To our shareholders: 

In 2011, the goals we set forth for Associated Banc-Corp were attained. Earnings increased each quarter. The credit quality of our loan portfolio continued to improve. Our loans outstanding increased substantially, with balanced growth across the major categories. Associated’s credit ratings improved and our capital levels remain very strong. We successfully repaid our TARP funds in September, without raising additional common equity. We dedicated ourselves to a renewed customer-centric focus. We celebrated 150 years of serving our communities this past year, and we reflect on this long history as we work to ensure continued growth in 2012 and beyond. 

## delivering on Our Commitment to Shareholders 

We set out in 2011 with a few specific goals, including: 

• Returning the company to sustained and growing profitability – We achieved four consecutive quarters of growing profitability and delivered full-year net income available to common shareholders of $115 million. 

• Repaying TARP funds in an efficient and shareholder- friendly manner and addressing open regulatory matters –  In April and September, we repaid TARP funds without raising additional common equity and the OCC Memorandum of Understanding (MOU) was terminated. 

• growing the loan portfolio throughout 2011 –  We grew loans and gained market share throughout the year; total loans grew 11% year-over-year, and commercial and business loans grew 17% year-over-year. 

As we look back, we are proud of having delivered on each of these commitments during 2011. 

We also set out to grow our core businesses within our markets and to expand into new markets. We are pleased by our accomplishments on these fronts. We continued to enhance the customer experience by making investments in our people, our infrastructure and our facilities. Our performance this year was supported by strong loan growth across many of our portfolios, resulting from increases in both the number and depth of customer relationships. We also benefited from a strong credit recovery in all of our portfolios. This performance was achieved in spite of revenue headwinds, including the current low interest rate environment, as well as increased regulation from the implementation of the Dodd-Frank legislation. 

## delivering on Our Strategy 

Our Commercial Bank continues to be successful across all of our major markets. During the year, we added over 60 commercial lenders and grew commercial and business loans strongly over the prior year. In 2011, we promoted Donna Smith to lead the Commercial Banking group. 

Commercial Deposit and Treasury Management, Specialized Industries and Commercial Financial Services have now all been aligned under the leadership of John Utz. John has a broad background in specialized commercial lending and treasury management and is leading the charge on our efforts to grow commercial deposits. 

Our Commercial Real Estate business, under the leadership of Breck Hanson, continues to provide us with numerous opportunities to work with seasoned and experienced developers. During the past year, we have expanded this business to new markets, including Cincinnati and Indianapolis, by bringing on board seasoned real estate lending teams with local experience. In 2012, we will further expand our Commercial Real Estate business into Michigan. 

We have continued to invest in our Retail Bank under the leadership of David Stein. During 2011, we launched a multi- year project to improve customer experience in our branches, with more than 30 relocated, remodeled or new offices and new signage in most locations. Our plans for 2012 include remodeling another 50 branches, while at the same time consolidating more than 20 branches into other nearby locations. We have enhanced product offerings and elevated service levels for our Premier Banking clientele. In addition, we have made major 

