7,783			401			5	%	32,049			31,152		897			3	%
Other interest	1,380		1,639			(259		)	(16	)%	4,829			6,591		(1,762		)	(27	)%
Total interest income	201,455		191,419			10,036			5	%	791,568			753,662		37,906			5	%
Interest Expense
Interest on deposits	13,773		8,844			4,929			56	%	50,335			33,125		17,210			52	%
Interest on Federal funds purchased and securities sold under agreements to repurchase	314		229			85			37	%	1,314			943		371			39	%
Interest on other short-term funding	458		186			272			146	%	2,114			465		1,649			N/M
Interest on long-term funding	6,875		10,692			(3,817		)	(36	)%	30,532			42,851		(12,319		)	(29	)%
Total interest expense	21,420		19,951			1,469			7	%	84,295			77,384		6,911			9	%
Net Interest Income	180,035		171,468			8,567			5	%	707,273			676,278		30,995			5	%
Provision for credit losses	15,000		20,000			(5,000		)	(25	)%	70,000			37,500		32,500			87	%
Net interest income after provision for credit losses	165,035		151,468			13,567			9	%	637,273			638,778		(1,505		)	—	%
Noninterest Income
Trust service fees	12,211		11,965			246			2	%	46,867			48,840		(1,973		)	(4	)%
Service charges on deposit accounts	16,447		16,577			(130		)	(1	)%	66,609			65,471		1,138			2	%
Card-based and other nondeposit fees⁽¹⁾	12,592		11,485			1,107			10	%	50,077			47,912		2,165			5	%
Insurance commissions	17,977		17,997			(20		)	—	%	80,795			75,363		5,432			7	%
Brokerage and annuity commissions	4,188		3,694			494			13	%	16,235			15,378		857			6	%
Mortgage banking, net	11,559		8,271			3,288			40	%	38,121			32,263		5,858			18	%
Capital market fees, net⁽¹⁾⁽²⁾	7,716		4,820			2,896			60	%	22,059			14,558		7,501			52	%
Bank owned life insurance income	3,338		2,092			1,246			60	%	14,371			9,796		4,575			47	%
Asset gains (losses), net	767		(391		)	1,158			N/M		(86		)	2,540		(2,626		)	(103	)%
Investment securities gains (losses), net	3,115		4,095			(980		)	(24	)%	9,316			8,133		1,183			15	%
Other⁽²⁾	2,379		2,392			(13		)	(1	)%	8,519			9,103		(584		)	(6	)%
Total noninterest income	92,289		82,997			9,292			11	%	352,883			329,357		23,526			7	%
Noninterest Expense
Personnel expense	107,491		100,469			7,022			7	%	414,837			404,741		10,096			2	%
Occupancy	13,690		14,718			(1,028		)	(7	)%	56,069			60,896		(4,827		)	(8	)%
Equipment	5,328		5,695			(367		)	(6	)%	21,489			23,209		(1,720		)	(7	)%
Technology	14,413		13,953			460			3	%	57,300			60,613		(3,313		)	(5	)%
Business development and advertising	6,298		7,652			(1,354		)	(18	)%	26,351			25,772		579			2	%
Other intangible amortization	525		520			5			1	%	2,093			3,094		(1,001		)	(32	)%
Loan expense	3,443		4,120			(677		)	(16	)%	13,641			14,102		(461		)	(3	)%
Legal and professional fees	5,184		3,963			1,221			31	%	19,869			17,052		2,817			17	%
Foreclosure / OREO expense, net	677		2,371			(1,694		)	(71	)%	4,844			5,442		(598		)	(11	)%
FDIC expense	9,250		7,500			1,750			23	%	34,750			26,000		8,750			34	%
Other	12,616		15,032			(2,416		)	(16	)%	51,317			57,426		(6,109		)	(11	)%
Total noninterest expense	178,915		175,993			2,922			2	%	702,560			698,347		4,213			1	%
Income before income taxes	78,409		58,472			19,937			34	%	287,596			269,788		17,808			7	%
Income tax expense	23,576		15,681			7,895			50	%	87,322			81,487		5,835			7	%
Net income	54,833		42,791			12,042			28	%	200,274			188,301		11,973			6	%
Preferred stock dividends	2,348		2,198			150			7	%	8,903			7,155		1,748			24	%
Net income available to common equity	$	52,485	$	40,593		$	11,892		29	%	$	191,371		$	181,146	$	10,225		6	%
Earnings Per Common Share:
Basic	$	0.35	$	0.27		$	0.08		30	%	$	1.27		$	1.20	$	0.07		6	%
Diluted	$	0.34	$	0.27		$	0.07		26	%	$	1.26		$	1.19	$	0.07		6	%
Average Common Shares Outstanding:
Basic	149,253		148,834			419			—	%	148,769			149,350		(581		)	—	%
Diluted	151,563		150,163			1,400			1	%	149,961			150,603		(642		)	—	%
N/M - Not meaningful
(1) During the fourth quarter of 2016, the consolidated statements of income were modified from prior periods' presentation to conform with the current period presentation, which reflects loan syndications as a component of Capital Market fees, net. In prior periods' presentation, loan syndications were reported as a component of Card-based and other nondeposit fees. All prior periods have been restated to reflect this change in presentation. (2) During the fourth quarter of 2016, the consolidated statements of income were modified from prior periods' presentation to conform with the current period presentation, which reflects bond underwriting as a component of Capital Market fees, net. In prior periods' presentation, bond underwriting was reported as a component of Other. All prior periods have been restated to reflect this change in presentation.

Page 2



Associated Banc-Corp Consolidated Statements of Income (Unaudited)—Quarterly Trend
						Seql Qtr													Comp Qtr
(in thousands, except per share data)	4Q16		3Q16			$ Change			% Change		2Q16			1Q16		4Q15			$ Change			% Change
Interest Income
Interest and fees on loans	$	169,473	$	167,350		$	2,123		1	%	$	163,059		$	159,656	$	155,602		$	13,871		9	%
Interest and dividends on investment securities:
Taxable	22,418		22,948			(530		)	(2	)%	24,270			25,516		26,395			(3,977		)	(15	)%
Tax-exempt	8,184		8,141			43			1	%	7,894			7,830		7,783			401			5	%
Other interest	1,380		1,064			316			30	%	1,318			1,067		1,639			(259		)	(16	)%
Total interest income	201,455		199,503			1,952			1	%	196,541			194,069		191,419			10,036			5	%
Interest Expense
Interest on deposits	13,773		13,118			655			5	%	11,678			11,766		8,844			4,929			56	%
Interest on Federal funds purchased and securities sold under agreements to repurchase	314		326			(12		)	(4	)%	378			296		229			85			37	%
Interest on other short-term funding	458		296			162			55	%	845			515		186			272			146	%
Interest on long-term funding	6,875		7,229			(354		)	(5	)%	6,923			9,505		10,692			(3,817		)	(36	)%
Total interest expense	21,420		20,969			451			2	%	19,824			22,082		19,951			1,469			7	%
Net Interest Income	180,035		178,534			1,501			1	%	176,717			171,987		171,468			8,567			5	%
Provision for credit losses	15,000		21,000			(6,000		)	(29	)%	14,000			20,000		20,000			(5,000		)	(25	)%
Net interest income after provision for credit losses	165,035		157,534			7,501			5	%	162,717			151,987		151,468			13,567			9	%
Noninterest Income
Trust service fees	12,211		11,700			511			4	%	11,509			11,447		11,965			246			2	%
Service charges on deposit accounts	16,447		17,445			(998		)	(6	)%	16,444			16,273		16,577			(130		)	(1	)%
Card-based and other nondeposit fees⁽¹⁾	12,592		12,777			(185		)	(1	)%	12,717			11,991		11,485			1,107			10	%
Insurance commissions	17,977		19,431			(1,454		)	(7	)%	22,005			21,382		17,997			(20		)	—	%
Brokerage and annuity commissions	4,188		4,155			33			1	%	4,098			3,794		3,694			494			13	%
Mortgage banking, net	11,559		18,291			(6,732		)	(37	)%	4,067			4,204		8,271			3,288			40	%
Capital market fees, net⁽¹⁾⁽²⁾	7,716		7,012			704			10	%	3,793			3,538		4,820			2,896			60	%
Bank owned life insurance income	3,338		3,290			48			1	%	2,973			4,770		2,092			1,246			60	%
Asset gains (losses), net	767		(1,034		)	1,801			(174	)%	(343		)	524		(391		)	1,158			N/M
Investment securities gains (losses), net	3,115		(13		)	3,128			N/M		3,116			3,098		4,095			(980		)	(24	)%
Other⁽²⁾	2,379		2,180			199			9	%	1,789			2,171		2,392			(13		)	(1	)%
Total noninterest income	92,289		95,234			(2,945		)	(3	)%	82,168			83,192		82,997			9,292			11	%
Noninterest Expense
Personnel expense	107,491		103,819			3,672			4	%	102,129			101,398		100,469			7,022			7	%
Occupancy	13,690		15,362			(1,672		)	(11	)%	13,215			13,802		14,718			(1,028		)	(7	)%
Equipment	5,328		5,319			9			—	%	5,396			5,446		5,695			(367		)	(6	)%
Technology	14,413		14,173			240			2	%	14,450			14,264		13,953			460			3	%
Business development and advertising	6,298		5,251			1,047			20	%	6,591			8,211		7,652			(1,354		)	(18	)%
Other intangible amortization	525		525			—			—	%	539			504		520			5			1	%
Loan expense	3,443		3,535			(92		)	(3	)%	3,442			3,221		4,120			(677		)	(16	)%
Legal and professional fees	5,184		4,804			380			8	%	4,856			5,025		3,963			1,221			31	%
Foreclosure / OREO expense, net	677		960			(283		)	(29	)%	1,330			1,877		2,371			(1,694		)	(71	)%
FDIC expense	9,250		9,000			250			3	%	8,750			7,750		7,500			1,750			23	%
Other	12,616		12,566			50			—	%	13,662			12,473		15,032			(2,416		)	(16	)%
Total noninterest expense	178,915		175,314			3,601			2	%	174,360			173,971		175,993			2,922			2	%
Income before income taxes	78,409		77,454			955			1	%	70,525			61,208		58,472			19,937			34	%
Income tax expense	23,576		23,638			(62		)	—	%	21,434			18,674		15,681			7,895			50	%
Net income	54,833		53,816			1,017			2	%	49,091			42,534		42,791			12,042			28	%
Preferred stock dividends	2,348		2,188			160			7	%	2,169			2,198		2,198			150			7	%
Net income available to common equity	$	52,485	$	51,628		$	857		2	%	$	46,922		$	40,336	$	40,593		$	11,892		29	%
Earnings Per Common Share:
Basic	$	0.35	$	0.34		$	0.01		3	%	$	0.31		$	0.27	$	0.27		$	0.08		30	%
Diluted	$	0.34	$	0.34		$	—		—	%	$	0.31		$	0.27	$	0.27		$	0.07		26	%
Average Common Shares Outstanding:
Basic	149,253		148,708			545			—	%	148,511			148,601		148,834			419			—	%
Diluted	151,563		149,973			1,590			1	%	149,530			149,454		150,163			1,400			1	%
N/M - Not meaningful
(1) During the fourth quarter of 2016, the consolidated statements of income were modified from prior periods' presentation to conform with the current period presentation, which reflects loan syndications as a component of Capital Market fees, net. In prior periods' presentation, loan syndications were reported as a component of Card-based and other nondeposit fees. All prior periods have been restated to reflect this change in presentation. (2) During the fourth quarter of 2016, the consolidated statements of income were modified from prior periods' presentation to conform with the current period presentation, which reflects bond underwriting as a component of Capital Market fees, net. In prior periods' presentation, bond underwriting was reported as a component of Other. All prior periods have been restated to reflect this change in presentation.

Page 3



Associated Banc-Corp Selected Quarterly Information
($ in millions, except share and per share, full time equivalent employee data and branch count)	YTD Dec 2016			YTD Dec 2015			4Q16			3Q16			2Q16			1Q16			4Q15
Per Common Share Data
Dividends	$	0.45		$	0.41		$	0.12		$	0.11		$	0.11		$	0.11		$	0.11
Market value:
High	25.15			20.84			25.15			19.91			18.84			18.79			20.61
Low	15.48			16.62			19.05			16.49			15.84			15.48			17.98
Close	24.70			18.75			24.70			19.59			17.15			17.94			18.75
Book value	19.27			18.62			19.27			19.42			19.27			18.96			18.62
Tangible book value / share	$	12.78		$	12.10		$	12.78		$	12.89		$	12.72		$	12.41		$	12.10
Performance Ratios (annualized)
Return on average assets	0.70		%	0.70		%	0.75		%	0.74		%	0.69		%	0.62		%	0.62		%
Effective tax rate	30.36		%	30.20		%	30.07		%	30.52		%	30.39		%	30.51		%	26.82		%
Dividend payout ratio⁽¹⁾	35.43		%	34.17		%	34.29		%	32.35		%	35.48		%	40.74		%	40.74		%
Selected Trend Information
Average full time equivalent employees	4,426			4,421			4,439			4,477			4,415			4,374			4,378
Branch count							217			217			215			215			215
Trust assets under management, at market value							$	8,302		$	8,179		$	7,944		$	7,844		$	7,729
Mortgage loans originated for sale during period	$	1,282		$	1,228		$	298		$	466		$	324		$	194		$	317
Mortgage loan settlements during period	$	1,543		$	1,241		$	396		$	655		$	270		$	222		$	299
Mortgage portfolio serviced for others							$	7,975		$	8,011		$	7,776		$	7,877		$	7,915
Mortgage servicing rights, net / mortgage portfolio serviced for others							0.77		%	0.73		%	0.74		%	0.75		%	0.77		%
Shares outstanding, end of period							152,121			151,243			151,036			150,994			151,239
Selected Quarterly Ratios
Loans / deposits							91.53		%	91.25		%	97.65		%	92.95		%	89.08		%
Stockholders’ equity / assets							10.61		%	10.62		%	10.43		%	10.58		%	10.60		%
Risk-based Capital ^{(2) (3)}
Total risk-weighted assets							$	21,350		$	21,265		$	21,168		$	20,454		$	19,930
Common equity Tier 1							$	2,033		$	1,984		$	1,941		$	1,903		$	1,898
Common equity Tier 1 capital ratio							9.52		%	9.33		%	9.17		%	9.30		%	9.52		%
Tier 1 capital ratio							10.27		%	10.08		%	9.73		%	9.88		%	10.12		%
Total capital ratio							12.68		%	12.49		%	12.16		%	12.35		%	12.62		%
Tier 1 leverage ratio							7.83		%	7.64		%	7.43		%	7.55		%	7.60		%


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


(2)	The Federal Reserve establishes regulatory capital requirements, including well-capitalized standards for the Corporation. The regulatory capital requirements effective for the Corporation follow Basel III, subject to certain transition provisions.


(3)	December 31, 2016 data is estimated.

Page 4



Associated Banc-Corp Selected Asset Quality Information
(in thousands)	Dec 31, 2016			Sep 30, 2016			Seql Qtr % Change		Jun 30, 2016			Mar 31, 2016			Dec 31, 2015			Comp Qtr % Change
Allowance for Loan Losses
Balance at beginning of period	$	269,540		$	267,780		1	%	$	277,370		$	274,264		$	262,536		3	%
Provision for loan losses	18,000			20,000			(10	)%	11,000			20,000			19,500			(8	)%
Charge offs	(11,609		)	(28,964		)	(60	)%	(24,621		)	(21,245		)	(12,741		)	(9	)%
Recoveries	2,404			10,724			(78	)%	4,031			4,351			4,969			(52	)%
Net charge offs	(9,205		)	(18,240		)	(50	)%	(20,590		)	(16,894		)	(7,772		)	18	%
Balance at end of period	$	278,335		$	269,540		3	%	$	267,780		$	277,370		$	274,264		1	%
Allowance for Unfunded Commitments
Balance at beginning of period	$	28,400		$	27,400		4	%	$	24,400		$	24,400		$	23,900		19	%
Provision for unfunded commitments	(3,000		)	1,000			N/M		3,000			—			500			N/M
Balance at end of period	$	25,400		$	28,400		(11	)%	$	27,400		$	24,400		$	24,400		4	%
Allowance for credit losses	$	303,735		$	297,940		2	%	$	295,180		$	301,770		$	298,664		2	%
Provision for credit losses	$	15,000		$	21,000		(29	)%	$	14,000		$	20,000		$	20,000		(25	)%
Net Charge Offs	Dec 31, 2016			Sep 30, 2016			Seql Qtr % Change		Jun 30, 2016			Mar 31, 2016			Dec 31, 2015			Comp Qtr % Change
Commercial and industrial	$	(6,566	)	$	(16,407	)	(60	)%	$	(18,564	)	$	(14,936	)	$	(4,586	)	43	%
Commercial real estate—owner occupied	(221		)	(154		)	44	%	(20		)	(43		)	(291		)	(24	)%
Commercial and business lending	(6,787		)	(16,561		)	(59	)%	(18,584		)	(14,979		)	(4,877		)	39	%
Commercial real estate—investor	5			(564		)	(101	)%	(560		)	1,239			(665		)	(101	)%
Real estate construction	(86		)	(22		)	N/M		(219		)	(28		)	140			(161	)%
Commercial real estate lending	(81		)	(586		)	(86	)%	(779		)	1,211			(525		)	(85	)%
Total commercial	(6,868		)	(17,147		)	(60	)%	(19,363		)	(13,768		)	(5,402		)	27	%
Residential mortgage	(1,048		)	(540		)	94	%	(757		)	(1,232		)	(714		)	47	%
Home equity revolving lines of credit	(611		)	36			N/M		275			(902		)	(294		)	108	%
Home equity loans junior liens	120			89			35	%	42			(244		)	(623		)	(119	)%
Home equity	(491		)	125			N/M		317			(1,146		)	(917		)	(46	)%
Other consumer	(798		)	(678		)	18	%	(787		)	(748		)	(739		)	8	%
Total consumer	(2,337		)	(1,093		)	114	%	(1,227		)	(3,126		)	(2,370		)	(1	)%
Total net charge offs	$	(9,205	)	$	(18,240	)	(50	)%	$	(20,590	)	$	(16,894	)	$	(7,772	)	18	%
Net Charge Offs to Average Loans (in basis points) *	Dec 31, 2016			Sep 30, 2016					Jun 30, 2016			Mar 31, 2016			Dec 31, 2015
Commercial and industrial	(40		)	(98		)			(114		)	(97		)	(31		)
Commercial real estate—owner occupied	(10		)	(7		)			(1		)	(2		)	(12		)
Commercial and business lending	(36		)	(87		)			(100		)	(85		)	(28		)
Commercial real estate—investor	N/M			(6		)			(7		)	15			(8		)
Real estate construction	(3		)	(1		)			(7		)	(1		)	5
Commercial real estate lending	(1		)	(5		)			(7		)	11			(5		)
Total commercial	(22		)	(55		)			(64		)	(48		)	(19		)
Residential mortgage	(7		)	(3		)			(5		)	(8		)	(5		)
Home equity revolving lines of credit	(29		)	2					13			(41		)	(13		)
Home equity loans junior liens	49			34					15			(83		)	(195		)
Home equity	(21		)	5					13			(46		)	(36		)
Other consumer	(80		)	(67		)			(78		)	(72		)	(69		)
Total consumer	(12		)	(6		)			(7		)	(17		)	(13		)
Total net charge offs	(18		)	(36		)			(42		)	(36		)	(17		)
Credit Quality	Dec 31, 2016			Sep 30, 2016			Seql Qtr % Change		Jun 30, 2016			Mar 31, 2016			Dec 31, 2015			Comp Qtr % Change
Nonaccrual loans	$	275,303		$	289,911		(5	)%	$	282,602		$	286,395		$	178,258		54	%
Other real estate owned (OREO)	10,274			14,499			(29	)%	13,669			16,056			14,569			(29	)%
Other nonperforming assets	7,418			—			N/M		—			—			—			N/M
Total nonperforming assets	$	292,995		$	304,410		(4	)%	$	296,271		$	302,451		$	192,827		52	%
Loans 90 or more days past due and still accruing	$	1,613		$	1,511		7	%	$	1,494		$	1,629		$	1,648		(2	)%
Allowance for loan losses to loans	1.39		%	1.36		%			1.35		%	1.44		%	1.47		%
Allowance for loan losses to nonaccrual loans	101.10		%	92.97		%			94.76		%	96.85		%	153.86		%
Nonaccrual loans to total loans	1.37		%	1.46		%			1.43		%	1.49		%	0.95		%
Nonperforming assets to total loans plus OREO	1.46		%	1.53		%			1.49		%	1.57		%	1.03		%
Nonperforming assets to total assets	1.01		%	1.04		%			1.02		%	1.07		%	0.70		%
Year-to-date net charge offs to average loans *	0.33		%	0.38		%			0.39		%	0.36		%	0.16		%
* Annualized
N/M - Not meaningful

Page 5



Associated Banc-Corp Selected Asset Quality Information (continued)
(in thousands)	Dec 31, 2016		Sep 30, 2016		Seql Qtr % Change		Jun 30, 2016		Mar 31, 2016		Dec 31, 2015		Comp Qtr % Change
Nonaccrual loans
Commercial and industrial	$	183,371	$	205,902	(11	)%	$	193,439	$	197,115	$	93,575	96	%
Commercial real estate—owner occupied	9,544		6,995		36	%	9,635		9,443		8,049		19	%
Commercial and business lending	192,915		212,897		(9	)%	203,074		206,558		101,624		90	%
Commercial real estate—investor	18,051		8,028		125	%	11,528		12,330		8,643		109	%
Real estate construction	844		864		(2	)%	957		840		940		(10	)%
Commercial real estate lending	18,895		8,892		112	%	12,485		13,170		9,583		97	%
Total commercial	211,810		221,789		(4	)%	215,559		219,728		111,207		90	%
Residential mortgage	50,236		53,475		(6	)%	52,300		52,212		51,482		(2	)%
Home equity revolving lines of credit	8,588		9,462		(9	)%	8,797		8,822		9,917		(13	)%
Home equity loans junior liens	4,413		4,885		(10	)%	5,566		5,250		5,327		(17	)%
Home equity	13,001		14,347		(9	)%	14,363		14,072		15,244		(15	)%
Other consumer	256		300		(15	)%	380		383		325		(21	)%
Total consumer	63,493		68,122		(7	)%	67,043		66,667		67,051		(5	)%
Total nonaccrual loans	$	275,303	$	289,911	(5	)%	$	282,602	$	286,395	$	178,258	54	%

Restructured loans (accruing)	Dec 31, 2016		Sep 30, 2016		Seql Qtr % Change		Jun 30, 2016		Mar 31, 2016		Dec 31, 2015		Comp Qtr % Change
Commercial and industrial	$	31,884	$	30,248	5	%	$	29,179	$	28,908	$	29,293	9	%
Commercial real estate—owner occupied	5,490		7,445		(26	)%	7,509		7,693		7,877		(30	)%
Commercial and business lending	37,374		37,693		(1	)%	36,688		36,601		37,170		1	%
Commercial real estate—investor	15,289		15,352		—	%	20,191		20,993		21,915		(30	)%
Real estate construction	359		365		(2	)%	372		386		510		(30	)%
Commercial real estate lending	15,648		15,717		—	%	20,563		21,379		22,425		(30	)%
Total commercial	53,022		53,410		(1	)%	57,251		57,980		59,595		(11	)%
Residential mortgage	18,100		18,049		—	%	18,314		19,807		19,870		(9	)%
Home equity revolving lines of credit	555		585		(5	)%	576		1,377		1,332		(58	)%
Home equity loans junior liens	7,201		7,100		1	%	6,379		5,540		5,737		26	%
Home equity	7,756		7,685		1	%	6,955		6,917		7,069		10	%
Other consumer	979		926		6	%	906		893		829		18	%
Total consumer	26,835		26,660		1	%	26,175		27,617		27,768		(3	)%
Total restructured loans (accruing)	$	79,857	$	80,070	—	%	$	83,426	$	85,597	$	87,363	(9	)%
Restructured loans included in nonaccrual loans (not included with restructed loans (accruing))	$	29,385	$	31,758	(7	)%	$	34,841	$	35,232	$	37,684	(22	)%

Accruing Loans 30-89 Days Past Due	Dec 31, 2016		Sep 30, 2016		Seql Qtr % Change		Jun 30, 2016		Mar 31, 2016		Dec 31, 2015		Comp Qtr % Change
Commercial and industrial	$	1,413	$	950	49	%	$	2,124	$	2,901	$	1,011	40	%
Commercial real estate—owner occupied	1,384		869		59	%	193		520		7,142		(81	)%
Commercial and business lending	2,797		1,819		54	%	2,317		3,421		8,153		(66	)%
Commercial real estate—investor	931		630		48	%	2,715		1,072		291		N/M
Real estate construction	369		402		(8	)%	524		415		296		25	%
Commercial real estate lending	1,300		1,032		26	%	3,239		1,487		587		121	%
Total commercial	4,097		2,851		44	%	5,556		4,908		8,740		(53	)%
Residential mortgage	8,142		6,697		22	%	7,382		3,594		4,930		65	%
Home equity revolving lines of credit	4,219		4,137		2	%	6,075		3,582		5,559		(24	)%
Home equity loans junior liens	1,630		1,336		22	%	1,655		2,222		2,360		(31	)%
Home equity	5,849		5,473		7	%	7,730		5,804		7,919		(26	)%
Other consumer	3,189		2,046		56	%	1,895		1,682		1,870		71	%
Total consumer	17,180		14,216		21	%	17,007		11,080		14,719		17	%
Total accruing loans 30-89 days past due	$	21,277	$	17,067	25	%	$	22,563	$	15,988	$	23,459	(9	)%

Potential Problem Loans	Dec 31, 2016		Sep 30, 2016		Seql Qtr % Change		Jun 30, 2016		Mar 31, 2016		Dec 31, 2015		Comp Qtr % Change
Commercial and industrial	$	227,196	$	351,290	(35	)%	$	379,818	$	328,464	$	233,130	(3	)%
Commercial real estate—owner occupied	64,524		47,387		36	%	45,671		41,107		35,706		81	%
Commercial and business lending	291,720		398,677		(27	)%	425,489		369,571		268,836		9	%
Commercial real estate—investor	51,228		36,765		39	%	25,081		25,385		25,944		97	%
Real estate construction	2,465		1,929		28	%	2,117		2,422		3,919		(37	)%
Commercial real estate lending	53,693		38,694		39	%	27,198		27,807		29,863		80	%
Total commercial	345,413		437,371		(21	)%	452,687		397,378		298,699		16	%
Residential mortgage	5,615		3,226		74	%	3,953		3,488		2,796		101	%
Home equity revolving lines of credit	46		46		—	%	62		48		48		(4	)%
Home equity loans junior liens	68		32		113	%	32		161		174		(61	)%
Home equity	114		78		46	%	94		209		222		(49	)%
Total consumer	5,729		3,304		73	%	4,047		3,697		3,018		90	%
Total potential problem loans	$	351,142	$	440,675	(20	)%	$	456,734	$	401,075	$	301,717	16	%
N/M - Not meaningful

Page 6



Associated Banc-Corp Net Interest Income Analysis—Fully Tax-Equivalent Basis — Sequential and Comparable Quarter
	Quarter ended,
	December 31, 2016						September 30, 2016						December 31, 2015
(in thousands)	Average Balance		Interest Income /Expense		Average Yield /Rate		Average Balance		Interest Income /Expense		Average Yield /Rate		Average Balance		Interest Income /Expense		Average Yield /Rate
Assets
Earning assets:
Loans:^{(1) (2) (3)}
Commercial and business lending	$	7,406,810	$	61,464	3.30	%	$	7,577,470	$	61,147	3.21	%	$	6,892,162	$	55,451	3.19	%
Commercial real estate lending	4,914,643		42,663		3.45	%	4,855,827		41,600		3.41	%	4,373,460		37,587		3.41	%
Total commercial	12,321,453		104,127		3.36	%	12,433,297		102,747		3.29	%	11,265,622		93,038		3.28	%
Residential mortgage	6,317,769		49,557		3.14	%	6,255,264		49,254		3.15	%	5,845,557		47,305		3.24	%
Retail	1,337,848		16,716		4.99	%	1,364,215		16,283		4.77	%	1,431,509		16,673		4.65	%
Total loans	19,977,070		170,400		3.40	%	20,052,776		168,284		3.35	%	18,542,688		157,016		3.37	%
Investment securities:
Taxable	4,963,633		22,418		1.81	%	4,859,750		22,948		1.89	%	5,205,033		26,395		2.03	%
Tax-exempt⁽¹⁾	1,140,175		12,523		4.39	%	1,119,873		12,456		4.45	%	1,016,329		11,909		4.69	%
Other short-term investments	342,344		1,380		1.53	%	401,764		1,064		1.06	%	259,053		1,639		2.53	%
Investments and other	6,446,152		36,321		2.25	%	6,381,387		36,468		2.29	%	6,480,415		39,943		2.47	%
Total earning assets	26,423,222		$	206,721	3.12	%	26,434,163		$	204,752	3.09	%	25,023,103		$	196,959	3.14	%
Other assets, net	2,482,062						2,534,209						2,434,297
Total assets	$	28,905,284					$	28,968,372					$	27,457,400
Liabilities and stockholders' equity
Interest-bearing liabilities:
Interest-bearing deposits:
Savings	$	1,451,803	$	198	0.05	%	$	1,448,223	$	198	0.05	%	$	1,358,141	$	249	0.07	%
Interest-bearing demand	4,140,072		3,248		0.31	%	4,151,708		2,937		0.28	%	3,150,628		1,217		0.15	%
Money market	9,296,364		7,269		0.31	%	9,088,943		6,956		0.30	%	9,534,551		4,351		0.18	%
Time deposits	1,560,145		3,058		0.78	%	1,553,349		3,027		0.78	%	1,604,864		3,027		0.75	%
Total interest-bearing deposits	16,448,384		13,773		0.33	%	16,242,223		13,118		0.32	%	15,648,184		8,844		0.22	%
Federal funds purchased and securities sold under agreements to repurchase	549,738		314		0.23	%	655,825		326		0.20	%	605,026		229		0.15	%
Other short-term funding	491,800		458		0.37	%	324,623		296		0.36	%	368,752		186		0.20	%
Total short-term funding	1,041,538		772		0.29	%	980,448		622		0.25	%	973,778		415		0.17	%
Long-term funding	2,761,695		6,875		0.99	%	3,256,099		7,229		0.89	%	2,676,116		10,692		1.60	%
Total short and long-term funding	3,803,233		7,647		0.80	%	4,236,547		7,851		0.74	%	3,649,894		11,107		1.22	%
Total interest-bearing liabilities	20,251,617		$	21,420	0.42	%	20,478,770		$	20,969	0.41	%	19,298,078		$	19,951	0.41	%
Noninterest-bearing demand deposits	5,294,078						5,161,802						4,967,719
Other liabilities	274,829						281,442						250,957
Stockholders’ equity	3,084,760						3,046,358						2,940,646
Total liabilities and stockholders’ equity	$	28,905,284					$	28,968,372					$	27,457,400
Interest rate spread					2.70	%					2.68	%					2.73	%
Net free funds					0.10	%					0.09	%					0.09	%
Fully tax-equivalent net interest income and net interest margin			$	185,301	2.80	%			$	183,783	2.77	%			$	177,008	2.82	%
Fully tax-equivalent adjustment			5,266						5,249						5,540
Net interest income			$	180,035					$	178,534					$	171,468


(1)	The yield on tax-exempt loans and securities is computed on a fully tax-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.

Page 7



Associated Banc-Corp Net Interest Income Analysis—Fully Tax-Equivalent Basis — Year Over Year
	Years Ended December 31,
	2016						2015
(in thousands)	Average Balance		Interest Income /Expense		Average Yield /Rate		Average Balance		Interest Income /Expense		Average Yield /Rate
Assets
Earning assets:
Loans:^{(1) (2) (3)}
Commercial and business lending	$	7,395,524	$	238,921	3.23	%	$	7,035,449	$	223,639	3.18	%
Commercial real estate lending	4,724,412		163,421		3.46	%	4,222,218		146,372		3.47	%
Total commercial	12,119,936		402,342		3.32	%	11,257,667		370,011		3.29	%
Residential mortgage	6,156,524		194,941		3.17	%	5,538,690		182,228		3.29	%
Retail	1,374,207		66,053		4.81	%	1,455,907		67,524		4.64	%
Total loans	19,650,667		663,336		3.38	%	18,252,264		619,763		3.40	%
Investment securities:
Taxable	4,955,980		95,152		1.92	%	4,936,065		100,292		2.03	%
Tax-exempt⁽¹⁾	1,092,583		49,036		4.49	%	976,784		47,663		4.88	%
Other short-term investments	327,431		4,829		1.45	%	405,974		6,591		1.62	%
Investments and other	6,375,994		149,017		2.34	%	6,318,823		154,546		2.45	%
Total earning assets	26,026,661		$	812,353	3.12	%	24,571,087		$	774,309	3.15	%
Other assets, net	2,479,451						2,448,129
Total assets	$	28,506,112					$	27,019,216
Liabilities and stockholders' equity
Interest-bearing liabilities:
Interest-bearing deposits:
Savings	$	1,428,292	$	860	0.06	%	$	1,336,755	$	1,000	0.07	%
Interest-bearing demand	3,790,185		10,361		0.27	%	3,201,085		4,266		0.13	%
Money market	9,127,940		26,978		0.30	%	9,210,179		16,574		0.18	%
Time deposits	1,553,069		12,136		0.78	%	1,613,547		11,285		0.70	%
Total interest-bearing deposits	15,899,486		50,335		0.32	%	15,361,566		33,125		0.22	%
Federal funds purchased and securities sold under agreements to repurchase	609,807		1,314		0.22	%	625,736		943		0.15	%
Other short-term funding	699,358		2,114		0.30	%	220,321		465		0.21	%
Total short-term funding	1,309,165		3,428		0.26	%	846,057		1,408		0.17	%
Long-term funding	2,913,751		30,532		1.05	%	3,123,224		42,851		1.37	%
Total short and long-term funding	4,222,916		33,960		0.80	%	3,969,281		44,259		1.12	%
Total interest-bearing liabilities	20,122,402		$	84,295	0.42	%	19,330,847		$	77,384	0.40	%
Noninterest-bearing demand deposits	5,106,286						4,541,521
Other liabilities	254,462						251,690
Stockholders’ equity	3,022,962						2,895,158
Total liabilities and stockholders’ equity	$	28,506,112					$	27,019,216
Interest rate spread					2.70	%					2.75	%
Net free funds					0.10	%					0.09	%
Fully tax-equivalent net interest income and net interest margin			$	728,058	2.80	%			$	696,925	2.84	%
Fully tax-equivalent adjustment			20,785						20,647
Net interest income			$	707,273					$	676,278


(1)	The yield on tax exempt loans and securities is computed on a fully tax-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.

Page 8



Associated Banc-Corp Loan and Deposit Composition (in thousands)
Period End Loan Composition	Dec 31, 2016		Sep 30, 2016		Seql Qtr % Change		Jun 30, 2016		Mar 31, 2016		Dec 31, 2015		Comp Qtr % Change
Commercial and industrial	$	6,489,014	$	6,721,557	(3	)%	$	6,701,986	$	6,511,648	$	6,190,683	5	%
Commercial real estate—owner occupied	897,724		892,678		1	%	921,736		917,285		918,212		(2	)%
Commercial and business lending	7,386,738		7,614,235		(3	)%	7,623,722		7,428,933		7,108,895		4	%
Commercial real estate—investor	3,574,732		3,530,370		1	%	3,495,791		3,276,733		3,234,266		11	%
Real estate construction	1,432,497		1,314,431		9	%	1,285,573		1,184,398		1,162,145		23	%
Commercial real estate lending	5,007,229		4,844,801		3	%	4,781,364		4,461,131		4,396,411		14	%
Total commercial	12,393,967		12,459,036		(1	)%	12,405,086		11,890,064		11,505,306		8	%
Residential mortgage	6,311,428		6,034,166		5	%	6,035,720		5,944,457		5,783,267		9	%
Home equity revolving lines of credit	840,872		851,382		(1	)%	861,311		867,860		883,759		(5	)%
Home equity loans junior liens	93,571		100,212		(7	)%	107,460		115,134		122,043		(23	)%
Home equity	934,443		951,594		(2	)%	968,771		982,994		1,005,802		(7	)%
Other consumer	393,979		399,209		(1	)%	405,709		409,725		419,968		(6	)%
Total consumer	7,639,850		7,384,969		3	%	7,410,200		7,337,176		7,209,037		6	%
Total loans	$	20,033,817	$	19,844,005	1	%	$	19,815,286	$	19,227,240	$	18,714,343	7	%

Period End Deposit and Customer Funding Composition	Dec 31, 2016		Sep 30, 2016		Seql Qtr % Change		Jun 30, 2016		Mar 31, 2016		Dec 31, 2015		Comp Qtr % Change
Noninterest-bearing demand	$	5,392,208	$	5,337,677	1	%	$	5,039,336	$	5,272,685	$	5,562,466	(3	)%
Savings	1,431,494		1,441,187		(1	)%	1,451,801		1,426,951		1,334,420		7	%
Interest-bearing demand	4,687,656		4,548,390		3	%	3,789,138		3,698,941		3,445,000		36	%
Money market	8,770,963		8,894,357		(1	)%	8,448,543		8,718,841		9,102,977		(4	)%
Brokered CDs	52,725		44,373		19	%	46,268		41,440		42,443		24	%
Other time	1,553,402		1,481,728		5	%	1,517,764		1,526,602		1,520,359		2	%
Total deposits	21,888,448		21,747,712		1	%	20,292,850		20,685,460		21,007,665		4	%
Customer funding	300,197		477,607		(37	)%	464,880		508,262		383,568		(22	)%
Total deposits and customer funding	$	22,188,645	$	22,225,319	—	%	$	20,757,730	$	21,193,722	$	21,391,233	4	%
Network transaction deposits included above in interest-bearing demand & money market	$	3,895,467	$	3,730,513	4	%	$	3,141,214	$	3,399,054	$	3,174,911	23	%
Brokered CDs	52,725		44,373		19	%	46,268		41,440		42,443		24	%
Total network and brokered funding	3,948,192		3,774,886		5	%	3,187,482		3,440,494		3,217,354		23	%
Net customer deposits and funding⁽¹⁾	$	18,240,453	$	18,450,433	(1	)%	$	17,570,248	$	17,753,228	$	18,173,879	—	%

Quarter Average Loan Composition	Dec 31, 2016		Sep 30, 2016		Seql Qtr % Change		Jun 30, 2016		Mar 31, 2016		Dec 31, 2015		Comp Qtr % Change
Commercial and industrial	$	6,514,974	$	6,674,688	(2	)%	$	6,559,613	$	6,207,458	$	5,947,939	10	%
Commercial real estate—owner occupied	891,836		902,782		(1	)%	915,020		913,603		944,223		(6	)%
Commercial and business lending	7,406,810		7,577,470		(2	)%	7,474,633		7,121,061		6,892,162		7	%
Commercial real estate—investor	3,546,559		3,532,861		—	%	3,448,741		3,298,522		3,266,008		9	%
Real estate construction	1,368,084		1,322,966		3	%	1,205,370		1,171,009		1,107,452		24	%
Commercial real estate lending	4,914,643		4,855,827		1	%	4,654,111		4,469,531		4,373,460		12	%
Total commercial	12,321,453		12,433,297		(1	)%	12,128,744		11,590,592		11,265,622		9	%
Residential mortgage	6,317,769		6,255,264		1	%	6,129,924		5,920,280		5,845,557		8	%
Home equity revolving lines of credit	845,740		857,244		(1	)%	863,941		876,820		882,599		(4	)%
Home equity loans junior liens	96,880		103,790		(7	)%	111,372		118,610		126,658		(24	)%
Home equity	942,620		961,034		(2	)%	975,313		995,430		1,009,257		(7	)%
Other consumer	395,228		403,181		(2	)%	408,004		416,528		422,252		(6	)%
Total consumer	7,655,617		7,619,479		—	%	7,513,241		7,332,238		7,277,066		5	%
Total loans	$	19,977,070	$	20,052,776	—	%	$	19,641,985	$	18,922,830	$	18,542,688	8	%

Quarter Average Deposit Composition	Dec 31, 2016		Sep 30, 2016		Seql Qtr % Change		Jun 30, 2016		Mar 31, 2016		Dec 31, 2015		Comp Qtr % Change
Noninterest-bearing demand	$	5,294,078	$	5,161,802	3	%	$	4,969,994	$	4,996,596	$	4,967,719	7	%
Savings	1,451,803		1,448,223		—	%	1,445,020		1,367,646		1,358,141		7	%
Interest-bearing demand	4,140,072		4,151,708		—	%	3,640,733		3,220,409		3,150,628		31	%
Money market	9,296,364		9,088,943		2	%	8,692,782		9,432,245		9,534,551		(2	)%
Time deposits	1,560,145		1,553,349		—	%	1,540,424		1,558,278		1,604,864		(3	)%
Total deposits	$	21,742,462	$	21,404,025	2	%	$	20,288,953	$	20,575,174	$	20,615,903	5	%


(1)	Total deposits and customer funding excluding total network and brokered funding.

Page 9



Associated Banc-Corp Non-GAAP Financial Measures Reconciliation
($ in millions)	YTD Dec 2016			YTD Dec 2015			4Q16			3Q16			2Q16			1Q16			4Q15
Tangible Common Equity Reconciliation ⁽¹⁾
Common equity							$	2,931		$	2,937		$	2,910		$	2,862		$	2,816
Goodwill and other intangible assets, net							(987		)	(988		)	(988		)	(989		)	(985		)
Tangible common equity							$	1,944		$	1,949		$	1,922		$	1,873		$	1,831
Tangible Assets Reconciliation ⁽¹⁾
Total assets							$	29,139		$	29,153		$	29,039		$	28,179		$	27,712
Goodwill and other intangible assets, net							(987		)	(988		)	(988		)	(989		)	(985		)
Tangible assets							$	28,152		$	28,165		$	28,051		$	27,190		$	26,727
Average Tangible Common Equity and Average Common Equity Tier 1 Reconciliation⁽¹⁾
Common equity	$	2,888		$	2,799		$	2,925		$	2,911		$	2,869		$	2,849		$	2,819
Goodwill and other intangible assets, net	(988		)	(982		)	(988		)	(988		)	(989		)	(989		)	(985		)
Tangible common equity	1,900			1,817			1,937			1,923			1,880			1,860			1,834
Less: Accumulated other comprehensive income / loss	8			(9		)	28			(3		)	1			3			4
Less: Deferred tax assets / deferred tax liabilities, net	32			26			33			33			32			33			34
Average common equity Tier 1	$	1,940		$	1,834		$	1,998		$	1,953		$	1,913		$	1,896		$	1,872
Selected Equity and Performance Ratios ^{(1) (2)}
Tangible common equity / tangible assets							6.91		%	6.92		%	6.85		%	6.89		%	6.85		%
Return on average equity	6.63		%	6.50		%	7.07		%	7.03		%	6.19		%	5.76		%	5.77		%
Return on average tangible common equity	10.07		%	9.97		%	10.78		%	10.68		%	10.04		%	8.72		%	8.78		%
Return on average common equity Tier 1	9.86		%	9.88		%	10.45		%	10.52		%	9.86		%	8.55		%	8.60		%
Efficiency Ratio Reconciliation ⁽³⁾
Federal Reserve efficiency ratio	66.95		%	69.96		%	65.35		%	64.40		%	69.34		%	69.01		%	70.49		%
Fully tax-equivalent adjustment	(1.29		)%	(1.41		)%	(1.25		)%	(1.21		)%	(1.36		)%	(1.37		)%	(1.52		)%
Other intangible amortization	(0.20		)%	(0.31		)%	(0.20		)%	(0.19		)%	(0.21		)%	(0.20		)%	(0.21		)%
Fully tax-equivalent efficiency ratio	65.46		%	68.24		%	63.90		%	63.00		%	67.77		%	67.44		%	68.76		%


(1)	The ratio tangible common equity to tangible assets excludes goodwill and other intangible assets, net. This financial measure has been included as it is considered to be a critical metric with which to analyze and evaluate financial condition and capital strength.


(2)	These capital measurements are used by management, regulators, investors, and analysts to assess, monitor and compare the quality and composition of our capital with the capital of other financial services companies.

(3)

The efficiency ratio as defined by the Federal Reserve guidance is noninterest expense (which includes the provision for unfunded commitments) divided by the sum of net interest income plus noninterest income, excluding investment securities gains / losses, net. The fully tax-equivalent efficiency ratio is noninterest expense (which includes the provision for unfunded commitments), excluding other intangible amortization, divided by the sum of fully tax-equivalent net interest income plus noninterest income, excluding investment securities gains / losses, net. Management believes the fully tax-equivalent efficiency ratio, which adjusts net interest income for the tax-favored status of certain loans and investment securities, to be the preferred industry measurement as it enhances the comparability of net interest income arising from taxable and tax-exempt sources.

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