Associated Earns 68 Cents Per Share in 2nd Quarter

Business Wire,  July 18, 2002  

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Net charge-offs for the second quarter were $7.6 million, up slightly from $7.1 million in the first quarter of 2002 and $3.6 million for the year earlier quarter. For the first six months, the company had net charge-offs of $14.7 million, up from $5.8 million for the same period last year. Non-performing loans increased to $87.3 million at June 30, 2002, up from $71.7 million at March 31, 2002, and $53.1 million at June 30 last year. Non-performing loans at June 30, 2002 include a $22 million credit. The payments are current on this credit, but Associated has doubt with respect to future collectibility. The provision for loan losses was increased to $12 million for the quarter, up from $11.3 million for the first quarter of 2002 and $6.4 million for the year earlier quarter. For the first six months of 2002, the provision for loan losses was $23.3 million, up from $12 million for the same period last year. The provision for loan losses reflects the increase in non-performing assets and charge-offs. The ratio of allowance for loan losses to total loans was 1.50 percent at June 30, 2002. The allowance includes a $10 million allocation for the above-mentioned credit.

"We are optimistic that interest rates will remain relatively stable and that the economy will improve at a faster rate in the second half of 2002. We believe these conditions will translate into improved asset quality and loan growth, allowing us to grow earnings per share 10 to 12 percent in 2002, as previously projected" Associated Banc-Corp President and CEO Robert C. Gallagher said.

"At the same time, the successful integration of Signal Financial into the Associated brand and operating systems positions us to take full advantage of our greatly increased market position, capabilities and efficiency in the vibrant markets of Eastern Minnesota," he added.

"We're very pleased that our progress on our strategic initiatives is delivering improved value for our shareholders," Gallagher said.

Associated Banc-Corp, headquartered in Green Bay, Wis., is a diversified multibank holding company with total assets of $14.5 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.

This news release contains forward-looking statements that involve a number of risks and uncertainties. Among the important factors that could cause actual results to differ materially from those indicated by such forward-looking statements are interest rates, changes in the mix of the company's business, competitive pressures, general economic conditions and the risk factors detailed in the company's periodic reports and registration statements filed with the Securities and Exchange Commission.

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