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	asb4q18ex992final.htm
8-K - FORM 8-K - ASSOCIATED BANC-CORP	asb12312018form8-kpressrel.htm

Exhibit 99.1



	NEWS RELEASE Investor Contact: Robb Timme, Senior 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 2018 Earnings of $1.89 Per Common Share,

Earnings per share up 33% from the prior year

GREEN BAY, Wis. -- January 24, 2019 -- Associated Banc-Corp (NYSE: ASB) ("Associated" or "Company") today reported net income available to common equity ("earnings") of $323 million, or $1.89 per common share for the year ended December 31, 2018. Earnings per common share ("EPS") for the year ended December 31, 2018 included $31 million of acquisition related costs. These amounts compare to net income available to common equity of $220 million, or $1.42 per common share for the year ended December 31, 2017. The Company reported earnings of $0.51 per common share for the quarter ended December 31, 2018, compared to $0.31 per common share for the quarter ended December 31, 2017.

“2018 was a year of significant accomplishments for Associated. We completed the Bank Mutual acquisition and ended the year with record levels of checking deposits. We announced the acquisition of the Wisconsin branch operations of The Huntington National Bank, which will further enhance our core franchise, and we look forward to welcoming Huntington's customers to Associated in the second quarter," said President and CEO Philip B. Flynn. "We are pleased with our 2018 results, which were driven by loan growth and higher fee revenues related to our acquisitions. We benefited from efficiency gains and a benign credit environment. For 2019, we expect modest loan growth, higher fee revenues, and continued efficiency gains to drive increasing returns on capital for our shareholders."

2018 HIGHLIGHTS (all comparisons to the previous year)


•	Average loans of $22.7 billion were up 10%, or $2.1 billion


•	Average deposits of $24.1 billion were up 10%, or $2.1 billion


•	Net interest income of $880 million increased $138 million, or 19%


•	Net interest margin of 2.97% improved 15 basis points from 2.82%


•	Provision for credit losses was zero, down from $26 million


•	Noninterest income of $356 million increased 7%, or $23 million


•	Noninterest expense of $822 million, including $29 million of acquisition related costs, was up 16%, or $113 million


•	Income before income taxes was up 22%, or $75 million


•	During the year, the Company repurchased over 9 million shares, or $240 million, of common stock


•	Total dividends paid per common share were $0.62, up 24%


•	Return on average common equity Tier 1 increased to 13.2% from 10.4%

2018 FULL YEAR AND FOURTH QUARTER FINANCIAL RESULTS

Loans

Full year 2018 average loans of $22.7 billion were up 10%, or $2.1 billion from 2017, primarily driven by the Bank Mutual acquisition. With respect to full year 2018 average balances by loan category as compared to 2017:


•	Consumer lending increased $1.2 billion, or 14%, to $9.5 billion.


•	Commercial and business lending increased $490 million, or 7%, to $7.7 billion.


•	Commercial real estate lending increased $481 million, or 10%, to $5.4 billion.

Fourth quarter 2018 average loans of $22.8 billion were up $1.9 billion, or 9%, from the year ago quarter but were down $169 million from the third quarter as loan growth in commercial and business lending was outpaced by run off in the commercial real estate portfolio.

With respect to fourth quarter 2018 average balances by loan category:


•	Commercial and business lending increased $841 million from the year ago quarter and increased $81 million from the third quarter to $8.0 billion. General commercial lending and oil & gas specialized lending drove the increase from the year ago quarter.


•	Consumer lending increased $764 million from the year ago quarter but was down $39 million from the third quarter to $9.6 billion as seasonality and higher interest rates tempered mortgage activity.


•	Commercial real estate lending increased $336 million from the year ago quarter but decreased $211 million from the third quarter to $5.2 billion.

For 2019, the Company expects to achieve 3% to 6% average loan growth.

Deposits

Full year 2018 average deposits of $24.1 billion increased 10%, or $2.1 billion from 2017, driven primarily by the addition of Bank Mutual customers and increased focus on and pricing of time deposit offerings.

With respect to full year 2018 average balances by deposit category as compared to 2017:


•	Money market deposits increased $939 million, or 15% to $7.3 billion.


•	Time deposits increased $852 million, or 43% to $2.8 billion.


•	Interest-bearing demand deposits increased $815 million, or 21% to $4.8 billion.


•	Savings increased $352 million, or 23% to $1.9 billion.


•	Noninterest-bearing demand deposits increased $241 million, or 5% to $5.2 billion.


•	Network transaction deposits decreased $1.0 billion, or 33% to $2.1 billion.

Fourth quarter 2018 average deposits of $24.2 billion were up $2.0 billion, or 9% from the year ago quarter, but were down $466 million compared to the third quarter of 2018 due to seasonal outflows from municipal customers. Fourth quarter period end deposits were $24.9 billion, up $66 million from the end of the third quarter.

With respect to fourth quarter 2018 average balances by deposit category:


•	Time deposits increased $706 million from the year ago quarter and increased $83 million from the third quarter of 2018 to $3.1 billion.


•	Interest-bearing demand deposits increased $669 million from the year ago quarter, but decreased $151 million from the third quarter of 2018 to $4.8 billion.


•	Money market deposits increased $569 million from the year ago quarter, but decreased $457 million from the third quarter of 2018 to $7.1 billion.


•	Savings increased $441 million from the year ago quarter and increased $93 million from the third quarter of 2018 to $2.0 billion.


•	Noninterest-bearing demand deposits increased $233 million from the year ago quarter and increased $56 million from the third quarter of 2018 to $5.4 billion.


•	Network transaction deposits decreased $637 million from the year ago quarter and decreased $89 million from the third quarter of 2018 to $1.9 billion.

The loan to deposit ratio was 92% at year end. The Company expects to continue maintain its loan to deposit ratio between 90% and 100% in 2019, with some seasonality.

Net Interest Income and Net Interest Margin

Full year 2018 net interest income of $880 million was up 19%, or $138 million from 2017. Net interest margin of 2.97% was up 15 basis points from the prior year.


•	The average yield on total commercial loans increased 97 basis points to 4.73% from the prior year.


•	The average cost of interest-bearing deposits increased 38 basis points to 0.94% from the prior year.


•	The net free funds benefit, the benefit of holding noninterest-bearing demand deposits, increased 10 basis points from the prior year.

Fourth quarter 2018 net interest income of $224 million was up 20%, or $37 million, with the net interest margin increasing 23 basis points to 3.02% from the year ago quarter. Fourth quarter 2018 net interest income increased 2%, or $5 million, with the net interest margin increasing 10 basis points from the prior quarter.


•	The average yield on total commercial loans for the fourth quarter of 2018 increased 118 basis points to 5.07% from the year ago quarter and increased 34 basis points from the prior quarter.


•	The average cost of total interest-bearing deposits for the fourth quarter of 2018 increased 49 basis points to 1.14% from the year ago quarter and increased 11 basis points from the prior quarter.


•	The net free funds benefit increased 12 basis points in the fourth quarter of 2018 compared to the year ago quarter and increased 3 basis points from the prior quarter.

The Company expects a stable to improving full-year net interest margin, given continued upward Fed Funds rate activity.

Noninterest Income

Full year 2018 total noninterest income of $356 million increased $23 million reflecting the contributions of acquisitions made in the fourth quarter of 2017 and in 2018.


•	Brokerage and advisory revenues increased $8 million from the prior year, driven by the Whitnell acquisition and the generally strong equity markets through the first three quarters of 2018.


•	Insurance commissions increased $8 million from the prior year, driven by the Diversified Insurance Solutions and Anderson Insurance acquisitions.


•	Card-based and loan fees were up $5 million from the prior year.

Fourth quarter 2018 total noninterest income of $84 million was essentially unchanged from the year ago quarter, but decreased $4 million from the prior quarter.

With respect to fourth quarter 2018 noninterest income line items:


•	Card-based and loan fees increased $2 million from the year ago quarter and increased $1 million from the prior quarter.


•	Insurance revenues were up $2 million from the year ago quarter, driven by acquisitions noted above, and were flat compared to the previous quarter.


•	Capital markets were down $2 million from a very strong fourth quarter of 2017, and were essentially unchanged from the previous quarter.


•	Asset losses were $2 million greater versus the year ago quarter and were $1 million greater than the prior quarter due to Bank Mutual related items.

The Company expects to earn between $360 million and $375 million of noninterest income in 2019.

Noninterest Expense

Full year 2018 noninterest expense of $822 million increased 16%, or $113 million from the prior year and included $29 million of acquisition related costs.


•	Personnel costs increased $54 million from the prior year, principally related to operating Bank Mutual as a stand-alone entity from February through conversion in June. Bank Mutual operations were wound down through the third quarter. This also reflected certain severance and other contractual personnel costs.


•	Technology expense increased $10 million from the prior year, driven by investments made in solutions to enhance operational efficiency and the customer experience.

Fourth quarter 2018 total noninterest expense of $193 million increased 6%, or $11 million from the year ago quarter, but decreased $11 million from the prior quarter. Fourth quarter 2018 noninterest expense included a $1 million recovery of Bank Mutual acquisition related costs.

With respect to fourth quarter 2018 noninterest expense line items:


•	Personnel expense increased $10 million from the year ago quarter, primarily driven by additional colleagues brought on through acquisitions. Personnel expense decreased $8 million from the third quarter of 2018.


•	Occupancy expense increased $1 million from the year ago quarter, with most of the increase coming from the additional expense of acquired Bank Mutual facilities. Occupancy expense was essentially unchanged from the prior quarter.


•	Acquisition related costs decreased $3 million from the prior quarter.

The Company expects its 2019 noninterest expense will be approximately $800 million.

Taxes

Full year 2018 effective tax rate was 19% compared to 32% in 2017. The decrease is primarily due to the Tax Cut and Jobs Act signed into law on December 22, 2017.


•	The fourth quarter 2018 effective tax rate was 22% compared to 21% in the prior quarter.


•	For 2019, the Company expects its effective tax rate to be in the range of 21%-23%.

Credit

Full year 2018 provision for credit losses was zero, down from $26 million in the prior year.

The fourth quarter 2018 provision for credit losses was $1 million, up from zero in the year ago quarter and up from negative $5 million in the prior quarter. With respect to fourth quarter 2018 credit quality:


•	Nonperforming assets of $140 million were down $89 million from the year ago quarter and were down $46 million from the prior quarter.


•	Nonaccrual loans of $128 million were down $81 million from the year ago quarter and were down $26 million from the prior quarter. The decrease from the prior quarter was primarily driven by payoffs. The nonaccrual loans to total loans ratio was 0.56% in the fourth quarter, compared to 1.00% in the year ago quarter, and 0.67% in the prior quarter.


•	Net charge offs were essentially zero, down $10 million from the year ago quarter and down $12 million from the prior quarter.


•	The allowance for loan losses of $238 million was down $28 million from the year ago quarter and was up $2 million from the prior quarter. The allowance for loan losses to total loans ratio was 1.04% in the fourth quarter of 2018, compared to 1.28% in the year ago quarter, and 1.03% in the prior quarter.

The Company expects its 2019 provision for credit losses to adjust with changes to risk grade, other indications of credit quality, and loan volume.

Capital

The Company’s capital position remains strong, with a CET1 capital ratio of 10.3% at December 31, 2018. The Company’s capital ratios continue to be in excess of the Basel III “well-capitalized” regulatory benchmarks on a fully phased in basis.

During 2018, the Company repurchased over 9 million shares, or $240 million, of common stock at an average price of $25.29 per share. This included fourth quarter repurchases of approximately 4 million shares, or $89 million, of common stock at an average price of $23.55 per share.

FOURTH QUARTER 2018 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 24, 2019. 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 2018 earnings call. The fourth quarter 2018 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 $34 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 more than 230 banking locations serving more than 110 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,” "target," “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. Management believes these measures are meaningful because they reflect adjustments commonly made by management, investors, regulators, and analysts to evaluate the adequacy of earnings per common share, provide a greater understanding of ongoing operations and enhance comparability of results with prior periods.

# # #



Associated Banc-Corp Consolidated Balance Sheets (Unaudited)
(In thousands)	Dec 31, 2018			Sep 30, 2018			Seql Qtr $ Change			Jun 30, 2018			Mar 31, 2018			Dec 31, 2017			Comp Qtr $ Change
Assets
Cash and due from banks	$	507,187		$	374,168		$	133,019		$	396,761		$	328,260		$	483,666		$	23,521
Interest-bearing deposits in other financial institutions	221,226			147,848			73,378			71,462			94,918			199,702			21,524
Federal funds sold and securities purchased under agreements to resell	148,285			24,325			123,960			3,150			10,000			32,650			115,635
Investment securities held to maturity, at amortized cost	2,740,511			2,661,755			78,756			2,602,247			2,443,203			2,282,853			457,658
Investment securities available for sale, at fair value	3,948,510			4,054,197			(105,687		)	4,261,651			4,485,875			4,043,446			(94,936		)
Federal Home Loan Bank and Federal Reserve Bank stocks, at cost	250,534			220,825			29,709			249,040			233,216			165,331			85,203
Residential loans held for sale	64,321			134,361			(70,040		)	143,022			103,953			85,544			(21,223		)
Commercial loans held for sale	14,943			30,452			(15,509		)	—			6,091			—			14,943
Loans	22,940,429			22,867,112			73,317			22,976,786			22,810,491			20,784,991			2,155,438
Allowance for loan losses	(238,023		)	(236,250		)	(1,773		)	(252,601		)	(257,058		)	(265,880		)	27,857
Loans, net	22,702,406			22,630,861			71,545			22,724,184			22,553,433			20,519,111			2,183,295
Bank and corporate owned life insurance	663,203			661,009			2,194			659,592			657,841			591,057			72,146
Investment in unconsolidated subsidiaries	161,181			156,878			4,303			161,676			166,124			170,473			(9,292		)
Trading assets	88,943			140,328			(51,385		)	132,919			102,890			69,675			19,268
Premises and equipment	363,225			358,926			4,299			361,385			381,327			330,963			32,262
Goodwill	1,169,023			1,168,922			101			1,166,665			1,153,156			976,239			192,784
Mortgage servicing rights, net	68,193			67,872			321			66,980			66,407			58,384			9,809
Other intangible assets, net	75,836			78,069			(2,233		)	80,346			79,714			15,580			60,256
Other assets	460,331			578,206			(117,875		)	571,566			500,099			458,920			1,410
Total assets	$	33,647,859		$	33,489,002		$	158,857		$	33,652,647		$	33,366,505		$	30,483,594		$	3,164,265
Liabilities and stockholders’ equity
Noninterest-bearing demand deposits	$	5,698,530		$	5,421,270		$	277,260		$	5,341,361		$	5,458,473		$	5,478,416		$	220,114
Interest-bearing deposits	19,198,863			19,410,342			(211,479		)	18,474,953			18,367,129			17,307,546			1,891,317
Total deposits	24,897,393			24,831,612			65,781			23,816,314			23,825,602			22,785,962			2,111,431
Federal funds purchased and securities sold under agreements to repurchase	111,651			166,556			(54,905		)	203,733			283,954			324,815			(213,164		)
Commercial paper	45,423			43,604			1,819			52,791			82,420			67,467			(22,044		)
FHLB advances	3,574,371			3,332,655			241,716			4,797,857			4,515,887			3,184,168			390,203
Other long-term funding	795,611			795,215			396			497,619			497,451			497,282			298,329
Trading liabilities	87,668			138,940			(51,272		)	131,612			100,247			67,660			20,008
Accrued expenses and other liabilities	354,855			383,381			(28,526		)	382,476			348,246			318,797			36,058
Total liabilities	29,866,971			29,691,963			175,008			29,882,403			29,653,806			27,246,151			2,620,820
Stockholders’ equity⁽¹⁾
Preferred equity	256,716			256,716			—			159,401			159,853			159,929			96,787
Common equity
Common stock	1,752			1,752			—			1,751			1,741			1,618			134
Surplus	1,828,081			1,824,544			3,537			1,820,053			1,813,987			1,454,188			373,893
Retained earnings	2,065,948			2,013,024			52,924			1,955,406			1,895,280			1,819,230			246,718
Accumulated other comprehensive income (loss)	(124,972		)	(135,520		)	10,548			(119,888		)	(107,673		)	(62,758		)	(62,214		)
Treasury stock, at cost	(246,638		)	(163,478		)	(83,160		)	(46,479		)	(50,488		)	(134,764		)	(111,874		)
Total common equity	3,524,171			3,540,322			(16,151		)	3,610,843			3,552,847			3,077,514			446,657
Total stockholders’ equity	3,780,888			3,797,038			(16,151		)	3,770,244			3,712,699			3,237,443			543,445
Total liabilities and stockholders’ equity	$	33,647,859		$	33,489,002		$	158,857		$	33,652,647		$	33,366,505		$	30,483,594		$	3,164,265

Numbers may not sum due to rounding.

(1) During 2018, unvested options, restricted stock awards, and restricted stock units were reclassified within stockholders' equity. This reclassification resulted in a net reduction in period end common shares outstanding, but had no impact on basic or diluted average common shares outstanding. There was no impact to earnings, expenses, or total stockholders' equity.

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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)	4Q18			4Q17			$ Change			% Change		Dec 2018			Dec 2017			$ Change			% Change
Interest income
Interest and fees on loans	$	260,661		$	194,133		$	66,528		34	%	$	976,990		$	749,000		$	227,990		30	%
Interest and dividends on investment securities
Taxable	29,119			25,614			3,505			14	%	119,741			96,909			22,832			24	%
Tax-exempt	12,899			8,437			4,462			53	%	44,782			32,977			11,805			36	%
Other interest	3,257			2,138			1,119			52	%	12,623			7,719			4,904			64	%
Total interest income	305,936			230,322			75,614			33	%	1,154,137			886,605			267,532			30	%
Interest expense
Interest on deposits	54,159			28,143			26,016			92	%	176,118			94,025			82,093			87	%
Interest on Federal funds purchased and securities sold under agreements to repurchase	442			420			22			5	%	2,006			2,527			(521		)	(21	)%
Interest on other short-term funding	36			54			(18		)	(33	)%	186			293			(107		)	(37	)%
Interest on FHLB advances	19,948			10,156			9,792			96	%	73,668			30,364			43,304			143	%
Interest on long-term funding	7,396			4,544			2,852			63	%	22,579			18,176			4,403			24	%
Total interest expense	81,980			43,317			38,663			89	%	274,557			145,385			129,172			89	%
Net interest income	223,955			187,005			36,950			20	%	879,580			741,220			138,360			19	%
Provision for credit losses	1,000			—			1,000			N/M		—			26,000			(26,000		)	(100	)%
Net interest income after provision for credit losses	222,955			187,005			35,950			19	%	879,580			715,220			164,360			23	%
Noninterest income
Insurance commissions and fees	21,232			19,186			2,046			11	%	89,511			81,474			8,037			10	%
Service charges and deposit account fees	16,361			15,773			588			4	%	66,075			64,427			1,648			3	%
Card-based and loan fees	15,575			13,840			1,735			13	%	57,474			52,688			4,786			9	%
Trust and asset management fees	13,371			13,125			246			2	%	54,316			50,191			4,125			8	%
Brokerage and advisory fees	6,993			6,864			129			2	%	28,246			19,935			8,311			42	%
Capital markets, net	4,931			7,107			(2,176		)	(31	)%	20,120			19,642			478			2	%
Mortgage banking, net	3,271			3,169			102			3	%	19,911			19,360			551			3	%
Bank and corporate owned life insurance	3,247			3,156			91			3	%	13,951			16,250			(2,299		)	(14	)%
Asset gains (losses), net ⁽¹⁾	(2,456		)	(528		)	(1,928		)	N/M		(1,103		)	(1,244		)	141			(11	)%
Investment securities gains (losses), net	—			75			(75		)	(100	)%	(1,985		)	434			(2,419		)	N/M
Other	1,522			2,777			(1,255		)	(45	)%	9,051			9,523			(472		)	(5	)%
Total noninterest income	84,046			84,544			(498		)	(1	)%	355,568			332,680			22,888			7	%
Noninterest expense
Personnel	116,535			107,031			9,504			9	%	482,676			428,976			53,700			13	%
Technology	17,944			17,878			66			—	%	72,674			63,004			9,670			15	%
Occupancy	14,174			13,497			677			5	%	59,121			53,842			5,279			10	%
Business development and advertising	8,950			8,195			755			9	%	30,923			28,946			1,977			7	%
Equipment	5,897			5,250			647			12	%	23,243			21,201			2,042			10	%
Legal and professional	5,888			6,384			(496		)	(8	)%	23,061			22,509			552			2	%
Card issuance and loan costs	2,232			2,836			(604		)	(21	)%	12,386			11,760			626			5	%
Foreclosure / OREO expense, net	909			1,285			(376		)	(29	)%	3,603			4,878			(1,275		)	(26	)%
FDIC assessment	5,750			7,500			(1,750		)	(23	)%	30,000			31,300			(1,300		)	(4	)%
Other intangible amortization	2,233			500			1,733			N/M		8,159			1,959			6,200			N/M
Acquisition related costs ⁽²⁾	(981		)	—			(981		)	N/M		29,002			—			29,002			N/M
Other	13,632			11,343			2,289			20	%	46,951			40,758			6,193			15	%
Total noninterest expense	193,163			181,699			11,464			6	%	821,799			709,133			112,666			16	%
Income before income taxes	113,839			89,850			23,989			27	%	413,349			338,767			74,582			22	%
Income tax expense	24,854			39,840			(14,986		)	(38	)%	79,786			109,503			(29,717		)	(27	)%
Net income	88,985			50,010			38,975			78	%	333,562			229,264			104,298			45	%
Preferred stock dividends	3,707			2,339			1,368			58	%	10,784			9,347			1,437			15	%
Net income available to common equity	$	85,278		$	47,671		$	37,607		79	%	$	322,779		$	219,917		$	102,862		47	%
Earnings per common share
Basic	$	0.52		$	0.31		$	0.21		68	%	$	1.92		$	1.45		$	0.47		32	%
Diluted	$	0.51		$	0.31		$	0.20		65	%	$	1.89		$	1.42		$	0.47		33	%
Average common shares outstanding
Basic	164,662			150,563			14,099			9	%	167,345			150,877			16,468			11	%
Diluted	166,394			153,449			12,945			8	%	169,732			153,647			16,085			10	%

N/M = Not meaningful

Numbers may not sum due to rounding.


(1)	YTD Dec 2018 includes approximately $2 million of Bank Mutual acquisition related asset losses net of asset gains.


(2)	Includes Bank Mutual and Huntington acquisition related costs only.

Page 2



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)	4Q18			3Q18			$ Change			% Change		2Q18			1Q18			4Q17			$ Change			% Change
Interest income
Interest and fees on loans	$	260,661		$	249,649		$	11,012		4	%	$	246,646		$	220,034		$	194,133		$	66,528		34	%
Interest and dividends on investment securities
Taxable	29,119			29,895			(776		)	(3	)%	30,623			30,104			25,614			3,505			14	%
Tax-exempt	12,899			11,883			1,016			9	%	10,783			9,217			8,437			4,462			53	%
Other interest	3,257			4,036			(779		)	(19	)%	3,153			2,177			2,138			1,119			52	%
Total interest income	305,936			295,464			10,472			4	%	291,205			261,532			230,322			75,614			33	%
Interest expense
Interest on deposits	54,159			50,116			4,043			8	%	38,431			33,412			28,143			26,016			92	%
Interest on Federal funds purchased and securities sold under agreements to repurchase	442			504			(62		)	(12	)%	538			522			420			22			5	%
Interest on other short-term funding	36			38			(2		)	(5	)%	51			60			54			(18		)	(33	)%
Interest on FHLB advances	19,948			19,318			630			3	%	21,279			13,123			10,156			9,792			96	%
Interest on long-term funding	7,396			6,095			1,301			21	%	4,544			4,544			4,544			2,852			63	%
Total interest expense	81,980			76,072			5,908			8	%	64,843			51,661			43,317			38,663			89	%
Net Interest income	223,955			219,392			4,563			2	%	226,362			209,871			187,005			36,950			20	%
Provision for credit losses	1,000			(5,000		)	6,000			(120	)%	4,000			—			—			1,000			N/M
Net interest income after provision for credit losses	222,955			224,392			(1,437		)	(1	)%	222,362			209,871			187,005			35,950			19	%
Noninterest income
Insurance commissions and fees	21,232			21,636			(404		)	(2	)%	23,996			22,648			19,186			2,046			11	%
Service charges and deposit account fees	16,361			16,904			(543		)	(3	)%	16,390			16,420			15,773			588			4	%
Card-based and loan fees	15,575			14,090			1,485			11	%	14,387			13,422			13,840			1,735			13	%
Trust and asset management fees	13,371			14,140			(769		)	(5	)%	13,437			13,369			13,125			246			2	%
Brokerage and advisory fees	6,993			7,084			(91		)	(1	)%	6,896			7,273			6,864			129			2	%
Capital markets, net	4,931			5,099			(168		)	(3	)%	4,783			5,306			7,107			(2,176		)	(31	)%
Mortgage banking, net	3,271			4,012			(741		)	(18	)%	6,258			6,370			3,169			102			3	%
Bank and corporate owned life insurance	3,247			3,540			(293		)	(8	)%	3,978			3,187			3,156			91			3	%
Asset gains (losses), net ⁽¹⁾	(2,456		)	(1,037		)	(1,419		)	137	%	2,497			(107		)	(528		)	(1,928		)	N/M
Investment securities gains (losses), net	—			30			(30		)	(100	)%	(2,015		)	—			75			(75		)	(100	)%
Other	1,522			2,802			(1,280		)	(46	)%	2,235			2,492			2,777			(1,255		)	(45	)%
Total noninterest income	84,046			88,300			(4,254		)	(5	)%	92,842			90,380			84,544			(498		)	(1	)%
Noninterest expense
Personnel	116,535			124,476			(7,941		)	(6	)%	123,980			117,685			107,031			9,504			9	%
Technology	17,944			17,563			381			2	%	19,452			17,715			17,878			66			—	%
Occupancy	14,174			14,519			(345		)	(2	)%	15,071			15,357			13,497			677			5	%
Business development and advertising	8,950			8,213			737			9	%	7,067			6,693			8,195			755			9	%
Equipment	5,897			5,838			59			1	%	5,953			5,556			5,250			647			12	%
Legal and professional	5,888			5,476			412			8	%	6,284			5,413			6,384			(496		)	(8	)%
Card issuance and loan costs	2,232			3,677			(1,445		)	(39	)%	3,173			3,304			2,836			(604		)	(21	)%
Foreclosure / OREO expense, net	909			950			(41		)	(4	)%	1,021			723			1,285			(376		)	(29	)%
FDIC assessment	5,750			7,750			(2,000		)	(26	)%	8,250			8,250			7,500			(1,750		)	(23	)%
Other intangible amortization	2,233			2,233			—			—	%	2,168			1,525			500			1,733			N/M
Acquisition related costs ⁽²⁾	(981		)	2,271			(3,252		)	(143	)%	7,107			20,605			—			(981		)	N/M
Other	13,632			11,445			2,187			19	%	11,732			10,140			11,343			2,289			20	%
Total noninterest expense	193,163			204,413			(11,250		)	(6	)%	211,258			212,965			181,699			11,464			6	%
Income before income taxes	113,839			108,279			5,560			5	%	103,947			87,285			89,850			23,989			27	%
Income tax expense	24,854			22,349			2,505			11	%	14,754			17,829			39,840			(14,986		)	(38	)%
Net income	88,985			85,929			3,056			4	%	89,192			69,456			50,010			38,975			78	%
Preferred stock dividends	3,707			2,409			1,298			54	%	2,329			2,339			2,339			1,368			58	%
Net income available to common equity	$	85,278		$	83,521		$	1,757		2	%	$	86,863		$	67,117		$	47,671		$	37,607		79	%
Earnings per common share
Basic	$	0.52		$	0.49		$	0.03		6	%	$	0.51		$	0.41		$	0.31		$	0.21		68	%
Diluted	$	0.51		$	0.48		$	0.03		6	%	$	0.50		$	0.40		$	0.31		$	0.20		65	%
Average common shares outstanding
Basic	164,662			170,516			(5,854		)	(3	)%	170,633			163,520			150,563			14,099			9	%
Diluted	166,394			172,802			(6,408		)	(4	)%	173,409			166,432			153,449			12,945			8	%

N/M = Not meaningful

Numbers may not sum due to rounding.


(1)	3Q18 includes approximately $1 million of Bank Mutual acquisition related asset losses net of asset gains; 2Q18 includes approximately $1 million of Bank Mutual acquisition related asset losses net of asset gains.


(2)	Includes Bank Mutual and Huntington acquisition related costs only.

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 2018			YTD Dec 2017			4Q18			3Q18			2Q18			1Q18			4Q17
Per common share data
Dividends	$	0.62		$	0.50		$	0.17		$	0.15		$	0.15		$	0.15		$	0.14
Market value:
High	28.85			26.50			26.55			28.35			28.85			26.90			26.10
Low	18.72			21.25			18.72			26.00			24.20			23.60			24.00
Close	19.79			25.40			19.79			26.00			27.30			24.85			25.40
Book value	21.43			20.13			21.43			21.06			20.95			20.78			20.13
Tangible book value / share	13.86			13.65			13.86			13.64			13.71			13.57			13.65
Performance ratios (annualized)
Return on average assets	1.01		%	0.78		%	1.07		%	1.02		%	1.07		%	0.88		%	0.66		%
Effective tax rate	19.30		%	32.32		%	21.83		%	20.64		%	14.19		%	20.43		%	44.34		%
Dividend payout ratio ⁽¹⁾	32.29		%	34.48		%	32.69		%	30.61		%	29.41		%	36.59		%	45.16		%
Net interest margin	2.97		%	2.82		%	3.02		%	2.92		%	3.02		%	2.92		%	2.79		%
Selected trend information
Average full time equivalent employees ⁽²⁾	4,699			4,307			4,659			4,707			4,792			4,637			4,303
Branch count							236			236			237			271			213
Assets under management, at market value ⁽³⁾							$	10,291		$	11,206		$	10,776		$	10,540		$	10,555
Mortgage loans originated for sale during period	$	1,092		$	715		$	245		$	331		$	319		$	198		$	249
Mortgage loan settlements during period	$	1,132		$	820		$	305		$	345		$	294		$	188		$	268
Mortgage portfolio serviced for others							$	8,601		$	8,547		$	8,501		$	8,507		$	7,647
Mortgage servicing rights, net / mortgage portfolio serviced for others							0.79		%	0.79		%	0.79		%	0.78		%	0.76		%
Shares outstanding, end of period ⁽⁶⁾							164,440			168,138			172,358			170,995			152,846
Selected quarterly ratios
Loans / deposits							92.14		%	92.09		%	96.47		%	95.74		%	91.22		%
Stockholders’ equity / assets							11.24		%	11.34		%	11.20		%	11.13		%	10.62		%
Risk-based capital ^{(4) (5)}
Total risk-weighted assets							$	23,875		$	23,907		$	24,059		$	23,535		$	21,544
Common equity Tier 1							$	2,450		$	2,475		$	2,528		$	2,474		$	2,172
Common equity Tier 1 capital ratio							10.26		%	10.35		%	10.51		%	10.51		%	10.08		%
Tier 1 capital ratio							11.33		%	11.42		%	11.17		%	11.19		%	10.82		%
Total capital ratio							13.47		%	13.56		%	13.36		%	13.45		%	13.22		%
Tier 1 leverage ratio							8.48		%	8.43		%	8.32		%	8.48		%	8.02		%
Loans
Recorded investment on loans							$	22,872		$	22,800		$	22,916		$	22,756		$	20,699
Net unaccreted Bank Mutual purchase discount							(18		)	(21		)	(26		)	(34		)	—
Net other deferred costs							87			87			87			88			86
Loans							$	22,940		$	22,867		$	22,977		$	22,810		$	20,785

Numbers may not sum due to rounding.


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


(2)	Average full time equivalent employees without overtime.


(3)	Excludes assets held in brokerage accounts.


(4)	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.


(5)	December 31, 2018 data is estimated.


(6)	During 2018, unvested options, restricted stock awards, and restricted stock units were reclassified within stockholders' equity. This reclassification resulted in a net reduction in period end common shares outstanding, but had no impact on basic or diluted average common shares outstanding. There was no impact to earnings, expenses, or total stockholders' equity.

Page 4



Associated Banc-Corp Selected Asset Quality Information
(In thousands)	Dec 31, 2018			Sep 30, 2018			Seql Qtr % Change		Jun 30, 2018			Mar 31, 2018			Dec 31, 2017			Comp Qtr % Change
Allowance for loan losses
Balance at beginning of period	$	236,250		$	252,601		(6	)%	$	257,058		$	265,880		$	276,551		(15	)%
Provision for loan losses	2,000			(4,000		)	(150	)%	4,000			500			—			N/M
Charge offs	(6,151		)	(17,304		)	(64	)%	(14,926		)	(12,155		)	(14,289		)	(57	)%
Recoveries	5,923			4,953			20	%	6,470			2,832			3,618			64	%
Net charge offs	(228		)	(12,351		)	(98	)%	(8,456		)	(9,323		)	(10,671		)	(98	)%
Balance at end of period	$	238,023		$	236,250		1	%	$	252,601		$	257,058		$	265,880		(10	)%
Allowance for unfunded commitments
Balance at beginning of period	$	25,336		$	26,336		(4	)%	$	26,336		$	24,400		$	24,400		4	%
Provision for unfunded commitments	(1,000		)	(1,000		)	—	%	—			(500		)	—			N/M
Amount recorded at acquisition	—			—			N/M		—			2,436			—			N/M
Balance at end of period	$	24,336		$	25,336		(4	)%	$	26,336		$	26,336		$	24,400		—	%
Allowance for credit losses	$	262,359		$	261,586		—	%	$	278,937		$	283,394		$	290,280		(10	)%
Provision for credit losses	$	1,000		$	(5,000	)	(120	)%	$	4,000		$	—		$	—		N/M
	Dec 31, 2018			Sep 30, 2018			Seql Qtr % Change		Jun 30, 2018			Mar 31, 2018			Dec 31, 2017			Comp Qtr % Change
Net charge offs
Commercial and industrial	$	2,974		$	(6,893	)	(143	)%	$	(6,606	)	$	(6,599	)	$	(8,212	)	(136	)%
Commercial real estate—owner occupied	282			(252		)	N/M		270			(1,025		)	(246		)	N/M
Commercial and business lending	3,256			(7,145		)	(146	)%	(6,336		)	(7,624		)	(8,458		)	(138	)%
Commercial real estate—investor	(2,107		)	(3,958		)	(47	)%	(1,189		)	8			(164		)	N/M
Real estate construction	106			(195		)	(154	)%	48			189			(365		)	(129	)%
Commercial real estate lending	(2,001		)	(4,153		)	(52	)%	(1,141		)	197			(529		)	N/M
Total commercial	1,255			(11,298		)	(111	)%	(7,477		)	(7,427		)	(8,987		)	(114	)%
Residential mortgage	(94		)	5			N/M		(135		)	(131		)	(966		)	(90	)%
Home equity	(270		)	200			N/M		140			(677		)	330			(182	)%
Other consumer	(1,118		)	(1,258		)	(11	)%	(984		)	(1,088		)	(1,048		)	7	%
Total consumer	(1,482		)	(1,053		)	41	%	(979		)	(1,896		)	(1,684		)	(12	)%
Total net charge offs	$	(228	)	$	(12,351	)	(98	)%	$	(8,456	)	$	(9,323	)	$	(10,671	)	(98	)%

(In basis points)	Dec 31, 2018			Sep 30, 2018					Jun 30, 2018			Mar 31, 2018			Dec 31, 2017
Net charge offs to average loans (annualized)
Commercial and industrial	16			(39		)			(39		)	(41		)	(51		)
Commercial real estate—owner occupied	13			(11		)			12			(48		)	(12		)
Commercial and business lending	16			(36		)			(33		)	(42		)	(47		)
Commercial real estate—investor	(22		)	(40		)			(12		)	—			(2		)
Real estate construction	3			(5		)			1			5			(10		)
Commercial real estate lending	(15		)	(30		)			(8		)	1			(4		)
Total commercial	4			(34		)			(22		)	(24		)	(30		)
Residential mortgage	—			—					(1		)	(1		)	(5		)
Home equity	(12		)	9					6			(30		)	15
Other consumer	(121		)	(133		)			(105		)	(115		)	(109		)
Total consumer	(6		)	(4		)			(4		)	(8		)	(8		)
Total net charge offs	—			(21		)			(15		)	(17		)	(20		)

(In thousands)	Dec 31, 2018			Sep 30, 2018			Seql Qtr % Change		Jun 30, 2018			Mar 31, 2018			Dec 31, 2017			Comp Qtr % Change
Credit Quality
Nonaccrual loans	$	127,901		$	154,092		(17	)%	$	204,460		$	208,553		$	208,546		(39	)%
Other real estate owned (OREO)⁽¹⁾	11,984			25,653			(53	)%	27,207			16,919			12,608			(5	)%
Other nonperforming assets	—			6,379			(100	)%	7,059			7,117			7,418			(100	)%
Total nonperforming assets	$	139,885		$	186,124		(25	)%	$	238,726		$	232,589		$	228,572		(39	)%

Loans 90 or more days past due and still accruing	$	2,165		$	2,175		—	%	$	1,839		$	3,393		$	1,867		16	%
Allowance for loan losses to loans	1.04		%	1.03		%			1.10		%	1.13		%	1.28		%
Net unaccreted purchase discount to net purchased loans	1.44		%	1.48		%			1.58		%	1.80		%	—		%
Allowance for loan losses to nonaccrual loans	186.10		%	153.32		%			123.55		%	123.26		%	127.49		%
Nonaccrual loans to total loans	0.56		%	0.67		%			0.89		%	0.91		%	1.00		%
Nonperforming assets to total loans plus OREO	0.61		%	0.81		%			1.04		%	1.02		%	1.10		%
Nonperforming assets to total assets	0.42		%	0.56		%			0.71		%	0.70		%	0.75		%
Year-to-date net charge offs to average loans (annualized)	0.13		%	0.18		%			0.16		%	0.17		%	0.19		%


(1)	The March 31, 2018 to June 30, 2018 change in OREO was primarily due to the closure of Bank Mutual properties.

Page 5



Associated Banc-Corp Selected Asset Quality Information (continued)
(In thousands)	Dec 31, 2018		Sep 30, 2018		Seql Qtr % Change		Jun 30, 2018		Mar 31, 2018		Dec 31, 2017		Comp Qtr % Change
Nonaccrual loans
Commercial and industrial	$	41,021	$	50,146	(18	)%	$	81,776	$	102,667	$	112,786	(64	)%
Commercial real estate—owner occupied	3,957		4,779		(17	)%	18,649		20,636		22,740		(83	)%
Commercial and business lending	44,978		54,925		(18	)%	100,425		123,303		135,526		(67	)%
Commercial real estate—investor	1,952		19,725		(90	)%	26,503		15,574		4,729		(59	)%
Real estate construction	979		1,154		(15	)%	1,544		1,219		974		1	%
Commercial real estate lending	2,931		20,879		(86	)%	28,047		16,793		5,703		(49	)%
Total commercial	47,909		75,804		(37	)%	128,472		140,096		141,229		(66	)%
Residential mortgage	67,574		65,896		3	%	62,896		55,100		53,632		26	%
Home equity	12,339		12,324		—	%	12,958		13,218		13,514		(9	)%
Other consumer	79		68		16	%	134		139		171		(54	)%
Total consumer	79,992		78,288		2	%	75,988		68,456		67,317		19	%
Total nonaccrual loans	$	127,901	$	154,092	(17	)%	$	204,460	$	208,553	$	208,546	(39	)%

	Dec 31, 2018		Sep 30, 2018		Seql Qtr % Change		Jun 30, 2018		Mar 31, 2018		Dec 31, 2017		Comp Qtr % Change
Restructured loans (accruing)
Commercial and industrial	$	25,478	$	38,885	(34	)%	$	32,438	$	29,580	$	30,047	(15	)%
Commercial real estate—owner occupied	2,080		3,746		(44	)%	3,820		3,892		3,989		(48	)%
Commercial and business lending	27,558		42,631		(35	)%	36,258		33,472		34,036		(19	)%
Commercial real estate—investor	799		350		128	%	372		13,683		14,389		(94	)%
Real estate construction	311		218		43	%	222		305		310		—	%
Commercial real estate lending	1,110		568		95	%	594		13,988		14,699		(92	)%
Total commercial	28,668		43,199		(34	)%	36,852		47,460		48,735		(41	)%
Residential mortgage	16,036		16,986		(6	)%	17,934		19,902		17,068		(6	)%
Home equity	7,385		7,792		(5	)%	7,900		8,098		7,705		(4	)%
Other consumer	1,174		1,177		—	%	1,037		1,041		1,110		6	%
Total consumer	24,595		25,955		(5	)%	26,871		29,041		25,883		(5	)%
Total restructured loans (accruing)	$	53,263	$	69,154	(23	)%	$	63,723	$	76,501	$	74,618	(29	)%
Nonaccrual restructured loans (included in nonaccrual loans)	$	26,292	$	33,757	(22	)%	$	38,005	$	23,827	$	23,486	12	%
	Dec 31, 2018		Sep 30, 2018		Seql Qtr % Change		Jun 30, 2018		Mar 31, 2018		Dec 31, 2017		Comp Qtr % Change
Accruing Loans 30-89 Days Past Due
Commercial and industrial	$	525	$	5,732	(91	)%	$	588	$	880	$	271	94	%
Commercial real estate—owner occupied	2,699		6,126		(56	)%	193		511		48		N/M
Commercial and business lending	3,224		11,858		(73	)%	781		1,391		319		N/M
Commercial real estate—investor	3,767		373		N/M		828		240		374		N/M
Real estate construction	330		517		(36	)%	19,765		490		251		31	%
Commercial real estate lending	4,097		890		N/M		20,593		730		625		N/M
Total commercial	7,321		12,748		(43	)%	21,374		2,121		944		N/M
Residential mortgage	9,706		8,899		9	%	9,341		15,133		9,552		2	%
Home equity	6,049		8,080		(25	)%	7,270		5,868		6,825		(11	)%
Other consumer	2,269		1,979		15	%	1,735		1,811		2,007		13	%
Total consumer	18,024		18,958		(5	)%	18,346		22,812		18,384		(2	)%
Total accruing loans 30-89 days past due	$	25,345	$	31,706	(20	)%	$	39,720	$	24,934	$	19,328	31	%

	Dec 31, 2018		Sep 30, 2018		Seql Qtr % Change		Jun 30, 2018		Mar 31, 2018		Dec 31, 2017		Comp Qtr % Change
Potential Problem Loans
Commercial and industrial	$	116,578	$	144,468	(19	)%	$	172,177	$	196,766	$	113,778	2	%
Commercial real estate—owner occupied	55,964		32,526		72	%	38,879		34,410		41,997		33	%
Commercial and business lending	172,542		176,994		(3	)%	211,056		231,176		155,775		11	%
Commercial real estate—investor	67,481		49,842		35	%	24,790		46,970		19,291		N/M
Real estate construction	3,834		3,392		13	%	3,168		1,695		—		N/M
Commercial real estate lending	71,315		53,234		34	%	27,958		48,665		19,291		N/M
Total commercial	243,856		230,228		6	%	239,014		279,841		175,066		39	%
Residential mortgage	5,975		6,073		(2	)%	2,355		2,155		1,616		N/M
Home equity	103		148		(30	)%	142		188		195		(47	)%
Other consumer	—		—		N/M		6		—		—		N/M
Total consumer	6,078		6,221		(2	)%	2,503		2,343		1,811		N/M
Total potential problem loans	$	249,935	$	236,449	6	%	$	241,517	$	282,184	$	176,877	41	%

N/M = Not meaningful

Numbers may not sum due to rounding.

Page 6



Associated Banc-Corp Net Interest Income Analysis - Fully Tax-Equivalent Basis - Sequential and Comparable Quarter
	Three Months Ended
	December 31, 2018						September 30, 2018						December 31, 2017
(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	$	8,019,254	$	96,539	4.78	%	$	7,938,739	$	91,250	4.56	%	$	7,178,384	$	68,440	3.79	%
Commercial real estate lending	5,209,743		72,364		5.51	%	5,420,680		68,020		4.98	%	4,873,889		49,744		4.05	%
Total commercial	13,228,997		168,903		5.07	%	13,359,419		159,270		4.73	%	12,052,273		118,184		3.89	%
Residential mortgage	8,314,421		73,158		3.52	%	8,333,303		71,926		3.45	%	7,546,288		59,979		3.18	%
Retail	1,261,307		18,982		6.00	%	1,280,996		18,859		5.87	%	1,265,055		16,853		5.31	%
Total loans	22,804,725		261,043		4.55	%	22,973,717		250,055		4.33	%	20,863,616		195,016		3.72	%
Investment securities
Taxable	5,087,746		29,119		2.29	%	5,290,859		29,895		2.26	%	4,986,279		25,614		2.05	%
Tax-exempt ⁽¹⁾	1,740,964		16,253		3.73	%	1,627,715		14,973		3.68	%	1,206,078		12,909		4.28	%
Other short-term investments	383,286		3,257		3.38	%	582,578		4,036		2.75	%	382,762		2,138		2.22	%
Investments and other	7,211,997		48,629		2.70	%	7,501,152		48,905		2.61	%	6,575,119		40,661		2.47	%
Total earning assets	30,016,722		$	309,672	4.11	%	30,474,870		$	298,959	3.91	%	27,438,735		$	235,677	3.42	%
Other assets, net	3,045,836						3,059,317						2,542,484
Total assets	$	33,062,558					$	33,534,187					$	29,981,219
Liabilities and stockholders' equity
Interest-bearing liabilities
Interest-bearing deposits
Savings	$	1,995,160	$	696	0.14	%	$	1,901,960	$	327	0.07	%	$	1,554,639	$	209	0.05	%
Interest-bearing demand	4,837,223		14,006		1.15	%	4,988,694		13,169		1.05	%	4,168,550		6,565		0.62	%
Money market	7,089,449		16,532		0.93	%	7,546,059		16,212		0.85	%	6,520,052		7,226		0.44	%
Network transaction deposits	1,880,595		10,943		2.31	%	1,969,915		10,027		2.02	%	2,517,737		7,945		1.25	%
Time deposits	3,060,896		11,982		1.55	%	2,978,314		10,382		1.38	%	2,354,828		6,198		1.04	%
Total interest-bearing deposits	18,863,323		54,159		1.14	%	19,384,942		50,116		1.03	%	17,115,806		28,143		0.65	%
Federal funds purchased and securities sold under agreements to repurchase	134,748		442		1.30	%	231,308		504		0.86	%	279,817		420		0.60	%
Commercial paper	41,528		36		0.35	%	43,911		38		0.35	%	66,927		54		0.32	%
FHLB advances	3,654,905		19,948		2.17	%	3,690,687		19,318		2.08	%	3,368,517		10,156		1.20	%
Long-term funding	795,379		7,396		3.72	%	656,055		6,095		3.72	%	497,188		4,544		3.66	%
Total short and long-term funding	4,626,560		27,822		2.39	%	4,621,961		25,956		2.23	%	4,212,449		15,174		1.43	%
Total interest-bearing liabilities	23,489,883		$	81,980	1.39	%	24,006,903		$	76,072	1.26	%	21,328,255		$	43,317	0.81	%
Noninterest-bearing demand deposits	5,366,711						5,310,977						5,133,977
Other liabilities	459,204						454,767						302,981
Stockholders’ equity	3,746,760						3,761,541						3,216,006
Total liabilities and stockholders’ equity	$	33,062,558					$	33,534,187					$	29,981,219
Interest rate spread					2.72	%					2.65	%					2.61	%
Net free funds					0.30	%					0.27	%					0.18	%
Fully tax-equivalent net interest income and net interest margin ("NIM")			$	227,692	3.02	%			$	222,887	2.92	%			$	192,360	2.79	%
Fully tax-equivalent adjustment			3,736						3,496						5,355
Net interest income			$	223,955					$	219,392					$	187,005

Numbers may not sum due to rounding.


(1)	Beginning in 2018, the yield on tax-exempt loans and securities is computed on a fully tax-equivalent basis using a tax rate of 21% and is net of the effects of certain disallowed interest deductions. Prior to 2018, the yield on tax-exempt loans and securities was computed on a fully tax-equivalent basis using a tax rate of 35% and was 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 amortization of net deferred loan origination costs and net accreted purchase loan discount.

Page 7



Associated Banc-Corp Net Interest Income Analysis - Fully Tax-Equivalent Basis - Year Over Year
	Years Ended December 31,
	2018						2017
(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	$	7,744,640	$	349,266	4.51	%	$	7,254,613	$	265,796	3.66	%
Commercial real estate lending	5,433,361		273,937		5.04	%	4,952,605		192,838		3.89	%
Total commercial	13,178,001		623,203		4.73	%	12,207,218		458,634		3.76	%
Residential mortgage	8,289,432		281,814		3.40	%	7,105,486		229,210		3.23	%
Retail	1,250,863		73,605		5.88	%	1,279,679		64,892		5.07	%
Total loans	22,718,297		978,622		4.31	%	20,592,383		752,736		3.66	%
Investment securities
Taxable	5,366,825		119,741		2.23	%	4,861,597		96,909		1.99	%
Tax-exempt⁽¹⁾	1,546,096		56,426		3.65	%	1,166,665		50,455		4.32	%
Other short-term investments	418,576		12,623		3.02	%	379,239		7,719		2.04	%
Investments and other	7,331,497		188,790		2.58	%	6,407,501		155,083		2.42	%
Total earning assets	30,049,793		$	1,167,412	3.88	%	26,999,884		$	907,819	3.36	%
Other assets, net	3,003,612						2,485,849
Total assets	$	33,053,405					$	29,485,733
Liabilities and stockholders' equity
Interest-bearing liabilities
Interest-bearing deposits
Savings	$	1,878,960	$	1,435	0.08	%	$	1,527,161	$	816	0.05	%
Interest-bearing demand	4,767,873		44,911		0.94	%	3,953,014		20,344		0.51	%
Money market	7,260,692		54,573		0.75	%	6,321,603		22,991		0.36	%
Network transaction deposits	2,095,715		39,251		1.87	%	3,145,554		31,455		1.00	%
Time deposits	2,831,229		35,948		1.27	%	1,979,709		18,419		0.93	%
Total interest-bearing deposits	18,834,469		176,118		0.94	%	16,927,041		94,025		0.56	%
Federal funds purchased and securities sold under agreements to repurchase	224,967		2,006		0.89	%	415,086		2,527		0.61	%
Commercial paper	56,076		186		0.33	%	91,797		293		0.32	%
FHLB advances	3,971,797		73,668		1.85	%	3,114,545		30,364		0.97	%
Long-term funding	612,513		22,579		3.69	%	496,930		18,176		3.66	%
Total short and long-term funding	4,865,353		98,439		2.02	%	4,118,358		51,360		1.25	%
Total interest-bearing liabilities	23,699,823		$	274,557	1.16	%	21,045,399		$	145,385	0.69	%
Noninterest-bearing demand deposits	5,237,580						4,996,561
Other liabilities	423,570						271,139
Stockholders’ equity	3,692,433						3,172,634
Total liabilities and stockholders’ equity	$	33,053,405					$	29,485,733
Interest rate spread					2.72	%					2.67	%
Net free funds					0.25	%					0.15	%
Fully tax-equivalent net interest income and net interest margin			$	892,855	2.97	%			$	762,434	2.82	%
Fully tax-equivalent adjustment			13,275						21,214
Net interest income			$	879,580					$	741,220

Numbers may not sum due to rounding.


(1)	Beginning in 2018, the yield on tax-exempt loans and securities is computed on a fully tax-equivalent basis using a tax rate of 21% and is net of the effects of certain disallowed interest deductions. Prior to 2018, the yield on tax-exempt loans and securities was computed on a fully tax-equivalent basis using a tax rate of 35% and was 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 amortization of net deferred loan origination costs and net accreted purchase loan discount.

Page 8



Associated Banc-Corp Loan and Deposit Composition
(In thousands)
Period end loan composition ⁽³⁾	Dec 31, 2018		Sep 30, 2018		Seql Qtr % Change		Jun 30, 2018		Mar 31, 2018		Dec 31, 2017		Comp Qtr % Change
Commercial and industrial	$	7,398,044	$	7,159,941	3	%	$	7,109,796	$	6,756,983	$	6,399,693	16	%
Commercial real estate—owner occupied	920,443		867,682		6	%	888,330		900,913		802,209		15	%
Commercial and business lending	8,318,487		8,027,622		4	%	7,998,126		7,657,896		7,201,902		16	%
Commercial real estate—investor	3,751,554		3,924,499		(4	)%	3,996,415		4,077,671		3,315,254		13	%
Real estate construction	1,335,031		1,416,209		(6	)%	1,487,159		1,579,778		1,451,684		(8	)%
Commercial real estate lending	5,086,585		5,340,708		(5	)%	5,483,574		5,657,449		4,766,938		7	%
Total commercial	13,405,072		13,368,330		—	%	13,481,700		13,315,345		11,968,840		12	%
Residential mortgage	8,277,712		8,227,649		1	%	8,207,253		8,197,223		7,546,534		10	%
Home equity	894,473		901,275		(1	)%	911,363		923,470		883,804		1	%
Other consumer	363,171		369,858		(2	)%	376,470		374,453		385,813		(6	)%
Total consumer	9,535,357		9,498,782		—	%	9,495,086		9,495,146		8,816,151		8	%
Total loans	$	22,940,429	$	22,867,112	—	%	$	22,976,786	$	22,810,491	$	20,784,991	10	%
Purchased credit-impaired loans	$	4,852	$	13,133	(63	)%	$	15,900	$	14,838	$	—	N/M
Period end deposit and customer funding composition ⁽⁴⁾	Dec 31, 2018		Sep 30, 2018		Seql Qtr % Change		Jun 30, 2018		Mar 31, 2018		Dec 31, 2017		Comp Qtr % Change
Noninterest-bearing demand	$	5,698,530	$	5,421,270	5	%	$	5,341,361	$	5,458,473	$	5,478,416	4	%
Savings	2,012,841		1,937,006		4	%	1,887,777		1,883,638		1,524,992		32	%
Interest-bearing demand	5,336,952		5,096,998		5	%	4,650,407		4,719,566		4,603,157		16	%
Money market	9,033,669		9,087,587		(1	)%	9,208,993		9,086,553		8,830,328		2	%
Brokered CDs	192,234		235,711		(18	)%	228,029		44,503		18,609		N/M
Other time	2,623,167		3,053,041		(14	)%	2,499,747		2,632,869		2,330,460		13	%
Total deposits	24,897,393		24,831,612		—	%	23,816,314		23,825,602		22,785,962		9	%
Customer funding ⁽¹⁾	137,364		184,269		(25	)%	235,804		297,289		250,332		(45	)%
Total deposits and customer funding	$	25,034,757	$	25,015,882	—	%	$	24,052,118	$	24,122,891	$	23,036,294	9	%
Network transaction deposits ⁽²⁾	$	2,276,296	$	1,852,863	23	%	$	2,094,670	$	2,244,739	$	2,520,968	(10	)%
Net deposits and customer funding (Total deposits and customer funding, excluding Brokered CDs and network transaction deposits)	$	22,566,227	$	22,927,308	(2	)%	$	21,729,419	$	21,833,649	$	20,496,717	10	%

Quarter average loan composition⁽³⁾	Dec 31, 2018		Sep 30, 2018		Seql Qtr % Change		Jun 30, 2018		Mar 31, 2018		Dec 31, 2017		Comp Qtr % Change
Commercial and industrial	$	7,166,092	$	7,059,946	2	%	$	6,804,311	$	6,449,898	$	6,366,626	13	%
Commercial real estate—owner occupied	853,162		878,793		(3	)%	892,746		863,723		811,758		5	%
Commercial and business lending	8,019,254		7,938,739		1	%	7,697,057		7,313,621		7,178,384		12	%
Commercial real estate—investor	3,788,398		3,948,922		(4	)%	4,117,675		3,866,286		3,369,785		12	%
Real estate construction	1,421,344		1,471,758		(3	)%	1,588,141		1,533,143		1,504,104		(6	)%
Commercial real estate lending	5,209,743		5,420,680		(4	)%	5,705,817		5,399,429		4,873,889		7	%
Total commercial	13,228,997		13,359,419		(1	)%	13,402,874		12,713,050		12,052,273		10	%
Residential mortgage	8,314,421		8,333,303		—	%	8,310,358		8,066,297		7,546,288		10	%
Home equity	895,412		906,364		(1	)%	917,688		917,001		885,235		1	%
Other consumer	365,895		374,632		(2	)%	374,508		382,180		379,820		(4	)%
Total consumer	9,575,728		9,614,298		—	%	9,602,555		9,365,479		8,811,343		9	%
Total loans	$	22,804,725	$	22,973,717	(1	)%	$	23,005,428	$	22,078,529	$	20,863,616	9	%

Quarter average deposit composition⁽⁴⁾	Dec 31, 2018		Sep 30, 2018		Seql Qtr % Change		Jun 30, 2018		Mar 31, 2018		Dec 31, 2017		Comp Qtr % Change
Noninterest-bearing demand	$	5,366,711	$	5,310,977	1	%	$	5,131,894	$	5,084,957	$	5,133,977	5	%
Savings	1,995,160		1,901,960		5	%	1,892,808		1,722,665		1,554,639		28	%
Interest-bearing demand	4,837,223		4,988,694		(3	)%	4,735,514		4,503,974		4,168,550		16	%
Money market	7,089,449		7,546,059		(6	)%	7,190,178		7,215,329		6,520,052		9	%
Network transaction deposits	1,880,595		1,969,915		(5	)%	2,130,854		2,408,681		2,517,737		(25	)%
Time deposits	3,060,896		2,978,314		3	%	2,565,001		2,715,292		2,354,828		30	%
Total deposits	$	24,230,034	$	24,695,918	(2	)%	$	23,646,250	$	23,650,898	$	22,249,783	9	%

N/M = Not meaningful

Numbers may not sum due to rounding.


(1)	Includes repurchase agreements and commercial paper.

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

(3) On February 1, 2018, the Corporation acquired Bank Mutual and added $1.9 billion of loans.

(4) On February 1, 2018, the Corporation acquired Bank Mutual and assumed $1.8 billion of deposits.

Page 9



Associated Banc-Corp Non-GAAP Financial Measures Reconciliation
(In millions, except per share data)								YTD Dec 2018			YTD Dec 2017			4Q18			3Q18			2Q18			1Q18			4Q17
Tangible common equity reconciliation ⁽¹⁾
Common equity														$	3,524		$	3,540		$	3,611		$	3,553		$	3,078
Goodwill and other intangible assets, net														(1,245		)	(1,247		)	(1,247		)	(1,233		)	(992		)
Tangible common equity														$	2,279		$	2,293		$	2,364		$	2,320		$	2,086
Tangible assets reconciliation ⁽¹⁾
Total assets														$	33,648		$	33,489		$	33,653		$	33,367		$	30,484
Goodwill and other intangible assets, net														(1,245		)	(1,247		)	(1,247		)	(1,233		)	(992		)
Tangible assets														$	32,403		$	32,242		$	32,406		$	32,134		$	29,492
Average tangible common equity and average common equity tier 1 reconciliation⁽¹⁾
Common equity								$	3,505		$	3,013		$	3,490		$	3,589		$	3,561		$	3,377		$	3,056
Goodwill and other intangible assets, net								(1,209		)	(988		)	(1,246		)	(1,246		)	(1,236		)	(1,108		)	(992		)
Tangible common equity								2,296			2,025			2,244			2,343			2,325			2,269			2,064
Accumulated other comprehensive loss (income)								117			54			137			125			117			89			62
Deferred tax assets (liabilities), net								42			30			46			45			47			32			29
Average common equity Tier 1								$	2,455		$	2,109		$	2,427		$	2,513		$	2,489		$	2,390		$	2,155
Selected Trend Information ⁽²⁾
Insurance commissions and fees								$	90		$	81		$	21		$	22		$	24		$	23		$	19
Service charges and deposit account fees								66			64			16			17			16			16			16
Card-based and loan fees								57			53			16			14			14			13			14
Trust and asset management fees								54			50			13			14			13			13			13
Brokerage and advisory fees								28			20			7			7			7			7			7
Fee-based revenue								296			269			74			74			75			73			69
Other								60			64			11			14			18			17			16
Total noninterest income								$	356		$	333		$	84		$	88		$	93		$	90		$	85
Selected equity and performance ratios ^{(1) (3)}
Tangible common equity / tangible assets														7.03		%	7.11		%	7.29		%	7.22		%	7.07		%
Return on average equity								9.03		%	7.23		%	9.42		%	9.06		%	9.61		%	7.96		%	6.17		%
Return on average tangible common equity								14.06		%	10.86		%	15.08		%	14.14		%	14.98		%	11.99		%	9.16		%
Return on average common equity Tier 1								13.15		%	10.43		%	13.94		%	13.18		%	14.00		%	11.39		%	8.77		%
Efficiency ratio reconciliation ⁽⁴⁾
Federal Reserve efficiency ratio								66.23		%	65.97		%	62.39		%	66.12		%	65.77		%	70.76		%	66.93		%
Fully tax-equivalent adjustment								(0.71		)%	(1.28		)%	(0.75		)%	(0.75		)%	(0.65		)%	(0.66		)%	(1.30		)%
Other intangible amortization								(0.66		)%	(0.18		)%	(0.72		)%	(0.73		)%	(0.68		)%	(0.51		)%	(0.18		)%
Fully tax-equivalent efficiency ratio								64.87		%	64.51		%	60.93		%	64.66		%	64.45		%	69.60		%	65.45		%
Acquisition related costs adjustment								(2.42		)%	—		%	0.31		%	(0.94		)%	(2.40		)%	(6.60		)%	—		%
Fully tax-equivalent efficiency ratio, excluding acquisition related costs (adjusted efficiency ratio)								62.45		%	64.51		%	61.24		%	63.72		%	62.05		%	63.00		%	65.45		%
Acquisition Related Costs	YTD 2018		YTD 2018 per share data⁽⁶⁾		4Q 2018			4Q 2018 per share data⁽⁶⁾			3Q 2018			3Q 2018 per share data⁽⁶⁾			2Q 2018			2Q 2018 per share data⁽⁶⁾			1Q 2018			1Q 2018 per share data⁽⁶⁾
GAAP earnings	$	323	$	1.89	$	85		$	0.51		$	84		$	0.48		$	87		$	0.50		$	67		$	0.40
Change of control and severance	7				—						1						(1		)				7
Merger advisors and consultants	5				—						1						—						4
Facilities and other	8				—						1						2						5
Contract terminations and conversion costs	10				(1		)				—						6						5
Asset losses (gains), net	$	2			$	—					$	1					$	1					$	—
Total acquisition related costs	$	31			$	(1	)				$	3					$	8					$	21
Less additional tax expense	$	8			$	—					$	1					$	2					$	5
Earnings, excluding acquisition related costs ⁽⁵⁾	$	346	$	2.03	$	84		$	0.50		$	87		$	0.49		$	93		$	0.53		$	83		$	0.50

Numbers may not sum due to rounding.


(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.


(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. The adjusted efficiency ratio is noninterest expense (which includes the provision for unfunded commitments), excluding other intangible amortization and acquisition related costs, divided by the sum of fully tax-equivalent net interest income plus noninterest income, excluding investment securities gains / losses, net and acquisition related costs. Management believes the adjusted efficiency ratio, which adjusts net interest income for the tax-favored status of certain loans and investment securities and acquisition related costs, to be a meaningful measure as it enhances the comparability of net interest income arising from taxable and tax-exempt sources and excludes acquisition related costs.


(5)	This is a non-GAAP financial measure. Management believes these measures are meaningful because they reflect adjustments commonly made by management, investors, regulators, and analysts to evaluate the adequacy of earnings per common share and provide greater understanding of ongoing operations and enhanced comparability of results with prior periods.


(6)	Earnings and per share data presented after-tax.

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