8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported)     January 18, 2007     

Associated Banc-Corp

(Exact name of registrant as specified in its chapter)

Wisconsin	001-31343	39-1098068
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

1200 Hansen Road, Green Bay, Wisconsin	54304
(Address of principal executive offices)	(Zip code)

Registrant’s telephone number, including area code     920-491-7000     

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02. Results of Operations and Financial Condition.

On January 18, 2007, Associated Banc-Corp announced its earnings for the fourth quarter of 2006. A copy of the registrant’s press release containing this information is being furnished as Exhibit 99.1 to this Report on Form 8-K and is incorporated herein by reference.

The information furnished pursuant to this Item 2.02, including Exhibit 99.1, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities under that Section and shall not be deemed to be incorporated by reference into any filing of the Registrant under the Securities Act of 1933 or the Exchange Act.

Item 9.01. Financial Statements and Exhibits.

     (d) Exhibits.

          The following exhibit is furnished as part of this Report on Form 8-K:

99.1 Press release of the registrant dated January 18, 2007, containing financial information for its fourth quarter ended December 31, 2006.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	Associated Banc-Corp
	(Registrant)
Date: January 18, 2007	By:	/s/ Brian R. Bodager
		Brian R. Bodager
		Chief Administrative Officer, General Counsel & Corporate Secretary

ASSOCIATED BANC-CORP

Exhibit Index to Current Report on Form 8-K

Exhibit
Number
99.1	Press release of the registrant dated January 18, 2007, containing financial information for its fourth quarter ended December 31, 2006.

EX-99.1

News Release CONTACTS:
Investors:
Joe Selner, Chief Financial Officer 920-491-7120 Media:
Cindy Moon-Mogush, Corporate Communications 920-431-8034

Associated Banc-Corp earns $2.38 per diluted share in 2006, 57 cents in fourth quarter

• Net income $316.6 million for 2006

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

• Margin of 3.62% for 2006

• Deposits up 5% over prior year end

• Accelerated stock buyback executed in fourth quarter

     GREEN BAY, Wis. — Jan. 18, 2007 — Associated Banc-Corp (NASDAQ: ASBC) earned $0.57 per diluted share in the fourth quarter of 2006, compared to $0.64 in the fourth quarter of 2005. Net income for the fourth quarter of 2006 was $74.5 million, compared to $87.6 million for the fourth quarter of 2005.

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

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

     “While the operating environment in 2006 was challenging, we made meaningful progress toward improving the quality of earnings and executing our strategic objectives. We reduced wholesale funding by nearly $2 billion, realigned resources to increase focus on markets with more

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ASBC YE 2006 earnings, add one

potential, improved fee income contribution and sustained credit quality. In addition, we aggressively managed expenses while continuing to focus on core deposit growth,” Associated Chairman and CEO Paul S. Beideman said.

     Return on average assets (ROA) and return on average equity (ROE) for 2006 were 1.50 percent and 13.89 percent, respectively. This compares to an ROA of 1.53 percent and an ROE of 15.24 percent in 2005. Return on average tangible equity (which is a non-GAAP measure that excludes the average of goodwill and other intangible assets from average equity) was 23.31 percent for 2006 compared to 23.47 percent in 2005. Book value per share rose to $17.44 as of Dec. 31, 2006, compared to $17.15 a year earlier.

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

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

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

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

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

     Net mortgage banking income was $14.8 million for 2006, compared to $36.4 million in 2005. The majority of this decrease was attributable to the $2.1 million loss on market valuation associated with the fourth quarter 2006 transfer of $0.3 billion of portfolio loans to loans held for

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ASBC YE 2006 earnings, add two

sale, the $5.3 million gain on the bulk servicing sale in fourth quarter 2005, and less favorable valuation recoveries on the mortgage servicing rights asset in 2006.

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

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

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

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

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

     Associated Banc-Corp, headquartered in Green Bay, Wis., is a diversified bank holding company with total assets of $21 billion. Associated has more than 315 banking offices serving more than 180 communities in Wisconsin, Illinois, and Minnesota. The company offers a full range of traditional banking services and a variety of other financial products and services. More information about Associated Banc-Corp is available at www.AssociatedBank.com.

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

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Six pages of tables follow.

Consolidated Balance Sheets (Unaudited)
Associated Banc-Corp
	December 31			December 31
(in thousands)	2006			2005			% Change
Assets
Cash and due from banks	$	458,344		$	460,230			(0.4	%)
Interest-bearing deposits in other financial institutions		10,505			14,254			(26.3	%)
Federal funds sold and securities purchased under agreements to resell		13,187			17,811			(26.0	%)
Securities available for sale, at fair value		3,436,621			4,711,605			(27.1	%)
Loans held for sale		370,758			57,710			542.5	%
Loans		14,881,526			15,206,464			(2.1	%)
Allowance for loan losses		(203,481	)		(203,404	)		0.0	%
Loans, net		14,678,045			15,003,060			(2.2	%)
Premises and equipment, net		196,007			206,153			(4.9	%)
Goodwill		871,629			877,680			(0.7	%)
Other intangible assets, net		109,234			120,358			(9.2	%)
Other assets		717,054			631,221			13.6	%
Total assets	$	20,861,384		$	22,100,082			(5.6	%)
Liabilities and Stockholders’ Equity
Noninterest-bearing deposits	$	2,756,222		$	2,504,926			10.0	%
Interest-bearing deposits, excluding Brokered CDs		10,922,274			10,538,856			3.6	%
Brokered CDs		637,575			529,307			20.5	%
Total deposits		14,316,071			13,573,089			5.5	%
Short-term borrowings		2,042,685			2,666,307			(23.4	%)
Long-term funding		2,071,142			3,348,476			(38.1	%)
Accrued expenses and other liabilities		185,993			187,232			(0.7	%)
Total liabilities		18,615,891			19,775,104			(5.9	%)
Stockholders’ Equity
Preferred stock		—			—
Common stock		1,304			1,357			(3.9	%)
Surplus		1,120,934			1,301,004			(13.8	%)
Retained earnings		1,189,658			1,029,247			15.6	%
Accumulated other comprehensive loss		(16,453	)		(3,938	)		317.8	%
Deferred compensation		—			(2,081	)		(100.0	%)
Treasury stock		(49,950	)		(611	)		N/M
Total stockholders’ equity		2,245,493			2,324,978			(3.4	%)
Total liabilities and stockholders’ equity	$	20,861,384		$	22,100,082			(5.6	%)

N/M = Not Meaningful.

Consolidated Statements of Income (Unaudited)
Associated Banc-Corp
	For The Three Months Ended,								For The Year Ended,
	December 31,								December 31,
(in thousands, except per share amounts)	2006			2005		% Change			2006		2005		% Change
Interest Income
Interest and fees on loans	$	282,918		$	252,443		12.1	%	$	1,106,903	$	889,374		24.5	%
Interest and dividends on investment securities and deposits in other financial institutions
Taxable		29,962			41,486		(27.8	%)		131,952		164,404		(19.7	%)
Tax-exempt		9,794			10,325		(5.1	%)		39,434		39,310		0.3	%
Interest on federal funds sold and securities purchased under agreements to resell		292			289		1.0	%		1,090		937		16.3	%
Total interest income		322,966			304,543		6.0	%		1,279,379		1,094,025		16.9	%
Interest Expense
Interest on deposits		98,757			66,934		47.5	%		363,953		213,052		70.8	%
Interest on short-term borrowings		31,971			26,828		19.2	%		129,791		89,356		45.3	%
Interest on long-term funding		26,174			35,186		(25.6	%)		116,086		119,362		(2.7	%)
Total interest expense		156,902			128,948		21.7	%		609,830		421,770		44.6	%
Net Interest Income		166,064			175,595		(5.4	%)		669,549		672,255		(0.4	%)
Provision for loan losses		7,068			3,676		92.3	%		19,056		13,019		46.4	%
Net interest income after provision for loan losses		158,996			171,919		(7.5	%)		650,493		659,236		(1.3	%)
Noninterest Income
Trust service fees		9,941			9,055		9.8	%		37,484		35,017		7.0	%
Service charges on deposit accounts		24,214			23,073		4.9	%		91,593		86,783		5.5	%
Mortgage banking, net		1,735			12,166		(85.7	%)		14,801		36,395		(59.3	%)
Card-based and other nondeposit fees		11,267			10,033		12.3	%		42,661		37,439		13.9	%
Retail commissions		15,053			13,624		10.5	%		61,256		56,604		8.2	%
Bank owned life insurance income		5,102			3,022		68.8	%		16,155		9,942		62.5	%
Asset sale gains, net		91			2,766		N/M			304		3,945		N/M
Investment securities gains (losses), net		(436	)		1,179		N/M			4,722		4,116		N/M
Other		7,568			6,126		23.5	%		26,525		20,845		27.2	%
Total noninterest income		74,535			81,044		(8.0	%)		295,501		291,086		1.5	%
Noninterest Expense
Personnel expense		68,315			68,619		(0.4	%)		283,431		274,941		3.1	%
Occupancy		10,971			10,287		6.6	%		43,825		38,961		12.5	%
Equipment		4,300			4,361		(1.4	%)		17,466		16,792		4.0	%
Data processing		8,033			7,972		0.8	%		31,451		29,534		6.5	%
Business development and advertising		4,365			4,999		(12.7	%)		16,857		17,661		(4.6	%)
Stationery and supplies		1,737			1,869		(7.1	%)		7,082		6,956		1.8	%
Other intangible amortization		1,999			2,418		(17.3	%)		8,903		8,607		3.4	%
Other		24,678			25,014		(1.3	%)		87,200		87,011		0.2	%
Total noninterest expense		124,398			125,539		(0.9	%)		496,215		480,463		3.3	%
Income before income taxes		109,133			127,424		(14.4	%)		449,779		469,859		(4.3	%)
Income tax expense		34,632			39,783		(12.9	%)		133,134		149,698		(11.1	%)
Net Income	$	74,501		$	87,641		(15.0	%)	$	316,645	$	320,161		(1.1	%)
Earnings Per Share:
Basic	$	0.58		$	0.65		(10.8	%)	$	2.40	$	2.45		(2.0	%)
Diluted	$	0.57		$	0.64		(10.9	%)	$	2.38	$	2.43		(2.1	%)
Average Shares Outstanding:
Basic		129,202			135,684		(4.8	%)		132,006		130,554		1.1	%
Diluted		130,366			137,005		(4.8	%)		133,132		131,931		0.9	%

N/M — Not meaningful.

Consolidated Statements of Income (Unaudited) - Quarterly Trend
Associated Banc-Corp
(in thousands, except per share amounts)	4Q06			3Q06		2Q06		1Q06			4Q05
Interest Income
Interest and fees on loans	$	282,918		$	284,397	$	278,573	$	261,015		$	252,443
Interest and dividends on investment securities and deposits with other financial institutions
Taxable		29,962			30,225		32,649		39,116			41,486
Tax-exempt		9,794			9,691		9,786		10,163			10,325
Interest on federal funds sold and securities purchased under agreements to resell		292			260		289		249			289
Total interest income		322,966			324,573		321,297		310,543			304,543
Interest Expense
Interest on deposits		98,757			99,242		88,076		77,878			66,934
Interest on short-term borrowings		31,971			30,450		34,126		33,244			26,828
Interest on long-term funding		26,174			26,664		30,696		32,552			35,186
Total interest expense		156,902			156,356		152,898		143,674			128,948
Net Interest Income		166,064			168,217		168,399		166,869			175,595
Provision for loan losses		7,068			3,837		3,686		4,465			3,676
Net interest income after provision for loan losses		158,996			164,380		164,713		162,404			171,919
Noninterest Income
Trust service fees		9,941			9,339		9,307		8,897			9,055
Service charges on deposit accounts		24,214			23,438		22,982		20,959			23,073
Mortgage banking, net		1,735			2,833		5,829		4,404			12,166
Card-based and other nondeposit fees		11,267			10,461		11,047		9,886			10,033
Retail commissions		15,053			14,360		16,365		15,478			13,624
Bank owned life insurance income		5,102			4,390		3,592		3,071			3,022
Asset sale gains (losses), net		91			89		354		(230	)		2,766
Investment securities gains (losses), net		(436	)		1,164		1,538		2,456			1,179
Other		7,568			6,911		6,194		5,852			6,126
Total noninterest income		74,535			72,985		77,208		70,773			81,044
Noninterest Expense
Personnel expense		68,315			71,321		74,492		69,303			68,619
Occupancy		10,971			10,442		10,654		11,758			10,287
Equipment		4,300			4,355		4,223		4,588			4,361
Data processing		8,033			7,668		7,711		8,039			7,972
Business development and advertising		4,365			4,142		4,101		4,249			4,999
Stationery and supplies		1,737			1,787		1,784		1,774			1,869
Other intangible amortization		1,999			2,280		2,281		2,343			2,418
Other		24,678			21,691		19,414		21,417			25,014
Total noninterest expense		124,398			123,686		124,660		123,471			125,539
Income before income taxes		109,133			113,679		117,261		109,706			127,424
Income tax expense		34,632			36,791		33,712		27,999			39,783
Net Income	$	74,501		$	76,888	$	83,549	$	81,707		$	87,641
Earnings Per Share:
Basic	$	0.58		$	0.58	$	0.63	$	0.60		$	0.65
Diluted	$	0.57		$	0.58	$	0.63	$	0.60		$	0.64
Average Shares Outstanding:
Basic		129,202			131,520		132,259		135,114			135,684
Diluted		130,366			132,591		133,441		136,404			137,005

Selected Quarterly Information
Associated Banc-Corp
(in thousands, except per share & full time equivalent employee data)	YTD 2006			YTD 2005			4th Qtr 2006			3rd Qtr 2006			2nd Qtr 2006			1st Qtr 2006			4th Qtr 2005
Summary of Operations
Net interest income		669,549			672,255			166,064			168,217			168,399			166,869			175,595
Provision for loan losses		19,056			13,019			7,068			3,837			3,686			4,465			3,676
Asset sale gains (losses), net		304			3,945			91			89			354			(230	)		2,766
Investment securities gains (losses), net		4,722			4,116			(436	)		1,164			1,538			2,456			1,179
Noninterest income (excluding securities & asset gains)		290,475			283,025			74,880			71,732			75,316			68,547			77,099
Noninterest expense		496,215			480,463			124,398			123,686			124,660			123,471			125,539
Income before income taxes		449,779			469,859			109,133			113,679			117,261			109,706			127,424
Income taxes		133,134			149,698			34,632			36,791			33,712			27,999			39,783
Net income		316,645			320,161			74,501			76,888			83,549			81,707			87,641
Taxable equivalent adjustment		26,233			25,509			6,568			6,495			6,503			6,667			6,766
Per Common Share Data (1)
Net income:
Basic	$	2.40		$	2.45		$	0.58		$	0.58		$	0.63		$	0.60		$	0.65
Diluted		2.38			2.43			0.57			0.58			0.63			0.60			0.64
Dividends		1.14			1.06			0.29			0.29			0.29			0.27			0.27
Market Value:
High	$	35.13		$	34.74		$	35.13		$	32.58		$	34.45		$	34.83		$	33.23
Low		30.27			29.09			32.13			30.27			30.69			32.75			29.09
Close		34.88			32.55			34.88			32.50			31.53			33.98			32.55
Book value		17.44			17.15			17.44			17.44			17.20			16.98			17.15
Performance Ratios (annualized)
Earning assets yield		6.79	%		5.84	%		6.95	%		6.89	%		6.74	%		6.38	%		6.12	%
Interest-bearing liabilities rate		3.71			2.57			3.93			3.84			3.65			3.37			2.98
Net interest margin		3.62			3.64			3.64			3.63			3.59			3.48			3.59
Return on average assets		1.50			1.53			1.43			1.46			1.58			1.52			1.58
Return on average equity		13.89			15.24			13.19			13.36			14.86			14.16			14.99
Return on tangible average equity (2)		23.31			23.47			22.31			22.32			25.18			23.48			22.70
Efficiency ratio (3)		50.31			48.99			50.26			50.19			49.82			51.00			48.38
Effective tax rate		29.60			31.86			31.73			32.36			28.75			25.52			31.22
Dividend payout ratio (4)		47.50			43.27			50.00			50.00			46.03			45.00			41.54
Average Balances
Assets	$	21,162,099		$	20,921,575		$	20,635,203		$	20,891,001		$	21,266,792		$	21,871,969		$	22,022,165
Earning assets		19,229,849			19,181,630			18,713,784			18,968,584			19,342,628			19,910,420			20,080,758
Interest-bearing liabilities		16,434,947			16,410,899			15,765,774			16,070,975			16,717,761			17,204,860			17,090,134
Loans		15,370,090			14,347,707			15,233,207			15,404,223			15,515,789			15,327,803			15,154,225
Deposits		13,623,703			12,462,981			13,748,444			13,884,404			13,534,725			13,319,664			13,282,910
Wholesale funding		5,161,192			6,207,846			4,547,042			4,636,853			5,391,108			6,092,275			6,280,793
Stockholders’ equity		2,279,376			2,101,389			2,240,143			2,283,933			2,254,933			2,339,539			2,320,134
Stockholders’ equity / assets		10.77	%		10.04	%		10.86	%		10.93	%		10.60	%		10.70	%		10.54	%
At Period End
Assets							$	20,861,384		$	20,926,523		$	21,128,354		$	21,518,860		$	22,100,082
Loans								14,881,526			15,284,608			15,405,630			15,539,187			15,206,464
Allowance for loan losses								203,481			203,442			203,411			203,408			203,404
Goodwill								871,629			871,629			875,727			875,727			877,680
Mortgage servicing rights, net								66,620			67,931			69,282			68,116			68,841
Other intangible assets, net								42,614			44,613			46,893			49,174			51,517
Deposits								14,316,071			14,208,545			13,646,408			13,616,870			13,573,089
Wholesale funding								4,113,827			4,277,636			5,033,961			5,496,039			6,014,783
Stockholders’ equity								2,245,493			2,270,380			2,274,860			2,244,695			2,324,978
Stockholders’ equity / assets								10.76	%		10.85	%		10.77	%		10.43	%		10.52	%
Tangible equity / tangible assets (5)								6.67	%		6.77	%		6.69	%		6.41	%		6.59	%
Shares outstanding, end of period								128,747			130,216			132,283			132,167			135,602
Shares repurchased during period								1,957			2,000			31			4,030			974
Average per share cost of shares repurchased during period							$	33.11		$	31.43		$	—		$	33.63		$	30.82
Year-to-date shares repurchased during period								8,018			6,061			4,061			4,030			3,496
YTD average per share cost of shares repurchased during period							$	32.83		$	32.74		$	33.38		$	33.63		$	32.43
Selected trend information
Average full time equivalent employees								5,084			5,117			5,112			5,147			5,113
Trust assets under management, at market value							$	5,800,000		$	5,500,000		$	5,200,000		$	5,200,000		$	5,000,000
Mortgage loans originated for sale								374,427			388,914			359,361			246,724			356,280
Portfolio serviced for others								8,330,000			8,226,000			8,134,000			8,050,000			8,028,000
Mortgage servicing rights, net / Portfolio serviced for others								0.80	%		0.83	%		0.85	%		0.85	%		0.86	%

(1)	Per share data adjusted retroactively for stock splits & stock dividends.
(2)	Return on tangible average equity = Net income divided by average equity excluding average goodwill & other intangible assets. This is a non-GAAP financial measure.
(3)	Efficiency ratio = Noninterest expense divided by sum of taxable equivalent net interest income plus noninterest income, excluding investment securities gains, net, & asset sales gains, net.
(4)	Ratio is based upon basic earnings per share.
(5)	Tangible equity to tangible assets = Stockholders’ equity excluding goodwill & other intangible assets divided by assets excluding goodwill & other intangible assets. This is a non-GAAP financial measure.

Financial Summary and Comparison
Associated Banc-Corp
	Three months ended									Year Ended
	December 31,									December 31,
(in thousands)	2006			2005			% Change			2006			2005			% Change
Allowance for Loan Losses
Beginning balance	$	203,442		$	190,080			7.0	%	$	203,404		$	189,762			7.2	%
Balance related to acquisition		—			13,283			(100.0	%)		—			13,283			(100.0	%)
Provision for loan losses		7,068			3,676			92.3	%		19,056			13,019			46.4	%
Charge offs		(10,574	)		(11,142	)		(5.1	%)		(30,507	)		(27,743	)		10.0	%
Recoveries		3,545			7,507			(52.8	%)		11,528			15,083			(23.6	%)
Net charge offs		(7,029	)		(3,635	)		93.4	%		(18,979	)		(12,660	)		49.9	%
Ending Balance	$	203,481		$	203,404			0.0	%	$	203,481		$	203,404			0.0	%

Credit Quality
							4Q06 vs 3Q06												4Q06 vs 4Q05
	Dec 31, 2006			Sept 30, 2006			% Change			June 30, 2006			March 31, 2006			Dec 31, 2005			% Change
Nonaccrual loans	$	136,734		$	123,743			10.5	%	$	95,426		$	102,824		$	95,313			43.5	%
Loans 90 or more days past due and still accruing		5,725			4,826			18.6	%		7,591			7,068			3,270			75.1	%
Restructured loans		26			28			(7.1	%)		29			31			32			(18.8	%)
Total nonperforming loans		142,485			128,597			10.8	%		103,046			109,923			98,615			44.5	%
Other real estate owned		14,417			13,866			4.0	%		14,947			11,676			11,336			27.2	%
Total nonperforming assets		156,902			142,463			10.1	%		117,993			121,599			109,951			42.7	%
Provision for loan losses		7,068			3,837			84.2	%		3,686			4,465			3,676			92.3	%
Net charge offs		7,029			3,806			84.7	%		3,683			4,461			3,635			93.4	%
Allowance for loan losses / loans		1.37	%		1.33	%					1.32	%		1.31	%		1.34	%
Allowance for loan losses / nonperforming loans		142.81			158.20						197.40			185.05			206.26
Nonperforming loans / total loans		0.96			0.84						0.67			0.71			0.65
Nonperforming assets / total assets		0.75			0.68						0.56			0.57			0.50
Net charge offs / average loans (annualized)		0.18			0.10						0.10			0.12			0.10
Year-to-date net charge offs / average loans		0.12			0.10						0.11			0.12			0.09

Period End Loan Composition
					4Q06 vs 3Q06									4Q06 vs 4Q05
	Dec 31, 2006		Sept 30, 2006		% Change			June 30, 2006		March 31, 2006		Dec 31, 2005		% Change
Commercial, financial & agricultural	$	3,677,573	$	3,549,216		3.6	%	$	3,505,819	$	3,571,835	$	3,417,343		7.6	%
Real estate — construction		2,047,124		2,186,810		(6.4	%)		2,122,136		1,981,473		1,783,267		14.8	%
Commercial real estate		3,789,480		3,755,037		0.9	%		3,872,819		4,024,260		4,064,327		(6.8	%)
Lease financing		81,814		79,234		3.3	%		74,919		62,600		61,315		33.4	%
Commercial		9,595,991		9,570,297		0.3	%		9,575,693		9,640,168		9,326,252		2.9	%
Home equity (a)		2,164,758		2,166,312		(0.1	%)		2,151,858		2,121,601		2,025,055		6.9	%
Installment		915,747		940,139		(2.6	%)		945,123		957,877		1,003,938		(8.8	%)
Retail		3,080,505		3,106,451		(0.8	%)		3,096,981		3,079,478		3,028,993		1.7	%
Residential mortgage		2,205,030		2,607,860		(15.4	%)		2,732,956		2,819,541		2,851,219		(22.7	%)
Total loans	$	14,881,526	$	15,284,608		(2.6	%)	$	15,405,630	$	15,539,187	$	15,206,464		(2.1	%)

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

Period End Deposit Composition
					4Q06 vs 3Q06									4Q06 vs 4Q05
	Dec 31, 2006		Sept 30, 2006		% Change			June 30, 2006		March 31, 2006		Dec 31, 2005		% Change
Demand	$	2,756,222	$	2,534,686		8.7	%	$	2,276,463	$	2,319,075	$	2,504,926		10.0	%
Savings		890,380		959,650		(7.2	%)		1,031,993		1,074,938		1,079,851		(17.5	%)
Interest-bearing demand		1,875,879		1,712,833		9.5	%		1,975,364		2,347,104		2,549,782		(26.4	%)
Money market		3,822,928		3,959,719		(3.5	%)		3,434,288		2,863,174		2,629,933		45.4	%
Brokered CDs		637,575		630,637		1.1	%		518,354		567,660		529,307		20.5	%
Other time deposits		4,333,087		4,411,020		(1.8	%)		4,409,946		4,444,919		4,279,290		1.3	%
Total deposits	$	14,316,071	$	14,208,545		0.8	%	$	13,646,408	$	13,616,870	$	13,573,089		5.5	%
Customer Repo Sweeps (b)	$	875,099	$	895,766		(2.3	%)	$	885,503	$	917,380	$	822,221		6.43	%

(b) Included within short-term borrowings.

Net Interest Income Analysis - Taxable Equivalent Basis
Associated Banc-Corp
	Year ended December 31, 2006							Year ended December 31, 2005
	Average		Interest		Average			Average		Interest		Average
(in thousands)	Balance		Income / Expense		Yield / Rate			Balance		Income / Expense		Yield / Rate
Earning assets:
Loans: (1) (2) (3)
Commercial	$	9,527,264	$	707,405		7.43	%	$	8,574,996	$	532,116		6.21	%
Residential mortgage		2,760,454		160,758		5.82			2,875,438		161,095		5.60
Retail		3,082,372		241,313		7.83			2,897,273		198,086		6.84
Total loans		15,370,090		1,109,476		7.22			14,347,707		891,297		6.21
Investments and other		3,859,759		196,136		5.08			4,833,923		228,237		4.72
Total earning assets		19,229,849		1,305,612		6.79			19,181,630		1,119,534		5.84
Other assets, net		1,932,250							1,739,945
Total assets	$	21,162,099						$	20,921,575
Interest-bearing liabilities:
Savings deposits	$	1,012,966	$	3,824		0.38	%	$	1,125,417	$	3,877		0.34	%
Interest-bearing demand deposits		1,997,355		34,895		1.75			2,337,462		26,611		1.14
Money market deposits		3,324,362		119,506		3.59			2,262,369		45,626		2.02
Time deposits, excluding Brokered CDs		4,388,147		177,860		4.05			4,083,500		123,550		3.03
Total interest-bearing deposits, excluding Brokered CDs		10,722,830		336,085		3.13			9,808,748		199,664		2.04
Brokered CDs		550,925		27,868		5.06			394,305		13,388		3.40
Total interest-bearing deposits		11,273,755		363,953		3.23			10,203,053		213,052		2.09
Wholesale funding		5,161,192		245,877		4.76			6,207,846		208,718		3.36
Total interest-bearing liabilities		16,434,947		609,830		3.71			16,410,899		421,770		2.57
Noninterest-bearing demand		2,349,948							2,259,928
Other liabilities		97,828							149,359
Stockholders’ equity		2,279,376							2,101,389
Total liabilities and stockholders’ equity	$	21,162,099						$	20,921,575
Net interest income and rate spread (1)			$	695,782		3.08	%			$	697,764		3.27	%
Net interest margin (1)						3.62	%						3.64	%
Taxable equivalent adjustment			$	26,233						$	25,509

	Three months ended December 31, 2006							Three months ended December 31, 2005
	Average		Interest		Average			Average		Interest		Average
	Balance		Income / Expense		Yield / Rate			Balance		Income / Expense		Yield / Rate
Earning assets:
Loans: (1) (2) (3)
Commercial	$	9,505,699	$	182,086		7.50	%	$	9,222,512	$	156,412		6.64	%
Residential mortgage		2,628,382		38,753		5.87			2,905,463		41,482		5.68
Retail		3,099,126		62,771		8.06			3,026,250		55,120		7.25
Total loans		15,233,207		283,610		7.33			15,154,225		253,014		6.58
Investments and other		3,480,577		45,924		5.27			4,926,533		58,295		4.73
Total earning assets		18,713,784		329,534		6.95			20,080,758		311,309		6.12
Other assets, net		1,921,419							1,941,407
Total assets	$	20,635,203						$	22,022,165
Interest-bearing liabilities:
Savings deposits	$	940,041	$	903		0.38	%	$	1,150,777	$	800		0.28	%
Interest-bearing demand deposits		1,729,355		7,945		1.82			2,210,056		7,082		1.27
Money market deposits		3,727,175		35,420		3.77			2,623,223		17,121		2.59
Time deposits, excluding Brokered CDs		4,356,474		48,243		4.39			4,342,185		37,004		3.38
Total interest-bearing deposits, excluding Brokered CDs		10,753,045		92,511		3.41			10,326,241		62,007		2.38
Brokered CDs		465,687		6,246		5.32			483,100		4,927		4.05
Total interest-bearing deposits		11,218,732		98,757		3.49			10,809,341		66,934		2.46
Wholesale funding		4,547,042		58,145		5.02			6,280,793		62,014		3.87
Total interest-bearing liabilities		15,765,774		156,902		3.93			17,090,134		128,948		2.98
Noninterest-bearing demand		2,529,712							2,473,569
Other liabilities		99,574							138,328
Stockholders’ equity		2,240,143							2,320,134
Total liabilities and stockholders’ equity	$	20,635,203						$	22,022,165
Net interest income and rate spread (1)			$	172,632		3.02	%			$	182,361		3.14	%
Net interest margin (1)						3.64	%						3.59	%
Taxable equivalent adjustment			$	6,568						$	6,766

(1)	The yield on tax exempt loans and securities is computed on a taxable equivalent basis using a tax rate of 35% for all periods presented and is net of the effects of certain disallowed interest deductions.
(2)	Nonaccrual loans and loans held for sale have been included in the average balances.
(3)	Interest income includes net loan fees.