Philip B. Flynn – President, Chief Executive Officer & Director Christopher J. Del Moral-Niles – Chief Financial Officer & Executive Vice President of the company and bank Scott S. Hickey – Executive Vice President, Chief Credit Officer of the company and bank

Scott R. Siefers – Sandler O’Neill & Partners, LP. Christopher McGratty – Keefe, Bruyette & Woods Emien Harmon – Jefferies & Co. Dave Rochester – Deutsche Bank Securities Ken Zerbe – Morgan Stanley Jon Arfstrom – RBC Capital Markets Matthew Clark – Credit Suisse Terry Mcevoy – Oppenheimer & Co. Steve [Sigerello] – UBS Peyton Green – Stern, Agee & Leach Mac Hodgson – SunTrust Robinson Humphrey Welcome to the Associated Banc-Corp’s fourth quarter 2012 earnings conference call. At this time all participants are in listen-only mode. We will be conducting a question and answer session at the end of this conference. Copies of the Slides that will be referenced during today’s call are available on the company’s website at Investor.AssociatedBanc.com. As a reminder, this conference call is being recorded. During the course of the discussion today, Associated’s Management may make statements that constitute projections, expectations, beliefs, or similar forward-looking statements. Associated’s actual results could differ materially from the results anticipated or projected in any such forward-looking statements. Addition detailed information concerning the important factors that could cause Associated’s actual results to differ materially from the information discussed today is readily available on the SEC website in the risk factors section of Associated’s most recent Form 10K and on any subsequent SEC filings. These factors are incorporated herein by reference. Following today’s presentation instructions will be given for the question and answer session. At this time I would like to turn the conference over to Philip Flynn, President and CEO for opening remarks.

Welcome to our fourth quarter earnings conference call. Joining me today are Chris Niles, our Chief Financial Officer and Scott Hickey, our Chief Credit Officer. Highlights for the fourth quarter are outlined on Slide Number Two. This quarter’s solid results were driven by strength across all of our businesses. In spite of the many uncertainties during the quarter our bankers remained focused on serving our customers and growing the franchise. For the quarter we reported net income to common shareholders of $45 million or $0.26 a share and that compares to net income of $40 million or $0.23 a share a year ago. Return on tier one common equity for the quarter was 9.6% up from 9% a year ago. Loan balances increased by 3% during the quarter with the majority of growth coming from the commercial portfolios. Average deposits increased by 7% from the third quarter to $16.7 billion with period end non-interest bearing deposits growing by 10%. Net interest income increased by $6 million compared to the last quarter and the increase included approximately $2 million of non-recurring interest income received during the quarter related to an income tax refund. Our net interest margin for the quarter was 332 basis points. Credit quality indicators continued to improve and we recorded a $3million provision for loan losses during the quarter, entirely driven by loan growth. We increased the quarterly dividend 60% to $0.08 per share and we repurchased $30 million of common stock, or about two million shares at an average price of $12.70. Even after completing these capital actions, our tier one common equity ratio remains very strong at 11.58%. For the full year on Slide Three we reported net income to common shareholders of $174 million or $1 per share, a significant increase from $0.66 per share…

(Operator instructions) your first question comes from Scott R. Siefers – Sandler O’Neill & Partners, LP. Scott R. Siefers – Sandler O’Neill & Partners, LP.: My first question was just on the reserve build for mortgage repurchase issues. I guess that could be one or two things, just sort of general elevated levels of repurchase requests or a new thing that a lot of the big banks learned about back in December was the increased look back period from ’04 to ’06. I guess, what dynamics were at play in the need to build that up please?

It’s not an increased look back period. What we have seen is we’ve seen very moderate and practically immaterial volume in this area in 2009 and ’10. We saw a modest amount of increase but was still relatively immaterial in ’11 and into the first part of ’12 and we saw increasing volumes of requests coming through in 2012. So we thought it was prudent and appropriate given the new OCC guidance that was out there and what we saw others doing to establish a reasonable and prudent reserve. The bulk of the activity was related to ’06, ’07, ’08 lending and we think it’s a reserve that’s in line with peer levels and appropriate for the level of our foreclosure activity. Scott R. Siefers – Sandler O’Neill & Partners, LP.: Does that kind of cover you for both Fannie and Freddie or just one of them?

No, it’s for all agency activity. Scott R. Siefers – Sandler O’Neill & Partners, LP.: I just want to make sure I understand the provision guidance for next year. It’s still an excellent and still improving credit profile overall and I just want to make sure, it sounds like the provisioning for next year is probably going to look a lot like what we saw in the third quarter where kind of some nominal provision just for loan growth but not necessarily to cover whatever charge offs might come through.

Let’s be clear, the third quarter was zero. The fourth quarter was $3 million and that’s largely to accommodate growth and we’ll continue to provide to accommodate growth provided the credit trends continue to improve.

Just a little more on that, we’ve seen continued meaningful improvement in our credit quality now for three years. We’ve also seen significant loan growth over the last two years so the benefit of improvement in the credit portfolio has offset the need to provide for loan growth over the last two years in a meaningful way but that benefit is coming to an end now with the credit portfolio having improved to the point it has and with continued robust loan growth, we expect the need to cover some of that with provisioning. Scott R. Siefers – Sandler O’Neill & Partners, LP.: But, it doesn’t sound like the provision is going to be anywhere near what an anticipated level of charge offs would be in the coming year?

Likely not.

Your next question comes from Christopher McGratty – Keefe, Bruyette & Woods. Christopher McGratty – Keefe, Bruyette & Woods: On the expenses, just so I’m clear, the run rate for ’13 is off the reported $682, right?

Correct. Christopher McGratty – Keefe, Bruyette & Woods: Can you talk about capital deployment through acquisitions? I think during the past quarter you talked more openly about completing possibly a bank deal. Can you talk about maybe what markets, what size and then do you think in reality you’ll announce a deal this year?

What we’ve been talking about is a desire to deploy capital in an accretive way. We think the best way to do that is to look at opportunities in our markets where we have scale so that if we were to acquire part of an institution or an entire institution there would be very significant and highly likely costs take outs to drive the economics of the transaction. I think it’s reasonably likely we’ll do something this year along those lines. Christopher McGratty – Keefe, Bruyette & Woods: Then this last one and I’ll just back in the queue, the tax benefit of $5 million there was also the $2 million to spread income, those are two separate adjustments we should be making? Am I interpreting that correctly?

That’s correct, those are two separate transactions.

Your next question comes from Emien Harmon – Jefferies & Co. Emien Harmon – Jefferies & Co.: Can you talk about your loan growth guidance? You guys pointed as a kind of high single digit, can you give us a sense of the mix of loan growth and just kind of which areas of the loan book you think are going to be supporting that?

When you look at what we just did in the fourth quarter, we had essentially completely balanced loan growth between commercial banking activities, commercial real estate activities, and our residential mortgage business somewhat offset by the continued decline in the home equity loan book. We expect balance growth like that next year. In other words, all of our major businesses are doing quite well in regards to loan growth. Emien Harmon – Jefferies & Co.: If I think about maybe the commercial loan book specifically, you guys have obviously been beneficiaries of picking up some market share kind of in your home market. Do you expect that to continue as well or is the mix within the commercial book maybe going to change a little bit as well?

No, we expect to grow our basic commercial banking business in our footprint as well as grow the specialty businesses that are in the commercial areas as well. Emien Harmon – Jefferies & Co.: I did notice the commercial or specifically the C&I loan yields were up quarter-over-quarter and I’d just be kind of interested in terms of the business mix that’s actually driving you to see expansion there where the majority of your peers are seeing those yields compress.

We did benefit from a few interest recoveries that accrued to us during the quarter that particularly had an impact on the improvement in the C&I book. The overall trend continues to be more of a defensive trend not a increasing trend without the benefit of those recoveries.

Your next question comes from Dave Rochester – Deutsche Bank Securities. Dave Rochester – Deutsche Bank Securities: Could you just update us on loan pricing trends on the commercial side? I know you mentioned resi was around 3% which sounded pretty stable with last quarter. Are you seeing that kind of stability on the commercial side as well?

It’s stable to the extent that we’re picking and choosing what type of credit we’re putting on. In some markets, particularly in some of the leveraged or sponsored business I think pricing is becoming quite competitive to the point where you have to ask yourself whether you’re getting an appropriate return for the risk so we’re being selective there. I guess the word to take is that we’re being disciplined about not just the residential mortgages that we’re putting on but we’re making sure we’re getting paid for the commercial real estate, the specialized book as well as the basic commercial banking business. We have fully implemented a risk adjusted return on capital model throughout all of our business lines. Our incentives are paid off of that as well as earnings throughout all of our business lines and so people are quite focused on making sure that they are being paid for risk and getting an appropriate return on capital. Dave Rochester – Deutsche Bank Securities: Just switching gears to the balance sheet, I noticed that securities grew along with short term borrowings. I was just wondering what the driver was for that and if we should expect to see more of that in 2013?

We prefunded some purchases at the end of the year in anticipation of volumes and activities going into the first of the year. So we purchased securities that largely settled late December. We borrowed short term knowing we would get deposit inflows right at the end of the year that would carry that into the first quarter so it’s just a prefunding of first quarter activity. Dave Rochester – Deutsche Bank Securities: You guys are just buying more of the same stuff?

Yeah, no material changes in our overall investment philosophy, structure, or composition.

You certainly shouldn’t expect to see the securities book grow by $0.5 billion a quarter. Dave Rochester – Deutsche Bank Securities: Just one last one on the expense side, heading into next quarter I know year-over-year we should be flat. Should we start to see the step down in 1Q despite any kind of seasonal bump up you might get? I mean, are the expense cuts going to cut into that and actually drive that number down in 1Q?

I would expect that 1Q would probably be down, yes. We’re trying to think about yearly numbers and drivers because any quarter can move around a bit. But clearly, the BSA expenses are very largely behind us. We had some unusual expenses in the fourth quarter related to efficiency moves which won’t be repeated. So yes, I would think you would start to see it moderate.

The fourth quarter is typically our highest net expense quarter so you’ll see it moderate.

Your next question comes from Ken Zerbe – Morgan Stanley. Ken Zerbe – Morgan Stanley: Just a couple of quick ones, in terms of FHOB advances, you said they come due in the first half, do you have more specific timing on that? Is that lump sum or is that several tranches over the two quarters?

There are $500 million tranches, $200 million in the first quarter and $300 million in the second. Ken Zerbe – Morgan Stanley: The other thing, can you just explain a little bit the $200 million benefit, I think it was interest on a tax refund in [NII] line, was that related to the $5 million of refund because it seems like a rather large amount of interest?

Actually, the refund was actually $50 million and it’s related to the way we had accounted for essentially our loan losses and we were able to go back in and recharacterize our loan losses for tax purposes and amend our return and claim back $50 million that we had not previously claimed and the interest was related to those which was in turn filed for ’09 and ’10 and the interest therefore related to that was almost $1 million as we received it in the fourth quarter of 2012. Ken Zerbe – Morgan Stanley: But the $50 million?

Is pure cash.

We got a cash refund of $50 million and we had earnings on that cash of $2 million.

Your next question comes from Jon Arfstrom – RBC Capital Markets. Jon Arfstrom – RBC Capital Markets: A couple of follow up questions, on the loan growth at Slide Five you made some comments that you thought a lot of it had to do with some year end activity but it was a pretty big jump compared to the type of growth you saw on Q3 and I’m just curious if you think there is anything else going on? If you’re seeing some increased borrower confidence or do you attribute most of it to year end?

If you’ve got Slide Five open you can see that commercial, resi, commercial real estate, all grew about the same amount net. Our power business grew, mortgage warehouse grew with all the activity that is going on. Oil and gas had some pay downs that will come right back up as we go into this year so I wouldn’t put much concern about that and home equity has continued to pay down consistently. The area where there was some year end activity was in that general commercial loan space where we had some year end activity from our customers including some syndicated loan volume where we’ve underwritten some loans and then those loans will be sold to other institutions. In fact, have already been sold to other institutions this year, so that drove a little bit of the growth. But generally, all of our business units are out doing a good job now, and have been for a while, of gaining market share and gaining wallet. I would expect, as I said earlier, continued growth in all the business units in a well balanced way but probably at more of the pace that you saw in the combination of the third and fourth quarter not just the fourth quarter. If you annualize the fourth quarter you’d be in double digit loan growth. We’ve had double digital loan growth for the last two years and at some point that needs to moderate to more of the high single digit area and that’s what we expect. Jon Arfstrom – RBC Capital Markets: That drives your comments with seasonally low Q1.

Yes, Q1 is usually low and then we’re going to have some pay downs as we syndicate some loans so that’s going to drive a fairly low first quarter which we expect to pick up from there. Jon Arfstrom – RBC Capital Markets: So this is maybe the more quote new Associated loan mix and it’s what we’ll likely see in the future, this kind of activity at year end?

Well, it all depends on transactions. Remember, we had an unusual year end with potential changes in tax laws so we had some privately owned companies doing transactions to get in front of whatever might happen with capital gains. As it turned out, not a whole lot happened with capital gains but we didn’t know that a month or six weeks ago. Jon Arfstrom – RBC Capital Markets: A couple more, you made the comment market disruption opportunities, is that still primarily Milwaukee or is there anything else happening?

It mostly relates to our very deliberate calling effort around changes, particularly in the Milwaukee area, but in other parts of the footprint too. Jon Arfstrom – RBC Capital Markets: Then just last question, a small one on mortgage banking, but my sense is that it is lower than typical banks, but what percentage of those revenues are refinance driven?

A lot, most of it. Just like everybody else, the boom in mortgage banking that we’ve seen all in 2012 and which frankly is still continuing as we speak, is driven by refi. Jon Arfstrom – RBC Capital Markets: So when you talk about higher fees but potentially lower mortgage, that’s what you’re talking about is the refinance piece of it?

The fee comment is higher fees from all of our lines of business private banking, insurance, foreign exchange, capital market swap activity. But, we expect lower mortgage banking year-over-year as each of the quarters in 2012 was individually more than the full year 2011 and we don’t see that pace continuing.

It may well continue as we get early into this year but our assumption is that it tails off as we get later into the year.

Your next question comes from Matthew Clark – Credit Suisse. Matthew Clark – Credit Suisse: Maybe on the loan growth front, can you give us a sense for your underlying assumptions there may be on the outlook on the economy? Are you assuming really no pick up or much of pick up given that you’re looking for a high single digit and you guys have been doing 10 plus? Also, whether or not there’s any incremental change in your expectation for an increase in utilization as well?

The assumptions around our loan growth is that utilization is flat. It has been flat at high 40s, 48% to 49% now for three quarters. We’re not assuming any big pick up there. We’re not assuming any big pick up from economic activity. In general, as we’ve talked about numerous times, the upper Midwest has done relatively well compared to other parts of the country. Manufacturing continues to do pretty well, there continues to be change and disruption like we were just talking about with some of our competitors and we expect to be the beneficiary of all that but we’re not expecting anything heroic out of the economy to help us along here. Matthew Clark – Credit Suisse: Then in terms of the latest growth of $445 you guys put up this quarter, can you break that down by market in terms of maybe some of your LPOs, the contribution there and some of your other major markets?

You see in our Slide deck by category where the growth came from. By markets we had, as you would expect, significant balance changes in our footprint. Illinois frankly, led the pack with a significant amount of the growth. Wisconsin about maybe a third of what we saw in Illinois. Now, this is the combination across business units so it’s commercial and commercial real estate. There’s a lot of activity in Illinois in those areas. About a third of that in Wisconsin, Minnesota about double Wisconsin and then in our specialty business, say in oil and gas, a lot of that activity as you would expect is in the oil patch. So, it’s quite diverse across our geographies. In the LPOs we had good solid growth commercial real estate driven in Indianapolis and Cincinnati. Michigan is newer but is starting to put on some business as well. Matthew Clark – Credit Suisse: As you continue to retool the banking model can you give us a better sense of what’s left to do and how significant that might be?

We continue to invest into the retail branch network. This past year we touched 50 branches and we expect to touch another 50 branches in 2013. That will start to come to an end as we get into early 2014, we’ll largely be completed. We’ve made significant investments already into enhancing mobile banking, changing out many of the ATMs to being imaged enabled. A lot of that is already done. We’ll always have continued upgrades and enhancements to our offering so we’ll have a major upgrade of our online offering later this year. Although, from a cost point of view it’s not terribly significant. The BSA AML issue, as we talked about, is largely behind us from an expense point of view. We’ve upgraded significantly our internal financial systems and that’s done. We are in the process of upgrading our commercial loan booking system, that’s a project that is kicking off right now. But again, most of these are not big dollar amounts. The big dollar amounts here were really driven by the need to invest into the physical retail footprint and we are now more than half way through that project. Matthew Clark – Credit Suisse: Do you sense that there might be some additional severance related charges going forward in the first half?

We’re not planning on any right now. We have closed and consolidated 10% of our branch network in the past, call it 13 months. So, I think we’ve done most of what we need to do there, if not all. We’ll continue to evaluate that. We’re in an industry that has over capacity and we’re in an industry where consumers’ behavior is continuing to change so that they’re not coming into branches to do their routine transactions and we’ve been investing to make sure that they have alternative methods to transact with us. As that continues to change we’ll continue to evaluate our physical distribution network but we’ve taken a pretty good swing at it compared to most institutions already.

Your next question comes from Terry Mcevoy – Oppenheimer & Co. Terry Mcevoy – Oppenheimer & Co.: Just a question on the capital deployment, if I just annualize your dividend versus consensus for this year you’re pretty close to a 30% payout. As I look out to ’13 or as you look out to ’13 in looking at capital deployment do you see a heavier emphasis on buyback just given where you’re dividend is today versus at least estimated earnings?

Well, you’ll recall that we announced an authorization for $125 million of buybacks on which we executed $30 in the fourth quarter. You can certainly expect that we will continue to look at share buybacks through the course of this year. You’re correct, using consensus numbers at $0.32 we’re probably in that 30% range or so and so a lot of our dollars will be going towards most likely share buybacks. Then we’ll also be looking, as I said, to do an in market acquisition if we can find something that makes sense for our shareholders. Terry Mcevoy – Oppenheimer & Co.: Then on the expense management side, have you shared any specific targets, cost saving targets and how do you look at reinvesting within the business and specifically what areas are you reinvesting in?

I kind of covered that a moment ago but what we continue to make investments is into the physical footprint. Most of those costs, of course, are capitalized so what we’ve done to date is starting to roll through our income statement in the form of capital expenses and those will continue and will build for a while. Then there’s some continued systems work but that’s not nearly as significant. So we’ve got a headwind from continuing to need to invest in the franchise to make up for past under investment. We’ve got the benefit of the BSA AML remediation costs rolling away. We’re being quite disciplined about adding staff. In fact, the headcount has shrunk. When you net all of that out we believe that as we’ve guided, flat expenses year-over-year is quite achievable.

Your next question comes from Steve [Sigerello] – UBS. Steve [Sigerello] – UBS: I just want to follow up on a question on loan mix. If I look at the pie chart on page five, I’m just kind of curious as you look out and kind of think strategically over the next three years or so, where do you want that mix to be and what are some of the components as you look ahead in terms of that future loan mix?

If you look at that pie chart, residential mortgage will continue to grow but it will certainly be likely offset by shrinkage in home equity as people refi into low costs permanent loans or into hybrid loans out of their home equity loans. We expect the mix of resi, home equity and installment to be somewhere ultimately around 35% to 40%, maybe down towards 35%. First lien business lending which includes commercial banking, small business lending as well as our specialty businesses has grown and will probably continue to grow. But depending on our growth in commercial real estate it will probably settle in a 40% range and commercial real estate would take up the rest. We’re somewhat under invested still in commercial real estate compared to the roughly 30% or so of the portfolio that we think we want to grow that to. Steve [Sigerello] – UBS: Then within commercial and business lending mix, how big do you think some of those specialty segments might get to be?

Well, if you look at our mortgage warehouse business, as we got to year end the outstandings, they were about $0.5 billion and then the combination of our oil and gas business and power and utilities business was about $0.5 billion between the two of them. We expect the mortgage warehouse business probably from an outstandings point of view to decline somewhat as we go through the year because it’s so tied to refi activity. Then, we expect power and utilities and oil and gas to continue to grow. The combination of all three of those specialty businesses which are the dominate ones, is about $1 billion and probably stay around that range. It probably goes up a couple hundred, $300 million maybe by the time you get to the end of this year. So, it is becoming more meaningful but certainly in the context of a $15 billion portfolio which will be growing, certainly isn’t a dominate part of the portfolio. Steve [Sigerello] – UBS: As I kind of think out it seems like as some of those other components grow on the CRE side as well it sounds like you might have some yield pick up opportunities as you look ahead. Is that a fair way to think about it?

I like your thinking. We’re in a low interest rate world where the portfolio continues to mature and be in churn so a lot of our, on the resi side you continue to refi. We refi a lot of our own stuff so that’s slowly grinding down. The commercial real estate business is becoming more competitive but the pricing is still reasonable for the risks involved. Our specialty business tends to get pretty decent pricing. But, when you look at the whole portfolio the expectation is that asset yields continue a slow grind down in this low rate environment.

Your next question comes from Peyton Green – Stern, Agee & Leach. Peyton Green – Stern, Agee & Leach: A couple questions, first to what degree would you expect the loan growth expansion to actually drive earning asset growth? I know in the past couple years the loan growth has really absorbed securities cash flow?

Correct. So we no longer expect to have net run off in the securities book period-to-period so while you won’t see the growth you saw in the fourth quarter order of magnitude you will see ongoing stabilization and growth in the securities portfolio which means the balance sheet growth will be driven by loan growth.

You’ll see the balance sheet expanding as we go through the year. Peyton Green – Stern, Agee & Leach: Then separately, what is your expectation of securities cash flow and what’s the role off yield and where are you reinvesting these days?

Unfortunately, the reinvestment yields continue to be grinding lower and lower just as they are in the loan book so unfortunately they’re down in the one handle area on the margin investment and reinvestment are unfortunately still cash flowing back at $100 million plus per month.

I think we’ve talked about this before, but we are not and maybe we’re going to be proven wrong one day, but we are not going out the yield curve in that search for yield in the securities book or in our resi book. We’re not booking 30 year resi, we’re not booking long dated securities. We’re clearly giving up yield there in the short run. But we really don’t want to own really long dated securities and 30 year mortgages when and if rates turn. Peyton Green – Stern, Agee & Leach: I know you’ve done a great job to reposition the borrowings from the whole sale nature of the deposit base from a few years back but in that vein is it time to go a little longer on the liabilities side?

It’s a great question and the answer is not yet. We hope we start pricing up CDs at just the right moment. But at this point, as you saw, the growth that we had in our deposits this past quarter and the fact that we’re bringing on a lot of deposits at very low costs it’s not time yet for us to extend out there.

Your next question comes from Mac Hodgson – SunTrust Robinson Humphrey. Mac Hodgson – SunTrust Robinson Humphrey: On M&A and market M&A can you remind of us the asset size of an institution you’d be looking to target?

It’s hard to say, it depends on what the opportunities are. I think it’s highly likely since this institution hasn’t done a sizeable acquisition for six plus years that we would do something pretty bite sized before we ran and do a little walking. We’ve worked really hard to put Associated in a good sound financial position. We’re growing across our businesses, we’re doing well, we are not going to jeopardize the franchise by doing something large that our shareholders end up paying for. Mac Hodgson – SunTrust Robinson Humphrey: You touched on this in your prepared remarks, but could you elaborate on any sort of deposit activity you saw in the fourth quarter or you expect to see in the first quarter related to TAG? I’m just sort of curious what sort of trends you’re seeing.

It’s too early to tell really but we had a significant inflow in front of TAG expiration. Some of that was from larger depositors. We don’t know exactly where those deposits came from but when you look at our profile, with the capital we have, with the ratings we have, we’re really not anticipating any issues at this institution. If anything, we expect to be a beneficiary of people getting cold feet without TAG protection in perhaps smaller or weaker institutions.

(Operator instructions) Showing no further questions this will conclude the question and answer session. I would like to turn the conference back over to Phil Flynn for any closing remarks.

Thank you all for joining us today. The quarter’s strong performance was highlighted by loan and deposit growth as well as higher net interest income and as we’ve been talking about we’re going to remain focused on deploying capital in value added transactions which will build shareholder value and we’re optimistic on our ability to continue to growth the franchise this year. We look forward to talking to you again in three months and if you have any questions, please give us a call. As always, thanks for your interested in Associated Banc.

Ladies and gentlemen this concludes the Associated Banc-Corp fourth quarter 2012 conference call. Thank you for attending today’s presentation, you may now disconnect.