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

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8-K - FORM 8-K - ASSOCIATED BANC-CORP	asb-20160331form8kpr.htm
EX-99.2 - EXHIBIT 99.2 - ASSOCIATED BANC-CORP	draftpresentation.htm

Exhibit 99.1



	NEWS RELEASE Investor Contact: Teresa Gutierrez, Senior Vice President, Director of Investor Relations 920-491-7059 Media Contact: Cliff Bowers, Senior Vice President, Director of Public Relations 920-491-7542

Associated Banc-Corp Reports First Quarter Earnings of $0.27 per share

Strong commercial loan growth and record insurance revenues

GREEN BAY, Wis. -- April 21, 2016 -- Associated Banc-Corp (NYSE: ASB) today reported net income available to common equity of $40 million, or $0.27 per common share, for the quarter ended March 31, 2016. This compares to net income available to common equity of $41 million, or $0.27 per common share, for the quarter ended December 31, 2015.

"We are encouraged by several positive trends within our core businesses in the first quarter. Strong commercial loan growth coupled with improving commercial lending rates contributed to higher net interest income. We also recognized record levels of insurance commissions," said President and CEO Philip B. Flynn. "We continue to be expense disciplined as we manage through the current low interest rate environment and the energy price cycle. While pressures in the oil and gas portfolio contributed to an elevated provision, overall, the quarter benefited from higher revenues, lower expenses, and solid underlying trends."

FIRST QUARTER SUMMARY


•	Average loans of $18.9 billion grew $380 million, or 2% from the fourth quarter


◦	Total commercial lending accounted for 85% of average loan growth


•	Average deposits of $20.6 billion declined slightly from the fourth quarter


◦	The loan to deposit ratio was 93%


•	Net interest income of $172 million was slightly higher than the prior quarter, and up $4 million, or 2% from the year ago quarter


•	Net interest margin was 2.81% compared to 2.82% in the fourth quarter


•	Provision for credit losses of $20 million was flat from the fourth quarter; the allowance related to the oil and gas portfolio increased to 6.5%


•	Noninterest income of $83 million was flat from the prior quarter


•	Noninterest expenses of $174 million declined $2 million, or 1% from the prior quarter


•	During the quarter, the Company repurchased $20 million of common stock


•	Return on average CET1 was 8.6% and ROATCE was 8.7%


•	Total dividends per common share of $0.11 in the quarter, were up 10% from the year ago quarter


•	Capital ratios remain strong with a CET1 ratio of 9.3% at quarter end

FIRST QUARTER RESULTS

Loans

First quarter average loans of $18.9 billion increased $380 million from the fourth quarter and increased $1.1 billion from the year ago quarter.

With respect to first quarter average balances,


•	Commercial and business lending grew $229 million from the fourth quarter to $7.1 billion, with growth driven by Power and Utilities and Real Estate Investment Trust lending. Commercial and business lending increased $128 million from the year ago quarter.


•	Commercial real estate lending grew $96 million from the fourth quarter to $4.5 billion, with growth driven by real estate construction lending. Commercial real estate lending increased $367 million from the year ago quarter.


•	Consumer lending grew $55 million from the fourth quarter to $7.3 billion, and increased $613 million from the year ago quarter.

Deposits

First quarter average deposits of $20.6 billion were down $41 million from the fourth quarter and up $1.5 billion from the year ago quarter.

With respect to first quarter average balances,


•	Noninterest-bearing demand deposits increased $29 million from the fourth quarter to $5.0 billion, and grew $670 million from the year ago quarter.


•	Interest-bearing demand deposits increased $70 million from the fourth quarter to $3.2 billion, and grew modestly from the year ago quarter.


•	Money market deposits declined $102 million from the fourth quarter to $9.4 billion, and have grown $779 million from the year ago quarter.


•	Time deposits declined $47 million from the fourth quarter to $1.6 billion, and decreased $36 million from the year ago quarter.


•	Savings deposits saw a modest increase from the fourth quarter to $1.4 billion, and have grown $90 million from the year ago quarter.

Net Interest Income and Net Interest Margin

First quarter net interest income of $172 million was modestly higher than the prior quarter and up $4 million, or 2% from the year ago quarter. First quarter net interest margin was 2.81%, a decrease of 1 basis point from the prior quarter and 8 basis points lower than the year ago quarter, reflecting the continued low interest rate environment.


•	Interest and fees on loans increased $4 million, or 3% from the fourth quarter. This increase was partially offset by $1 million in lower interest income from investment securities and other sources.


•	Interest expense on deposits increased $3 million from the fourth quarter, reflecting an 8 basis point increase in the cost of total interest-bearing deposits.


•	Interest on short-term and long-term funding decreased by $1 million from the fourth quarter, primarily as a result of the Company’s retirement of $430 million of senior notes.

Noninterest Income

First quarter noninterest income of $83 million was flat from the fourth quarter and up $3 million, or 4% from the year ago quarter.


•	Insurance commissions increased $3 million from the fourth quarter principally related to seasonally higher property and casualty insurance revenues.


•	Mortgage banking income decreased $4 million from the fourth quarter, primarily driven by lower volumes and a negative change in the interest rate mark at quarter end.


•	Other noninterest income benefited from higher bank owned life insurance income.

Noninterest Expense

First quarter total noninterest expense was $174 million, down $2 million, or 1% from the fourth quarter and was flat from the year ago quarter. The efficiency ratio improved to 67% in the first quarter, compared to 69% in the prior quarter.


•	Lower occupancy, loan expense, OREO, fraud-related and other costs contributed to a $5 million reduction in expenses from the fourth quarter.


•	These savings were partially offset by $3 million in higher legal and professional fees, personnel expense and business development and advertising expenses.

Taxes

First quarter income taxes were $19 million with an effective tax rate of 31%, compared to $22 million and 32% in the year ago period.

Credit

First quarter credit trends deteriorated, principally driven by risk rating migration in the Company’s oil and gas portfolio, with increases in the levels of potential problem loans, nonaccrual loans and net charge offs.

The provision for credit losses was $20 million in the first quarter, flat from the prior quarter and up $16 million from the year ago quarter. The provision in the first quarter was primarily attributable to oil and gas credits.

The Company’s allowance for loan losses was $277 million, up $3 million from the fourth quarter, and up $12 million from the year ago quarter. The allowance for loan losses to total loans was 1.44% in the first quarter, compared to 1.47% in the fourth quarter and 1.48% in the year ago quarter.

The allowance related to the oil and gas portfolio was $49 million, up $7 million from the fourth quarter, and up $22 million from the year ago quarter. The allowance represented 6.5% of total oil and gas loans at quarter end, compared to 5.6% at year end, and 3.5% at March 31, 2015.

Capital

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

The Company’s capital position remains strong, with a common equity Tier 1 ratio of 9.3% at March 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.

FIRST 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, April 21, 2016. Interested parties can listen to the call live on the internet through the investor relations section of the Company's website, http://investor.associatedbank.com or by dialing 877-407-8037. The first quarter 2016 financial tables and an accompanying slide presentation for the call will be available on the Company's website just prior to the call. The number for international callers is 201-689-8037. Participants should ask the operator for the Associated Banc-Corp first quarter 2016 earnings 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 $28 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 contains 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)	Mar 31, 2016			Dec 31, 2015			Seql Qtr $ Change			Sep 30, 2015			Jun 30, 2015			Mar 31, 2015			Comp Qtr $ Change
Assets
Cash and due from banks	$	287,183		$	374,921		$	(87,738	)	$	303,701		$	375,369		$	355,541		$	(68,358	)
Interest-bearing deposits in other financial institutions	68,025			79,764			(11,739		)	70,023			101,573			488,426			(420,401		)
Federal funds sold and securities purchased under agreements to resell	20,200			19,000			1,200			36,490			39,850			3,380			16,820
Investment securities held to maturity, at amortized cost	1,176,821			1,168,230			8,591			604,799			532,382			438,047			738,774
Investment securities available for sale, at fair value	4,905,841			4,967,414			(61,573		)	5,403,656			5,407,998			5,358,310			(452,469		)
Federal Home Loan Bank and Federal Reserve Bank stocks, at cost	181,853			147,240			34,613			160,871			160,765			189,222			(7,369		)
Loans held for sale	128,339			124,915			3,424			105,144			151,146			159,963			(31,624		)
Loans	19,227,240			18,714,343			512,897			18,524,773			18,303,252			17,979,032			1,248,208
Allowance for loan losses	(277,370		)	(274,264		)	(3,106		)	(262,536		)	(261,538		)	(265,268		)	(12,102		)
Loans, net	18,949,870			18,440,079			509,791			18,262,237			18,041,714			17,713,764			1,236,106
Premises and equipment, net	331,711			267,606			64,105			271,119			274,338			274,591			57,120
Goodwill	971,951			968,844			3,107			968,844			968,844			968,774			3,177
Mortgage servicing rights, net	59,414			61,341			(1,927		)	61,402			61,192			59,733			(319		)
Other intangible assets	16,966			16,458			508			16,978			17,863			18,251			(1,285		)
Trading assets	53,087			32,192			20,895			43,752			35,386			42,336			10,751
Other assets⁽¹⁾	1,027,606			1,043,831			(16,225		)	1,154,750			1,012,957			994,343			33,263
Total assets	$	28,178,867		$	27,711,835		$	467,032		$	27,463,766		$	27,181,377		$	27,064,681		$	1,114,186
Liabilities and Stockholders’ Equity
Noninterest-bearing demand deposits	$	5,272,685		$	5,562,466		$	(289,781	)	$	4,657,261		$	4,332,171		$	4,570,872		$	701,813
Interest-bearing deposits	15,412,775			15,445,199			(32,424		)	15,901,134			14,937,392			15,280,720			132,055
Total deposits	20,685,460			21,007,665			(322,205		)	20,558,395			19,269,563			19,851,592			833,868
Federal funds purchased and securities sold under agreements to repurchase	583,247			431,438			151,809			702,569			689,699			587,272			(4,025		)
Other short-term funding	834,161			402,978			431,183			319,766			905,837			75,265			758,896
Long-term funding⁽¹⁾	2,861,316			2,676,164			185,152			2,676,065			3,175,966			3,425,866			(564,550		)
Trading liabilities	55,223			33,430			21,793			45,817			37,169			44,730			10,493
Accrued expenses and other liabilities	176,962			222,914			(45,952		)	207,357			198,752			197,818			(20,856		)
Total liabilities	25,196,369			24,774,589			421,780			24,509,969			24,276,986			24,182,543			1,013,826
Stockholders’ Equity
Preferred equity	120,347			121,379			(1,032		)	121,379			122,015			59,727			60,620
Common equity
Common stock	1,630			1,642			(12		)	1,642			1,642			1,674			(44		)
Surplus	1,447,368			1,458,522			(11,154		)	1,455,034			1,450,200			1,505,170			(57,802		)
Retained earnings	1,599,835			1,593,239			6,596			1,570,199			1,538,684			1,509,967			89,868
Accumulated other comprehensive income (loss)	2,167			(32,616		)	34,783			15,376			2,594			24,800			(22,633		)
Treasury stock	(188,849		)	(204,920		)	16,071			(209,833		)	(210,744		)	(219,200		)	30,351
Total common equity	2,862,151			2,815,867			46,284			2,832,418			2,782,376			2,822,411			39,740
Total stockholders’ equity	2,982,498			2,937,246			45,252			2,953,797			2,904,391			2,882,138			100,360
Total liabilities and stockholders’ equity	$	28,178,867		$	27,711,835		$	467,032		$	27,463,766		$	27,181,377		$	27,064,681		$	1,114,186

(1)

During the first quarter of 2016, the Corporation adopted a new accounting standard related to simplifying the presentation of debt issuance costs. Under this new accounting standard, debt issuance costs are still capitalized; however, they are reflected on the balance sheet with the related debt issued rather than within other assets. All prior periods have been restated to reflect this change in presentation.

Page 1



Associated Banc-Corp Consolidated Statements of Income (Unaudited)—Quarterly Trend
						Seql Qtr											Comp Qtr
(in thousands, except per share amounts)	1Q16		4Q15			$ Change			% Change		3Q15		2Q15		1Q15		$ Change			% Change
Interest Income
Interest and fees on loans	$	159,656	$	155,602		$	4,054		3	%	$	155,663	$	152,417	$	151,945	$	7,711		5	%
Interest and dividends on investment securities:
Taxable	25,516		26,395			(879		)	(3	)%	24,937		23,868		25,092		424			2	%
Tax-exempt	7,830		7,783			47			1	%	7,917		7,565		7,887		(57		)	(1	)%
Other interest	1,067		1,639			(572		)	(35	)%	1,489		1,771		1,692		(625		)	(37	)%
Total interest income	194,069		191,419			2,650			1	%	190,006		185,621		186,616		7,453			4	%
Interest Expense
Interest on deposits	11,766		8,844			2,922			33	%	8,521		8,141		7,619		4,147			54	%
Interest on Federal funds purchased and securities sold under agreements to repurchase	296		229			67			29	%	248		235		231		65			28	%
Interest on other short-term funding	515		186			329			177	%	83		115		81		434			536	%
Interest on long-term funding	9,505		10,692			(1,187		)	(11	)%	10,645		10,642		10,872		(1,367		)	(13	)%
Total interest expense	22,082		19,951			2,131			11	%	19,497		19,133		18,803		3,279			17	%
Net Interest Income	171,987		171,468			519			—	%	170,509		166,488		167,813		4,174			2	%
Provision for credit losses	20,000		20,000			—			—	%	8,000		5,000		4,500		15,500			344	%
Net interest income after provision for credit losses	151,987		151,468			519			—	%	162,509		161,488		163,313		(11,326		)	(7	)%
Noninterest Income
Trust service fees	11,447		11,965			(518		)	(4	)%	12,273		12,515		12,087		(640		)	(5	)%
Service charges on deposit accounts	16,273		16,577			(304		)	(2	)%	17,385		15,703		15,806		467			3	%
Card-based and other nondeposit fees	11,991		12,694			(703		)	(6	)%	12,618		13,597		12,416		(425		)	(3	)%
Insurance commissions	21,382		17,997			3,385			19	%	17,561		20,077		19,728		1,654			8	%
Brokerage and annuity commissions	3,794		3,694			100			3	%	3,809		4,192		3,683		111			3	%
Mortgage banking, net	4,204		8,271			(4,067		)	(49	)%	6,643		9,941		7,408		(3,204		)	(43	)%
Capital market fees, net	3,538		3,423			115			3	%	2,170		2,692		2,467		1,071			43	%
Bank owned life insurance income	4,770		2,092			2,678			128	%	2,448		2,381		2,875		1,895			66	%
Asset gains (losses), net⁽¹⁾	524		(391		)	915			(234	)%	244		1,854		833		(309		)	(37	)%
Investment securities gains, net	3,098		4,095			(997		)	(24	)%	2,796		1,242		—		3,098			N/M
Other	2,171		2,580			(409		)	(16	)%	2,118		2,288		2,510		(339		)	(14	)%
Total noninterest income	83,192		82,997			195			—	%	80,065		86,482		79,813		3,379			4	%
Noninterest Expense
Personnel expense	101,398		100,469			929			1	%	101,134		102,986		100,152		1,246			1	%
Occupancy	13,802		14,718			(916		)	(6	)%	14,187		14,308		17,683		(3,881		)	(22	)%
Equipment	5,446		5,695			(249		)	(4	)%	6,003		5,739		5,772		(326		)	(6	)%
Technology	14,264		13,953			311			2	%	14,748		16,354		15,558		(1,294		)	(8	)%
Business development and advertising	8,211		7,652			559			7	%	5,964		6,829		5,327		2,884			54	%
Other intangible amortization	504		520			(16		)	(3	)%	885		888		801		(297		)	(37	)%
Loan expense	3,221		4,120			(899		)	(22	)%	3,305		3,681		2,996		225			8	%
Legal and professional fees	5,025		3,963			1,062			27	%	4,207		4,344		4,538		487			11	%
Foreclosure / OREO expense, net⁽¹⁾	1,877		2,371			(494		)	(21	)%	645		1,264		1,162		715			62	%
FDIC expense	7,750		7,500			250			3	%	6,000		6,000		6,500		1,250			19	%
Other	12,473		15,032			(2,559		)	(17	)%	14,507		14,384		13,503		(1,030		)	(8	)%
Total noninterest expense	173,971		175,993			(2,022		)	(1	)%	171,585		176,777		173,992		(21		)	—	%
Income before income taxes	61,208		58,472			2,736			5	%	70,989		71,193		69,134		(7,926		)	(11	)%
Income tax expense	18,674		15,681			2,993			19	%	21,551		21,793		22,462		(3,788		)	(17	)%
Net income	42,534		42,791			(257		)	(1	)%	49,438		49,400		46,672		(4,138		)	(9	)%
Preferred stock dividends	2,198		2,198			—			—	%	2,184		1,545		1,228		970			79	%
Net income available to common equity	$	40,336	$	40,593		$	(257	)	(1	)%	$	47,254	$	47,855	$	45,444	$	(5,108	)	(11	)%
Earnings Per Common Share:
Basic	$	0.27	$	0.27		$	—		—	%	$	0.31	$	0.32	$	0.30	$	(0.03	)	(10	)%
Diluted	$	0.27	$	0.27		$	—		—	%	$	0.31	$	0.31	$	0.30	$	(0.03	)	(10	)%
Average Common Shares Outstanding:
Basic	148,601		148,834			(233		)	—	%	148,614		149,903		150,070		(1,469		)	(1	)%
Diluted	149,454		150,163			(709		)	—	%	149,799		151,108		151,164		(1,710		)	(1	)%

N/M = Not meaningful

(1)

During the first quarter of 2016, the consolidated statements of income were modified from prior periods' presentation to conform with the current period presentation, which reflect OREO gains / losses as a component of Foreclosure / OREO expense, net. In prior periods' presentation, OREO gains / losses were reported as a component of asset gains (losses), net. All prior periods have been restated to reflect this change in presentation.

Page 2



Associated Banc-Corp Selected Quarterly Information
($ in millions, except per share, full time equivalent employee data and branch count)	1Q16			4Q15			3Q15			2Q15			1Q15
Per Common Share Data
Dividends	$	0.11		$	0.11		$	0.10		$	0.10		$	0.10
Market value:
High	18.79			20.61			20.55			20.84			19.07
Low	15.48			17.98			17.17			18.50			16.62
Close	17.94			18.75			17.97			20.27			18.60
Book value	18.96			18.62			18.77			18.44			18.38
Tangible book value / share	$	12.41		$	12.10		$	12.23		$	11.90		$	11.95
Performance Ratios (annualized)
Return on average assets	0.62		%	0.62		%	0.72		%	0.74		%	0.71		%
Effective tax rate	30.51		%	26.82		%	30.36		%	30.61		%	32.49		%
Dividend payout ratio⁽¹⁾	40.74		%	40.74		%	32.26		%	31.25		%	33.33		%
Selected Trend Information
Average full time equivalent employees	4,374			4,378			4,421			4,465			4,422
Branch count	215			215			225			228			227
Trust assets under management, at market value	$	7,844		$	7,729		$	7,626		$	8,068		$	8,138
Mortgage loans originated for sale during period	$	194		$	317		$	292		$	351		$	268
Mortgage portfolio serviced for others	$	7,877		$	7,915		$	7,907		$	7,898		$	7,920
Mortgage servicing rights, net / mortgage portfolio serviced for others	0.75		%	0.77		%	0.78%			0.77		%	0.75		%
Selected Quarterly Ratios
Loans / deposits	92.95		%	89.08		%	90.11		%	94.99		%	90.57		%
Stockholders’ equity / assets	10.58		%	10.60		%	10.76		%	10.69		%	10.65		%
Shares outstanding, end of period	150,994			151,239			150,928			150,862			153,567


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

Page 3



Associated Banc-Corp Selected Asset Quality Information
(in thousands)	Mar 31, 2016			Dec 31, 2015			Seql Qtr % Change		Sep 30, 2015			Jun 30, 2015			Mar 31, 2015			Comp Qtr % Change
Allowance for Loan Losses
Balance at beginning of period	$	274,264		$	262,536		4	%	$	261,538		$	265,268		$	266,302		3	%
Provision for loan losses	20,000			19,500			3	%	9,000			5,000			4,500			344	%
Charge offs	(21,245		)	(12,741		)	67	%	(11,732		)	(14,537		)	(13,270		)	60	%
Recoveries	4,351			4,969			(12	)%	3,730			5,807			7,736			(44	)%
Net charge offs	(16,894		)	(7,772		)	117	%	(8,002		)	(8,730		)	(5,534		)	205	%
Balance at end of period	$	277,370		$	274,264		1	%	$	262,536		$	261,538		$	265,268		5	%
Allowance for Unfunded Commitments
Balance at beginning of period	$	24,400		$	23,900		2	%	$	24,900		$	24,900		$	24,900		(2	)%
Provision for unfunded commitments	—			500			(100	)%	(1,000		)	—			—			N/M
Balance at end of period	$	24,400		$	24,400		—	%	$	23,900		$	24,900		$	24,900		(2	)%
Allowance for credit losses	$	301,770		$	298,664		1	%	$	286,436		$	286,438		$	290,168		4	%
Net Charge Offs	Mar 31, 2016			Dec 31, 2015			Seql Qtr % Change		Sep 30, 2015			Jun 30, 2015			Mar 31, 2015			Comp Qtr % Change
Commercial and industrial⁽¹⁾	$	(14,936	)	$	(4,586	)	226	%	$	(4,709	)	$	(3,921	)	$	(4,650	)	221	%
Commercial real estate—owner occupied	(43		)	(291		)	(85	)%	504			(1,198		)	(739		)	(94	)%
Commercial and business lending	(14,979		)	(4,877		)	207	%	(4,205		)	(5,119		)	(5,389		)	178	%
Commercial real estate—investor	1,239			(665		)	(286	)%	(496		)	(1,856		)	2,529			(51	)%
Real estate construction	(28		)	140			(120	)%	(38		)	673			743			(104	)%
Commercial real estate lending	1,211			(525		)	(331	)%	(534		)	(1,183		)	3,272			(63	)%
Total commercial	(13,768		)	(5,402		)	155	%	(4,739		)	(6,302		)	(2,117		)	550	%
Residential mortgage	(1,232		)	(714		)	73	%	(1,562		)	(1,278		)	(1,005		)	23	%
Home equity revolving lines of credit	(902		)	(294		)	207	%	(533		)	(246		)	(1,220		)	(26	)%
Home equity loans junior liens	(244		)	(623		)	(61	)%	(358		)	(118		)	(423		)	(42	)%
Home equity	(1,146		)	(917		)	25	%	(891		)	(364		)	(1,643		)	(30	)%
Other consumer	(748		)	(739		)	1	%	(810		)	(786		)	(769		)	(3	)%
Total consumer	(3,126		)	(2,370		)	32	%	(3,263		)	(2,428		)	(3,417		)	(9	)%
Total net charge offs	$	(16,894	)	$	(7,772	)	117	%	$	(8,002	)	$	(8,730	)	$	(5,534	)	205	%
Net Charge Offs to Average Loans (in basis points) *	Mar 31, 2016			Dec 31, 2015					Sep 30, 2015			Jun 30, 2015			Mar 31, 2015
Commercial and industrial⁽¹⁾	(97		)	(31		)			(31		)	(25		)	(31		)
Commercial real estate—owner occupied	(2		)	(12		)			21			(48		)	(30		)
Commercial and business lending	(85		)	(28		)			(24		)	(29		)	(31		)
Commercial real estate—investor	15			(8		)			(6		)	(24		)	33
Real estate construction	(1		)	5					(1		)	26			30
Commercial real estate lending	11			(5		)			(5		)	(11		)	32
Total commercial	(48		)	(19		)			(17		)	(22		)	(8		)
Residential mortgage	(8		)	(5		)			(11		)	(9		)	(8		)
Home equity revolving lines of credit	(41		)	(13		)			(24		)	(11		)	(56		)
Home equity loans junior liens	(83		)	(195		)			(104		)	(32		)	(108		)
Home equity	(46		)	(36		)			(35		)	(14		)	(64		)
Other consumer	(72		)	(69		)			(75		)	(73		)	(70		)
Total consumer	(17		)	(13		)			(18		)	(14		)	(21		)
Total net charge offs	(36		)	(17		)			(17		)	(19		)	(13		)
Credit Quality	Mar 31, 2016			Dec 31, 2015			Seql Qtr % Change		Sep 30, 2015			Jun 30, 2015			Mar 31, 2015			Comp Qtr % Change
Nonaccrual loans	$	286,395		$	178,258		61	%	$	147,454		$	160,361		$	174,346		64	%
Other real estate owned (OREO)	16,056			14,569			10	%	13,740			13,557			14,926			8	%
Total nonperforming assets	$	302,451		$	192,827		57	%	$	161,194		$	173,918		$	189,272		60	%
Loans 90 or more days past due and still accruing	$	1,629		$	1,648		(1	)%	$	1,484		$	1,662		$	1,715		(5	)%
Allowance for loan losses to loans	1.44		%	1.47		%			1.42		%	1.43		%	1.48		%
Allowance for loan losses to nonaccrual loans	96.85			153.86					178.05			163.09			152.15
Nonaccrual loans to total loans	1.49			0.95					0.80			0.88			0.97
Nonperforming assets to total loans plus OREO	1.57			1.03					0.87			0.95			1.05
Nonperforming assets to total assets	1.07			0.70					0.59			0.64			0.70
Year-to-date net charge offs to average loans *	0.36			0.16					0.16			0.16			0.13
* Annualized
N/M = Not meaningful

Page 4



Associated Banc-Corp Selected Asset Quality Information (continued)
(in thousands)	Mar 31, 2016		Dec 31, 2015		Seql Qtr % Change		Sep 30, 2015		Jun 30, 2015		Mar 31, 2015		Comp Qtr % Change
Nonaccrual loans
Commercial and industrial⁽¹⁾	$	197,115	$	93,575	111	%	$	60,184	$	66,394	$	63,340	211	%
Commercial real estate—owner occupied	9,443		8,049		17	%	13,368		18,821		21,861		(57	)%
Commercial and business lending	206,558		101,624		103	%	73,552		85,215		85,201		142	%
Commercial real estate—investor	12,330		8,643		43	%	6,921		6,090		13,742		(10	)%
Real estate construction	840		940		(11	)%	997		2,906		5,423		(85	)%
Commercial real estate lending	13,170		9,583		37	%	7,918		8,996		19,165		(31	)%
Total commercial	219,728		111,207		98	%	81,470		94,211		104,366		111	%
Residential mortgage	52,212		51,482		1	%	51,957		51,920		54,149		(4	)%
Home equity revolving lines of credit	8,822		9,917		(11	)%	8,060		8,420		9,171		(4	)%
Home equity loans junior liens	5,250		5,327		(1	)%	5,581		5,356		6,145		(15	)%
Home equity	14,072		15,244		(8	)%	13,641		13,776		15,316		(8	)%
Other consumer	383		325		18	%	386		454		515		(26	)%
Total consumer	66,667		67,051		(1	)%	65,984		66,150		69,980		(5	)%
Total nonaccrual loans	$	286,395	$	178,258	61	%	$	147,454	$	160,361	$	174,346	64	%

Restructured loans (accruing)	Mar 31, 2016		Dec 31, 2015		Seql Qtr % Change		Sep 30, 2015		Jun 30, 2015		Mar 31, 2015		Comp Qtr % Change
Commercial and industrial⁽¹⁾	$	28,908	$	29,293	(1	)%	$	28,598	$	32,063	$	26,466	9	%
Commercial real estate—owner occupied	7,693		7,877		(2	)%	7,343		5,433		9,780		(21	)%
Commercial and business lending	36,601		37,170		(2	)%	35,941		37,496		36,246		1	%
Commercial real estate—investor	20,993		21,915		(4	)%	18,580		22,009		22,775		(8	)%
Real estate construction	386		510		(24	)%	485		714		717		(46	)%
Commercial real estate lending	21,379		22,425		(5	)%	19,065		22,723		23,492		(9	)%
Total commercial	57,980		59,595		(3	)%	55,006		60,219		59,738		(3	)%
Residential mortgage	19,807		19,870		—	%	20,054		21,373		20,295		(2	)%
Home equity revolving lines of credit	1,377		1,332		3	%	1,121		1,222		1,251		10	%
Home equity loans junior liens	5,540		5,737		(3	)%	5,824		6,610		6,642		(17	)%
Home equity	6,917		7,069		(2	)%	6,945		7,832		7,893		(12	)%
Other consumer	893		829		8	%	804		796		891		—	%
Total consumer	27,617		27,768		(1	)%	27,803		30,001		29,079		(5	)%
Total restructured loans (accruing)	$	85,597	$	87,363	(2	)%	$	82,809	$	90,220	$	88,817	(4	)%
Restructured loans included in nonaccrual loans (not included with restructed loans (accruing))	$	35,232	$	37,684	(7	)%	$	36,583	$	43,699	$	53,553	(34	)%

Accruing Loans 30-89 Days Past Due	Mar 31, 2016		Dec 31, 2015		Seql Qtr % Change		Sep 30, 2015		Jun 30, 2015		Mar 31, 2015		Comp Qtr % Change
Commercial and industrial⁽¹⁾	$	2,901	$	1,011	187	%	$	3,296	$	6,357	$	1,717	69	%
Commercial real estate—owner occupied	520		7,142		(93	)%	2,018		1,090		1,849		(72	)%
Commercial and business lending	3,421		8,153		(58	)%	5,314		7,447		3,566		(4	)%
Commercial real estate—investor	1,072		291		268	%	1,218		19,843		2,215		(52	)%
Real estate construction	415		296		40	%	373		312		317		31	%
Commercial real estate lending	1,487		587		153	%	1,591		20,155		2,532		(41	)%
Total commercial	4,908		8,740		(44	)%	6,905		27,602		6,098		(20	)%
Residential mortgage	3,594		4,930		(27	)%	4,811		6,602		4,356		(17	)%
Home equity revolving lines of credit	3,582		5,559		(36	)%	6,142		5,157		7,150		(50	)%
Home equity loans junior liens	2,222		2,360		(6	)%	2,423		1,894		1,905		17	%
Home equity	5,804		7,919		(27	)%	8,565		7,051		9,055		(36	)%
Other consumer	1,682		1,870		(10	)%	1,723		1,655		1,818		(7	)%
Total consumer	11,080		14,719		(25	)%	15,099		15,308		15,229		(27	)%
Total accruing loans 30-89 days past due	$	15,988	$	23,459	(32	)%	$	22,004	$	42,910	$	21,327	(25	)%

Potential Problem Loans	Mar 31, 2016		Dec 31, 2015		Seql Qtr % Change		Sep 30, 2015		Jun 30, 2015		Mar 31, 2015		Comp Qtr % Change
Commercial and industrial⁽¹⁾	$	328,464	$	233,130	41	%	$	192,174	$	127,028	$	140,412	134	%
Commercial real estate—owner occupied	41,107		35,706		15	%	41,466		41,997		43,114		(5	)%
Commercial and business lending	369,571		268,836		37	%	233,640		169,025		183,526		101	%
Commercial real estate—investor	25,385		25,944		(2	)%	23,633		23,543		26,026		(2	)%
Real estate construction	2,422		3,919		(38	)%	2,354		1,327		1,487		63	%
Commercial real estate lending	27,807		29,863		(7	)%	25,987		24,870		27,513		1	%
Total commercial	397,378		298,699		33	%	259,627		193,895		211,039		88	%
Residential mortgage	3,488		2,796		25	%	3,966		5,341		6,621		(47	)%
Home equity revolving lines of credit	48		48		—	%	141		202		247		(81	)%
Home equity loans junior liens	161		174		(7	)%	86		230		711		(77	)%
Home equity	209		222		(6	)%	227		432		958		(78	)%
Total consumer	3,697		3,018		22	%	4,193		5,773		7,579		(51	)%
Total potential problem loans	$	401,075	$	301,717	33	%	$	263,820	$	199,668	$	218,618	83	%


(1)	During the first quarter of 2016, the Corporation combined the lease financing portfolio with the commercial and industrial portfolio for disclosure purposes. All prior periods have been restated to reflect this change in presentation.

Page 5



Associated Banc-Corp Net Interest Income Analysis—Fully Tax-Equivalent Basis — Sequential and Comparable Quarter
	Quarter ended,
	March 31, 2016						December 31, 2015						March 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
Earning assets:
Loans:^{(1) (2) (3)}
Commercial and business lending	$	7,121,061	$	57,258	3.23	%	$	6,892,162	$	55,451	3.19	%	$	6,993,169	$	55,915	3.24	%
Commercial real estate lending	4,469,531		38,989		3.51	%	4,373,460		37,587		3.41	%	4,102,733		36,403		3.60	%
Total commercial	11,590,592		96,247		3.34	%	11,265,622		93,038		3.28	%	11,095,902		92,318		3.37	%
Residential mortgage	5,920,280		47,748		3.23	%	5,845,557		47,305		3.24	%	5,231,698		43,472		3.33	%
Retail	1,411,958		16,640		4.72	%	1,431,509		16,673		4.65	%	1,487,515		17,081		4.62	%
Total loans	18,922,830		160,635		3.41	%	18,542,688		157,016		3.37	%	17,815,115		152,871		3.46	%
Investment securities:
Taxable	5,034,072		25,516		2.03	%	5,205,033		26,395		2.03	%	4,804,411		25,092		2.09	%
Tax-exempt⁽¹⁾	1,045,210		11,980		4.58	%	1,016,329		11,909		4.69	%	950,336		12,067		5.08	%
Other short-term investments	270,261		1,067		1.59	%	259,053		1,639		2.53	%	578,164		1,692		1.18	%
Investments and other	6,349,543		38,563		2.43	%	6,480,415		39,943		2.47	%	6,332,911		38,851		2.45	%
Total earning assets	25,272,373		$	199,198	3.16	%	25,023,103		$	196,959	3.14	%	24,148,026		$	191,722	3.20	%
Other assets, net⁽⁴⁾	2,426,475						2,434,297						2,454,664
Total assets	$	27,698,848					$	27,457,400					$	26,602,690
Liabilities and stockholder's equity
Interest-bearing liabilities:
Interest-bearing deposits:
Savings	$	1,367,646	$	236	0.07	%	$	1,358,141	$	249	0.07	%	$	1,277,469	$	238	0.08	%
Interest-bearing demand	3,220,409		2,032		0.25	%	3,150,628		1,217		0.15	%	3,203,727		1,050		0.13	%
Money market	9,432,245		6,444		0.27	%	9,534,551		4,351		0.18	%	8,653,260		3,785		0.18	%
Time deposits	1,558,278		3,054		0.79	%	1,604,864		3,027		0.75	%	1,594,183		2,546		0.65	%
Total interest-bearing deposits	15,578,578		11,766		0.30	%	15,648,184		8,844		0.22	%	14,728,639		7,619		0.21	%
Federal funds purchased and securities sold under agreements to repurchase	559,459		296		0.21	%	605,026		229		0.15	%	585,498		231		0.16	%
Other short-term funding	777,898		515		0.27	%	368,752		186		0.20	%	119,240		81		0.27	%
Total short-term funding	1,337,357		811		0.24	%	973,778		415		0.17	%	704,738		312		0.18	%
Long-term funding⁽⁴⁾	2,582,538		9,505		1.47	%	2,676,116		10,692		1.60	%	3,731,367		10,872		1.17	%
Total short and long-term funding	3,919,895		10,316		1.05	%	3,649,894		11,107		1.22	%	4,436,105		11,184		1.01	%
Total interest-bearing liabilities	19,498,473		$	22,082	0.45	%	19,298,078		$	19,951	0.41	%	19,164,744		$	18,803	0.40	%
Noninterest-bearing demand deposits	4,996,596						4,967,719						4,326,557
Other liabilities	233,029						250,957						266,660
Stockholders’ equity	2,970,750						2,940,646						2,844,729
Total liabilities and stockholders’ equity	$	27,698,848					$	27,457,400					$	26,602,690
Interest rate spread					2.71	%					2.73	%					2.80	%
Net free funds					0.10	%					0.09	%					0.09	%
Fully tax-equivalent net interest income and net interest margin			$	177,116	2.81	%			$	177,008	2.82	%			$	172,919	2.89	%
Fully tax-equivalent adjustment			5,129						5,540						5,106
Net interest income			$	171,987					$	171,468					$	167,813


(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.

(4)

Page 6



Associated Banc-Corp Financial Summary and Comparison (in thousands)
Period End Loan Composition	Mar 31, 2016		Dec 31, 2015		Seql Qtr % Change		Sep 30, 2015		Jun 30, 2015		Mar 31, 2015		Comp Qtr % Change
Commercial and industrial⁽¹⁾	$	6,511,648	$	6,190,683	5	%	$	6,128,080	$	6,255,092	$	6,189,916	5	%
Commercial real estate—owner occupied	917,285		918,212		—	%	966,689		978,183		1,003,885		(9	)%
Commercial and business lending	7,428,933		7,108,895		5	%	7,094,769		7,233,275		7,193,801		3	%
Commercial real estate—investor	3,276,733		3,234,266		1	%	3,183,352		3,126,440		3,086,980		6	%
Real estate construction	1,184,398		1,162,145		2	%	1,124,280		1,092,308		1,019,571		16	%
Commercial real estate lending	4,461,131		4,396,411		1	%	4,307,632		4,218,748		4,106,551		9	%
Total commercial	11,890,064		11,505,306		3	%	11,402,401		11,452,023		11,300,352		5	%
Residential mortgage	5,944,457		5,783,267		3	%	5,682,178		5,398,434		5,208,241		14	%
Home equity revolving lines of credit	867,860		883,759		(2	)%	883,573		880,628		879,827		(1	)%
Home equity loans junior liens	115,134		122,043		(6	)%	130,892		141,344		154,120		(25	)%
Home equity	982,994		1,005,802		(2	)%	1,014,465		1,021,972		1,033,947		(5	)%
Other consumer	409,725		419,968		(2	)%	425,729		430,823		436,492		(6	)%
Total consumer	7,337,176		7,209,037		2	%	7,122,372		6,851,229		6,678,680		10	%
Total loans	$	19,227,240	$	18,714,343	3	%	$	18,524,773	$	18,303,252	$	17,979,032	7	%

Period End Deposit and Customer Funding Composition	Mar 31, 2016		Dec 31, 2015		Seql Qtr % Change		Sep 30, 2015		Jun 30, 2015		Mar 31, 2015		Comp Qtr % Change
Noninterest-bearing demand	$	5,272,685	$	5,562,466	(5	)%	$	4,657,261	$	4,332,171	$	4,570,872	15	%
Savings	1,426,951		1,334,420		7	%	1,346,407		1,359,478		1,337,643		7	%
Interest-bearing demand	3,698,941		3,445,000		7	%	3,416,429		3,576,311		3,525,870		5	%
Money market	8,718,841		9,102,977		(4	)%	9,516,503		8,374,186		8,781,206		(1	)%
Brokered CDs	41,440		42,443		(2	)%	42,689		39,760		40,699		2	%
Other time	1,526,602		1,520,359		—	%	1,579,106		1,587,657		1,595,302		(4	)%
Total deposits	20,685,460		21,007,665		(2	)%	20,558,395		19,269,563		19,851,592		4	%
Customer funding	508,262		383,568		33	%	524,630		433,044		528,572		(4	)%
Total deposits and customer funding	$	21,193,722	$	21,391,233	(1	)%	$	21,083,025	$	19,702,607	$	20,380,164	4	%
Network transaction deposits included above in interest-bearing demand & money market	$	3,399,054	$	3,174,911	7	%	$	3,207,867	$	2,920,939	$	2,900,325	17	%
Brokered CDs	41,440		42,443		(2	)%	42,689		39,760		40,699		2	%
Total network and brokered funding	3,440,494		3,217,354		7	%	3,250,556		2,960,699		2,941,024		17	%
Net customer deposits and funding⁽²⁾	$	17,753,228	$	18,173,879	(2	)%	$	17,832,469	$	16,741,908	$	17,439,140	2	%

Quarter Average Loan Composition	Mar 31, 2016		Dec 31, 2015		Seql Qtr % Change		Sep 30, 2015		Jun 30, 2015		Mar 31, 2015		Comp Qtr % Change
Commercial and industrial⁽¹⁾	$	6,207,458	$	5,947,939	4	%	$	6,119,552	$	6,171,334	$	5,994,876	4	%
Commercial real estate—owner occupied	913,603		944,223		(3	)%	970,112		995,981		998,293		(8	)%
Commercial and business lending	7,121,061		6,892,162		3	%	7,089,664		7,167,315		6,993,169		2	%
Commercial real estate—investor	3,298,522		3,266,008		1	%	3,134,454		3,110,637		3,106,965		6	%
Real estate construction	1,171,009		1,107,452		6	%	1,125,875		1,038,318		995,768		18	%
Commercial real estate lending	4,469,531		4,373,460		2	%	4,260,329		4,148,955		4,102,733		9	%
Total commercial	11,590,592		11,265,622		3	%	11,349,993		11,316,270		11,095,902		4	%
Residential mortgage	5,920,280		5,845,557		1	%	5,658,253		5,411,193		5,231,698		13	%
Home equity revolving lines of credit	876,820		882,599		(1	)%	880,660		881,036		882,869		(1	)%
Home equity loans junior liens	118,610		126,658		(6	)%	136,254		147,391		159,378		(26	)%
Home equity	995,430		1,009,257		(1	)%	1,016,914		1,028,427		1,042,247		(4	)%
Other consumer	416,528		422,252		(1	)%	427,589		432,415		445,268		(6	)%
Total consumer	7,332,238		7,277,066		1	%	7,102,756		6,872,035		6,719,213		9	%
Total loans	$	18,922,830	$	18,542,688	2	%	$	18,452,749	$	18,188,305	$	17,815,115	6	%

Quarter Average Deposit Composition	Mar 31, 2016		Dec 31, 2015		Seql Qtr % Change		Sep 30, 2015		Jun 30, 2015		Mar 31, 2015		Comp Qtr % Change
Noninterest-bearing demand	$	4,996,596	$	4,967,719	1	%	$	4,573,840	$	4,290,567	$	4,326,557	15	%
Savings	1,367,646		1,358,141		1	%	1,357,677		1,352,616		1,277,469		7	%
Interest-bearing demand	3,220,409		3,150,628		2	%	3,199,391		3,251,196		3,203,727		1	%
Money market	9,432,245		9,534,551		(1	)%	9,538,030		9,101,589		8,653,260		9	%
Time deposits	1,558,278		1,604,864		(3	)%	1,624,661		1,630,242		1,594,183		(2	)%
Total deposits	$	20,575,174	$	20,615,903	—	%	$	20,293,599	$	19,626,210	$	19,055,196	8	%


(1)	During the first quarter of 2016, the Corporation combined the lease financing portfolio with the commercial and industrial portfolio for disclosure purposes. All prior periods have been restated to reflect this change in presentation.


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

Page 7



Associated Banc-Corp Non-GAAP Financial Measures Reconciliation
($ in millions)	1Q16			4Q15			3Q15			2Q15			1Q15
Tangible Common Equity and Common Equity Tier 1 Reconciliation ⁽¹⁾
Common equity	$	2,862		$	2,816		$	2,832		$	2,782		$	2,823
Goodwill and other intangible assets	(989		)	(985		)	(986		)	(987		)	(987		)
Tangible common equity	1,873			1,831			1,846			1,795			1,836
Less: Accumulated other comprehensive income (loss)	(2		)	33			(15		)	(2		)	(25		)
Less: Deferred tax assets / deferred tax liabilities, net	32			34			34			32			27
Common equity Tier 1	$	1,903		$	1,898		$	1,865		$	1,825		$	1,838
Average Tangible Common Equity and Common Equity Tier 1 Reconciliation ⁽¹⁾
Common equity	$	2,849		$	2,819		$	2,798		$	2,794		$	2,785
Goodwill and other intangible assets	(989		)	(985		)	(986		)	(987		)	(971		)
Tangible common equity	1,860			1,834			1,812			1,807			1,814
Less: Accumulated other comprehensive income (loss)	3			4			(7		)	(16		)	(18		)
Less: Deferred tax assets / deferred tax liabilities, net	33			34			32			29			8
Average common equity Tier 1	$	1,896		$	1,872		$	1,837		$	1,820		$	1,804
Risk-based Capital ^{(1) (2)}
Total risk-weighted assets	$	20,457		$	19,930		$	19,866		$	19,610		$	19,574
Common equity Tier 1 capital ratio	9.30		%	9.52		%	9.39		%	9.31		%	9.39		%
Tier 1 capital ratio	9.88		%	10.12		%	9.98		%	9.90		%	9.69		%
Total capital ratio	12.35		%	12.62		%	12.49		%	12.43		%	12.22		%
Tier 1 leverage ratio	7.56		%	7.60		%	7.53		%	7.53		%	7.39		%
Selected Trend Information ^{(3) (4)}
Fee-based revenue	$	65		$	63		$	64		$	66		$	64
Total revenue	$	255		$	254		$	251		$	253		$	248
Selected Equity and Performance Ratios ^{(1) (5)}
Tangible common equity / tangible assets	6.89		%	6.85		%	6.97		%	6.86		%	7.04		%
Tangible stockholders' equity / tangible assets	7.33		%	7.30		%	7.43		%	7.32		%	7.27		%
Return on average tangible common equity	8.72		%	8.78		%	10.35		%	10.62		%	10.16		%
Return on average common equity Tier 1	8.55		%	8.60		%	10.20		%	10.55		%	10.22		%
Efficiency Ratio Reconciliation ⁽⁶⁾
Federal Reserve efficiency ratio	69.01		%	70.49		%	68.85		%	70.23		%	70.26		%
Fully tax-equivalent adjustment	(1.37		)%	(1.52		)%	(1.38		)%	(1.35		)%	(1.41		)%
Other intangible amortization	(0.20		)%	(0.21		)%	(0.36		)%	(0.35		)%	(0.32		)%
Fully tax-equivalent efficiency ratio	67.44		%	68.76		%	67.11		%	68.53		%	68.53		%

(1)

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. These regulatory 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.


(2)	March 31, 2016 data is estimated.


(3)	Fee-based revenue, a non-GAAP financial measure, is the sum of trust service fees, service charges on deposit accounts, card-based and other nondeposit fees, insurance commissions, and brokerage and annuity commissions, as presented on Page 2 in the Consolidated Statements of Income.


(4)	Total revenue, a non-GAAP financial measure, is the sum of net interest income and noninterest income, as presented on Page 2 in the Consolidated Statements of Income.


(5)	The ratios tangible common equity to tangible assets and tangible equity to tangible assets exclude goodwill and other intangible assets, which is a non-GAAP financial measure. These financial measures have been included as they are considered to be critical metrics with which to analyze and evaluate financial condition and capital strength.

(6)

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.

Page 8

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