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

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EX-99.2 - EXHIBIT 99.2 - ASSOCIATED BANC-CORP	a4q17presentationfinalwd.htm
8-K - FORM 8-K - ASSOCIATED BANC-CORP	asb12312017form8-kpressrel.htm

Exhibit 99.1



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

Associated Banc-Corp Reports Full Year 2017 Earnings of $1.42 per common share,

or $1.52 per common share excluding expenses related to the Tax Act¹

Net deposits and customer funding up 12% year over year

GREEN BAY, Wis. -- January 25, 2018 -- Associated Banc-Corp (NYSE: ASB) today reported net income available to common equity ("earnings") of $220 million, or $1.42 per common share for the year ended December 31, 2017. Earnings per common share ("EPS") for the year ended December 31, 2017 included $15 million of expenses related to the recently enacted Tax Cuts and Jobs Act of 2017 (the "Tax Act"). These amounts compare to net income available to common equity of $191 million, or $1.26 per common share for the year ended December 31, 2016. The Company reported earnings of $0.31 per common share for the quarter ended December 31, 2017 ($0.41 per common share excluding expenses related to the Tax Act), compared to $0.34 per common share for the quarter ended December 31, 2016.

“During 2017, Associated continued to grow its customer deposit market share across its footprint. The pending acquisition of Bank Mutual will further enhance our Wisconsin and Minnesota network and we look forward to welcoming Bank Mutual's customers to Associated on February 1," said President and CEO Philip B. Flynn. “Our 2017 financial results reflect strong underlying credit quality, growing fee-based revenue, and the ongoing benefits of our technology and efficiency initiatives. For 2018, we expect to fund over $1 billion in new loans, to improve our net interest margin modestly, and to further reduce our efficiency ratio, driving increasing returns on capital for our shareholders."

¹The following table reconciles non-GAAP financial measures which exclude expenses related to the Tax Act, to GAAP financial measures.



($ in millions, except per share data)	4Q 2017		4Q 2017 per share data		FY 2017		FY 2017 per share data
GAAP earnings and EPS	$	48	$	0.31	$	220	$	1.42
Required partial write-off of deferred tax asset	12		0.08		12		0.08
Required acceleration of low income housing tax credit amortization	1		<0.01		1		<0.01
Previously disclosed compensation actions	1		<0.01		1		<0.01
Other accelerated write-offs	1		<0.01		1		<0.01
Total expenses related to the Tax Act	$	15	$	0.10	$	15	$	0.10
Earnings and EPS, excluding expenses related to the Tax Act	$	63	$	0.41	$	235	$	1.52
For notes on non-GAAP measures see page 7.

2017 HIGHLIGHTS (all comparisons to the year ago)


•	Average loans of $20.6 billion were up 5%, or $942 million


•	Average deposits of $21.9 billion were up 4%, or $918 million


•	Income before income taxes was up 18%, or $51 million


•	Total dividends paid per common share were $0.50, up 11%

2017 FULL YEAR AND FOURTH QUARTER FINANCIAL RESULTS

Loans

Full year 2017 average loans of $20.6 billion were up 5%, or $942 million from 2016.

With respect to full year 2017 average balances by loan category as compared to 2016:


•	Consumer lending increased $854 million, or 11% to $8.4 billion driven by the Company's on balance sheet mortgage retention strategy.


•	Commercial real estate lending increased $228 million, or 5% to $5.0 billion.


•	Commercial and business lending decreased $141 million, or 2% to $7.3 billion.

At year end 2017, loans of $20.8 billion were up $730 million, or 4% from 2016. The loan to deposit ratio was 91% at year end.

Fourth quarter 2017 average loans of $20.9 billion were up $887 million, or 4% from the year ago quarter and were down modestly from the third quarter.

With respect to fourth quarter 2017 average balances by loan category:


•	Consumer lending increased $1.2 billion from the year ago quarter driven by the Company's on balance sheet mortgage retention strategy and grew $204 million from the third quarter to $8.8 billion.


•	Commercial real estate lending decreased $41 million from the year ago quarter and decreased $100 million from the third quarter to $4.9 billion, consistent with the Company's plan to moderate commercial real estate growth in anticipation of the pending Bank Mutual transaction.


•	Commercial and business lending decreased $228 million from the year ago quarter and decreased $140 million from the third quarter to $7.2 billion on lower general commercial outstandings.

Deposits

Full year 2017 average deposits of $21.9 billion were up 4%, or $918 million from 2016.

With respect to full year 2017 average balances by deposit category as compared to 2016:


•	Interest-bearing demand deposits increased $544 million, or 14% to $4.3 billion.


•	Savings and time deposits increased $526 million, or 18% to $3.5 billion.


•	Money market deposits decreased $42 million to $9.1 billion.


•	Noninterest-bearing demand deposits decreased $110 million to $5.0 billion.

At year end 2017, deposits of $22.8 billion were up $898 million, or 4% from 2016. During the year, the Company reduced its reliance on network deposits by $1.4 billion, or 35% while increasing net deposits and customer funding by $2.2 billion, or 12%.

Fourth quarter 2017 average deposits of $22.2 billion were up $507 million, or 2% from the year ago quarter and were down $192 million, or 1% from the third quarter.

With respect to fourth quarter 2017 average balances by deposit category:


•	Savings and time deposits increased $898 million from the year ago quarter and increased $176 million from the third quarter to $3.9 billion.


•	Interest-bearing demand deposits increased $323 million from the year ago quarter and increased $115 million from the third quarter to $4.5 billion.


•	Noninterest-bearing demand deposits decreased $160 million from the year ago quarter, but increased $142 million from the third quarter to $5.1 billion.


•	Money market deposits decreased $553 million from the year ago quarter and decreased $624 million from the third quarter to $8.7 billion.

Net Interest Income and Net Interest Margin

Full year 2017 net interest income of $741 million was up 5%, or $34 million from 2016. Net interest margin of 2.82% was up 2 basis points from the prior year.


•	The average yield on total commercial loans increased 44 basis points to 3.76% from the prior year.


•	The average cost of interest-bearing deposits increased 24 basis points to 0.56% from the prior year.


•	The net free funds benefit, the benefit of holding noninterest-bearing demand deposits, increased 5 basis points from the prior year.

Fourth quarter 2017 net interest income of $187 million was up 4%, or $7 million from the year ago quarter, with net interest margin decreasing 1 basis point to 2.79%. Fourth quarter net interest income decreased 2%, or $3 million from the third quarter, with net interest margin decreasing 5 basis points to 2.79%.


•	The average yield on total commercial loans increased 53 basis points to 3.89% from the year ago quarter, but decreased 4 basis points from the prior quarter.


•	The average cost of interest-bearing deposits increased 32 basis points to 0.65% from the year ago quarter and increased 2 basis points from the prior quarter.


•	The net free funds benefit, the benefit of holding noninterest-bearing demand deposits, increased 8 basis points from the year ago quarter and increased 1 basis point from the prior quarter.

Noninterest Income

Full year 2017 total noninterest income of $333 million was down $20 million reflecting expected lower mortgage banking activity.


•	Mortgage banking decreased $19 million from the prior year primarily driven by the Company's on balance sheet mortgage retention strategy.


•	Brokerage and asset management fees benefited from the strong equity market and were up $7 million.

Fourth quarter 2017 total noninterest income of $85 million decreased $8 million from the year ago quarter and decreased $1 million from the prior quarter.

With respect to fourth quarter 2017 noninterest income line items:


•	Brokerage and asset management fees were up $4 million from the year ago quarter and up $3 million from the prior quarter based on the strong equity market and the acquisition of Whitnell & Co., which increased both assets under management and related run-rate revenues.


•	Capital market fees increased $2 million from the prior quarter primarily driven by increased loan syndication activity and higher customer hedging transactions, but decreased $1 million from the year ago quarter.


•	Mortgage banking decreased $3 million from the prior quarter primarily driven by seasonal factors and decreased $8 million from the year ago quarter primarily driven by overall mortgage market contraction.

Noninterest Expense

Full year 2017 noninterest expense of $709 million was up 1%, or $7 million from the prior year.


•	Technology expense increased $6 million from the prior year as the Company continues to invest in solutions that drive operational efficiency.


•	All other noninterest expense line items, collectively, increased $1 million from the prior year.

Fourth quarter 2017 total noninterest expense of $182 million increased 2%, or $3 million from the year ago quarter and increased $4 million from the third quarter.

With respect to fourth quarter 2017 noninterest expense line items:


•	Technology expense increased $3 million from the prior and year ago quarters as the Company continues to invest in solutions that drive operational efficiency.


•	Occupancy expense increased $1 million from the prior quarter primarily driven by higher maintenance and snow plowing costs.


•	As previously announced, in connection with the enactment of the Tax Act, the Company recorded $1 million in the fourth quarter of 2017 for one-time bonus payments to hourly, non-commissioned employees.

Taxes

Full year 2017 income tax expense of $110 million was up $22 million from 2016 due to a partial write-down of the Company's deferred tax assets driven by a decrease in the corporate tax rate, an acceleration of low income housing tax credit amortization, and certain other charges related to the Tax Act. The Company's effective tax rate was 32% in 2017 compared to 30% in 2016.

Fourth quarter 2017 income tax expense was $40 million, including the above referenced items.

For 2018, the Company expects its effective tax rate to be in the range of 20%-22%.

Credit

Full year 2017 provision for credit losses of $26 million was down $44 million from the prior year.

The fourth quarter 2017 provision for credit losses of $0 was down $15 million from the year ago quarter and down $5 million from the prior quarter.


•	Potential problem loans of $177 million were down $174 million from the year ago quarter and down $82 million from the prior quarter.


•	Nonaccrual loans of $209 million were down $67 million from the year ago quarter and down $2 million from the prior quarter. The nonaccrual loans to total loans ratio was 1.00% in the fourth quarter, compared to 1.37% in the year ago quarter, and 1.01% in the prior quarter.


•	Fourth quarter net charge offs of $11 million were up $1 million from the year ago quarter and relatively unchanged from the prior quarter.


•	The allowance for loan losses of $266 million was down $12 million from the year ago quarter and was down $11 million from the prior quarter. The allowance for loan losses to total loans ratio was 1.28% in the fourth quarter, compared to 1.39% in the year ago quarter, and 1.32% in the prior quarter.


•	The allowance related to the oil and gas portfolio was $27 million at December 31, 2017 and represented 4.5% of total oil and gas loans compared to 5.7% in the year ago quarter, and 5.2% in the prior quarter.

Capital

The Company’s capital position remains strong, with a CET1 capital ratio of 10.1% at December 31, 2017. 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 2017 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 25, 2018. 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 2017 earnings call. The fourth quarter 2017 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 $30 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.

On December 22, 2017, the Tax Act was signed into law. The fourth quarter of 2017 and full year 2017 results reflect the estimated impact of the enactment of the Tax Act, which resulted in a $15 million decrease in net income. Net income and earnings per share excluding these related expenses are non-GAAP financial measures. Management believes these measures are meaningful because it reflects adjustments commonly made by management, investors, regulators, and analysts to evaluate the adequacy of earnings per common share and provides a greater understanding of ongoing operations and enhances comparability of results with prior periods. All items are tax effected.

# # #



Associated Banc-Corp Consolidated Balance Sheets (Unaudited)
(In thousands)	Dec 31, 2017			Sep 30, 2017			Seql Qtr $ Change			Jun 30, 2017			Mar 31, 2017			Dec 31, 2016			Comp Qtr $ Change
Assets
Cash and due from banks	$	483,666		$	354,331		$	129,335		$	396,677		$	332,601		$	446,558		$	37,108
Interest-bearing deposits in other financial institutions	199,702			109,596			90,106			126,232			337,167			149,175			50,527
Federal funds sold and securities purchased under agreements to resell	32,650			27,700			4,950			43,000			19,700			46,500			(13,850		)
Investment securities held to maturity, at amortized cost	2,282,853			2,233,579			49,274			2,255,395			1,554,843			1,273,536			1,009,317
Investment securities available for sale, at fair value	4,043,446			3,801,699			241,747			3,687,470			4,300,490			4,680,226			(636,780		)
Federal Home Loan Bank and Federal Reserve Bank stocks, at cost	165,331			172,446			(7,115		)	181,180			139,273			140,001			25,330
Residential loans held for sale ⁽¹⁾	85,544			113,064			(27,520		)	41,620			34,051			108,010			(22,466		)
Commercial loans held for sale	—			9,718			(9,718		)	4,772			2,901			12,474			(12,474		)
Loans	20,784,991			20,931,460			(146,469		)	20,783,069			20,147,683			20,054,716			730,275
Allowance for loan losses	(265,880		)	(276,551		)	10,671			(281,101		)	(282,672		)	(278,335		)	12,455
Loans, net	20,519,111			20,654,909			(135,798		)	20,501,968			19,865,011			19,776,381			742,730
Bank and corporate owned life insurance	591,057			589,093			1,964			588,440			587,600			585,290			5,767
Tax credit investments	147,099			120,927			26,172			95,710			92,675			67,860			79,239
Trading assets	69,675			48,429			21,246			48,576			49,306			52,398			17,277
Premises and equipment	330,963			330,065			898			328,404			332,884			330,315			648
Goodwill	976,239			972,006			4,233			972,006			972,006			971,951			4,288
Mortgage servicing rights, net	58,384			58,377			7			59,395			60,702			61,476			(3,092		)
Other intangible assets, net	15,580			14,080			1,500			14,530			15,026			15,377			203
Other assets	482,294			454,528			27,766			423,650			413,621			421,787			60,507
Total assets	$	30,483,594		$	30,064,547		$	419,047		$	29,769,025		$	29,109,857		$	29,139,315		$	1,344,279
Liabilities and stockholders’ equity
Noninterest-bearing demand deposits	$	5,478,416		$	5,177,734		$	300,682		$	5,038,162		$	5,338,212		$	5,392,208		$	86,208
Interest-bearing deposits	17,307,546			17,155,717			151,829			16,580,018			16,489,823			16,496,240			811,306
Total deposits	22,785,962			22,333,451			452,511			21,618,180			21,828,035			21,888,448			897,514
Federal funds purchased and securities sold under agreements to repurchase	324,815			476,550			(151,735		)	607,669			650,188			508,347			(183,532		)
Other short-term funding	351,467			588,067			(236,600		)	794,813			430,679			583,688			(232,221		)
Long-term funding	3,397,450			3,147,285			250,165			3,262,120			2,761,955			2,761,795			635,655
Trading liabilities	67,660			46,812			20,848			47,143			47,561			51,103			16,557
Accrued expenses and other liabilities	318,797			268,781			50,016			247,598			246,645			254,622			64,175
Total liabilities	27,246,151			26,860,946			385,205			26,577,523			25,965,063			26,048,003			1,198,148
Stockholders’ equity
Preferred equity	159,929			159,929			—			159,929			159,929			159,929			—
Common equity
Common stock	1,618			1,615			3			1,630			1,630			1,630			(12		)
Surplus	1,454,188			1,442,328			11,860			1,474,301			1,469,744			1,459,498			(5,310		)
Retained earnings	1,819,230			1,792,184			27,046			1,747,632			1,709,514			1,695,764			123,466
Accumulated other comprehensive income (loss)	(62,758		)	(54,288		)	(8,470		)	(53,470		)	(56,344		)	(54,679		)	(8,079		)
Treasury stock, at cost	(134,764		)	(138,167		)	3,403			(138,520		)	(139,679		)	(170,830		)	36,066
Total common equity	3,077,514			3,043,672			33,842			3,031,573			2,984,865			2,931,383			146,131
Total stockholders’ equity	3,237,443			3,203,601			33,842			3,191,502			3,144,794			3,091,312			146,131
Total liabilities and stockholders’ equity	$	30,483,594		$	30,064,547		$	419,047		$	29,769,025		$	29,109,857		$	29,139,315		$	1,344,279


(1)	Effective January 1, 2017, residential loans originated for sale are accounted for under the fair value option. Prior periods have not been restated.

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Associated Banc-Corp Consolidated Statements of Income (Unaudited)
(In thousands, except per share data)						Comp Qtr					YTD			YTD			Comp YTD
(In thousands, except per share data)	4Q17			4Q16		$ Change			% Change		Dec 2017			Dec 2016			$ Change			% Change
Interest income
Interest and fees on loans	$	194,133		$	169,473	$	24,660		15	%	$	749,000		$	659,538		$	89,462		14	%
Interest and dividends on investment securities
Taxable	25,614			22,418		3,196			14	%	96,909			95,152			1,757			2	%
Tax-exempt	8,437			8,184		253			3	%	32,977			32,049			928			3	%
Other interest	2,138			1,380		758			55	%	7,719			4,829			2,890			60	%
Total interest income	230,322			201,455		28,867			14	%	886,605			791,568			95,037			12	%
Interest expense
Interest on deposits	28,143			13,773		14,370			104	%	94,025			50,335			43,690			87	%
Interest on Federal funds purchased and securities sold under agreements to repurchase	420			314		106			34	%	2,527			1,314			1,213			92	%
Interest on other short-term funding	1,731			458		1,273			N/M		5,677			2,114			3,563			169	%
Interest on long-term funding	13,023			6,875		6,148			89	%	43,156			30,532			12,624			41	%
Total interest expense	43,317			21,420		21,897			102	%	145,385			84,295			61,090			72	%
Net interest income	187,005			180,035		6,970			4	%	741,220			707,273			33,947			5	%
Provision for credit losses	—			15,000		(15,000		)	(100	)%	26,000			70,000			(44,000		)	(63	)%
Net interest income after provision for credit losses	187,005			165,035		21,970			13	%	715,220			637,273			77,947			12	%
Noninterest income
Insurance commissions and fees	19,186			17,977		1,209			7	%	81,474			80,795			679			1	%
Service charges and deposit account fees	15,773			16,447		(674		)	(4	)%	64,427			66,609			(2,182		)	(3	)%
Card-based and loan fees	13,840			12,592		1,248			10	%	52,688			50,077			2,611			5	%
Trust and asset management fees	13,125			12,211		914			7	%	50,191			46,867			3,324			7	%
Brokerage commissions and fees	6,864			4,188		2,676			64	%	19,935			16,235			3,700			23	%
Mortgage banking, net	3,169			11,559		(8,390		)	(73	)%	19,360			38,121			(18,761		)	(49	)%
Capital markets, net	7,107			7,716		(609		)	(8	)%	19,642			22,059			(2,417		)	(11	)%
Bank and corporate owned life insurance	3,156			3,338		(182		)	(5	)%	16,250			14,371			1,879			13	%
Asset gains (losses), net	(528		)	767		(1,295		)	(169	)%	(1,244		)	(86		)	(1,158		)	N/M
Investment securities gains (losses), net	75			3,115		(3,040		)	(98	)%	434			9,316			(8,882		)	(95	)%
Other	2,777			2,379		398			17	%	9,523			8,519			1,004			12	%
Total noninterest income	84,544			92,289		(7,745		)	(8	)%	332,680			352,883			(20,203		)	(6	)%
Noninterest expense
Personnel	104,824			107,491		(2,667		)	(2	)%	419,778			414,837			4,941			1	%
Occupancy	13,497			13,690		(193		)	(1	)%	53,842			56,069			(2,227		)	(4	)%
Technology	17,878			14,413		3,465			24	%	63,004			57,300			5,704			10	%
Equipment	5,250			5,328		(78		)	(1	)%	21,201			21,489			(288		)	(1	)%
Business development and advertising	8,195			6,298		1,897			30	%	28,946			26,351			2,595			10	%
Legal and professional	6,384			5,184		1,200			23	%	22,509			19,869			2,640			13	%
Card issuance and loan costs	2,836			3,443		(607		)	(18	)%	11,760			13,641			(1,881		)	(14	)%
Foreclosure / OREO expense, net	1,285			677		608			90	%	4,878			4,844			34			1	%
FDIC assessment	7,500			9,250		(1,750		)	(19	)%	31,300			34,750			(3,450		)	(10	)%
Other intangible amortization	500			525		(25		)	(5	)%	1,959			2,093			(134		)	(6	)%
Other	13,550			12,616		934			7	%	49,956			51,317			(1,361		)	(3	)%
Total noninterest expense	181,699			178,915		2,784			2	%	709,133			702,560			6,573			1	%
Income before income taxes	89,850			78,409		11,441			15	%	338,767			287,596			51,171			18	%
Income tax expense	39,840			23,576		16,264			69	%	109,503			87,322			22,181			25	%
Net income	50,010			54,833		(4,823		)	(9	)%	229,264			200,274			28,990			14	%
Preferred stock dividends	2,339			2,348		(9		)	—	%	9,347			8,903			444			5	%
Net income available to common equity	$	47,671		$	52,485	$	(4,814	)	(9	)%	$	219,917		$	191,371		$	28,546		15	%
Earnings per common share
Basic	$	0.31		$	0.35	$	(0.04	)	(11	)%	$	1.45		$	1.27		$	0.18		14	%
Diluted	$	0.31		$	0.34	$	(0.03	)	(9	)%	$	1.42		$	1.26		$	0.16		13	%
Average common shares outstanding
Basic	150,563			149,253		1,310			1	%	150,877			148,769			2,108			1	%
Diluted	153,449			151,563		1,886			1	%	153,647			149,961			3,686			2	%

N/M = Not meaningful

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Associated Banc-Corp Consolidated Statements of Income (Unaudited) - Quarterly Trend
(In thousands, except per share data)							Seql Qtr													Comp Qtr
(In thousands, except per share data)	4Q17			3Q17			$ Change			% Change		2Q17			1Q17			4Q16		$ Change			% Change
Interest income
Interest and fees on loans	$	194,133		$	196,972		$	(2,839	)	(1	)%	$	184,246		$	173,649		$	169,473	$	24,660		15	%
Interest and dividends on investment securities
Taxable	25,614			24,162			1,452			6	%	23,658			23,475			22,418		3,196			14	%
Tax-exempt	8,437			8,268			169			2	%	8,143			8,129			8,184		253			3	%
Other interest	2,138			2,492			(354		)	(14	)%	1,553			1,536			1,380		758			55	%
Total interest income	230,322			231,894			(1,572		)	(1	)%	217,600			206,789			201,455		28,867			14	%
Interest expense
Interest on deposits	28,143			27,778			365			1	%	21,180			16,924			13,773		14,370			104	%
Interest on Federal funds purchased and securities sold under agreements to repurchase	420			768			(348		)	(45	)%	824			515			314		106			34	%
Interest on other short-term funding	1,731			1,039			692			67	%	1,827			1,080			458		1,273			278	%
Interest on long-term funding	13,023			12,187			836			7	%	9,950			7,996			6,875		6,148			89	%
Total interest expense	43,317			41,772			1,545			4	%	33,781			26,515			21,420		21,897			102	%
Net Interest income	187,005			190,122			(3,117		)	(2	)%	183,819			180,274			180,035		6,970			4	%
Provision for credit losses	—			5,000			(5,000		)	(100	)%	12,000			9,000			15,000		(15,000		)	(100	)%
Net interest income after provision for credit losses	187,005			185,122			1,883			1	%	171,819			171,274			165,035		21,970			13	%
Noninterest income
Insurance commissions and fees	19,186			19,815			(629		)	(3	)%	20,853			21,620			17,977		1,209			7	%
Service charges and deposit account fees	15,773			16,268			(495		)	(3	)%	16,030			16,356			16,447		(674		)	(4	)%
Card-based and loan fees	13,840			12,619			1,221			10	%	13,764			12,465			12,592		1,248			10	%
Trust and asset management fees	13,125			12,785			340			3	%	12,346			11,935			12,211		914			7	%
Brokerage commissions and fees	6,864			4,392			2,472			56	%	4,346			4,333			4,188		2,676			64	%
Mortgage banking, net	3,169			6,585			(3,416		)	(52	)%	5,027			4,579			11,559		(8,390		)	(73	)%
Capital markets, net	7,107			4,610			2,497			54	%	4,042			3,883			7,716		(609		)	(8	)%
Bank and corporate owned life insurance	3,156			6,580			(3,424		)	(52	)%	3,899			2,615			3,338		(182		)	(5	)%
Asset gains (losses), net	(528		)	(16		)	(512		)	N/M		(466		)	(234		)	767		(1,295		)	(169	)%
Investment securities gains (losses), net	75			3			72			N/M		356			—			3,115		(3,040		)	(98	)%
Other	2,777			2,254			523			23	%	2,213			2,279			2,379		398			17	%
Total noninterest income	84,544			85,895			(1,351		)	(2	)%	82,410			79,831			92,289		(7,745		)	(8	)%
Noninterest expense
Personnel	104,824			105,852			(1,028		)	(1	)%	104,683			104,419			107,491		(2,667		)	(2	)%
Occupancy	13,497			12,294			1,203			10	%	12,832			15,219			13,690		(193		)	(1	)%
Technology	17,878			15,233			2,645			17	%	15,473			14,420			14,413		3,465			24	%
Equipment	5,250			5,232			18			—	%	5,234			5,485			5,328		(78		)	(1	)%
Business development and advertising	8,195			7,764			431			6	%	7,152			5,835			6,298		1,897			30	%
Legal and professional	6,384			6,248			136			2	%	5,711			4,166			5,184		1,200			23	%
Card issuance and loan costs	2,836			3,330			(494		)	(15	)%	2,974			2,620			3,443		(607		)	(18	)%
Foreclosure / OREO expense, net	1,285			906			379			42	%	1,182			1,505			677		608			90	%
FDIC assessment	7,500			7,800			(300		)	(4	)%	8,000			8,000			9,250		(1,750		)	(19	)%
Other intangible amortization	500			450			50			11	%	496			513			525		(25		)	(5	)%
Other	13,550			12,318			1,232			10	%	12,579			11,509			12,616		934			7	%
Total noninterest expense	181,699			177,427			4,272			2	%	176,316			173,691			178,915		2,784			2	%
Income before income taxes	89,850			93,590			(3,740		)	(4	)%	77,913			77,414			78,409		11,441			15	%
Income tax expense	39,840			28,589			11,251			39	%	19,930			21,144			23,576		16,264			69	%
Net income	50,010			65,001			(14,991		)	(23	)%	57,983			56,270			54,833		(4,823		)	(9	)%
Preferred stock dividends	2,339			2,339			—			—	%	2,339			2,330			2,348		(9		)	—	%
Net income available to common equity	$	47,671		$	62,662		$	(14,991	)	(24	)%	$	55,644		$	53,940		$	52,485	$	(4,814	)	(9	)%
Earnings per common share
Basic	$	0.31		$	0.41		$	(0.10	)	(24	)%	$	0.36		$	0.36		$	0.35	$	(0.04	)	(11	)%
Diluted	$	0.31		$	0.41		$	(0.10	)	(24	)%	$	0.36		$	0.35		$	0.34	$	(0.03	)	(9	)%
Average common shares outstanding
Basic	150,563			150,565			(2		)	—	%	151,573			150,815			149,253		1,310			1	%
Diluted	153,449			152,968			481			—	%	154,302			153,869			151,563		1,886			1	%

N/M = Not meaningful

Page 3



Associated Banc-Corp Selected Quarterly Information
(In millions, except share and per share, full time equivalent employee and branch count data)	YTD Dec 2017			YTD Dec 2016			4Q17			3Q17			2Q17			1Q17			4Q16
Per common share data
Dividends	$	0.50		$	0.45		$	0.14		$	0.12		$	0.12		$	0.12		$	0.12
Market value:
High	26.50			25.15			26.10			25.70			25.50			26.50			25.15
Low	21.25			15.48			24.00			21.25			23.25			23.40			19.05
Close	25.40			24.70			25.40			24.25			25.20			24.40			24.70
Book value	20.13			19.27			20.13			19.98			19.70			19.42			19.27
Tangible book value / share	$	13.65		$	12.78		$	13.65		$	13.51		$	13.29		$	13.00		$	12.78
Performance ratios (annualized)
Return on average assets	0.78		%	0.70		%	0.66		%	0.86		%	0.80		%	0.79		%	0.75		%
Effective tax rate	32.32		%	30.36		%	44.34		%	30.55		%	25.58		%	27.31		%	30.07		%
Dividend payout ratio ⁽¹⁾	34.48		%	35.43		%	45.16		%	29.27		%	33.33		%	33.33		%	34.29		%
Net interest margin	2.82		%	2.80		%	2.79		%	2.84		%	2.83		%	2.84		%	2.80		%
Selected trend information
Average full time equivalent employees	4,368			4,426			4,367			4,384			4,352			4,370			4,439
Branch count							213			214			214			215			217
Assets under management, at market value ⁽²⁾							$	10,555		$	9,243		$	8,997		$	8,716		$	8,302
Mortgage loans originated for sale during period	$	715		$	1,271		$	249		$	246		$	119		$	101		$	287
Mortgage loan settlements during period	$	820		$	1,543		$	268		$	188		$	167		$	197		$	396
Mortgage portfolio serviced for others							$	7,647		$	7,653		$	7,768		$	7,909		$	7,975
Mortgage servicing rights, net / mortgage portfolio serviced for others							0.76		%	0.76		%	0.76		%	0.77		%	0.77		%
Shares outstanding, end of period							152,846			152,316			153,848			153,734			152,121
Selected quarterly ratios
Loans / deposits							91.22		%	93.72		%	96.14		%	92.30		%	91.62		%
Stockholders’ equity / assets							10.62		%	10.66		%	10.72		%	10.80		%	10.61		%
Risk-based capital ^{(3) (4)}
Total risk-weighted assets							$	21,544		$	21,657		$	21,590		$	21,129		$	21,341
Common equity Tier 1							$	2,172		$	2,144		$	2,130		$	2,085		$	2,033
Common equity Tier 1 capital ratio							10.08		%	9.90		%	9.87		%	9.87		%	9.52		%
Tier 1 capital ratio							10.82		%	10.64		%	10.61		%	10.62		%	10.27		%
Total capital ratio							13.22		%	13.04		%	13.01		%	13.05		%	12.68		%
Tier 1 leverage ratio							8.02		%	7.93		%	8.09		%	8.05		%	7.83		%


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


(2)	Excludes assets held in brokerage accounts.


(3)	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.


(4)	December 31, 2017 data is estimated.

Page 4



Associated Banc-Corp Selected Asset Quality Information
(In thousands)	Dec 31, 2017			Sep 30, 2017			Seql Qtr % Change		Jun 30, 2017			Mar 31, 2017			Dec 31, 2016			Comp Qtr % Change
Allowance for loan losses
Balance at beginning of period	$	276,551		$	281,101		(2	)%	$	282,672		$	278,335		$	269,540		3	%
Provision for loan losses	—			6,000			(100	)%	11,000			10,000			18,000			(100	)%
Charge offs	(14,289		)	(14,727		)	(3	)%	(15,376		)	(11,854		)	(11,609		)	23	%
Recoveries	3,618			4,177			(13	)%	2,805			6,191			2,404			50	%
Net charge offs	(10,671		)	(10,550		)	1	%	(12,571		)	(5,663		)	(9,205		)	16	%
Balance at end of period	$	265,880		$	276,551		(4	)%	$	281,101		$	282,672		$	278,335		(4	)%
Allowance for unfunded commitments
Balance at beginning of period	$	24,400		$	25,400		(4	)%	$	24,400		$	25,400		$	28,400		(14	)%
Provision for unfunded commitments	—			(1,000		)	(100	)%	1,000			(1,000		)	(3,000		)	(100	)%
Balance at end of period	$	24,400		$	24,400		—	%	$	25,400		$	24,400		$	25,400		(4	)%
Allowance for credit losses	$	290,280		$	300,951		(4	)%	$	306,501		$	307,072		$	303,735		(4	)%
Provision for credit losses	$	—		$	5,000		(100	)%	$	12,000		$	9,000		$	15,000		(100	)%
	Dec 31, 2017			Sep 30, 2017			Seql Qtr % Change		Jun 30, 2017			Mar 31, 2017			Dec 31, 2016			Comp Qtr % Change
Net charge offs
Commercial and industrial	$	(8,212	)	$	(9,442	)	(13	)%	$	(11,046	)	$	(4,368	)	$	(6,566	)	25	%
Commercial real estate—owner occupied	(246		)	13			N/M		43			19			(221		)	11	%
Commercial and business lending	(8,458		)	(9,429		)	(10	)%	(11,003		)	(4,349		)	(6,787		)	25	%
Commercial real estate—investor	(164		)	55			(398	)%	(126		)	(514		)	5			N/M
Real estate construction	(365		)	(150		)	143	%	(26		)	11			(86		)	324	%
Commercial real estate lending	(529		)	(95		)	457	%	(152		)	(503		)	(81		)	553	%
Total commercial	(8,987		)	(9,524		)	(6	)%	(11,155		)	(4,852		)	(6,868		)	31	%
Residential mortgage	(966		)	(26		)	N/M		(564		)	(128		)	(1,048		)	(8	)%
Home equity	330			(87		)	(479	)%	54			173			(491		)	(167	)%
Other consumer	(1,048		)	(913		)	15	%	(906		)	(856		)	(798		)	31	%
Total consumer	(1,684		)	(1,026		)	64	%	(1,416		)	(811		)	(2,337		)	(28	)%
Total net charge offs	$	(10,671	)	$	(10,550	)	1	%	$	(12,571	)	$	(5,663	)	$	(9,205	)	16	%

(In basis points)	Dec 31, 2017			Sep 30, 2017					Jun 30, 2017			Mar 31, 2017			Dec 31, 2016
Net charge offs to average loans (annualized)
Commercial and industrial	(51		)	(58		)			(69		)	(28		)	(40		)
Commercial real estate—owner occupied	(12		)	1					2			1			(10		)
Commercial and business lending	(47		)	(51		)			(60		)	(24		)	(36		)
Commercial real estate—investor	(2		)	1					(2		)	(6		)	N/M
Real estate construction	(10		)	(4		)			(1		)	N/M			(3		)
Commercial real estate lending	(4		)	(1		)			(1		)	(4		)	(1		)
Total commercial	(30		)	(31		)			(36		)	(16		)	(22		)
Residential mortgage	(5		)	N/M					(3		)	(1		)	(7		)
Home equity	15			(4		)			2			8			(21		)
Other consumer	(109		)	(97		)			(98		)	(90		)	(80		)
Total consumer	(8		)	(5		)			(7		)	(4		)	(12		)
Total net charge offs	(20		)	(20		)			(25		)	(11		)	(18		)

(In thousands)	Dec 31, 2017			Sep 30, 2017			Seql Qtr % Change		Jun 30, 2017			Mar 31, 2017			Dec 31, 2016			Comp Qtr % Change
Credit Quality
Nonaccrual loans	$	208,546		$	210,517		(1	)%	$	231,888		$	259,991		$	275,303		(24	)%
Other real estate owned (OREO)	12,608			8,483			49	%	7,782			7,540			10,274			23	%
Other nonperforming assets	7,418			7,418			—	%	7,418			7,418			7,418			—	%
Total nonperforming assets	$	228,572		$	226,418		1	%	$	247,088		$	274,949		$	292,995		(22	)%

Loans 90 or more days past due and still accruing	$	1,867		$	1,611		16	%	$	1,535		$	1,720		$	1,613		16	%
Allowance for loan losses to loans	1.28		%	1.32		%			1.35		%	1.40		%	1.39		%
Allowance for loan losses to nonaccrual loans	127.49		%	131.37		%			121.22		%	108.72		%	101.10		%
Nonaccrual loans to total loans	1.00		%	1.01		%			1.12		%	1.29		%	1.37		%
Nonperforming assets to total loans plus OREO	1.10		%	1.08		%			1.19		%	1.36		%	1.46		%
Nonperforming assets to total assets	0.75		%	0.75		%			0.83		%	0.94		%	1.01		%
Year-to-date net charge offs to average loans (annualized)	0.19		%	0.19		%			0.18		%	0.11		%	0.33		%

N/M = Not meaningful

Page 5



Associated Banc-Corp Selected Asset Quality Information (continued)
(In thousands)	Dec 31, 2017		Sep 30, 2017		Seql Qtr % Change		Jun 30, 2017		Mar 31, 2017		Dec 31, 2016		Comp Qtr % Change
Nonaccrual loans
Commercial and industrial	$	112,786	$	122,284	(8	)%	$	141,475	$	164,891	$	183,371	(38	)%
Commercial real estate—owner occupied	22,740		15,598		46	%	15,800		17,925		9,544		138	%
Commercial and business lending	135,526		137,882		(2	)%	157,275		182,816		192,915		(30	)%
Commercial real estate—investor	4,729		3,543		33	%	7,206		8,273		18,051		(74	)%
Real estate construction	974		1,540		(37	)%	1,717		1,247		844		15	%
Commercial real estate lending	5,703		5,083		12	%	8,923		9,520		18,895		(70	)%
Total commercial	141,229		142,965		(1	)%	166,198		192,336		211,810		(33	)%
Residential mortgage	53,632		54,654		(2	)%	51,975		54,183		50,236		7	%
Home equity	13,514		12,639		7	%	13,482		13,212		13,001		4	%
Other consumer	171		259		(34	)%	233		260		256		(33	)%
Total consumer	67,317		67,552		—	%	65,690		67,655		63,493		6	%
Total nonaccrual loans	$	208,546	$	210,517	(1	)%	$	231,888	$	259,991	$	275,303	(24	)%

	Dec 31, 2017		Sep 30, 2017		Seql Qtr % Change		Jun 30, 2017		Mar 31, 2017		Dec 31, 2016		Comp Qtr % Change
Restructured loans (accruing)
Commercial and industrial	$	30,047	$	32,572	(8	)%	$	31,540	$	30,852	$	31,884	(6	)%
Commercial real estate—owner occupied	3,989		4,077		(2	)%	4,145		5,532		5,490		(27	)%
Commercial and business lending	34,036		36,649		(7	)%	35,685		36,384		37,374		(9	)%
Commercial real estate—investor	14,389		14,294		1	%	14,628		14,563		15,289		(6	)%
Real estate construction	310		316		(2	)%	321		327		359		(14	)%
Commercial real estate lending	14,699		14,610		1	%	14,949		14,890		15,648		(6	)%
Total commercial	48,735		51,259		(5	)%	50,634		51,274		53,022		(8	)%
Residential mortgage	17,068		16,859		1	%	17,624		18,535		18,100		(6	)%
Home equity	7,705		7,987		(4	)%	7,985		8,209		7,756		(1	)%
Other consumer	1,110		1,073		3	%	1,082		1,041		979		13	%
Total consumer	25,883		25,919		—	%	26,691		27,785		26,835		(4	)%
Total restructured loans (accruing)	$	74,618	$	77,178	(3	)%	$	77,325	$	79,059	$	79,857	(7	)%
Restructured loans included in nonaccrual loans (not included with restructured loans (accruing))	$	23,486	$	33,520	(30	)%	$	51,715	$	78,902	$	29,385	(20	)%
	Dec 31, 2017		Sep 30, 2017		Seql Qtr % Change		Jun 30, 2017		Mar 31, 2017		Dec 31, 2016		Comp Qtr % Change
Accruing Loans 30-89 Days Past Due
Commercial and industrial	$	271	$	1,378	(80	)%	$	1,255	$	1,675	$	1,413	(81	)%
Commercial real estate—owner occupied	48		1,522		(97	)%	1,284		970		1,384		(97	)%
Commercial and business lending	319		2,900		(89	)%	2,539		2,645		2,797		(89	)%
Commercial real estate—investor	374		1,109		(66	)%	899		1,122		931		(60	)%
Real estate construction	251		700		(64	)%	135		431		369		(32	)%
Commercial real estate lending	625		1,809		(65	)%	1,034		1,553		1,300		(52	)%
Total commercial	944		4,709		(80	)%	3,573		4,198		4,097		(77	)%
Residential mortgage	9,552		8,870		8	%	9,165		7,243		8,142		17	%
Home equity	6,825		7,191		(5	)%	5,924		4,512		5,849		17	%
Other consumer	2,007		1,686		19	%	1,746		1,658		3,189		(37	)%
Total consumer	18,384		17,747		4	%	16,835		13,413		17,180		7	%
Total accruing loans 30-89 days past due	$	19,328	$	22,456	(14	)%	$	20,408	$	17,611	$	21,277	(9	)%

	Dec 31, 2017		Sep 30, 2017		Seql Qtr % Change		Jun 30, 2017		Mar 31, 2017		Dec 31, 2016		Comp Qtr % Change
Potential Problem Loans
Commercial and industrial	$	113,778	$	153,779	(26	)%	$	142,607	$	218,930	$	227,196	(50	)%
Commercial real estate—owner occupied	41,997		57,468		(27	)%	60,724		58,994		64,524		(35	)%
Commercial and business lending	155,775		211,247		(26	)%	203,331		277,924		291,720		(47	)%
Commercial real estate—investor	19,291		46,770		(59	)%	48,569		49,217		51,228		(62	)%
Real estate construction	—		118		(100	)%	8,901		10,141		2,465		(100	)%
Commercial real estate lending	19,291		46,888		(59	)%	57,470		59,358		53,693		(64	)%
Total commercial	175,066		258,135		(32	)%	260,801		337,282		345,413		(49	)%
Residential mortgage	1,616		650		149	%	1,576		2,155		5,615		(71	)%
Home equity	195		124		57	%	208		220		114		71	%
Total consumer	1,811		774		134	%	1,784		2,375		5,729		(68	)%
Total potential problem loans	$	176,877	$	258,909	(32	)%	$	262,585	$	339,657	$	351,142	(50	)%

N/M = Not meaningful

Page 6



Associated Banc-Corp Net Interest Income Analysis - Fully Tax-Equivalent Basis - Sequential and Comparable Quarter
	Three Months Ended
	December 31, 2017						September 30, 2017						December 31, 2016
(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	$	7,178,384	$	68,440	3.79	%	$	7,318,594	$	71,169	3.86	%	$	7,406,810	$	61,501	3.30	%
Commercial real estate lending	4,873,889		49,744		4.05	%	4,973,436		50,396		4.02	%	4,914,643		42,663		3.45	%
Total commercial	12,052,273		118,184		3.89	%	12,292,030		121,565		3.93	%	12,321,453		104,164		3.36	%
Residential mortgage	7,546,288		59,979		3.18	%	7,339,827		59,828		3.26	%	6,317,769		49,557		3.14	%
Retail	1,265,055		16,853		5.31	%	1,267,280		16,541		5.21	%	1,337,848		16,679		4.98	%
Total loans	20,863,616		195,016		3.72	%	20,899,137		197,934		3.77	%	19,977,070		170,400		3.40	%
Investment securities
Taxable	4,986,279		25,614		2.05	%	4,846,653		24,162		1.99	%	4,963,633		22,418		1.81	%
Tax-exempt ⁽¹⁾	1,206,078		12,909		4.28	%	1,177,962		12,650		4.30	%	1,140,175		12,523		4.39	%
Other short-term investments	382,762		2,138		2.22	%	536,043		2,492		1.85	%	342,344		1,380		1.61	%
Investments and other	6,575,119		40,661		2.47	%	6,560,658		39,304		2.40	%	6,446,152		36,321		2.25	%
Total earning assets	27,438,735		$	235,677	3.42	%	27,459,795		$	237,238	3.44	%	26,423,222		$	206,721	3.12	%
Other assets, net	2,542,484						2,504,232						2,482,062
Total assets	$	29,981,219					$	29,964,027					$	28,905,284
Liabilities and stockholders' equity
Interest-bearing liabilities
Interest-bearing deposits
Savings	$	1,554,639	$	209	0.05	%	$	1,545,884	$	218	0.06	%	$	1,451,803	$	198	0.05	%
Interest-bearing demand	4,462,725		7,462		0.66	%	4,347,550		6,831		0.62	%	4,140,072		3,248		0.31	%
Money market	8,743,614		14,274		0.65	%	9,367,907		15,357		0.65	%	9,296,364		7,269		0.31	%
Time deposits	2,354,828		6,198		1.04	%	2,187,986		5,372		0.97	%	1,560,145		3,058		0.78	%
Total interest-bearing deposits	17,115,806		28,143		0.65	%	17,449,327		27,778		0.63	%	16,448,384		13,773		0.33	%
Federal funds purchased and securities sold under agreements to repurchase	279,817		420		0.60	%	398,200		768		0.76	%	549,738		314		0.23	%
Other short-term funding	600,492		1,731		1.14	%	416,124		1,039		0.99	%	491,800		458		0.37	%
Total short-term funding	880,309		2,151		0.97	%	814,324		1,807		0.88	%	1,041,538		772		0.29	%
Long-term funding	3,332,140		13,023		1.55	%	3,239,687		12,187		1.50	%	2,761,695		6,875		0.99	%
Total short and long-term funding	4,212,449		15,174		1.43	%	4,054,011		13,994		1.37	%	3,803,233		7,647		0.80	%
Total interest-bearing liabilities	21,328,255		$	43,317	0.81	%	21,503,338		$	41,772	0.77	%	20,251,617		$	21,420	0.42	%
Noninterest-bearing demand deposits	5,133,977						4,992,118						5,294,078
Other liabilities	302,981						283,724						274,829
Stockholders’ equity	3,216,006						3,184,847						3,084,760
Total liabilities and stockholders’ equity	$	29,981,219					$	29,964,027					$	28,905,284
Interest rate spread					2.61	%					2.67	%					2.70	%
Net free funds					0.18	%					0.17	%					0.10	%
Fully tax-equivalent net interest income and net interest margin			$	192,360	2.79	%			$	195,466	2.84	%			$	185,301	2.80	%
Fully tax-equivalent adjustment			5,355						5,344						5,266
Net interest income			$	187,005					$	190,122					$	180,035


(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,
	2017						2016
(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	$	7,254,613	$	265,796	3.66	%	$	7,395,524	$	239,064	3.23	%
Commercial real estate lending	4,952,605		192,838		3.89	%	4,724,412		163,421		3.46	%
Total commercial	12,207,218		458,634		3.76	%	12,119,936		402,485		3.32	%
Residential mortgage	7,105,486		229,210		3.23	%	6,156,524		194,941		3.17	%
Retail	1,279,679		64,892		5.07	%	1,374,207		65,910		4.80	%
Total loans	20,592,383		752,736		3.66	%	19,650,667		663,336		3.38	%
Investment securities
Taxable	4,861,597		96,909		1.99	%	4,955,980		95,152		1.92	%
Tax-exempt⁽¹⁾	1,166,665		50,455		4.32	%	1,092,583		49,036		4.49	%
Other short-term investments	379,239		7,719		2.04	%	327,431		4,829		1.48	%
Investments and other	6,407,501		155,083		2.42	%	6,375,994		149,017		2.34	%
Total earning assets	26,999,884		$	907,819	3.36	%	26,026,661		$	812,353	3.12	%
Other assets, net	2,485,849						2,479,451
Total assets	$	29,485,733					$	28,506,112
Liabilities and stockholders' equity
Interest-bearing liabilities
Interest-bearing deposits
Savings	$	1,527,161	$	816	0.05	%	$	1,428,292	$	860	0.06	%
Interest-bearing demand	4,334,181		24,009		0.55	%	3,790,185		10,361		0.27	%
Money market	9,085,990		50,781		0.56	%	9,127,940		26,978		0.30	%
Time deposits	1,979,709		18,419		0.93	%	1,553,069		12,136		0.78	%
Total interest-bearing deposits	16,927,041		94,025		0.56	%	15,899,486		50,335		0.32	%
Federal funds purchased and securities sold under agreements to repurchase	415,086		2,527		0.61	%	609,807		1,314		0.22	%
Other short-term funding	634,729		5,677		0.89	%	699,358		2,114		0.30	%
Total short-term funding	1,049,815		8,204		0.78	%	1,309,165		3,428		0.26	%
Long-term funding	3,068,543		43,156		1.41	%	2,913,751		30,532		1.05	%
Total short and long-term funding	4,118,358		51,360		1.25	%	4,222,916		33,960		0.80	%
Total interest-bearing liabilities	21,045,399		$	145,385	0.69	%	20,122,402		$	84,295	0.42	%
Noninterest-bearing demand deposits	4,996,561						5,106,286
Other liabilities	271,139						254,462
Stockholders’ equity	3,172,634						3,022,962
Total liabilities and stockholders’ equity	$	29,485,733					$	28,506,112
Interest rate spread					2.67	%					2.70	%
Net free funds					0.15	%					0.10	%
Fully tax-equivalent net interest income and net interest margin			$	762,434	2.82	%			$	728,058	2.80	%
Fully tax-equivalent adjustment			21,214						20,785
Net interest income			$	741,220					$	707,273


(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)	Dec 31, 2017		Sep 30, 2017		Seql Qtr % Change		Jun 30, 2017		Mar 31, 2017		Dec 31, 2016		Comp Qtr % Change
Period end loan composition
Commercial and industrial	$	6,399,693	$	6,534,660	(2	)%	$	6,571,000	$	6,300,646	$	6,489,014	(1	)%
Commercial real estate—owner occupied	802,209		827,064		(3	)%	845,336		878,391		897,724		(11	)%
Commercial and business lending	7,201,902		7,361,724		(2	)%	7,416,336		7,179,037		7,386,738		(3	)%
Commercial real estate—investor	3,315,254		3,345,536		(1	)%	3,329,585		3,415,355		3,574,732		(7	)%
Real estate construction	1,451,684		1,552,135		(6	)%	1,651,805		1,553,205		1,432,497		1	%
Commercial real estate lending	4,766,938		4,897,671		(3	)%	4,981,390		4,968,560		5,007,229		(5	)%
Total commercial	11,968,840		12,259,395		(2	)%	12,397,726		12,147,597		12,393,967		(3	)%
Residential mortgage	7,546,534		7,408,471		2	%	7,115,457		6,715,282		6,332,327		19	%
Home equity	883,804		890,130		(1	)%	897,111		911,969		934,443		(5	)%
Other consumer	385,813		373,464		3	%	372,775		372,835		393,979		(2	)%
Total consumer	8,816,151		8,672,065		2	%	8,385,343		8,000,086		7,660,749		15	%
Total loans	$	20,784,991	$	20,931,460	(1	)%	$	20,783,069	$	20,147,683	$	20,054,716	4	%

	Dec 31, 2017		Sep 30, 2017		Seql Qtr % Change		Jun 30, 2017		Mar 31, 2017		Dec 31, 2016		Comp Qtr % Change
Period end deposit and customer sweeps composition
Noninterest-bearing demand	$	5,478,416	$	5,177,734	6	%	$	5,038,162	$	5,338,212	$	5,392,208	2	%
Savings	1,524,992		1,544,037		(1	)%	1,552,820		1,530,155		1,431,494		7	%
Interest-bearing demand	4,603,157		4,990,891		(8	)%	3,858,739		4,736,236		4,687,656		(2	)%
Money market	8,830,328		8,299,512		6	%	9,228,129		8,608,523		8,770,963		1	%
Brokered CDs	18,609		3,554		N/M		131,184		54,993		52,725		(65	)%
Other time	2,330,460		2,317,723		1	%	1,809,146		1,559,916		1,553,402		50	%
Total deposits	22,785,962		22,333,451		2	%	21,618,180		21,828,035		21,888,448		4	%
Customer funding ⁽¹⁾	250,332		324,042		(23	)%	360,131		448,502		401,885		(38	)%
Total deposits and customer funding	$	23,036,294	$	22,657,493	2	%	$	21,978,311	$	22,276,537	$	22,290,333	3	%
Network transaction deposits ⁽²⁾	$	2,520,968	$	2,622,787	(4	)%	$	3,220,956	$	3,417,380	$	3,895,467	(35	)%
Net deposits and customer funding (Total deposits and customer sweeps, excluding Brokered CDs and network transaction deposits)	$	20,496,717	$	20,031,152	2	%	$	18,626,171	$	18,804,164	$	18,342,141	12	%

	Dec 31, 2017		Sep 30, 2017		Seql Qtr % Change		Jun 30, 2017		Mar 31, 2017		Dec 31, 2016		Comp Qtr % Change
Quarter average loan composition
Commercial and industrial	$	6,366,626	$	6,487,378	(2	)%	$	6,449,250	$	6,313,389	$	6,514,974	(2	)%
Commercial real estate—owner occupied	811,758		831,216		(2	)%	872,273		886,092		891,836		(9	)%
Commercial and business lending	7,178,384		7,318,594		(2	)%	7,321,523		7,199,481		7,406,810		(3	)%
Commercial real estate—investor	3,369,785		3,346,669		1	%	3,359,817		3,502,769		3,546,559		(5	)%
Real estate construction	1,504,104		1,626,767		(8	)%	1,604,440		1,497,225		1,368,084		10	%
Commercial real estate lending	4,873,889		4,973,436		(2	)%	4,964,257		4,999,994		4,914,643		(1	)%
Total commercial	12,052,273		12,292,030		(2	)%	12,285,780		12,199,475		12,321,453		(2	)%
Residential mortgage	7,546,288		7,339,827		3	%	6,957,865		6,564,600		6,317,769		19	%
Home equity	885,235		894,596		(1	)%	906,208		923,896		942,620		(6	)%
Other consumer	379,820		372,684		2	%	372,137		384,754		395,228		(4	)%
Total consumer	8,811,343		8,607,107		2	%	8,236,210		7,873,250		7,655,617		15	%
Total loans	$	20,863,616	$	20,899,137	—	%	$	20,521,990	$	20,072,725	$	19,977,070	4	%

	Dec 31, 2017		Sep 30, 2017		Seql Qtr % Change		Jun 30, 2017		Mar 31, 2017		Dec 31, 2016		Comp Qtr % Change
Quarter average deposit composition
Noninterest-bearing demand	$	5,133,977	$	4,992,118	3	%	$	4,892,271	$	4,966,082	$	5,294,078	(3	)%
Savings	1,554,639		1,545,884		1	%	1,541,129		1,465,811		1,451,803		7	%
Interest-bearing demand	4,462,725		4,347,550		3	%	4,272,620		4,251,357		4,140,072		8	%
Money market	8,743,614		9,367,907		(7	)%	9,064,874		9,169,141		9,296,364		(6	)%
Time deposits	2,354,828		2,187,986		8	%	1,752,255		1,613,331		1,560,145		51	%
Total deposits	$	22,249,783	$	22,441,445	(1	)%	$	21,523,149	$	21,465,722	$	21,742,462	2	%

N/M = Not meaningful


(1)	Includes repurchase agreements and commercial paper.

(2) Included above in interest-bearing demand and money market.

Page 9



Associated Banc-Corp Non-GAAP Financial Measures Reconciliation
(In millions, except per share data)	YTD Dec 2017			YTD Dec 2016			4Q17			3Q17			2Q17			1Q17			4Q16
Tangible common equity reconciliation ⁽¹⁾
Common equity							$	3,078		$	3,044		$	3,032		$	2,985		$	2,931
Goodwill and other intangible assets, net							(992		)	(986		)	(987		)	(987		)	(987		)
Tangible common equity							$	2,086		$	2,058		$	2,045		$	1,998		$	1,944
Tangible assets reconciliation ⁽¹⁾
Total assets							$	30,484		$	30,065		$	29,769		$	29,110		$	29,139
Goodwill and other intangible assets, net							(992		)	(986		)	(987		)	(987		)	(987		)
Tangible assets							$	29,492		$	29,079		$	28,782		$	28,123		$	28,152
Average tangible common equity and average common equity tier 1 reconciliation⁽¹⁾
Common equity	$	3,013		$	2,888		$	3,056		$	3,025		$	3,005		$	2,963		$	2,925
Goodwill and other intangible assets, net	(988		)	(988		)	(992		)	(986		)	(987		)	(987		)	(988		)
Tangible common equity	2,025			1,900			2,064			2,039			2,018			1,976			1,937
Less: Accumulated other comprehensive income / loss	54			8			62			49			50			54			28
Less: Deferred tax assets / deferred tax liabilities, net	30			32			29			32			32			32			33
Average common equity Tier 1	$	2,109		$	1,940		$	2,155		$	2,120		$	2,100		$	2,062		$	1,998
Selected Trend Information ⁽²⁾
Insurance commissions and fees							$	19		$	20		$	21		$	22		$	18
Service charges and deposit account fees							16			16			16			16			16
Card-based and loan fees							14			13			14			13			13
Trust and asset management fees							13			13			12			12			12
Brokerage commissions and fees							7			4			4			4			4
Fee-based revenue							69			66			67			67			63
Other							16			20			15			13			29
Total noninterest income							$	85		$	86		$	82		$	80		$	92
Selected equity and performance ratios ^{(1) (3)}
Tangible common equity / tangible assets							7.07		%	7.08		%	7.11		%	7.10		%	6.91		%
Return on average equity	7.23		%	6.63		%	6.17		%	8.10		%	7.35		%	7.31		%	7.07		%
Return on average tangible common equity	10.86		%	10.07		%	9.16		%	12.20		%	11.06		%	11.07		%	10.78		%
Return on average common equity Tier 1	10.43		%	9.86		%	8.77		%	11.73		%	10.63		%	10.61		%	10.45		%
Efficiency ratio reconciliation ⁽⁴⁾
Federal Reserve efficiency ratio	65.97		%	66.95		%	66.93		%	63.92		%	66.69		%	66.39		%	65.35		%
Fully tax-equivalent adjustment	(1.28		)%	(1.29		)%	(1.30		)%	(1.21		)%	(1.30		)%	(1.30		)%	(1.25		)%
Other intangible amortization	(0.18		)%	(0.20		)%	(0.18		)%	(0.16		)%	(0.18		)%	(0.20		)%	(0.20		)%
Fully tax-equivalent efficiency ratio	64.51		%	65.46		%	65.45		%	62.55		%	65.21		%	64.89		%	63.90		%

Tax Cuts and Jobs Act related expenses⁽⁵⁾	4Q 2017			4Q 2017 per share data			FY 2017			FY 2017 per share data
GAAP earnings and EPS	$	48		$	0.31		$	220		$	1.42
Required partial write-off of deferred tax asset	12			0.08			12			0.08
Required acceleration of low income housing tax credit amortization	1			<0.01			1			<0.01
Previously disclosed compensation actions	1			<0.01			1			<0.01
Other accelerated write-offs	1			<0.01			1			<0.01
Total expenses related to the Tax Act	$	15		$	0.10		$	15		$	0.10
Earnings and EPS, excluding expenses related to the Tax Act	$	63		$	0.41		$	235		$	1.52


(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 financial measures have been included as they provide meaningful supplemental information to assess trends in the Corporation’s results of operations. May not match the income statement due to rounding.


(3)	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.

(4)

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.

(5)

Given the passage of the Tax Cuts and Jobs Act of 2017, the Company believes the above required and reported impacts of the Tax Cuts and Jobs Act of 2017 are generally of a non-recurring nature and notably impacted the fourth quarter 2017 results. Management believes this measure is meaningful because it reflects adjustments commonly made by management, investors, regulators, and analysts to evaluate the adequacy of earnings per common share. Associated believes net income available to common equity, excluding expenses related to the Tax Act and earnings per common share, excluding expenses related to the Tax Act provide a greater understanding of ongoing operations and enhances comparability of results with prior periods. All items are tax effected.

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