Associated 2nd Quarter Earnings Per Diluted Share up 12 Percent

Business Wire, July 17, 2003

Noninterest expense for the second quarter 2003 grew by approximately $12.7 million, or 14 percent, compared to the second quarter of 2002, with $9.1 million of the increase coming from higher mortgage servicing rights expense. While the strong mortgage refinance activity benefited mortgage banking income in the second quarter, it increased the prepayment speeds of Associated's mortgage portfolio serviced for others, a key factor behind the valuation of mortgage servicing rights. Mortgage servicing rights expense included an $8.5 million addition to the valuation allowance compared to a $.8 million addition in the second quarter of 2002. The mortgage servicing asset at June 30, 2003, represents 0.51 percent of the total $5.5 billion residential mortgage portfolio serviced for others. Compared to first quarter 2003, noninterest expense was up $5.8 million, with $3.0 million of the increase in personnel expense, directly attributable to the addition of CFG personnel, as well as a $1.4 million increase in mortgage servicing rights expense.

"Although our first half results are encouraging, our 2003 goal of 10 percent earnings per share growth was predicated on an improving economy, moderate interest rate increases, and increased confidence among consumers and businesses. While economic stimulus from Washington and recent stock market strength are helpful, a sustained economic recovery may take some time to materialize. The continuation of lower rates will put pressure on our margin, but mortgage banking should remain strong for the rest of the year. We remain cautiously optimistic about our financial performance in 2003," Beideman said.

The company repurchased 476,000 shares of its common stock during the second quarter of 2003 at an average cost of $36.12 per share. Associated repurchased 1.2 million shares in the first six months of 2003 at an average cost of $34.66 per share.

Associated Banc-Corp, headquartered in Green Bay, Wis., is a diversified multibank holding company with total assets of $15.2 billion. Associated has more than 200 banking offices serving more than 150 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 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 descriptions of 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.