• Net income of $47.4 million, or $0.37 per share
• Provision for loan losses of $59 million; net charge offs of $37 million
• Allowance for loan losses to loans ratio increased to 1.42% at June 30
• Loans up 9% annualized over March 31
• Net interest margin of 3.65%, up 7 basis points from first quarter
• Core fee-based revenue up 12% over first quarter
• Efficiency ratio improved to 50.75% for second quarter
• Tangible capital ratio of 6.50%

Associated Banc-Corp (NASDAQ:ASBC) reported net income of $47.4 million, or $0.37 per share, for the second quarter of 2008. Comparatively, net income was $66.5 million ($0.52 per share) for first quarter 2008 and $75.8 million ($0.59 per share) for the second quarter of 2007. Book value per share rose to $18.46 at June 30, 2008, up 5 percent over a year ago.

Net income was $113.8 million, or $0.89 per share, for the six months ending June 30, 2008, compared to net income of $149.2 million, or $1.16 per share, for the first half of 2007.

Associated’s Board of Directors declared a regular cash dividend of $0.32 per share, payable Aug. 15 to shareholders of record Aug. 7. It is the company’s 154^th consecutive quarterly cash dividend. During the second quarter, Associated paid a dividend of $0.32 cents per share, up 3 percent over the second quarter of last year.

A key variance between the 2008 second and first quarter financial results was the provision for loan losses. The provision for second quarter 2008 was $59 million (representing approximately $0.30 per share after tax), compared to $23 million for first quarter (or approximately $0.12 per share after tax). Net charge offs were $37 million for second quarter, compared to $16 million for first quarter, bringing net charge offs to 67 basis points of average loans for the first half of 2008. Six housing-related commercial credits accounted for $21 million of the quarter’s $37 million in net charge offs. The allowance for loan losses to total loans ratio increased to 1.42 percent at June 30, compared to 1.32 percent at March 31, 2008.

Nonperforming loans increased $81 million during the quarter to $289 million at June 30, attributable primarily to 6 commercial credits all related to the housing industry, including five construction credits totaling $51 million and a $20 million commercial credit.

“The increase in allowance for loan losses was principally due to deterioration of collateral values in a number of commercial real estate and other commercial credits related to and affected by the downturn of the housing industry,” said Associated Chairman and CEO Paul S. Beideman. “For the remainder of 2008, we expect nonperforming loans to stabilize at the quarter end levels and net charge offs to continue at levels experienced in the second quarter.”

Net interest income was $173 million for second quarter 2008, up from $165 million for first quarter 2008 and $157 million for the second quarter of 2007, and the net interest margin for the same quarters was 3.65 percent, 3.58 percent and 3.53 percent, respectively. The net interest margin benefited in second quarter 2008 largely from improved loan growth, lower funding costs, and higher average balances of noninterest-bearing demand deposits.

On average, loans were $16.1 billion for the second quarter of 2008, up $0.4 billion or 11 percent annualized over the first quarter of 2008, led by home equity growth (up $0.3 billion) and commercial loan growth (up $0.2 billion). At June 30, 2008, loans were $16.1 billion, up $0.4 billion (9 percent annualized) since March 31.

Deposits, on average, were $13.5 billion for the second quarter of 2008, down $0.2 billion compared to first quarter, primarily attributable to lower time deposits. Average second quarter noninterest-bearing demand deposits were $2.5 billion, up $0.1 billion over first quarter 2008 and $0.1 billion (4 percent) over second quarter 2007.

Core fee-based revenues were $69 million, up $7 million over the first quarter 2008, and up $5 million or 7 percent over the second quarter a year ago, led predominantly by increased service charges on deposit accounts for both comparable periods. Net mortgage banking income of $5 million was down nearly $2 million from first quarter 2008, primarily due to a $2 million increase in first quarter from the adoption of recent accounting standards related to fair value measurement.

Total quarterly noninterest expense was $136 million for both the second and first quarters of 2008 and $133 million for second quarter 2007. The efficiency ratio improved to 50.75% for the current quarter, benefiting from controlled expenses and growth in total revenues.

For 2008 second quarter, the effective tax rate was 26.61 percent, compared to 24.84 percent for first quarter which included a $4 million net reduction to income tax expense related to the resolution of certain tax matters, changes in estimated exposure of uncertain tax positions, and a valuation allowance adjustment on certain deferred tax assets.

“Our financial results show improved net interest income and core fee-based revenues, steady loan growth, and controlled expenses,” said Beideman. “We recognize the challenging environment in which we are operating. Given our revenue momentum and focus on managing credit risks, we believe we have the ability to generate earnings at levels that will contribute to capital.”

Associated will host a conference call for investors and analysts at 10 a.m. Central Time (CT) today, July 14, 2008, rather than as previously announced for July 17. The toll-free dial-in number for the live call is 800-762-8779. The number for international callers is 480-248-5081. Participants should ask the operator for the Associated Banc-Corp second quarter 2008 earnings call, or for call ID number 3901460. A replay of the call will be available starting at 1 p.m. CT July 14, 2008, through Aug. 4, 2008, by calling 800-406-7325 (toll-free) domestically or 303-590-3030 internationally. The call ID number, 3901460, is required to access the replay.

Associated Banc-Corp, headquartered in Green Bay, Wis., is a diversified bank holding company with total assets of $22 billion. Associated has approximately 300 banking offices serving 180 communities in Wisconsin, Illinois, and Minnesota. The company offers a full range of traditional banking services and a variety of other financial products and services. More information about Associated Banc-Corp is available at www.associatedbank.com.

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