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UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2006

Commission file number 013393

AMCORE Financial, Inc.



|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|NEVADA                                                         |  | 363183870                          
|(State or other jurisdiction of incorporation or organization) |  | (I.R.S. Employer Identification No.)

501 Seventh Street, Rockford, Illinois 61104

Telephone Number (815) 9682241

Securities Registered Pursuant to Section 12(g) of the Act:

Common Stock, $0.22 par value

Common Stock Purchase Rights

Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

x  Yes ̈No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of accelerated filer and large accelerated
filer in Rule 12b-2 of the Exchange Act (Check one):



|                         |  |                      |  |                       
|------------------------ |  | -------------------- |  | ----------------------
|Large accelerated filer ̈ |  | Accelerated filer  x |  | Non-accelerated filer ̈

Indicate by check mark whether the registrant is a shell company
(as defined in Exchange Act Rule 12b-2).

 ̈Yes  x  No

As of May 1, 2006, 24,836,000 shares of common stock were outstanding. The aggregate market value of the common equity held by non-affiliates, computed by reference to the average bid and ask price of such common equity, as of the last
business day of the registrants most recently completed second fiscal quarter was approximately $683,506,000.



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##### Table of Contents

AMCORE Financial, Inc.

Form 10Q Table of Contents



|              |  |                                                                                                    |  |           
|------------- |  | -------------------------------------------------------------------------------------------------- |  | ----------
|              |  |                                                                                                    |  | PageNumber
|PART I        |  | FINANCIAL INFORMATION                                                                              |  | 3         
|              |  |                                                                                                   
|Item 1        |  | Financial Statements (unaudited)                                                                   |  | 3         
|              |  |                                                                                                   
|              |  | Consolidated Balance Sheets as of March 31, 2006 and December 31, 2005                             |  | 3         
|              |  |                                                                                                   
|              |  | Consolidated Statements of Income for the Three Months Ended March 31, 2006 and 2005               |  | 4         
|              |  |                                                                                                   
|              |  | Consolidated Statements of Stockholders Equity for the Three Months Ended March 31, 2006 and 2005 |  | 5         
|              |  |                                                                                                   
|              |  | Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2006 and 2005           |  | 6         
|              |  |                                                                                                   
|              |  | Notes to Consolidated Financial Statements                                                         |  | 7         
|              |  |                                                                                                   
|Item 2        |  | Management's Discussion and Analysis of Financial Condition and Results of Operations              |  | 24        
|              |  |                                                                                                   
|Item 3        |  | Quantitative and Qualitative Disclosures About Market Risk                                         |  | 47        
|              |  |                                                                                                   
|Item 4        |  | Controls and Procedures                                                                            |  | 48        
|              |  |                                                                                                   
|PART II       |  | OTHER INFORMATION                                                                                  |  | 48        
|              |  |                                                                                                   
|Item 1        |  | Legal Proceedings                                                                                  |  | 48        
|              |  |                                                                                                   
|Item 1A.      |  | Risk Factors                                                                                       |  | 48        
|              |  |                                                                                                   
|Item 2        |  | Unregistered Sales of Equity Securities and Use of Proceeds                                        |  | 48        
|              |  |                                                                                                   
|Item 6        |  | Exhibits                                                                                           |  | 49        
|              | 
|Signatures    |  | 50                                                                                                
|              | 
|Exhibit Index |  | 51                                                                                                



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##### Table of Contents

PART 1.
ITEM 1. FINANCIAL STATEMENTS

AMCORE FINANCIAL, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Unaudited)



|                                                                         |  |                                    |           |            |                  |   |           |   |  |  |          |  
|------------------------------------------------------------------------ |  | ---------------------------------- | --------- | ---------- | ---------------- | - | --------- | - |  |  | -------- | -
|                                                                         |  | March 31,2006                      |           |            | December 31,2005 |  
|                                                                         |  | ( in thousands, except share data) |          
|ASSETS                                                                   |  |                                    |           |            |                  |   |           |  
|Cash and cash equivalents                                                |  | $                                  | 121,132   |            |                  | $ | 144,350   |  
|Interest earning deposits in banks and fed funds sold                    |  |                                    | 21,610    |            |                  |   | 5,713     |  
|Loans held for sale                                                      |  |                                    | 30,895    |            |                  |   | 24,138    |  
|Securities available for sale, at fair value                             |  |                                    | 1,131,134 |            |                  |   | 1,183,384 |  
|Gross loans                                                              |  |                                    | 3,774,498 |            |                  |   | 3,721,864 |  
|Allowance for loan losses                                                |  |                                    | (40,733   | )          |                  |   | (40,756   | )
|                                                                         |  |                                    |           |            |                  |   |           |  
|Net loans                                                                |  | $                                  | 3,733,765 |            |                  | $ | 3,681,108 |  
|Company owned life insurance                                             |  |                                    | 133,411   |            |                  |   | 132,472   |  
|Premises and equipment, net                                              |  |                                    | 85,912    |            |                  |   | 84,818    |  
|Goodwill                                                                 |  |                                    | 6,148     |            |                  |   | 6,148     |  
|Foreclosed real estate, net                                              |  |                                    | 341       |            |                  |   | 621       |  
|Other assets                                                             |  |                                    | 87,051    |            |                  |   | 82,150    |  
|                                                                         |  |                                    |           |            |                  |   |           |  
|Total Assets                                                             |  | $                                  | 5,351,399 |            |                  | $ | 5,344,902 |  
|                                                                         |  |                                    |           |            |                  |   |           |  
|LIABILITIES                                                              |  |                                    |           |            |                  |   |           |  
|Deposits:                                                                |  |                                    |           |            |                  |   |           |  
|Non-interest bearing deposits                                            |  | $                                  | 479,533   |            |                  | $ | 524,875   |  
|Interest bearing demand deposits                                         |  |                                    | 1,864,912 |            |                  |   | 1,873,274 |  
|Time deposits                                                            |  |                                    | 1,209,365 |            |                  |   | 1,188,337 |  
|                                                                         |  |                                    |           |            |                  |   |           |  
|Total bank issued deposits                                               |  | $                                  | 3,553,810 |            |                  | $ | 3,586,486 |  
|Wholesale deposits                                                       |  |                                    | 686,611   |            |                  |   | 626,730   |  
|                                                                         |  |                                    |           |            |                  |   |           |  
|Total deposits                                                           |  | $                                  | 4,240,421 |            |                  | $ | 4,213,216 |  
|Short-term borrowings                                                    |  |                                    | 374,936   |            |                  |   | 489,334   |  
|Long-term borrowings                                                     |  |                                    | 269,541   |            |                  |   | 169,730   |  
|Other liabilities                                                        |  |                                    | 65,711    |            |                  |   | 74,105    |  
|                                                                         |  |                                    |           |            |                  |   |           |  
|Total Liabilities                                                        |  | $                                  | 4,950,609 |            |                  | $ | 4,946,385 |  
|                                                                         |  |                                    |           |            |                  |   |           |  
|STOCKHOLDERS' EQUITY                                                     |  |                                    |           |            |                  |   |           |  
|Preferred stock, $1 par value; authorized 10,000,000 shares; none issued |  | $                                  |          |            |                  | $ |          |  
|Common stock, $0.22 par value; authorized 45,000,000 shares;             |  |                                    |           |            |                  |   |           |  
|                                                                         |  | 2006                               |           | 2005       |                  |   |           |   |  | 
|Issued                                                                   |  | 29,951,593                         |           | 29,938,942 |                  |   |           |   |  |  |          |  
|Outstanding                                                              |  | 24,826,191                         |           | 24,810,703 |                  |   | 6,655     |   |  |  | 6,652    |  
|Treasury stock                                                           |  | 5,125,402                          |           | 5,128,239  |                  |   | (104,123  | ) |  |  | (104,240 | )
|Additional paid-in capital                                               |  |                                    | 75,544    |            |                  |   | 74,110    |  
|Retained earnings                                                        |  |                                    | 440,912   |            |                  |   | 435,113   |  
|Deferred compensation                                                    |  |                                    |          |            |                  |   | (294      | )
|Accumulated other comprehensive loss                                     |  |                                    | (18,198   | )          |                  |   | (12,824   | )
|                                                                         |  |                                    |           |            |                  |   |           |   |  |  |          |  
|Total Stockholders' Equity                                               |  | $                                  | 400,790   |            |                  | $ | 398,517   |  
|                                                                         |  |                                    |           |            |                  |   |           |   |  |  |          |  
|Total Liabilities and Stockholders' Equity                               |  | $                                  | 5,351,399 |            |                  | $ | 5,344,902 |  
|                                                                         |  |                                    |           |            |                  |   |           |   |  |  |          |  

See accompanying notes to consolidated financial statements.



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AMCORE FINANCIAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)



|                                                                |  |                                     |        |   |      |   |        |  
|--------------------------------------------------------------- |  | ----------------------------------- | ------ | - | ---- | - | ------ | -
|                                                                |  | For the Three MonthsEnded March 31, |       
|                                                                |  | 2006                                |        |   | 2005 |  
|INTEREST INCOME                                                 |  |                                     |        |   |      |   |        |  
|Interest and fees on loans                                      |  | $                                   | 66,890 |   |      | $ | 49,775 |  
|Interest on securities:                                         |  |                                     |        |   |      |   |        |  
|Taxable                                                         |  |                                     | 11,016 |   |      |   | 11,290 |  
|Tax-exempt                                                      |  |                                     | 1,708  |   |      |   | 1,905  |  
|                                                                |  |                                     |        |   |      |   |        |  
|Total Income on Securities                                      |  | $                                   | 12,724 |   |      | $ | 13,195 |  
|                                                                |  |                                     |        |   |      |   |        |  
|Interest on federal funds sold and other short-term investments |  |                                     | 87     |   |      |   | 25     |  
|Interest and fees on loans held for sale                        |  |                                     | 283    |   |      |   | 233    |  
|Interest on deposits in banks                                   |  |                                     | 10     |   |      |   | 6      |  
|                                                                |  |                                     |        |   |      |   |        |  
|Total Interest Income                                           |  | $                                   | 79,994 |   |      | $ | 63,234 |  
|                                                                |  |                                     |        |   |      |   |        |  
|INTEREST EXPENSE                                                |  |                                     |        |   |      |   |        |  
|Interest on deposits                                            |  | $                                   | 29,842 |   |      | $ | 17,976 |  
|Interest on short-term borrowings                               |  |                                     | 5,841  |   |      |   | 3,526  |  
|Interest on long-term borrowings                                |  |                                     | 2,881  |   |      |   | 2,420  |  
|                                                                |  |                                     |        |   |      |   |        |  
|Total Interest Expense                                          |  | $                                   | 38,564 |   |      | $ | 23,922 |  
|                                                                |  |                                     |        |   |      |   |        |  
|Net Interest Income                                             |  |                                     | 41,430 |   |      |   | 39,312 |  
|Provision for loan losses                                       |  |                                     | 2,000  |   |      |   | 2,500  |  
|                                                                |  |                                     |        |   |      |   |        |  
|Net Interest Income After Provision for Loan Losses             |  | $                                   | 39,430 |   |      | $ | 36,812 |  
|                                                                |  |                                     |        |   |      |   |        |  
|NON-INTEREST INCOME                                             |  |                                     |        |   |      |   |        |  
|Investment management and trust income                          |  | $                                   | 3,665  |   |      | $ | 3,961  |  
|Service charges on deposits                                     |  |                                     | 5,550  |   |      |   | 5,163  |  
|Mortgage banking income                                         |  |                                     | 1,232  |   |      |   | 1,315  |  
|Company owned life insurance income                             |  |                                     | 929    |   |      |   | 908    |  
|Brokerage commission income                                     |  |                                     | 881    |   |      |   | 733    |  
|Bankcard fee income                                             |  |                                     | 1,357  |   |      |   | 1,125  |  
|Gain on sale of loans                                           |  |                                     | 161    |   |      |   | 111    |  
|Other                                                           |  |                                     | 1,699  |   |      |   | 2,070  |  
|                                                                |  |                                     |        |   |      |   |        |  
|Non-Interest Income, Excluding Net Security Gains               |  | $                                   | 15,474 |   |      | $ | 15,386 |  
|Net security gains (losses)                                     |  |                                     | 225    |   |      |   | (51    | )
|                                                                |  |                                     |        |   |      |   |        |  
|Total Non-Interest Income                                       |  | $                                   | 15,699 |   |      | $ | 15,335 |  
|                                                                |  |                                    
|OPERATING EXPENSES                                              |  |                                     |        |   |      |   |        |  
|Compensation expense                                            |  | $                                   | 19,995 |   |      | $ | 16,286 |  
|Employee benefits                                               |  |                                     | 5,061  |   |      |   | 4,857  |  
|Net occupancy expense                                           |  |                                     | 2,670  |   |      |   | 2,757  |  
|Equipment expense                                               |  |                                     | 2,215  |   |      |   | 2,362  |  
|Data processing expense                                         |  |                                     | 755    |   |      |   | 605    |  
|Professional fees                                               |  |                                     | 1,705  |   |      |   | 975    |  
|Communication expense                                           |  |                                     | 1,258  |   |      |   | 1,082  |  
|Advertising and business development                            |  |                                     | 1,723  |   |      |   | 1,699  |  
|Other                                                           |  |                                     | 5,008  |   |      |   | 4,186  |  
|                                                                |  |                                     |        |   |      |   |        |  
|Total Operating Expenses                                        |  | $                                   | 40,390 |   |      | $ | 34,809 |  
|                                                                |  |                                     |        |   |      |   |        |  
|Income from continuing operations before income taxes           |  | $                                   | 14,739 |   |      | $ | 17,338 |  
|Income taxes                                                    |  |                                     | 4,280  |   |      |   | 5,210  |  
|                                                                |  |                                     |        |   |      |   |        |  
|Income from continuing operations                               |  | $                                   | 10,459 |   |      | $ | 12,128 |  
|                                                                |  |                                     |        |   |      |   |        |  
|Discontinued operations:                                        |  |                                     |        |   |      |   |        |  
|Loss from discontinued operations                               |  | $                                   | (113   | ) |      | $ | (97    | )
|Income tax benefit                                              |  |                                     | (44    | ) |      |   | (19    | )
|                                                                |  |                                     |        |   |      |   |        |  
|Loss from discontinued operations                               |  | $                                   | (69    | ) |      | $ | (78    | )
|                                                                |  |                                     |        |   |      |   |        |  
|Net Income                                                      |  | $                                   | 10,390 |   |      | $ | 12,050 |  
|                                                                |  |                                     |        |   |      |   |        |  
|                                                                |  |                                     |        |   |      |   |        |  
|EARNINGS PER COMMON SHARE                                       |  |                                     |        |   |      |   |        |  
|                                                                |  |                                    
|Basic: Income from continuing
operations                        |  | $                                   | 0.42   |   |      | $ | 0.49   |  
|Loss from discontinued operations                               |  |                                     |       |   |      |   |       |  
|                                                                |  |                                     |        |   |      |   |        |  
|Net Income                                                      |  | $                                   | 0.42   |   |      | $ | 0.49   |  
|                                                                |  |                                     |        |   |      |   |        |  
|Diluted: Income from continuing operations                      |  | $                                   | 0.42   |   |      | $ | 0.48   |  
|Loss from discontinued operations                               |  |                                     |       |   |      |   |       |  
|                                                                |  |                                     |        |   |      |   |        |  
|Net Income                                                      |  | $                                   | 0.42   |   |      | $ | 0.48   |  
|                                                                |  |                                     |        |   |      |   |        |  
|DIVIDENDS PER COMMON SHARE                                      |  | $                                   | 0.185  |   |      | $ | 0.170  |  
|                                                                |  |                                    
|AVERAGE COMMON SHARES OUTSTANDING                               |  |                                     |        |   |      |   |        |  
|Basic                                                           |  |                                     | 24,811 |   |      |   | 24,805 |  
|Diluted                                                         |  |                                     | 24,956 |   |      |   | 25,061 |  

See accompanying notes to consolidated financial statements.



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##### Table of Contents

AMCORE FINANCIAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(Unaudited)



|                                                                                         |  |                                   |       |               |   |          |                          |  |   |                  |   |  |                      |         |   |                                            |   |      |                          |  |   |         |   |  |   |         |  
|---------------------------------------------------------------------------------------- |  | --------------------------------- | ----- | ------------- | - | -------- | ------------------------ |  | - | ---------------- | - |  | -------------------- | ------- | - | ------------------------------------------ | - | ---- | ------------------------ |  | - | ------- | - |  | - | ------- | -
|                                                                                         |  | CommonStock                       |       | TreasuryStock |   |          | AdditionalPaid-inCapital |  |   | RetainedEarnings |   |  | DeferredCompensation |         |   | AccumulatedOtherComprehensiveIncome (Loss) |   |      | TotalStockholders'Equity | 
|                                                                                         |  | (in thousands, except share data) |      
|Balance at December 31, 2004                                                             |  | $                                 | 6,643 |               | $ | (102,832 | )                        |  | $ | 74,102           |   |  | $                    | 407,045 |   |                                            | $ | (273 | )                        |  | $ | 1,893   |   |  | $ | 386,578 |  
|                                                                                         |  |                                   |       |               |   |          |                          |  |   |                  |   |  |                      |         |   |                                            |   |      |                          |  |   |         |   |  |   |         |  
|Comprehensive Income (Loss):                                                             |  |                                   |       |               |   |          |                          |  |   |                  |   |  |                      |         |   |                                            |   |      |                          |  |   |         |   |  |   |         |  
|Net Income                                                                               |  |                                   |      |               |   |         |                          |  |   |                 |   |  |                      | 12,050  |   |                                            |   |     |                          |  |   |        |   |  |   | 12,050  |  
|Net unrealized holding losses on securities available for sale arising during the period |  |                                   |      |               |   |         |                          |  |   |                 |   |  |                      |        |   |                                            |   |     |                          |  |   | (20,155 | ) |  |   | (20,155 | )
|Less reclassification adjustment for net security losses included in net income          |  |                                   |      |               |   |         |                          |  |   |                 |   |  |                      |        |   |                                            |   |     |                          |  |   | 51      |   |  |   | 51      |  
|Income tax effect related to items of other comprehensive income                         |  |                                   |      |               |   |         |                          |  |   |                 |   |  |                      |        |   |                                            |   |     |                          |  |   | 7,650   |   |  |   | 7,650   |  
|                                                                                         |  |                                   |       |               |   |          |                          |  |   |                  |   |  |                      |         |   |                                            |   |      |                          |  |   |         |   |  |   |         |  
|Net unrealized losses on securities available for sale                                   |  |                                   |      |               |   |         |                          |  |   |                 |   |  |                      |        |   |                                            |   |     |                          |  |   | (12,454 | ) |  |   | (12,454 | )
|                                                                                         |  |                                   |       |               |   |          |                          |  |   |                  |   |  |                      |         |   |                                            |   |      |                          |  |   |         |   |  |   |         |  
|Comprehensive Income (Loss)                                                              |  |                                   |      |               |   |         |                          |  |   |                 |   |  |                      | 12,050  |   |                                            |   |     |                          |  |   | (12,454 | ) |  |   | (404    | )
|Cash dividends on common stock - $0.17 per share                                         |  |                                   |      |               |   |         |                          |  |   |                 |   |  |                      | (4,218  | ) |                                            |   |     |                          |  |   |        |   |  |   | (4,218  | )
|Purchase of 68,521 shares for the treasury                                               |  |                                   |      |               |   | (1,949   | )                        |  |   |                 |   |  |                      |        |   |                                            |   |     |                          |  |   |        |   |  |   | (1,949  | )
|Deferred compensation expense and other                                                  |  |                                   |      |               |   |         |                          |  |   | 514              |   |  |                      |        |   |                                            |   | 35   |                          |  |   |        |   |  |   | 549     |  
|Reissuance of 29,781 treasury shares for incentive plans                                 |  |                                   |      |               |   | 876      |                          |  |   | (399             | ) |  |                      |        |   |                                            |   | (49  | )                        |  |   |        |   |  |   | 428     |  
|Issuance of 11,698 common shares for Employee Stock Plan                                 |  |                                   | 3     |               |   |         |                          |  |   | 278              |   |  |                      |        |   |                                            |   |     |                          |  |   |        |   |  |   | 281     |  
|                                                                                         |  |                                   |       |               |   |          |                          |  |   |                  |   |  |                      |         |   |                                            |   |      |                          |  |   |         |   |  |   |         |  
|Balance at March 31, 2005                                                                |  | $                                 | 6,646 |               | $ | (103,905 | )                        |  | $ | 74,495           |   |  | $                    | 414,877 |   |                                            | $ | (287 | )                        |  | $ | (10,561 | ) |  | $ | 381,265 |  
|                                                                                         |  |                                   |       |               |   |          |                          |  |   |                  |   |  |                      |         |   |                                            |   |      |                          |  |   |         |   |  |   |         |  
|                                                                                         |  |                                   |       |               |   |          |                          |  |   |                  |   |  |                      |         |   |                                            |   |      |                          |  |   |         |   |  |   |         |  
|                                                                                         |  |                                   |       |               |   |          |                          |  |   |                  |   |  |                      |         |   |                                            |   |      |                          |  |   |         |   |  |   |         |  
|Balance at December 31, 2005                                                             |  | $                                 | 6,652 |               | $ | (104,240 | )                        |  | $ | 74,110           |   |  | $                    | 435,113 |   |                                            | $ | (294 | )                        |  | $ | (12,824 | ) |  | $ | 398,517 |  
|                                                                                         |  |                                   |       |               |   |          |                          |  |   |                  |   |  |                      |         |   |                                            |   |      |                          |  |   |         |   |  |   |         |  
|Comprehensive Income (Loss)                                                              |  |                                   |       |               |   |          |                          |  |   |                  |   |  |                      |         |   |                                            |   |      |                          |  |   |         |   |  |   |         |  
|Net Income                                                                               |  |                                   |      |               |   |         |                          |  |   |                 |   |  |                      | 10,390  |   |                                            |   |     |                          |  |   |        |   |  |   | 10,390  |  
|Net unrealized holding losses on securities available for sale arising during the period |  |                                   |      |               |   |         |                          |  |   |                 |   |  |                      |        |   |                                            |   |     |                          |  |   | (8,440  | ) |  |   | (8,440  | )
|Less reclassification adjustment for net security gains included in net income           |  |                                   |      |               |   |         |                          |  |   |                 |   |  |                      |        |   |                                            |   |     |                          |  |   | (225    | ) |  |   | (225    | )
|Income tax effect related to items of other comprehensive income                         |  |                                   |      |               |   |         |                          |  |   |                 |   |  |                      |        |   |                                            |   |     |                          |  |   | 3,291   |   |  |   | 3,291   |  
|                                                                                         |  |                                   |       |               |   |          |                          |  |   |                  |   |  |                      |         |   |                                            |   |      |                          |  |   |         |   |  |   |         |  
|Net unrealized losses on securities available for sale                                   |  |                                   |      |               |   |         |                          |  |   |                 |   |  |                      |        |   |                                            |   |     |                          |  |   | (5,374  | ) |  |   | (5,374  | )
|                                                                                         |  |                                   |       |               |   |          |                          |  |   |                  |   |  |                      |         |   |                                            |   |      |                          |  |   |         |   |  |   |         |  
|Comprehensive Income (Loss)                                                              |  |                                   |      |               |   |         |                          |  |   |                 |   |  |                      | 10,390  |   |                                            |   |     |                          |  |   | (5,374  | ) |  |   | 5,016   |  
|Cash dividends on common stock - $0.185 per share                                        |  |                                   |      |               |   |         |                          |  |   |                 |   |  |                      | (4,591  | ) |                                            |   |     |                          |  |   |        |   |  |   | (4,591  | )
|Purchase of 49,934 shares for the treasury                                               |  |                                   |      |               |   | (1,506   | )                        |  |   |                 |   |  |                      |        |   |                                            |   |     |                          |  |   |        |   |  |   | (1,506  | )
|Deferred compensation expense and other                                                  |  |                                   |      |               |   |         |                          |  |   | 100              |   |  |                      |        |   |                                            |   |     |                          |  |   |        |   |  |   | 100     |  
|Stock-based compensation                                                                 |  |                                   |      |               |   |         |                          |  |   | 1,035            |   |  |                      |        |   |                                            |   |     |                          |  |   |        |   |  |   | 1,035   |  
|Reclassification upon adoption of SFAS No. 123R                                          |  |                                   |       |               |   |          |                          |  |   | 342              |   |  |                      |         |   |                                            |   | 294  |                          |  |   |        |   |  |   | 636     |  
|Reissuance of 52,771 treasury shares for incentive plans                                 |  |                                   |      |               |   | 1,623    |                          |  |   | (344             | ) |  |                      |        |   |                                            |   |     |                          |  |   |        |   |  |   | 1,279   |  
|Issuance of 12,651 common shares for Employee Stock Plan                                 |  |                                   | 3     |               |   |         |                          |  |   | 301              |   |  |                      |        |   |                                            |   |     |                          |  |   |        |   |  |   | 304     |  
|                                                                                         |  |                                   |       |               |   |          |                          |  |   |                  |   |  |                      |         |   |                                            |   |      |                          |  |   |         |   |  |   |         |  
|Balance at March 31, 2006                                                                |  | $                                 | 6,655 |               | $ | (104,123 | )                        |  | $ | 75,544           |   |  | $                    | 440,912 |   |                                            | $ |     |                          |  | $ | (18,198 | ) |  | $ | 400,790 |  
|                                                                                         |  |                                   |       |               |   |          |                          |  |   |                  |   |  |                      |         |   |                                            |   |      |                          |  |   |         |   |  |   |         |  

See accompanying notes to consolidated financial statements.



5



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##### Table of Contents

AMCORE FINANICAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)



|                                                                                                  |  |                             |          |   |      |   |         |  
|------------------------------------------------------------------------------------------------- |  | --------------------------- | -------- | - | ---- | - | ------- | -
|                                                                                                  |  | Three Months EndedMarch 31, |         
|                                                                                                  |  | 2006                        |          |   | 2005 |  
|                                                                                                  |  | (in thousands)              |         
|Cash Flows From Operating Activities                                                              |  |                             |          |   |      |   |         |  
|Net income                                                                                        |  | $                           | 10,390   |   |      | $ | 12,050  |  
|Adjustments to reconcile net income from operations to net cash provided by operating activities: |  |                             |          |   |      |   |         |  
|Depreciation and amortization of premises and equipment                                           |  |                             | 1,739    |   |      |   | 2,054   |  
|Amortization and accretion of securities, net                                                     |  |                             | 442      |   |      |   | 374     |  
|Stock-based compensation expense                                                                  |  |                             | 1,035    |   |      |   |        |  
|Tax benefit on exercise of stock options                                                          |  |                             | 189      |   |      |   | 115     |  
|Excess tax benefits from stock-based compensation                                                 |  |                             | (59      | ) |      |   |        |  
|Provision for loan losses                                                                         |  |                             | 2,000    |   |      |   | 2,500   |  
|Company owned life insurance income, net of death benefits                                        |  |                             | (929     | ) |      |   | (908    | )
|Net securities (gains) losses                                                                     |  |                             | (225     | ) |      |   | 51      |  
|Net gains on sale of loans                                                                        |  |                             | (161     | ) |      |   | (111    | )
|Net losses (gains) on sale of mortgage loans held for sale                                        |  |                             | 211      |   |      |   | (491    | )
|Originations of mortgage loans held for sale                                                      |  |                             | (64,583  | ) |      |   | (66,671 | )
|Proceeds from sales of mortgage loans held for sale                                               |  |                             | 58,210   |   |      |   | 64,229  |  
|Deferred income tax expense                                                                       |  |                             | 607      |   |      |   | 150     |  
|Net (increase) decrease in other assets                                                           |  |                             | (1,799   | ) |      |   | 567     |  
|Net (decrease) increase in other liabilities                                                      |  |                             | (7,840   | ) |      |   | 59      |  
|                                                                                                  |  |                             |          |   |      |   |         |  
|Net cash (used for) provided by operating activities                                              |  | $                           | (773     | ) |      | $ | 13,968  |  
|                                                                                                  |  |                             |          |   |      |   |         |  
|Cash Flows From Investing Activities                                                              |  |                             |          |   |      |   |         |  
|Proceeds from maturities of securities available for sale                                         |  | $                           | 53,324   |   |      | $ | 47,461  |  
|Proceeds from sales of securities available for sale                                              |  |                             | 40,124   |   |      |   | 8,812   |  
|Purchase of securities available for sale                                                         |  |                             | (50,080  | ) |      |   | (52,283 | )
|Net (increase) decrease in federal funds sold and other short-term investments                    |  |                             | (16,300  | ) |      |   | 250     |  
|Net decrease (increase) in interest earning deposits in banks                                     |  |                             | 403      |   |      |   | (19     | )
|Net increase in loans                                                                             |  |                             | (57,949  | ) |      |   | (77,809 | )
|Proceeds from the sale of loans                                                                   |  |                             | 2,233    |   |      |   | 2,277   |  
|Investment in company owned life insurance                                                        |  |                             | (10      | ) |      |   | (3,314  | )
|Premises and equipment expenditures, net                                                          |  |                             | (2,833   | ) |      |   | (849    | )
|Proceeds from the sale of foreclosed real estate                                                  |  |                             | 487      |   |      |   | 1,225   |  
|                                                                                                  |  |                             |          |   |      |   |         |  
|Net cash used for investing activities                                                            |  | $                           | (30,601  | ) |      | $ | (74,249 | )
|                                                                                                  |  |                             |          |   |      |   |         |  
|Cash Flows From Financing Activities                                                              |  |                             |          |   |      |   |         |  
|Net (decrease) increase in non-interest-bearing demand deposits                                   |  | $                           | (45,342  | ) |      | $ | 3,298   |  
|Net (decrease) increase in interest-bearing demand deposits                                       |  |                             | (8,362   | ) |      |   | 118,684 |  
|Net increase (decrease) in time deposits                                                          |  |                             | 21,028   |   |      |   | (27,501 | )
|Net increase in wholesale deposits                                                                |  |                             | 59,881   |   |      |   | 7,602   |  
|Net decrease in short-term borrowings                                                             |  |                             | (114,405 | ) |      |   | (50,361 | )
|Proceeds from long-term borrowings                                                                |  |                             | 100,000  |   |      |   | 7,000   |  
|Dividends paid                                                                                    |  |                             | (4,591   | ) |      |   | (4,218  | )
|Issuance of common shares for employee stock plan                                                 |  |                             | 304      |   |      |   | 281     |  
|Reissuance of treasury shares for incentive plans                                                 |  |                             | 1,090    |   |      |   | 313     |  
|Excess tax benefits from stock-based compensation                                                 |  |                             | 59       |   |      |   |        |  
|Purchase of shares for treasury                                                                   |  |                             | (1,506   | ) |      |   | (1,949  | )
|                                                                                                  |  |                             |          |   |      |   |         |  
|Net cash provided by financing activities                                                         |  | $                           | 8,156    |   |      | $ | 53,149  |  
|                                                                                                  |  |                             |          |   |      |   |         |  
|Net change in cash and cash equivalents                                                           |  | $                           | (23,218  | ) |      | $ | (7,132  | )
|Cash and cash equivalents:                                                                        |  |                             |          |   |      |   |         |  
|                                                                                                  |  |                             | 144,350  |   |      |   | 117,072 |  
|                                                                                                  |  |                             |          |   |      |   |         |  
|Beginning of year                                                                                 |  | $                           | 121,132  |   |      | $ | 109,940 |  
|                                                                                                  |  |                             |          |   |      |   |         |  
|End of period                                                                                     |  |                             |          |   |      |   |         |  
|Supplemental Disclosures of Cash Flow Information                                                 |  |                             |          |   |      |   |         |  
|Cash payments for:                                                                                |  |                             |          |   |      |   |         |  
|Interest paid to depositors                                                                       |  | $                           | 29,650   |   |      | $ | 18,867  |  
|Interest paid on borrowings                                                                       |  |                             | 7,201    |   |      |   | 4,790   |  
|Income tax payments (receipts)                                                                    |  |                             | 3,096    |   |      |   | (30     | )
|                                                                                                  |  |                            
|Non-Cash Investing and Financing                                                                  |  |                             |          |   |      |   |         |  
|Foreclosed real estate - acquired in settlement of loans                                          |  |                             | 51       |   |      |   | 525     |  
|Transfer current portion of long-term borrowings to short-term borrowings                         |  |                             | 7        |   |      |   | 4       |  
|Capitalized interest                                                                              |  |                             | 67       |   |      |   | 3       |  

See accompanying notes to consolidated financial statements.



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##### Table of Contents

AMCORE Financial, Inc.

Notes to Consolidated Financial Statements

(Unaudited)

NOTE 1  BASIS OF
PRESENTATION

The accompanying unaudited Consolidated Financial Statements have been prepared in accordance with U.S. generally accepted
accounting principles for interim financial reporting and with instructions for Form 10Q and Rule 1001 of Regulation SX. The preparation of Consolidated Financial Statements requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities as of the balance sheet date and revenues and expenses for the period. Actual results could differ from these estimates. These financial statements include all adjustments (consisting of
normal recurring accruals) that in the opinion of management are considered necessary for the fair presentation of the financial position and results of operations for the periods shown. Certain prior year amounts may be reclassified to conform to
the current year presentation.

The accompanying unaudited Consolidated Financial Statements and related notes, including the critical
accounting estimates, should be read in conjunction with the audited Financial Statements and related notes contained in the 2005 Annual Report of AMCORE Financial, Inc. and Subsidiaries (the Company) on Form 10-K (2005 Form 10-K).
Effective the first quarter of 2006, the Company began recognizing compensation expense for stock options with the adoption of Statement of Financial Accounting Standards (SFAS) No. 123 (Revised 2004) Share-Based Payment (SFAS
123R). There have been no other significant changes to the Companys accounting policies from the 2005 Form 10-K.

Operating results
for the three-month period ended March 31, 2006 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2006. For further information, refer to the consolidated financial statements and
footnotes thereto included in the 2005 Form 10K.

Discontinued Operations

During 2005, the Company closed on the transition of three Vintage equity funds into two mutual funds managed by Federated Investors, Inc. and sold its
subsidiary IMG. The transition of $142 million in assets of three Vintage equity funds to the two Federated mutual funds was completed in September, 2005, resulting in a pre-tax gain of $1.3 million. On December 30, 2005, the Company completed
the sale of IMG resulting in a $576,000 pre-tax loss, net of associated costs, and a $3.2 million tax charge. The operating results for IMG have been reclassified and shown as discontinued operations on the Statements of Income and in the Notes to
the Consolidated Financial Statements for all periods presented. This includes the effect of the sale of IMG and the transition of the Vintage equity funds.

New Accounting Standards

In March 2006, the FASB issued Statement of Financial Accounting Standards
(SFAS) No. 156, Accounting for Servicing of Financial Assets (SFAS No. 156), which amends SFAS No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities. SFAS
No. 156 requires an entity to separately recognize servicing assets and servicing liabilities and to report these balances at fair value upon inception. Future methods of assessing values can be performed using either the amortization or fair
value measurement techniques. Adoption of SFAS No. 156 is required for transactions occurring in fiscal years beginning after September 15, 2006. The adoption of this standard is not expected to have a material impact on the Companys
consolidated financial position or results of operations.

In February 2006, the FASB issued SFAS No. 155, Accounting for
Certain Hybrid Financial Instruments, which establishes the accounting for certain derivatives embedded in other financial instruments (hybrid financial instruments). This Statement is effective for all financial instruments
acquired, issued, or subject to a remeasurement event occurring after January 1, 2007, the start of the Companys next fiscal year. The adoption of this standard is not expected to have a material impact on the Companys consolidated
financial position or results of operations.

In May 2005, the FASB issued SFAS No. 154, Accounting Changes and Error
Corrections, which provides guidance on the accounting for and reporting of accounting changes and error corrections. It establishes, unless impracticable, retrospective application as the required method for reporting a change in accounting
principle in the absence of explicit transition requirements specific to the newly adopted accounting principle. SFAS No. 154 also addresses the reporting of a correction of an error by restating previously issued financial statements. This
Statement is effective, on a prospective basis, for fiscal years beginning after December 15, 2005. The adoption of SFAS No. 154 on January 1, 2006, did not affect on the Companys financial position or results of operation.



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##### Table of Contents

SFAS No. 123R, Share-Based Payment was issued in December 2004 and requires compensation
cost relating to share-based payment transactions be recognized in the Consolidated Financial Statements for periods beginning after December 15, 2005. Companies are no longer able to account for share-based compensation transactions using the
intrinsic value method in accordance with Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees. Instead, companies are required to account for such transactions using a fair-value method and recognize
the expense in the Consolidated Statements of Income. SFAS 123R supercedes APB Opinion No. 25 and revises guidance in SFAS 123, Accounting for Stock-Based Compensation. See Note 13 of the Notes to the Consolidated Financial
Statements for information on the assumptions used to calculate the fair value of stock-based compensation and other disclosures required by SFAS 123R.

On November 10, 2005, the FASB issued FASB Staff Position No. FAS 123R-3 Transition Election Related to Accounting for Tax Effects of Share-Based Payment Awards that allows for a simplified method to
establish the beginning balance of the additional paid-in capital pool (APIC Pool) related to the tax effects of employee stock-based compensation, and to determine the subsequent impact on the APIC Pool and Consolidated Statements of Cash Flows of
the tax effects of employee stock-based compensation awards that are outstanding upon adoption of SFAS 123R. The Company has not yet determined if the simplified method will be elected. The election will be determined by the fourth quarter of 2006.

In November 2005, the Financial Accounting Standards Board (FASB) issued FASB Staff Position (FSP) Nos. FAS 115-1 and FAS 124-1, The
Meaning of Other-Than-Temporary Impairment and its Application to Certain Investments, which applies to reporting periods beginning after December 15, 2005. The FSPs provide guidance on determining when investments in certain debt and
equity securities are considered impaired, whether that impairment is other-than-temporary, and on measuring such impairment loss. The FSPs also include accounting considerations subsequent to the recognition of other-than-temporary impairment and
requirements for certain disclosures about unrealized losses that have not been recognized as other-than-temporary impairments. The adoption of the FSPs on January 1, 2006, did not have a material effect on the Companys financial position
or results of operation.



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NOTE 2 - SECURITIES

A summary of information for investment securities, categorized by security type, at March 31, 2006 and December 31, 2005 follows. Fair values are based on quoted market prices or are based on quoted prices
for similar financial instruments.



|                                                    |  |                |           |                      |   |                       |  |   |            |   |  |   |          
|--------------------------------------------------- |  | -------------- | --------- | -------------------- | - | --------------------- |  | - | ---------- | - |  | - | ---------
|                                                    |  | AmortizedCost  |           | GrossUnrealizedGains |   | GrossUnrealizedLosses |  |   | Fair Value
|                                                    |  | (in thousands)
|March 31, 2006                                      |  |                |          
|Securities Available for Sale:                      |  |                |           |                      |   |                       |  |   |            |   |  |   |          
|U.S. Treasury                                       |  | $              | 5,006     |                      | $ |                      |  | $ | (101       | ) |  | $ | 4,905    
|U.S. Government sponsored enterprises (GSEs)        |  |                | 80,986    |                      |   | 3                     |  |   | (1,149     | ) |  |   | 79,840   
|GSEs and U.S. agency mortgage-backed securities (1) |  |                | 854,843   |                      |   | 522                   |  |   | (28,049    | ) |  |   | 827,316  
|State and political subdivisions                    |  |                | 162,953   |                      |   | 1,746                 |  |   | (1,416     | ) |  |   | 163,283  
|Corporate obligations and other (2)                 |  |                | 56,703    |                      |   | 42                    |  |   | (955       | ) |  |   | 55,790   
|                                                    |  |                |           |                      |   |                       |  |   |            |   |  |   |          
|Total Securities Available for Sale                 |  | $              | 1,160,491 |                      | $ | 2,313                 |  | $ | (31,670    | ) |  | $ | 1,131,134
|                                                    |  |                |           |                      |   |                       |  |   |            |   |  |   |          
|December 31, 2005                                   |  |                |           |                      |   |                       |  |   |            |   |  |   |          
|Securities Available for Sale:                      |  |                |           |                      |   |                       |  |   |            |   |  |   |          
|U.S. Treasury                                       |  | $              | 5,008     |                      | $ |                      |  | $ | (91        | ) |  | $ | 4,917    
|U.S. Government sponsored enterprises (GSEs)        |  |                | 117,161   |                      |   | 43                    |  |   | (1,445     | ) |  |   | 115,759  
|GSEs and U.S. agency mortgage-backed securities (1) |  |                | 851,552   |                      |   | 788                   |  |   | (20,450    | ) |  |   | 831,890  
|State and political subdivisions                    |  |                | 166,051   |                      |   | 2,244                 |  |   | (1,114     | ) |  |   | 167,181  
|Corporate obligations and other (2)                 |  |                | 64,304    |                      |   | 56                    |  |   | (723       | ) |  |   | 63,637   
|                                                    |  |                |           |                      |   |                       |  |   |            |   |  |   |          
|Total Securities Available for Sale                 |  | $              | 1,204,076 |                      | $ | 3,131                 |  | $ | (23,823    | ) |  | $ | 1,183,384
|                                                    |  |                |           |                      |   |                       |  |   |            |   |  |   |          

A summary of unrealized loss information for investment
securities, categorized by security type, was as follows:



|                                                         |  |                     |         |                  |                     |        |            |       |                      |         |  |            |         |                  |  |   |         |  |   |         |  
|-------------------------------------------------------- |  | ------------------- | ------- | ---------------- | ------------------- | ------ | ---------- | ----- | -------------------- | ------- |  | ---------- | ------- | ---------------- |  | - | ------- |  | - | ------- | -
|                                                         |  | Less Than 12 Months |         |                  | 12 Months or Longer |        |            | Total |                     
|                                                         |  | Fair Value          |         | UnrealizedLosses |                     |        | Fair Value |       | UnrealizedLosses (3) |         |  | Fair Value |         | UnrealizedLosses | 
|                                                         |  | (in thousands)      |        
|March 31, 2006                                           |  |                     |         |                 
|Securities Available for Sale:                           |  |                     |         |                  |                     |        |            |       |                      |         |  |            |         |                  |  |   |         |  |   |         |  
|U.S. Treasury                                            |  | $                   |        |                  | $                   |       |            |       | $                    | 4,905   |  | $          | (101    | )                |  | $ | 4,905   |  | $ | (101    | )
|U.S. Government sponsored enterprises (GSEs)             |  |                     | 16,758  |                  |                     | (47    | )          |       |                      | 58,262  |  |            | (1,102  | )                |  |   | 75,020  |  |   | (1,149  | )
|GSEs and U.S. agency mortgage-backed securities (1)      |  |                     | 250,608 |                  |                     | (6,071 | )          |       |                      | 555,632 |  |            | (21,978 | )                |  |   | 806,240 |  |   | (28,049 | )
|State and political subdivisions                         |  |                     | 52,687  |                  |                     | (558   | )          |       |                      | 28,967  |  |            | (858    | )                |  |   | 81,654  |  |   | (1,416  | )
|Corporate obligations and other                          |  |                     | 19,441  |                  |                     | (360   | )          |       |                      | 11,315  |  |            | (595    | )                |  |   | 30,756  |  |   | (955    | )
|                                                         |  |                     |         |                  |                     |        |            |       |                      |         |  |            |         |                  |  |   |         |  |   |         |  
|Total Unrealized Losses on Securities Available for Sale |  | $                   | 339,494 |                  | $                   | (7,036 | )          |       | $                    | 659,081 |  | $          | (24,634 | )                |  | $ | 998,575 |  | $ | (31,670 | )
|                                                         |  |                     |         |                  |                     |        |            |       |                      |         |  |            |         |                  |  |   |         |  |   |         |  
|December 31, 2005                                        |  |                     |         |                  |                     |        |            |       |                      |         |  |            |         |                  |  |   |         |  |   |         |  
|Securities Available for Sale:                           |  |                     |         |                  |                     |        |            |       |                      |         |  |            |         |                  |  |   |         |  |   |         |  
|U.S. Treasury                                            |  | $                   |        |                  | $                   |       |            |       | $                    | 4,917   |  | $          | (91     | )                |  | $ | 4,917   |  | $ | (91     | )
|U.S. Government sponsored enterprises (GSEs)             |  |                     | 37,357  |                  |                     | (491   | )          |       |                      | 63,773  |  |            | (954    | )                |  |   | 101,130 |  |   | (1,445  | )
|GSEs and U.S. agency mortgage-backed securities (1)      |  |                     | 362,303 |                  |                     | (6,281 | )          |       |                      | 434,655 |  |            | (14,169 | )                |  |   | 796,958 |  |   | (20,450 | )
|State and political subdivisions                         |  |                     | 54,991  |                  |                     | (787   | )          |       |                      | 11,218  |  |            | (327    | )                |  |   | 66,209  |  |   | (1,114  | )
|Corporate obligations and other                          |  |                     | 11,863  |                  |                     | (269   | )          |       |                      | 11,553  |  |            | (454    | )                |  |   | 23,416  |  |   | (723    | )
|                                                         |  |                     |         |                  |                     |        |            |       |                      |         |  |            |         |                  |  |   |         |  |   |         |  
|Total Unrealized Losses on Securities Available for Sale |  | $                   | 466,514 |                  | $                   | (7,828 | )          |       | $                    | 526,116 |  | $          | (15,995 | )                |  | $ | 992,630 |  | $ | (23,823 | )
|                                                         |  |                     |         |                  |                     |        |            |       |                      |         |  |            |         |                  |  |   |         |  |   |         |  

|(1) | Includes U.S. Government agencies.
|--- | ----------------------------------



|(2) | At March 31, 2006, includes investments of $4 million and $21 million, respectively, in stock of the Federal Reserve Bank (FRB) and the Federal Home Loan
Bank (FHLB). At December 31, 2005, these amounts were $4 million and $21 million, respectively. These investments are recorded at amortized historical cost or fair value, as applicable, with income recorded when dividends are declared. A
portion of the FRB and FHLB investments are restricted as to sale because they are held to satisfy membership requirements.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(3) | The Company has the ability to hold, and has no present intent to dispose of, the related securities as of March 31, 2006. The total $24.6 million of
unrealized losses related to 100 securities. None of the unrealized losses were individually significant to the total and, except as discussed below, the unrealized losses were caused by interest rate increases. Of the total, $21.9 million was
related to 90 mortgage-backed securities issued by GSEs with a quality rating of Aaa; $1.1 million related to eight Aaa rated GSEs; and $858,000 related to 44 municipal obligation bonds with quality ratings from
A2 to Aaa. Corporate obligations and other included one asset-backed bond with an unrealized loss of $535,000 that had an average life of 4.9 years and was collateralized by fixed rate manufactured housing contracts and
installment loan agreements. The bond had a quality rating of B2 and was sufficiently collateralized such that credit loss was considered remote. The remaining $60,000 was an asset-backed bond with an average life of 1.6 years and was
collateralized by owner occupied first lien, conforming mortgage loans. This bond had a quality rating of Aaa and was sufficiently collateralized such that credit loss was considered remote. In the event of prepayment, it is expected
that the Company would recover substantially all of its recorded investment in both of these bonds.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

A summary of
realized gain and loss information follows:



|                            |  |                |       |                 |   |      |                    |  |   |     |  
|--------------------------- |  | -------------- | ----- | --------------- | - | ---- | ------------------ |  | - | --- | -
|                            |  | Realized Gains |       | Realized Losses |   |      | Net Gains/(Losses) | 
|                            |  |                |       |                
|                            |  | (in thousands) |      
|For the three months ended: |  |                |       |                 |   |      |                    |  |   |     |  
|March 31, 2006              |  | $              | 1,012 |                 | $ | (787 | )                  |  | $ | 225 |  
|March 31, 2005              |  |                |      |                 |   | (51  | )                  |  |   | (51 | )

At March 31, 2006 and 2005, securities with a fair value of approximately $716 million and
$859 million, respectively, were pledged to secure public deposits, securities under agreements to repurchase, derivative credit exposure and for other purposes required by law.



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NOTE 3 - LOANS AND ALLOWANCE FOR LOAN LOSSES

The composition of the loan portfolio at March 31, 2006 and December 31, 2005 was as follows:



|                                                                                                                         |  |                            |           |   |                  |   |           |  
|------------------------------------------------------------------------------------------------------------------------ |  | -------------------------- | --------- | - | ---------------- | - | --------- | -
|                                                                                                                         |  | March 31,2006              |           |   | December 31,2005 |  
|                                                                                                                         |  | (in thousands)             |          
|Commercial, financial and agricultural                                                                                   |  | $                          | 821,662   |   |                  | $ | 818,657   |  
|Real estate-commercial                                                                                                   |  |                            | 1,871,534 |   |                  |   | 1,821,868 |  
|Real estate-residential                                                                                                  |  |                            | 461,115   |   |                  |   | 459,823   |  
|Real estate-construction                                                                                                 |  |                            | 307,254   |   |                  |   | 310,006   |  
|Installment and consumer                                                                                                 |  |                            | 312,926   |   |                  |   | 311,497   |  
|Direct lease financing                                                                                                   |  |                            | 7         |   |                  |   | 13        |  
|                                                                                                                         |  |                            |           |   |                  |   |           |  
|Gross loans                                                                                                              |  | $                          | 3,774,498 |   |                  | $ | 3,721,864 |  
|Allowance for loan losses                                                                                                |  |                            | (40,733   | ) |                  |   | (40,756   | )
|                                                                                                                         |  |                            |           |   |                  |   |           |  
|Net Loans                                                                                                                |  | $                          | 3,733,765 |   |                  | $ | 3,681,108 |  
|                                                                                                                         |  |                            |           |   |                  |   |           |  
|An analysis of the allowance for loan losses for
the periods ended March 31, 2006 and March 31, 2005 is presented below: | 
|                                                                                                                         |  | For the Three Months Ended |          
|                                                                                                                         |  | March 31,2006              |           |   | March 31,2005    |  
|                                                                                                                         |  | (in thousands)             |          
|Balance at beginning of year                                                                                             |  | $                          | 40,756    |   |                  | $ | 40,945    |  
|Provision charged to expense                                                                                             |  |                            | 2,000     |   |                  |   | 2,500     |  
|Loans charged off                                                                                                        |  |                            | (3,103    | ) |                  |   | (3,375    | )
|Recoveries on loans previously charged off                                                                               |  |                            | 1,080     |   |                  |   | 884       |  
|                                                                                                                         |  |                            |           |   |                  |   |           |  
|Balance at end of period                                                                                                 |  | $                          | 40,733    |   |                  | $ | 40,954    |  
|                                                                                                                         |  |                            |           |   |                  |   |           |  



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NOTE 4  GOODWILL AND OTHER INTANGIBLE ASSETS

The Companys goodwill by segment at March 31, 2006 is as follows (in thousands):



|                                |  |   |      
|------------------------------- |  | - | -----
|Retail Banking                  |  | $ | 3,572
|Commercial Banking              |  |   | 2,381
|Investment Management and Trust |  |   | 195  
|                                |  |   |      
|Total Goodwill                  |  | $ | 6,148
|                                |  |   |      

There were no changes in the carrying amount of goodwill for the
three months ended March 31, 2006.

The Originated Mortgage Servicing Right (OMSR) asset values, which are recorded in Other Assets on
the Consolidated Balance Sheets are included in the Mortgage Banking Segment, are as follows:



|                                              |  |                |         |   |                  |   |         |  
|--------------------------------------------- |  | -------------- | ------- | - | ---------------- | - | ------- | -
|                                              |  | March 31,2006  |         |   | December 31,2005 |  
|                                              |  | (in thousands) |        
|Unamortized Cost of Mortgage Servicing Rights |  |                |         |   |                  |   |         |  
|Gross Carrying Amount                         |  | $              | 40,533  |   |                  | $ | 39,763  |  
|Less: Accumulated Amortization                |  |                | (27,019 | ) |                  |   | (26,488 | )
|Less: OMSR Valuation Allowance                |  |                |        |   |                  |   |        |  
|                                              |  |                |         |   |                  |   |         |  
|Net OMSR at end of period                     |  | $              | 13,514  |   |                  | $ | 13,275  |  
|                                              |  |                |         |   |                  |   |         |  
|Fair value of OMSRs                           |  | $              | 16,416  |   |                  | $ | 16,064  |  
|                                              |  |                |         |   |                  |   |         |  
|                                              |  |                |         |   |                  |   |         |  
|                                              |  |                |         |   |                  |   |         |  
|OMSR Valuation Allowance                      |  |                |         |   |                  |   |         |  
|Balance at beginning of year                  |  | $              |        |   |                  | $ | 53      |  
|Net impairment valuation credited to income   |  |                |        |   |                  |   | (53     | )
|                                              |  |                |         |   |                  |   |         |  
|Balance at end of period                      |  | $              |        |   |                  | $ |        |  
|                                              |  |                |         |   |                  |   |         |  

The current and estimated OMSR amortization expense on the
Companys OMSR asset are as follows (in thousands):



|                                      |  |   |       
|------------------------------------- |  | - | ------
|Aggregate Amortization Expense        |  |   |       
|For Quarter Ended 3/31/06             |  | $ | 531   
|                                      | 
|Estimated Amortization Expense        |  |   |       
|For Remainder of Year Ending 12/31/06 |  | $ | 1,824 
|For Year Ending 12/31/07              |  |   | 2,265 
|For Year Ending 12/31/08              |  |   | 1,967 
|For Year Ending 12/31/09              |  |   | 1,669 
|For Year Ending 12/31/10              |  |   | 1,397 
|For Year Ending 12/31/11              |  |   | 1,147 
|Thereafter                            |  |   | 3,245 
|                                      |  |   |       
|Total                                 |  | $ | 13,514
|                                      |  |   |       

The weighted-average amortization period for OMSR retained during the first quarter of 2006 was
11.7 years. The unpaid principal balance of mortgage loans serviced for others, plus mortgage loans held for sale, was $1.5 billion as of March 31, 2006, $1.4 billion as of December 31, 2005 and $1.3 billion as of March 31, 2005.



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NOTE 5 - SALE OF RECEIVABLES

The Company periodically sells certain indirect automobile loans in securitization transactions. Upon sale, the net carrying amount of the loans is removed from the consolidated balance sheet in
exchange for cash and certain retained residual interests. The retained interests includes rights to service the loans that were sold (the "Servicing Rights") and an interest in residual cash flows (the "Interest-Only Strip"). The Interest-Only
Strip includes the excess of interest collected on the loans over the amount required to be paid to the investors and the securitization agent (the "Excess Spread") plus an interest in sales proceeds that were not remitted by the securitization
trust at the time of the initial sale of the loans to the extent it exceeds projected credit losses (the "Credit Enhancement" or "Overcollateralization"). There were no sales of indirect automobile loans during the first quarter 2006 or 2005.

The Company receives monthly servicing fees equal to 0.75 percent per annum of the outstanding beginning principal balance of the loans
serviced for the month and rights to future cash flows arising after the investors in the securitization trust have received the returns for which they have contracted. The Company's retained interests are subordinate to investor's interests. The
value of the Interest-Only Strip is subject to prepayment risk and interest rate risk on the Excess Spread and credit risk on the transferred automobile loans on the Overcollateralization. The Company's risk of loss attributable to prepayment and
credit risk is limited to its interest in the Interest-Only Strip. Neither the investors nor the securization trust have any further recourse to the Company's other assets. Interest rate risk could exceed the Company's interest in the Excess Spread,
but such a possibility is not considered probable as of March 31, 2006.

Key economic assumptions used in measuring the retained
interests as of March 31, 2006, including the sensitivity of the current fair value of residual cash flows to immediate 10 percent and 20 percent adverse changes in those assumptions, are as follows:



|                                             |  |                      |       |   |                   |   |       |                   |  |   |       |  
|-------------------------------------------- |  | -------------------- | ----- | - | ----------------- | - | ----- | ----------------- |  | - | ----- | -
|                                             |  | As of March 31, 2006 |      
|                                             |  | Actual               |       |   | 10% AdverseChange |   |       | 20% AdverseChange | 
|                                             |  | (in thousands)       |      
|Prepayment speed assumptions                 |  |                      |       |   |                   |   |       |                   |  |   |       |  
|Prepayment speed                             |  |                      | 2.2   | % |                   |   | 2.4   | %                 |  |   | 2.6   | %
|Weighted average life (in months)            |  |                      | 13.8  |   |                   |   | 13.3  |                   |  |   | 12.8  |  
|Fair value of retained interests             |  | $                    | 5,973 |   |                   | $ | 5,975 |                   |  | $ | 5,982 |  
|Change in fair value                         |  | $                    |      |   |                   | $ | 2     |                   |  | $ | 9     |  
|Expected credit loss assumptions             |  |                      |       |   |                   |   |       |                   |  |   |       |  
|Expected credit losses (loss to liquidation) |  |                      | 0.9   | % |                   |   | 0.9   | %                 |  |   | 1.0   | %
|Fair value of retained interests             |  | $                    | 5,973 |   |                   | $ | 5,896 |                   |  | $ | 5,818 |  
|Change in fair value                         |  | $                    |      |   |                   | $ | (77   | )                 |  | $ | (155  | )
|Residual cash flow discount rate assumptions |  |                      |       |   |                   |   |       |                   |  |   |       |  
|Residual cash flow discount rate (annual)    |  |                      | 15.9  | % |                   |   | 17.5  | %                 |  |   | 19.1  | %
|Fair value of retained interests             |  | $                    | 5,973 |   |                   | $ | 5,811 |                   |  | $ | 5,656 |  
|Change in fair value                         |  | $                    |      |   |                   | $ | (162  | )                 |  | $ | (317  | )
|Interest rate assumptions                    |  |                      |       |   |                   |   |       |                   |  |   |       |  
|Weighted average forward rate (annual)       |  |                      | 4.5   | % |                   |   | 4.9   | %                 |  |   | 5.3   | %
|Fair value of retained interests             |  | $                    | 5,973 |   |                   | $ | 5,550 |                   |  | $ | 5,222 |  
|Change in fair value                         |  | $                    |      |   |                   | $ | (423  | )                 |  | $ | (751  | )

These sensitivities are hypothetical and should be used with caution. Changes in fair value based
on a 10 percent variation should not be extrapolated because the relationship of the change in assumption to the change in fair value may not always be linear. Also, in this table, the effect of a variation in a particular assumption on the fair
value of the retained interests is calculated without changing any other assumption; in reality, changes in one factor may result in changes in another (for example, increases in market interest rates may result in lower prepayments and increased
credit losses), which might magnify or counteract the sensitivities.

Total cash flows attributable to the indirect automobile loan
securitization transactions was an inflow of $1.7 and $4.3 million for the first quarters of 2006 and 2005, respectively. The following table summarizes the various cash flows received from and paid to the securitization trust:



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|                                                     |  |                             |   |                         |   |                 |  |           |       |  |   |  
|---------------------------------------------------- |  | --------------------------- | - | ----------------------- | - | --------------- |  | --------- | ----- |  | - | -
|                                                     |  | Proceeds FromSecuritization |   | Servicing FeesCollected |   | Other CashFlows |  | Fees Paid
|                                                     |  | (in thousands)             
|Cash flows received from trust in first quarter 2006 |  | $                           |  |                         | $ | 237             |  | $         | 1,464 |  | $ | 
|Cash flows received from trust in first quarter 2005 |  | $                           |  |                         | $ | 365             |  | $         | 3,974 |  | $ | 

Other cash flows include, for example, gross cash flows from Interest-Only Strips, net of
reductions in such cash flows for loan defaults, including the release of excess Overcollateralization funds.

The following table presents
quantitative information about delinquencies (loans 30 or more days past due plus non-accruals), net credit losses, and components of securitized indirect automobile loans and other assets managed together with them. Loan amounts represent the
principal amount of the loan only. Retained interests held for securitized assets are excluded from this table because they are recognized separately.



|                  |  |                                |         |                                      |   |                   |  |      |       |      |   |       |  |   |     |  |   |      
|----------------- |  | ------------------------------ | ------- | ------------------------------------ | - | ----------------- |  | ---- | ----- | ---- | - | ----- |  | - | --- |  | - | -----
|                  |  | Total Principal Amountof Loans |         | Principal Amount of Delinquent Loans |   | Net Credit Losses
|                  |  | As of March 31                 |         | Year-to-Date                        
|                  |  | 2006                           |         | 2005                                 |   | 2006              |  | 2005 |       | 2006 |   | 2005 
|Held in portfolio |  | $                              | 250,271 |                                      | $ | 245,819           |  | $    | 2,359 |      | $ | 2,686 |  | $ | 301 |  | $ | 536  
|Securitized       |  |                                | 94,044  |                                      |   | 171,411           |  |      | 1,941 |      |   | 2,365 |  |   | 432 |  |   | 616  
|                  |  |                                |         |                                      |   |                   |  |      |       |      |   |       |  |   |     |  |   |      
|Total             |  | $                              | 344,315 |                                      | $ | 417,230           |  | $    | 4,300 |      | $ | 5,051 |  | $ | 733 |  | $ | 1,152
|                  |  |                                |         |                                      |   |                   |  |      |       |      |   |       |  |   |     |  |   |      

Actual and projected static pool credit losses, as a percentage of indirect automobile loans
securitized are 1.67%, 1.83% and 1.85% as of the quarters ended March 31, 2006, 2007, and 2008, respectively. Static pool losses are calculated by summing the actual and projected future credit losses and dividing them by the original balance
of each pool of assets. The amounts shown here for each year are a weighted average for all indirect automobile loan securitizations.



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NOTE 6 - SHORT-TERM BORROWINGS

Short-term borrowings consisted of the following at March 31, 2006 and December 31, 2005:



|                                                 |  |                |         |                  |   |        
|------------------------------------------------ |  | -------------- | ------- | ---------------- | - | -------
|                                                 |  | March 31,2006  |         | December 31,2005
|                                                 |  | (in thousands)
|Securities sold under agreements to repurchase   |  | $              | 317,677 |                  | $ | 410,089
|Federal Home Loan Bank borrowings                |  |                | 16,711  |                  |   | 16,711 
|Federal funds purchased                          |  |                | 40,220  |                  |   | 50,278 
|U.S. Treasury tax and loan note accounts         |  |                | 314     |                  |   | 10,245 
|Commercial paper and other short-term borrowings |  |                | 14      |                  |   | 2,011  
|                                                 |  |                |         |                  |   |        
|Total Short-Term Borrowings                      |  | $              | 374,936 |                  | $ | 489,334
|                                                 |  |                |         |                  |   |        

NOTE 7 - LONG-TERM BORROWINGS

Long-term borrowings consisted of the following at March 31, 2006 and December 31, 2005:



|                                  |  |                |         |                  |   |        
|--------------------------------- |  | -------------- | ------- | ---------------- | - | -------
|                                  |  | March 31,2006  |         | December 31,2005
|                                  |  | (in thousands)
|Federal Home Loan Bank borrowings |  | $              | 227,258 |                  | $ | 127,444
|AMCORE Capital Trust I borrowings |  |                | 41,238  |                  |   | 41,238 
|Capitalized lease obligation      |  |                | 1,045   |                  |   | 1,048  
|                                  |  |                |         |                  |   |        
|Total Long-Term Borrowings        |  | $              | 269,541 |                  | $ | 169,730
|                                  |  |                |         |                  |   |        

The Company periodically borrows additional funds from the Federal Home Loan Bank (FHLB) in
connection with the purchase of mortgage-backed securities and the financing of eligible family real estate loans. The average stated maturity of these borrowings at March 31, 2006 is 2.5 years, with a weighted average borrowing rate of 4.92%.
Certain FHLB borrowings have prepayment penalties and call features associated with them. FHLB borrowings with call features, assuming they are called at the next call date, total $77.0 million in 2006. Mortgage-related assets with a carrying value
of $382 million were held as collateral for FHLB borrowings.

Other long-term borrowings include a capital lease with a net carrying value
of $1.0 million on a branch facility leased by the Company. The Company is amortizing the capitalized lease obligation and depreciating the facility over the remaining non-cancellable term of the original lease, which expires or renews in 2021.

The Company reclassifies borrowings to short-term borrowings when the remaining maturity becomes less than one year. Scheduled reductions
of long-term borrowings are as follows:



|                           |  |                |        
|-------------------------- |  | -------------- | -------
|                           |  | Total         
|                           |  | (in thousands)
|2007                       |  | $              | 7,521  
|2008                       |  |                | 167,765
|2009                       |  |                | 25,035 
|2010                       |  |                | 444    
|2011                       |  |                | 25,036 
|Thereafter                 |  |                | 43,740 
|                           |  |                |        
|Total Long-Term Borrowings |  | $              | 269,541
|                           |  |                |        



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NOTE 8  DERIVATIVE INSTRUMENTS

The Company uses derivatives to manage its risk or exposure to changes in interest rates and in conjunction with its mortgage banking operations. The derivatives currently used include interest
rate swaps and mortgage loan commitments and forward contracts. Interest rate swaps are used by the Company to convert fixed-rate assets or liabilities to floating-rate assets or liabilities (fair value Hedges). The Company has also used interest
rate swaps to convert assets or liabilities with variable-rate cash flows to assets or liabilities with fixed-rate cash flows (cash flow Hedges).

The following derivative related activity is included in other non-interest income or miscellaneous other expense, depending on the direction, in the Consolidated Statements of Income, for the three months ended:



|                                                |  |                |      |   |                |   |     |  
|----------------------------------------------- |  | -------------- | ---- | - | -------------- | - | --- | -
|                                                |  | March 31, 2006 |      |   | March 31, 2005 |  
|Changes in Value:                               |  |                |      |   |                |   |     |  
|Derivatives not qualifying for Hedge accounting |  | $              | (361 | ) |                | $ | (13 | )
|Ineffective portion of fair value Hedges        |  |                | 23   |   |                |   | 44  |  
|Mortgage loan derivatives                       |  |                | 5    |   |                |   | (63 | )
|                                                |  |                |      |   |                |   |     |  
|Total                                           |  | $              | (333 | ) |                | $ | 214 |  
|                                                |  |                |      |   |                |   |     |  

In first quarter 2004, the Company terminated two fair value Hedges of FHLB borrowings with a
combined notional amount of $74 million, which resulted in a gain of $690,000. The gain continued to be classified as long-term debt and is being amortized over the remaining terms of the debt. The unrealized gain was $328,000 and $506,000 at
March 31, 2006 and 2005, respectively. In first quarter 2006, the Company terminated two fair value Hedges of FHLB borrowings with a combined notional amount of $74 million, which resulted in a loss of $2.9 million. The loss continued to be
classified as long-term debt and is being amortized over the remaining terms of the debt.

NOTE 9  CONTINGENCIES AND GUARANTEES

Contingencies:

Management believes that no litigation is threatened or pending in which the Company faces potential loss or exposure which will materially affect the Companys consolidated financial position or consolidated results of operations.
Since the Companys subsidiaries act as depositories of funds, trustee and escrow agents, they occasionally are named as defendants in lawsuits involving claims to the ownership of funds in particular accounts. This and other litigation is
incidental to the Companys business.

Guarantees:

The Companys subsidiary AMCORE Bank, N.A. (Bank), as a provider of financial services, routinely enters into commitments to extend credit to its customers, including financial and
performance standby letters of credit. Financial and performance standby letters of credit are a conditional but irrevocable form of guarantee. Under a financial standby letter of credit, the Company guarantees payment to a third party obligee upon
the default of payment by the Bank customer, and upon receipt of complying documentation from the obligee. Under a performance standby letter of credit, the Company guarantees payment to a third party obligee upon nonperformance by the Bank customer
and upon receipt of complying documentation from the obligee.

Both financial and performance standby letters of credit are typically
issued for a period of one year to five years, but can be extended depending on the Bank customers needs. As of March 31, 2006, the maximum remaining term for any outstanding standby letters of credit expires on October 15, 2011.

A fee is normally charged to compensate the Bank for the value of the guarantees that are granted to the customer. The fees are deferred
and recognized as income over the term of the guarantee. As of March 31, 2006, the carrying value of these deferrals was a deferred credit of $1.2 million. This amount included a $300,000 guarantee liability for financial and performance
standby letters of credit recorded in accordance with Financial Interpretation No. (FIN) 45, Guarantors Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others. The
remaining $892,000 represented deferred fees charged for letters of credit exempted from the scope of FIN 45.



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At March 31, 2006 the contractual amount of all financial and performance standby letters of credit,
including those exempted from FIN 45, was $150.4 million and $57.4 million, respectively. These represent the maximum potential amount of future payments that the Company would be obligated to pay under the guarantees.

The issuance of either a financial or performance standby letter of credit is generally backed by collateral. The collateral can take various forms
including, but not limited to, bank accounts, investments, fixed assets, inventory, accounts receivable and real estate. At the time that the letters of credit are issued, the value of the collateral is usually in an amount that is considered
sufficient to cover the contractual amount of the standby letter of credit.

In addition to the guarantee liability and deferred fees
described above, the Company has recorded a $884,000 contingent liability for probable losses on unfunded loan commitments and letters of credit outstanding as of March 31, 2006. Prior to the third quarter 2005, this liability was included as
part of the Companys Allowance for Loan Losses.

NOTE 10  EARNINGS PER SHARE

Earnings per share (EPS) calculations are as follows:



|                                               |  |                                      |        |   |      |   |        |  
|---------------------------------------------- |  | ------------------------------------ | ------ | - | ---- | - | ------ | -
|                                               |  | For the Three MonthsEnded March 31,  |       
|                                               |  | 2006                                 |        |   | 2005 |  
|                                               |  | (in thousands, except pershare data) |       
|Numerator                                      |  |                                      |        |   |      |   |        |  
|Net Income from continuing operations          |  | $                                    | 10,459 |   |      | $ | 12,128 |  
|Loss from discontinued operations, net of tax  |  |                                      | (69    | ) |      |   | (78    | )
|                                               |  |                                      |        |   |      |   |        |  
|Net income                                     |  | $                                    | 10,390 |   |      | $ | 12,050 |  
|                                               |  |                                      |        |   |      |   |        |  
|Denominator                                    |  |                                      |        |   |      |   |        |  
|Average number of shares outstanding  basic   |  |                                      | 24,811 |   |      |   | 24,805 |  
|Plus: Diluted potential common shares          |  |                                      | 99     |   |      |   | 227    |  
|Contingently issuable shares                   |  |                                      | 46     |   |      |   | 29     |  
|                                               |  |                                      |        |   |      |   |        |  
|Average number of shares outstanding  diluted |  |                                      | 24,956 |   |      |   | 25,061 |  
|                                               |  |                                      |        |   |      |   |        |  
|Earnings per share from continuing operations  |  |                                      |        |   |      |   |        |  
|Basic                                          |  | $                                    | 0.42   |   |      | $ | 0.49   |  
|Diluted                                        |  |                                      | 0.42   |   |      |   | 0.48   |  
|                                               |  |                                     
|Loss per share from discontinued operations    |  |                                      |        |   |      |   |        |  
|Basic                                          |  |                                      | 0.00   |   |      |   | 0.00   |  
|Diluted                                        |  |                                      | 0.00   |   |      |   | 0.00   |  
|                                               |  |                                     
|Earnings per share                             |  |                                      |        |   |      |   |        |  
|Basic                                          |  |                                      | 0.42   |   |      |   | 0.49   |  
|Diluted                                        |  |                                      | 0.42   |   |      |   | 0.48   |  

As prescribed by SFAS No.128, Earnings Per Share, basic EPS is computed by dividing
net income available to common stockholders (numerator) by the weighted-average number of common shares outstanding (denominator) during the period. Shares issued during the period and shares reacquired during the period are weighted for the portion
of the period they were outstanding.

The computation of diluted EPS is similar to the computation of basic EPS except that the denominator
is increased to include the number of additional common shares that would have been outstanding if the dilutive potential common shares had been issued and to include shares contingently issuable pursuant to employee incentive plans. Securities
(e.g. options) that do not have a current right to participate fully in earnings, but that may do so in the future by virtue of their option rights, are potentially dilutive shares. The dilutive shares are calculated based on the treasury stock
method meaning that, for the purposes of this calculation, all outstanding options are assumed to have been exercised during the period and the resulting proceeds used to repurchase Company stock at the average market price during the period. In
computing diluted EPS, only potential common shares that are dilutivethose that reduce earnings per share or increase loss per shareare included. Exercise of options is not assumed if the result would be antidilutive.



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NOTE 11 - SEGMENT INFORMATION

AMCOREs internal reporting and planning process focuses on its four primary lines of business (Segment(s)): Commercial Banking, Retail Banking, Investment Management and Trust, and Mortgage
Banking. The financial information presented was derived from the Companys internal profitability reporting system that is used by management to monitor and manage the financial performance of the Company. This information is based on internal
management accounting policies which have been developed to reflect the underlying economics of the Segments and, to the extent practicable, to portray each Segment as if it operated on a stand-alone basis. Thus, each Segment, in addition to its
direct revenues, expenses, assets and liabilities, includes an appropriate allocation of shared support function expenses. The Commercial, Retail and Mortgage Banking Segments also include fund transfer adjustments to appropriately reflect the cost
of funds on loans made and funding credits on deposits generated. Apart from these adjustments, the accounting policies used are similar to those described in Note 1 of the Notes to Consolidated Financial Statements in the Companys Form 10-K
for the year ended December 31, 2005.

Since there are no comprehensive authorities for management accounting equivalent to U.S.
generally accepted accounting principles, the information presented may not necessarily be comparable with similar information from other financial institutions. In addition, methodologies used to measure, assign and allocate certain items may
change from time-to-time to reflect, among other things, accounting estimate refinements, changes in risk profiles, changes in customers or product lines, and changes in management structure.

Total Segment results differ from consolidated results primarily due to inter-segment eliminations, certain corporate administration costs, items not otherwise allocated in the management
accounting process and treasury and investment activities. The impact of these items is aggregated to reconcile the amounts presented for the Segments to the consolidated results and is included in the Other column. On December 30,
2005, the Company completed the sale of Investors Management Group, Ltd, (IMG). The results of IMG for the current and prior periods have been presented in discontinued operations.

The Commercial Banking Segment provides commercial banking services including lending, business checking and deposits, treasury management and other traditional as well as electronic commerce
commercial banking services to middle market and small business customers through the BANKs full-service and limited branch office (LBO) locations. The Retail Banking Segment provides retail banking services including direct and indirect
lending, checking, savings, money market and certificate of deposit (CD) accounts, safe deposit rental, automated teller machines and other traditional and electronic commerce retail banking services to individual customers through the BANKs
branch locations. The Investment Management and Trust segment provides its clients with wealth management services, which include trust services, investment management, estate administration and financial planning, employee benefit plan
administration and recordkeeping services. The Mortgage Banking segment provides a variety of mortgage lending products to meet its customer needs. It sells a majority of the long-term fixed-rate loans to the secondary market and continues to
service most of the loans sold.



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|                                                             |  |                        |           |   |               |   |         |                                |  |   |                 |   |  |       |         |   |              |   |           |   |  |   |           |  
|------------------------------------------------------------ |  | ---------------------- | --------- | - | ------------- | - | ------- | ------------------------------ |  | - | --------------- | - |  | ----- | ------- | - | ------------ | - | --------- | - |  | - | --------- | -
|For the three months ended March 31, 2006                    |  |                        |           |   |               |   |         |                                |  |   |                 |   |  |       |         |   |              |   |           |   |  |   |           |  
|                                                             |  | Operating Segments     |           |   |               |   |         |                                | 
|                                                             |  | CommercialBanking      |           |   | RetailBanking |   |         | InvestmentManagement and Trust |  |   | MortgageBanking |   |  | Other |         |   | Consolidated |  
|                                                             |  | (dollars in thousands) |          
|Net interest income                                          |  | $                      | 26,170    |   |               | $ | 13,014  |                                |  | $ | 108             |   |  | $     | 932     |   |              | $ | 1,206     |   |  | $ | 41,430    |  
|Non-interest income                                          |  |                        | 2,003     |   |               |   | 4,683   |                                |  |   | 4,686           |   |  |       | 1,163   |   |              |   | 3,164     |   |  |   | 15,699    |  
|                                                             |  |                        |           |   |               |   |         |                                |  |   |                 |   |  |       |         |   |              |   |           |   |  |   |           |  
|Total revenue                                                |  |                        | 28,173    |   |               |   | 17,697  |                                |  |   | 4,794           |   |  |       | 2,095   |   |              |   | 4,370     |   |  |   | 57,129    |  
|Provision for loan losses                                    |  |                        | 1,529     |   |               |   | 478     |                                |  |   |                |   |  |       | (7      | ) |              |   |          |   |  |   | 2,000     |  
|Depreciation and amortization                                |  |                        | 193       |   |               |   | 622     |                                |  |   | 14              |   |  |       | 77      |   |              |   | 833       |   |  |   | 1,739     |  
|Other non-interest expense                                   |  |                        | 13,521    |   |               |   | 13,156  |                                |  |   | 4,668           |   |  |       | 2,096   |   |              |   | 5,210     |   |  |   | 38,651    |  
|                                                             |  |                        |           |   |               |   |         |                                |  |   |                 |   |  |       |         |   |              |   |           |   |  |   |           |  
|Income (loss) from continuing operations before income taxes |  |                        | 12,930    |   |               |   | 3,441   |                                |  |   | 112             |   |  |       | (71     | ) |              |   | (1,673    | ) |  |   | 14,739    |  
|Income taxes (benefit)                                       |  |                        | 5,043     |   |               |   | 1,342   |                                |  |   | 62              |   |  |       | (28     | ) |              |   | (2,139    | ) |  |   | 4,280     |  
|                                                             |  |                        |           |   |               |   |         |                                |  |   |                 |   |  |       |         |   |              |   |           |   |  |   |           |  
|Income (loss) from continuing operations                     |  | $                      | 7,887     |   |               | $ | 2,099   |                                |  | $ | 50              |   |  | $     | (43     | ) |              | $ | 466       |   |  | $ | 10,459    |  
|                                                             |  |                        |           |   |               |   |         |                                |  |   |                 |   |  |       |         |   |              |   |           |   |  |   |           |  
|Discontinued operations:                                     |  |                        |           |   |               |   |         |                                |  |   |                 |   |  |       |         |   |              |   |           |   |  |   |           |  
|Loss from discontinued operations                            |  |                        |          |   |               |   |        |                                |  |   | (113            | ) |  |       |        |   |              |   |          |   |  |   | (113      | )
|Income tax benefit                                           |  |                        |          |   |               |   |        |                                |  |   | (44             | ) |  |       |        |   |              |   |          |   |  |   | (44       | )
|                                                             |  |                        |           |   |               |   |         |                                |  |   |                 |   |  |       |         |   |              |   |           |   |  |   |           |  
|Loss from discontinued operations                            |  | $                      |          |   |               | $ |        |                                |  | $ | (69             | ) |  | $     |        |   |              | $ |          |   |  | $ | (69       | )
|                                                             |  |                        |           |   |               |   |         |                                |  |   |                 |   |  |       |         |   |              |   |           |   |  |   |           |  
|Net Income (Loss)                                            |  | $                      | 7,887     |   |               | $ | 2,099   |                                |  | $ | (19             | ) |  | $     | (43     | ) |              | $ | 466       |   |  | $ | 10,390    |  
|                                                             |  |                        |           |   |               |   |         |                                |  |   |                 |   |  |       |         |   |              |   |           |   |  |   |           |  
|Segment profit percentage (continuing operations)            |  |                        | 79        | % |               |   | 21      | %                              |  |   | 0               | % |  |       | 0       | % |              |   | N/A       |   |  |   | 100       | %
|                                                             |  |                        |           |   |               |   |         |                                |  |   |                 |   |  |       |         |   |              |   |           |   |  |   |           |  
|Assets                                                       |  | $                      | 3,004,293 |   |               | $ | 646,527 |                                |  | $ | 12,684          |   |  | $     | 285,767 |   |              | $ | 1,402,128 |   |  | $ | 5,351,399 |  
|                                                             |  |                        |           |   |               |   |         |                                |  |   |                 |   |  |       |         |   |              |   |           |   |  |   |           |  
|For the three months ended March 31, 2005                    |  |                        |           |   |               |   |         |                                |  |   |                 |   |  |       |         |   |              |   |           |   | 
|                                                             |  |                        |           |   |               |  
|Net interest income                                          |  | $                      | 23,760    |   |               | $ | 11,067  |                                |  | $ | 17              |   |  | $     | 1,231   |   |              | $ | 3,237     |   |  | $ | 39,312    |  
|Non-interest income                                          |  |                        | 2,095     |   |               |   | 4,019   |                                |  |   | 4,902           |   |  |       | 1,270   |   |              |   | 3,049     |   |  |   | 15,335    |  
|                                                             |  |                        |           |   |               |   |         |                                |  |   |                 |   |  |       |         |   |              |   |           |   |  |   |           |  
|Total revenue                                                |  |                        | 25,855    |   |               |   | 15,086  |                                |  |   | 4,919           |   |  |       | 2,501   |   |              |   | 6,286     |   |  |   | 54,647    |  
|Provision for loan losses                                    |  |                        | 2,230     |   |               |   | 318     |                                |  |   |                |   |  |       | (48     | ) |              |   |          |   |  |   | 2,500     |  
|Depreciation and amortization                                |  |                        | 157       |   |               |   | 693     |                                |  |   | 23              |   |  |       | 59      |   |              |   | 1,064     |   |  |   | 1,996     |  
|Other non-interest expense                                   |  |                        | 11,192    |   |               |   | 11,131  |                                |  |   | 4,165           |   |  |       | 2,339   |   |              |   | 3,986     |   |  |   | 32,813    |  
|                                                             |  |                        |           |   |               |   |         |                                |  |   |                 |   |  |       |         |   |              |   |           |   |  |   |           |  
|Income from continuing operations before income taxes        |  |                        | 12,276    |   |               |   | 2,944   |                                |  |   | 731             |   |  |       | 151     |   |              |   | 1,236     |   |  |   | 17,338    |  
|Income taxes (benefit)                                       |  |                        | 4,788     |   |               |   | 1,148   |                                |  |   | 302             |   |  |       | 59      |   |              |   | (1,087    | ) |  |   | 5,210     |  
|                                                             |  |                        |           |   |               |   |         |                                |  |   |                 |   |  |       |         |   |              |   |           |   |  |   |           |  
|Income from continuing operations                            |  | $                      | 7,488     |   |               | $ | 1,796   |                                |  | $ | 429             |   |  | $     | 92      |   |              | $ | 2,323     |   |  | $ | 12,128    |  
|                                                             |  |                        |           |   |               |   |         |                                |  |   |                 |   |  |       |         |   |              |   |           |   |  |   |           |  
|Discontinued operations:                                     |  |                        |           |   |               |   |         |                                |  |   |                 |   |  |       |         |   |              |   |           |   |  |   |           |  
|Loss from discontinued operations                            |  |                        |          |   |               |   |        |                                |  |   | (97             | ) |  |       |        |   |              |   |          |   |  |   | (97       | )
|Income tax benefit                                           |  |                        |          |   |               |   |        |                                |  |   | (19             | ) |  |       |        |   |              |   |          |   |  |   | (19       | )
|                                                             |  |                        |           |   |               |   |         |                                |  |   |                 |   |  |       |         |   |              |   |           |   |  |   |           |  
|Loss from discontinued operations                            |  | $                      |          |   |               | $ |        |                                |  | $ | (78             | ) |  | $     |        |   |              | $ |          |   |  | $ | (78       | )
|                                                             |  |                        |           |   |               |   |         |                                |  |   |                 |   |  |       |         |   |              |   |           |   |  |   |           |  
|Net Income                                                   |  | $                      | 7,488     |   |               | $ | 1,796   |                                |  | $ | 351             |   |  | $     | 92      |   |              | $ | 2,323     |   |  | $ | 12,050    |  
|                                                             |  |                        |           |   |               |   |         |                                |  |   |                 |   |  |       |         |   |              |   |           |   |  |   |           |  
|Segment profit percentage (continuing operations)            |  |                        | 77        | % |               |   | 18      | %                              |  |   | 4               | % |  |       | 1       | % |              |   | N/A       |   |  |   | 100       | %
|                                                             |  |                        |           |   |               |   |         |                                |  |   |                 |   |  |       |         |   |              |   |           |   |  |   |           |  
|Assets                                                       |  | $                      | 2,578,696 |   |               | $ | 647,819 |                                |  | $ | 16,907          |   |  | $     | 250,245 |   |              | $ | 1,499,740 |   |  | $ | 4,993,407 |  
|                                                             |  |                        |           |   |               |   |         |                                |  |   |                 |   |  |       |         |   |              |   |           |   |  |   |           |  



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NOTE 12- EMPLOYEE BENEFIT PLANS

All eligible employees of the Company participate in the AMCORE Financial Security Plan (Security Plan), a qualified profit sharing plan under Section 401(a) of the Internal Revenue Code.
The Security Plan offers participants a personal retirement account funded by Company contributions and a personal savings account 401(k) funded by employee contributions and Company matching amounts. The expense related to the Security Plan was
$1.2 million for each of the three-month periods ended March 31, 2006 and 2005. The Company also has a non-qualified profit sharing plan that provides a cash profit sharing payment based upon achievement of corporate performance goals, to all
employees who have met service requirements. The expense related to the profit sharing plan was $186,000 and $293,000 for the three-month periods ended March 31, 2006 and 2005, respectively.

The AMCORE Financial, Inc. Employee Health Benefit Plan (Health Plan) provides group medical, pharmacy, dental and vision benefits to eligible
participating employees of the Company and their dependents. Employees, retirees, and COBRA beneficiaries contribute specific amounts determined annually by the Health Plans administrator. The Companys share of the cost of these benefits
is expensed as incurred. Expense related to the Health Plan was $1.2 million and $1.3 million for the three-month periods ended March 31, 2006 and 2005, respectively. Life insurance benefits are provided to eligible active employees.

The Company provides a deferred compensation plan (entitled AMCORE Financial, Inc. Deferred Compensation Plan) for certain key
employees and directors. This plan provides the opportunity to defer salary, bonuses and non-employee director fees. Participants may defer up to 90% of base compensation and up to 100% of bonus. The deferred compensation liability to participants
is recorded in other liabilities in the Consolidated Balance Sheets. The deferrals and earnings grow tax deferred until withdrawn from the plan. The amount and method of payment are pre-defined by participants each year of deferral. Earnings to
individual accounts are recorded as compensation expense when earned. The total non-qualified deferred compensation plan liability totaled $13.8 million at both March 31, 2006 and 2005. Expense related to the deferred compensation plan was
$233,000 and $124,000 for the three-month periods ended March 31, 2006 and 2005, respectively.

The Company provides additional
retirement benefits to certain senior officers through plans that are non-qualified, non-contributory and unfunded. Under one such arrangement, the additional retirement benefits replace what would have been provided under the Companys defined
contribution qualified plan in the absence of limits placed on qualified plan benefits by the Internal Revenue Code of 1986. The expense related to this arrangement was $57,000 and $77,000 for the three-month periods ended March 31, 2006 and
2005, respectively.

Another arrangement, which is a defined benefit plan, provides supplemental retirement benefits that are based upon
three percent of final base salary, times the number of years of service. Benefits under this plan may not exceed 70% or be less than 45% of a participants final base salary less offsets for employer retirement plan benefits attributable to
employer contributions and 50% of a participants Social Security benefit. The measurement date for obligations for this plan is as of December 31. The following table summarizes the costs and obligations to participants for the
three-month periods ended March 31, 2006 and 2005:



|                                         |  |                                     |                |   |      |   |      |  
|---------------------------------------- |  | ----------------------------------- | -------------- | - | ---- | - | ---- | -
|                                         |  | For the Three MonthsEnded March 31, |               
|                                         |  | 2006                                |                |   | 2005 |  
|                                         |  |                                     | (in thousands) |  
|Components of net periodic benefit cost: |  |                                     |                |  
|Service cost                             |  | $                                   | 7              |   |      | $ | 3    |  
|Interest cost                            |  |                                     | 29             |   |      |   | 23   |  
|Actuarial losses and decrease in offsets |  |                                     | 189            |   |      |   |     |  
|                                         |  |                                     |                |   |      |   |      |  
|Net periodic cost                        |  | $                                   | 225            |   |      | $ | 26   |  
|                                         |  |                                     |                |   |      |   |      |  
|                                         |  |                                    
|                                         |  | 2006                                |                |   | 2005 |  
|Weighted-average assumptions:            |  |                                     |                |   |      |   |      |  
|Discount rate                            |  |                                     | 5.75           | % |      |   | 5.75 | %
|Rate of compensation increase            |  |                                     | 3.00           | % |      |   | 3.00 | %

During the first quarter of 2006, $134,000 was contributed to the plan to fund distributions to
plan participants. No contributions or distributions are expected to be made during the remainder of the year. The plan has no assets at March 31, 2006.



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NOTE 13 - STOCK-BASED COMPENSATION

The Company has several stock-based compensation plans. The Company provides an employee stock purchase plan and makes awards of stock options, restricted stock and performance share units
(PSUs). Effective January 1, 2006, the Company adopted the fair value recognition provisions of SFAS 123R, Share-Based Payment, using the modified prospective transition method as permitted by SFAS 123R.
Accordingly, the Company has not restated prior period results to reflect the impact of SFAS 123R. Under this transition method, compensation cost is recognized for all share-based payments granted subsequent to the effective date and for all awards
granted, but not yet vested, prior to the effective date.

Prior to January 1, 2006, the Company accounted for awards granted under
those plans using the recognition and measurement principles of Accounting Principles Board Opinion (APB) No. 25, Accounting for Stock Issued to Employees, and related interpretations. Stock options were granted at an exercise price
equal to the market value on the date of grant and as a result no expense was recorded. Proforma expense was estimated using a Black-Scholes valuation model. Restricted stock was recorded at the market value on the date of issuance and performance
share units were revalued each period based upon actual performance and current market value and recognized over the period during which they were earned.

The Companys actual expense related to stock-based compensation for the quarters ended March 31, 2006 and 2005 were as follows:



|                                                              |  |                             |       |      |   |    
|------------------------------------------------------------- |  | --------------------------- | ----- | ---- | - | ---
|                                                              |  | Three Months EndedMarch 31,
|                                                              |  | 2006                        |       | 2005
|                                                              |  | (in thousands)             
|Compensation expense included in reported operating expenses: |  |                             |       |      |   |    
|Stock options                                                 |  | $                           | 936   |      |   | N/A
|Employee stock purchase plan                                  |  |                             | 7     |      |   | N/A
|Performance share units                                       |  |                             | 50    |      | $ | 247
|Restricted stock                                              |  |                             | 42    |      |   | 35 
|                                                              |  |                             |       |      |   |    
|Total stock-based compensation expense                        |  | $                           | 1,035 |      | $ | 282
|                                                              |  |                             |       |      |   |    
|Income tax benefits                                           |  | $                           | 389   |      | $ | 108

At March 31, 2006, total unrecognized stock-based compensation expense was $4.4 million, net
of estimated forfeitures, which will be recognized over a weighted average amortization period of 2.5 years. Prior to adopting SFAS 123R, the Company presented tax benefits resulting from the exercise of stock options as operating cash flows in the
Statement of Cash Flows. SFAS 123R requires cash flows resulting from the tax benefits from tax deductions in excess of the compensation cost recognized (excess tax benefits) to be classified as financing cash flows. For the three months ended
March 31, 2006, $59,000 of excess tax benefits has been classified as an operating cash outflow and a financing cash inflow.

The
Company estimates the fair value of stock options using a Black-Scholes valuation model. The fair value of restricted stock, PSUs and employee stock purchase plan grants generally equal their intrinsic value on the date of grant. The fair value of
stock-based grants are amortized to operating expense on a straight-line basis over the required vesting period of the grant. Stock option grants made to retirement eligible employees are fully expensed during the period in which the options are
granted.

In anticipation of adoption of SFAS 123R, the Company evaluated the assumptions used in the Black-Scholes model. As a result, the
Company changed its methodology for computing expected volatility and expected term. Calculation of expected volatility was changed from being based solely on historical volatility to a combination of both historical volatility and implied
volatility derived from an analysis of relevant indices volatility trends. The Company believes that the combination of historical and implied volatility provides a better estimate of expected stock price volatility and will continue to monitor
these and other relevant factors to estimate expected volatility for future option grants. The Company utilized the simplified method for estimating the expected term of options granted during the period as provided for in Staff
Accounting Bulletin 107.

The Company continues to base the estimate of risk-free rate on the U.S. Treasury yield curve in effect at the
time of grant. Dividend yield is the Companys annual dividend rate expressed as a percentage of the closing stock price on grant date. Estimated forfeitures are based on historical employee termination experience. The estimate of forfeitures
will be adjusted to the extent that actual forfeitures differ from such estimates. Changes in estimated forfeitures will be recognized in subsequent periods as they occur.



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The fair value of the Companys employee and director stock options granted during the first
quarters of 2006 and 2005 was estimated using the Black-Scholes option-pricing model with the following weighted average assumptions.



|                                 |  |                                |   |  |                               |  
|-------------------------------- |  | ------------------------------ | - |  | ----------------------------- | -
|                                 |  | SFAS No. 123R 1st Quarter 2006 |   |  | SFAS No. 123 1st Quarter 2005 |  
|Expected dividend yield          |  | 2.44                           | % |  | 2.41                          | %
|Expected price volatility        |  | 19.08                          | % |  | 27.94                         | %
|Expected term in years           |  | 5.94                           |   |  | 6.10                          |  
|Expected risk-free interest rate |  | 4.40                           | % |  | 4.29                          | %
|Estimated forfeiture rate        |  | 1.14                           | % |  | 1.16                          | %

Stock Award and Incentive Plans.The 2005 Stock Award and Incentive Plan (SAIP) allows for
awards to key employees of stock options, restricted shares, PSUs and other forms of stock-based awards. The maximum number of shares to be granted under the plan is 2,125,000. The Company will not reprice any awards under the SAIP unless such
repricing is approved by a majority vote of the Companys stockholders. Awards issued pursuant to the SAIP that expire, are forfeited or terminated for any reason shall again be available to grant.

Stock Options.Non-qualified stock options are issued at an exercise price equal to the fair market value of the shares on the grant date
and generally vest within three to five years and expire from seven to ten years from the date of grant. Options issued are valued using the Black-Scholes model with assumptions as previously described. The activity during the first quarter of 2006
and the total options outstanding and exercisable as of March 31, 2006 pursuant to the SAIP and previous incentive plans are as follows:



|                                         |  |           |   |  |                                 |       |                                            |           |                                   |   |       
|---------------------------------------- |  | --------- | - |  | ------------------------------- | ----- | ------------------------------------------ | --------- | --------------------------------- | - | ------
|                                         |  | Shares    |   |  | Weighted Average Exercise Price |       | Weighted AverageRemaining Contractual Life |           | Aggregate Intrinsic Value (000s)
|Options outstanding at beginning of year |  | 1,815,566 |   |  | $                               | 24.43 |                                            |           |                                   |   |       
|Options granted                          |  | 213,833   |   |  |                                 | 30.36 |                                            |           |                                   |   |       
|Option reloads                           |  | 5,395     |   |  |                                 | 30.34 |                                            |           |                                   |   |       
|Options exercised                        |  | (60,190   | ) |  |                                 | 22.41 |                                            |           |                                   |   |       
|Options forfeited                        |  | (8,538    | ) |  |                                 | 26.11 |                                            |           |                                   |   |       
|                                         |  |           |   |  |                                 |       |                                            |           |                                   |   |       
|Options outstanding at end of period     |  | 1,966,066 |   |  | $                               | 25.15 |                                            | 5.3 years |                                   | $ | 12,364
|                                         |  |           |   |  |                                 |       |                                            |           |                                   |   |       
|Options exercisable at end of period     |  | 1,112,793 |   |  | $                               | 23.27 |                                            | 3.6 years |                                   | $ | 9,090 

The estimated fair value of options granted during the first quarter of 2006 was $5.99 per option.
The total fair value of stocks options that vested during the first quarter of 2006 was $303,000, or $6.90 per option.

Performance
Share Units.The Company grants PSUs pursuant to the terms and conditions of the SAIP under various sub-plans as provided for in Section 8(e) of the SAIP. The sub-plans establish performance periods that are generally three-year periods
during which PSUs may be earned. Specific performance goals and target PSUs granted are approved by the Compensation Committee of the AMCORE Financial, Inc. Board of Directors. The number of PSUs earned can range from 0% to 200% of the target PSUs
granted. Each PSU represents the right to receive a share of the Companys common stock at the end of the performance period some of which may be issued as restricted shares. Those restricted shares generally have a five-year vesting period.

Compensation expense is calculated based upon the expected number of PSUs earned during the performance period and is recorded over the
service period. The fair value is calculated equal to market value on the date of grant less the present value of dividends that are not earned during the performance period. As of March 31, 2006, 92,631 PSUs were expected to be earned and the
weighted average grant date value per PSU was $29.34. Expense is adjusted for forfeitures as they occur.



|                                       |  |         |   |  |                                     |       |                                        |          
|-------------------------------------- |  | ------- | - |  | ----------------------------------- | ----- | -------------------------------------- | ---------
|                                       |  | Units   |   |  | Weighted AverageFair Value Per Unit |       | Weighted AverageRemaining Vesting Term
|Units outstanding at beginning of year |  | 63,146  |   |  | $                                   | 30.72 |                                        |          
|Units granted                          |  | 40,030  |   |  |                                     | 28.89 |                                        |          
|Adjustment to estimated grants         |  | (10,545 | ) |  |                                     | 30.72 |                                        |          
|                                       |  |         |   |  |                                     |       |                                        |          
|Units outstanding at end of period     |  | 92,631  |   |  | $                                   | 29.34 |                                        | 3.6 years
|                                       |  |         |   |  |                                     |       |                                        |          

Restricted Stock Awards.The Company granted restricted stock awards to certain key
employees. The shares are restricted as to transfer, but are not restricted as to dividend payment and voting rights. Transfer restrictions lapse at the end of three or nine years contingent upon performance goals being met and continued employment.
Restricted stock grants are valued at market value on the date of grant and are expensed over the service period. As of March 31, 2006, non-vested shares totaled 10,071 with a weighted average value of $22.84 per share. No awards were granted
or forfeited and no restrictions lapsed during the first quarter of 2006.



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Directors' Stock Plans. The Restricted Stock Plan for Non-Employee Directors provides that each
current eligible non-employee director and each subsequently elected non-employee director receive, in lieu of a cash retainer, shares of common stock of the Company, the value of which is equal to three times the annual retainer. Restricted stock
grants are valued at market value on the date of grant and are expensed over the required service period. The shares vest annually over a three-year period based upon the anniversary date of the election and continued service as a director. As of
March 31, 2006, restricted shares totaled 12,681 with a weighted average value of $25.54 per share. Restrictions lapsed on 1,624 shares during the first quarter of 2006.

The 2001 Stock Option Plan for Non-Employee Directors provides that each current eligible non-employee director and each subsequently elected non-employee director receive options to purchase
common stock of the Company. Options granted have an exercise price equal to the market value on the date of grant and generally vest within one to three years and expire in seven to 10 years from the date of grant. Stock options granted pursuant to
this plan are valued using a Black-Scholes model with assumptions as previously described. The activity during the first quarter of 2006 and the total options outstanding and exercisable as of March 31, 2006 pursuant to the director option plan
and previous director option plans are as follows:



|                                         |  |         |  |                                 |       |                                            |           |                                   |   |    
|---------------------------------------- |  | ------- |  | ------------------------------- | ----- | ------------------------------------------ | --------- | --------------------------------- | - | ---
|                                         |  | Shares  |  | Weighted Average Exercise Price |       | Weighted AverageRemaining Contractual Life |           | Aggregate Intrinsic Value (000s)
|Options outstanding at beginning of year |  | 101,000 |  | $                               | 22.90 |                                            |           |                                   |   |    
|Options exercised                        |  | 1,500   |  |                                 | 13.33 |                                            |           |                                   |   |    
|                                         |  |         |  |                                 |       |                                            |           |                                   |   |    
|Options outstanding at end of period     |  | 99,500  |  | $                               | 23.05 |                                            | 4.3 years |                                   | $ | 834
|                                         |  |         |  |                                 |       |                                            |           |                                   |   |    
|Options exercisable at end of period     |  | 79,500  |  | $                               | 22.34 |                                            | 3.1 years |                                   | $ | 723

Stock options exercised by employees and directors in the first quarter of 2006 totaled 61,690
shares with an intrinsic value of $503,000. The Company received cash or stock equivalent to the exercise price of $1.4 million, and a tax benefit of $189,000 was recognized. Shares are issued from treasury stock to fulfill exercises. The Company
repurchases shares in open-market and private transactions in accordance with Exchange Act Rule 10b-18 to replenish treasury stock for issuances related to stock option exercises and other employee benefit plans.

A summary of the Companys non-vested stock options as of March 31, 2006 is presented below.



|                                        |  |                  |   |                  |               |       |        |        |               |   |      
|--------------------------------------- |  | ---------------- | - | ---------------- | ------------- | ----- | ------ | ------ | ------------- | - | -----
|                                        |  | Employee options |   | Director options
|                                        |  | Shares           |   |                  | Average Price |       | Shares |        | Average Price
|Non-vested options at beginning of year |  | 686,458          |   |                  | $             | 26.84 |        | 20,000 |               | $ | 25.88
|Options granted                         |  | 219,228          |   |                  |               | 30.36 |        |       |               |   |     
|Options forfeited                       |  | (8,538           | ) |                  |               | 26.11 |        |       |               |   |     
|Options vested                          |  | (43,875          | ) |                  |               | 29.87 |        |       |               |   |     
|                                        |  |                  |   |                  |               |       |        |        |               |   |      
|Non-vested options at end of period     |  | 853,273          |   |                  | $             | 27.60 |        | 20,000 |               | $ | 25.88
|                                        |  |                  |   |                  |               |       |        |        |               |   |      

Employee Stock Purchase Plan. The AMCORE Stock Option Advantage Plan permits eligible
employees to purchase from the Company shares of its common stock. The Company intends that the plan be an employee stock purchase plan (ESPP) within the meaning of Section 423 of the Internal Revenue Code of 1986. Reserved for
issuance under the ESPP is a total of 600,000 shares of unissued common stock. The exercise or purchase price is 85% of the lower of the closing price of the Companys common stock on the Nasdaq National Market on the first or last day of each
offering period.

Shares issued pursuant to the ESPP are prohibited from sale by a participant for two years after the date of purchase.
Dividends earned are credited to a participants account and used to purchase shares from the Companys treasury stock at the same discounted price on the next purchase date. The Company has the option to purchase all, or any portion of,
the shares owned by such participant that, at the time of termination of employment, are subject to the restriction on transfer. The 15% discount is recorded as compensation expense and is amortized on a straight-line basis over the two-year service
period. As of March 31, 2006, $47,000 remains unrecognized related to shares issued during the first quarter of 2006.



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##### Table of Contents

Prior Period Proforma Presentation.Prior to January 1, 2006, the Company accounted for
stock-based compensation plans pursuant to APB 25. The following table sets forth proforma information as if compensation expense had been determined consistent with the requirements of SFAS 123. The estimated fair value of options granted during
the first quarter of 2005 was $7.87 per option.



|                                                                                                                                           |  |                                   |        |  
|------------------------------------------------------------------------------------------------------------------------------------------ |  | --------------------------------- | ------ | -
|                                                                                                                                           |  | Three Months ended March 31, 2005 |       
|                                                                                                                                           |  | (000s, except per share data)    |       
|Net Income:                                                                                                                                |  |                                   |        |  
|Income from continuing operations                                                                                                          |  | $                                 | 12,128 |  
|Deduct: Total stock-based employee compensation expense determined under fair value based method for all awards, net of
related tax effect |  |                                   | (457   | )
|                                                                                                                                           |  |                                   |        |  
|Pro forma                                                                                                                                  |  | $                                 | 11,671 |  
|                                                                                                                                           |  |                                   |        |  
|Diluted Shares:                                                                                                                            |  |                                   |        |  
|As reported                                                                                                                                |  |                                   | 25,061 |  
|Deduct: Shares due to average unrecognized compensation cost related to future services                                                    |  |                                   | (79    | )
|                                                                                                                                           |  |                                   |        |  
|Pro forma                                                                                                                                  |  |                                   | 24,982 |  
|                                                                                                                                           |  |                                   |        |  
|Basic Earnings per share from continuing operations                                                                                        |  |                                   |        |  
|As reported                                                                                                                                |  | $                                 | 0.49   |  
|Pro forma                                                                                                                                  |  |                                   | 0.47   |  
|                                                                                                                                           | 
|Diluted Earnings per share from continuing operations                                                                                      |  |                                   |        |  
|As reported                                                                                                                                |  | $                                 | 0.48   |  
|Pro forma                                                                                                                                  |  |                                   | 0.47   |  



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ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The
following discussion highlights the significant factors affecting AMCORE Financial, Inc. and Subsidiaries (AMCORE or the Company) consolidated financial condition as of March 31, 2006 compared to December 31, 2005,
and the consolidated results of operations for the three months ended March 31, 2006 compared to the same period of 2005. The discussion should be read in conjunction with the Consolidated Financial Statements, accompanying Notes to the
Consolidated Financial Statements, and selected financial data appearing elsewhere within this report.

FACTORS INFLUENCING
FORWARD-LOOKING STATEMENTS

This quarterly report on Form 10-Q contains, and periodic filings with the Securities and Exchange
Commission and written or oral statements made by the Companys officers and directors to the press, potential investors, securities analysts and others will contain, forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Act of 1934, and the Company intends that such forward-looking statements be subject to the safe harbors created thereby with respect to, among other things, the financial condition,
results of operations, plans, objectives, future performance and business of AMCORE. Statements that are not historical facts, including statements about beliefs and expectations, are forward-looking statements. These statements are based upon
beliefs and assumptions of AMCOREs management and on information currently available to such management. The use of the words believe, expect, anticipate, plan, estimate,
should, may, will or similar expressions identify forward-looking statements. Forward-looking statements speak only as of the date they are made, and AMCORE undertakes no obligation to update publicly any
forward-looking statements in light of new information or future events.

Contemplated, projected, forecasted or estimated results in such
forward-looking statements involve certain inherent risks and uncertainties. A number of factors  many of which are beyond the ability of the Company to control or predict  could cause actual results to differ materially from those in
its forward-looking statements. These factors include, among others, the following possibilities: (I) heightened competition, including specifically the intensification of price competition, the entry of new competitors and the formation of new
products by new or existing competitors; (II) adverse state, local and federal legislation and regulation or adverse findings or rulings made by local, state or federal regulators or agencies regarding AMCORE and its operations; (III) failure to
obtain new customers and retain existing customers; (IV) inability to carry out marketing and/or expansion plans; (V) ability to attract and retain key executives or personnel; (VI) changes in interest rates including the effect of prepayments;
(VII) general economic and business conditions which are less favorable than expected; (VIII) equity and fixed income market fluctuations; (IX) unanticipated changes in industry trends; (X) unanticipated changes in credit quality and risk
factors; (XI) success in gaining regulatory approvals when required; (XII) changes in Federal Reserve Board monetary policies; (XIII) unexpected outcomes on existing or new litigation in which AMCORE, its subsidiaries, officers, directors or
employees are named defendants; (XIV) technological changes; (XV) changes in U.S. generally accepted accounting principles; (XVI) changes in assumptions or conditions affecting the application of critical accounting estimates; (XVII)
inability of third-party vendors to perform critical services for the Company or its customers; (XVIII) disruption of operations caused by the conversion and installation of data processing systems; and (XIX) zoning restrictions or other limitations
at the local level, which could prevent limited branches from transitioning to full-service facilities.

OVERVIEW OF OPERATIONS

AMCORE reported net income from continuing operations of $10.5 million or $0.42 per diluted share for the quarter ended March 31,
2006. This compares to $12.1 million or $0.48 per diluted share for the same period in 2005 and represents a $1.7 million or 14% decrease in the first quarter of 2006 from the same period a year ago. Diluted earnings per share from continuing
operations decreased 13% or $0.06. AMCOREs return on average equity and on average assets from continuing operations for the first quarter of 2006 were 10.60% and 0.79%, respectively, compared to 12.69% and 0.99% in the same period in 2005.



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##### Table of Contents

Net income including discontinued operations was $10.4 million, or $0.42 per diluted share, for the
quarter ended March 31, 2006. This compares to $12.1 million, or $0.48 per diluted share, for the same period in 2005 and represents a $1.7 million or 14% decrease year to year. Diluted earnings per share including discontinued operations
declined 13% or $0.06.

The most significant factors affecting first quarter 2006 net income from continuing operations, compared to first
quarter 2005, were:

Net interest income-Increased $2.1 million primarily due to increased loan volumes and higher yields,
partially offset by increased funding costs. Net interest margin was 3.44% in the first quarter of 2006 compared to 3.57% in the first quarter of 2005. The reduction in net interest margin was due to increased funding costs associated with a rising
interest rate environment and deposit attraction strategies.

Provision for loan losses - Declined $500,000 to $2.0 million
in the first quarter of 2006 from $2.5 million in first quarter 2005.

Non-interest income  Increased $364,000. The
most significant increases were attributable to $387,000 in service charges on deposits, $276,000 in net security gains, $232,000 in bankcard fee income and $148,000 in brokerage commission income. These were partially offset by lower other
non-interest income of $371,000 and investment management and trust income of $296,000.

Operating expenses - Increased $5.5
million. Personnel costs increased $3.7 million primarily due to $1.5 million of direct costs attributable to branch expansion, branch-related corporate staffing increases, and stock based compensation expense of $753,000. Also contributing to the
increase were higher professional fees of $730,000 and other operating expense of $822,000.

Income taxes  Decreased
$930,000, mainly due to lower earnings before income taxes. The effective tax rate was 29.0% in 2006 compared to 30.0% in first quarter 2005.

Discontinued operations Loss was flat at $69,000 in the first quarter of 2006 compared to $78,000 in 2005.

KEY INITIATIVES AND OTHER SIGNIFICANT EVENTS

Key Initiatives

Branch Expansion - The Companys banking operations (Bank) launched a branch expansion initiative during
2001 targeting the area generally bounded by Interstates 94 in the north, 294 and 94 in the east, 80 in the south and 90 and 39 in the west (the Branch Expansion). The Branch Expansion strategy initially targets markets where there are
high concentrations of mid-size businesses, with a seasoned commercial lending and treasury management sales staff in a leased facility (limited branch office or LBO). Once a book of business is developed and the LBO becomes profitable,
plans to develop a permanent site for a full service facility in a nearby area that is surrounded by a high concentration of homeowners with strong population and household income growth are initiated. Increased capabilities in the markets served by
these facilities, in addition to better brand recognition, are expected to accelerate the Companys ability to generate bank-issued deposits, which will better support loan growth and decrease the use of wholesale funding.

Since the inception of the Branch Expansion strategy in April 2001, 25 new branches, net of closed offices, have opened. The new locations have
contributed $1.51 billion in loans and $652 million in deposits outstanding as of March 31, 2006. Same store contributions, which include new branches that have been open at least one year, were $1.48 billion in loans and $647 million in
deposits outstanding at March 31, 2006. During the first quarter of 2006, the Company opened one LBO in Joliet, Illinois and one full service branch in Belvidere, Illinois.



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##### Table of Contents

The Company anticipates opening five full-service branches and five LBOs in 2006. By the end of 2009 the
Company expects to have two-thirds of its branches located in markets that the Company believes exhibit strong growth characteristics.

To
date, the Companys Board of Directors has authorized $120 million of capital expenditures for new facilities in connection with the Companys Branch Expansion. As of March 31, 2006, $66 million of the total $120 million capital
authorization remained to be spent.

As a complement to its Branch Expansion, the Bank has also expanded its automated teller machine
system (ATMs), which includes both owned and third party operated, to 133 in Illinois and 145 in Wisconsin, or 278 overall at March 31, 2006 from 131 in Illinois and 37 in Wisconsin, or 168 overall, at March 31, 2005. These amounts include
109 ATMs located in Walgreens drug stores throughout Wisconsin as part of a co-branding relationship. The placement of additional ATMs is an important part of AMCOREs commitment to provide quality customer service as additional ATMs provide
AMCORE customers with greater ease and convenience in completing banking transactions.

Quality Loan Growth  Improving
credit quality is part of AMCOREs Quality Loan Growth initiative. Since 2001, the Company has experienced a steady decline in the amount of non-performing loans. Over the same time period, the Company has averaged double-digit loan growth. For
the first quarter of 2006, average loans rose $447 million to $3.8 billion, a 14% increase over the same period in 2005. Over the same period of time, total non-performing loans decreased 18% or $5.8 million to $25.7 million. However, pricing
spreads continue to narrow and maintaining credit and pricing discipline is likely to exert downward pressure on future loan growth.

Deposit Growth - Average bank-issued deposits grew to $3.5 billion in the first quarter of 2006, an increase of 12%, or $376 million, compared to $3.1 billion in the first quarter of 2005. AMCORE continues to focus on
transactional deposit growth, such as checking accounts, which helps lower funding costs, as well as increasing the number of households served by the Company. Handling a customers checking account enables the Bank to cross-sell other products
and increases the likelihood of retaining their business over time. The Companys goal is to become the customers primary bank, meeting all of their banking, mortgage and investment needs. On the commercial side, the Companys main
emphasis is on cash management products, including remote deposit capture, as it focuses on its core niche of mid-size commercial customers.

AMCORE continues to focus on bank-issued deposit growth because it provides a source of funding for the Branch Expansion and the Quality Loan Growth initiatives, and is also a means of reducing its reliance on wholesale funding sources.
Customer attraction strategies during 2005, especially in the newer markets, included a market segment of high initial rates for checking account balances. While this strategy did initially bring in balances, as rates rose these customers migrated
either to CDs or to other high rate products within the bank once the high initial rates expired. This strategy is being phased out in 2006, and a more market-oriented, spread-based deposit sales strategy is being emphasized.

Increasing Investment Management and Trust Income  As of the end of 2005, the Company completed its migration to an open architecture
sales platform, which allows greater customer access to non-proprietary products. This included the transition of $142 million in assets of three Company-managed Vintage equity funds into two mutual funds managed by Federated Investors, Inc.
(Federated) in September 2005 and the sale of the Companys asset management subsidiary, Investors Management Group, Ltd. (IMG), to West Bancorporation, Inc. (West Banc) on December 30, 2005. With these transactions, AMCORE has
transitioned from being a developer of proprietary investment products to being a provider that can offer its customers a wider array of investment product choices. The results of IMG for prior periods and the related-sale are reported as
discontinued operations.

The changes in the business due to the combined impact of the Federated and West Banc transactions have resulted
in slower income growth in the short run.

Capital Efficiency and Deployment  The Companys priorities with
respect to effectively deploying capital include a more structured pricing discipline that targets profitable growth on both sides of the balance sheet, migration of the balance sheet away from lower spread investments to higher spread loans, buying
back its common shares and increasing dividends on its common stock.



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During the first quarter of 2006, the Company liquidated $25 million of callable Agency debentures, and
used the proceeds to pay down short-term debt. In addition, it resold $15 million of the Companys issuance of a trust preferred security that it had repurchased a few years ago. Also during the first quarter of 2006, the Company increased its
dividend from $0.17 to $0.185 per share, an increase of $.015 per share, or nine percent.

Other Significant Events

Stock Repurchase Authorization - On May 4, 2006, the Company announced that its Board of Directors authorized a stock repurchase
program (Repurchase Program) of up to 3 million common shares, or approximately 12% of diluted shares outstanding. The repurchase authorization is for a twelve-month period. The repurchased shares will become treasury shares.

Accounting Changes  Following is a discussion of accounting standards that materially affected the Companys Consolidated
Financial Statements for the periods and dates presented, along with recently issued accounting standards that may impact future periods.

Statement of Financial Accounting Standards (SFAS) No. 123 (Revised 2005) (123R), Share-Based Payment requiring compensation cost relating to share-based payment transactions was effective for periods beginning after
December 15, 2005. The Companys implementation of SFAS No. 123R resulted in an increase in compensation expense of $753,000 for a total of $1.0 million in the first quarter of 2006.

Regulatory Agreement Update On May 31, 2005, the Bank entered into a written agreement with the Office of the Comptroller of
the Currency (OCC). The agreement describes commitments made by the Bank and outlines a series of steps to address and strengthen the Company's Regulatory Compliance Program. The Bank has implemented procedures to address the matters identified by
the OCC. These procedures are subject to review by the OCC to determine if they comply with the commitment made in the agreement or whether additional steps are necessary.

EARNINGS REVIEW OF CONSOLIDATED STATEMENTS OF INCOME

The following highlights a comparative
discussion of the major components of net income and their impact for the three months ended March 31, 2006 and 2005.

Net Interest
Income

Net interest income is the difference between income earned on interest-earning assets and the interest expense incurred on
interest-bearing liabilities. The interest income on certain loans and investment securities is not subject to federal income tax. For analytical purposes, the interest income and rates on these types of assets are adjusted to a fully taxable
equivalent, or FTE basis. The FTE adjustment was calculated using AMCOREs statutory federal income tax rate of 35%.

Overview - FTE adjusted interest income is as follows (in thousands):



|                              |  |                         |        |      |   |       
|----------------------------- |  | ----------------------- | ------ | ---- | - | ------
|                              |  | Quarters EndedMarch 31,
|                              |  | 2006                    |        | 2005
|Interest Income Book Basis    |  | $                       | 79,994 |      | $ | 63,234
|FTE Adjustment                |  |                         | 1,092  |      |   | 1,195 
|                              |  |                         |        |      |   |       
|Interest Income FTE Basis     |  |                         | 81,086 |      |   | 64,429
|Interest Expense              |  |                         | 38,564 |      |   | 23,922
|                              |  |                         |        |      |   |       
|Net Interest Income FTE Basis |  | $                       | 42,522 |      | $ | 40,507
|                              |  |                         |        |      |   |       



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Net interest income on an FTE basis increased $2.0 million or 5% in the first quarter of 2006 compared to
the same period in 2005. The increase was driven by a 112 basis point increase in average loan yields and by a 14% increase in average loan volumes. These improvements were largely offset by a 61% increase in interest expense.

Net interest spread is the difference between the average rates on interest-earning assets and the average rates on interest-bearing liabilities. Net
interest margin represents net interest income divided by average earning assets. These ratios can also be used to analyze net interest income. Since a portion of the Companys funding is derived from interest-free sources, primarily demand
deposits, other liabilities and stockholders equity, the effective rate paid for all funding sources is lower than the rate paid on interest-bearing liabilities alone.

As Table 1 indicates, the net interest spread declined 27 basis points to 3.02% in the first quarter of 2006 from 3.29% in the first quarter of 2005. The net interest margin was 3.44% in the
first quarter of 2006, a decline of 13 basis points from 3.57% in the first quarter of 2005. The declines in spread and margin were driven by higher funding costs, the result of continued increases in short-term interest rates and deposit attraction
strategies.

The level of net interest income is the result of the relationship between the total volume and mix of interest-earning assets
and the rates earned and the total volume and mix of interest-bearing liabilities and the rates paid. The rate and volume components associated with interest-earning assets and interest-bearing liabilities can be segregated to analyze the
period-to-period changes in net interest income. Changes due to rate/volume variances have been allocated between changes due to average volume and changes due to average rate based on the absolute value of each to the total change of both
categories. Table 2 analyzes the changes attributable to the volume and rate components of net interest income.

Changes due to
volume- In the first quarter of 2006, net interest income (FTE) increased due to average volume by $3.8 million when compared to the same period in 2005. This increase was comprised of a $6.2 million increase in interest income that was
partially offset by a $2.4 million increase in interest expense.

The first quarter of 2006 increase in interest income of $6.2 million was
primarily due to a $447 million or 14% increase in average loans. Average commercial real estate and commercial loans increased a combined $404 million, driven mostly by the Branch Expansion. Average residential real estate loans increased $50
million. Average consumer loan balances declined $7 million compared to the prior year.

The first quarter of 2006 increase in average
loans was largely funded by a $376 million or 12% increase in average bank-issued deposits. The increase in average bank-issued deposits was attributable to the Companys Deposit Growth and Branch Expansion initiatives.

Changes due to rate  During the first quarter of 2006, net interest income (FTE) declined due to average rates by $1.8 million when
compared with the first quarter of 2005. This was comprised of a $10.5 million increase in interest income that was more than offset by a $12.3 million increase in interest expense. Both loan yields and funding costs were affected by eight 25 basis
point increases in the federal funds (Fed Funds) rate that occurred since March 31, 2005. The yield on average earning assets increased 88 basis points to 6.58% during the first quarter of 2006, compared to 5.70% in the same period last year.
This was primarily attributable to the 112 basis point increase in average loan yields due to increasing loan volumes in the rising rate environment. During this same period of time, the rate paid on average interest bearing liabilities increased
115 basis points. All categories of liabilities experienced increased rates driven by increases in short-term rates. Interest-bearing demand and savings accounts, which saw the largest increase, were also affected by promotional deposit pricing
strategies that were part of the Deposit Growth initiative.



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The deposit attraction strategies included higher initial rates on deposits in checking accounts,
especially in newer markets. While this strategy did initially bring in balances, as rates rose these customers migrated to high rate products once the high initial rates expired. Partially as a result of this deposit strategy, the Companys
balance sheet had become more rate-sensitive than expected, and as a result of the rising short-term rate environment, the costs of funds rose faster than the assets repriced. This was mitigated during March 2006, through the sale of $40 million of
longer dated bonds and the execution of $100 million of longer-dated wholesale funding. This strategy is being phased out, and a more market-oriented, spread-based deposit sales strategy is being emphasized.

Like most financial institutions, AMCORE has an exposure to changes in both short-term and long-term interest rates. The Company expects a more stable
margin for the remainder of this year, based on improved discipline in its deposit pricing strategy and the mitigation of the repricing mismatch, as discussed above. Among those factors that could cause margin and spread not to perform as
anticipated by the Company include: greater and more frequent than anticipated changes in interest rates, including the impact of basis risk between various interest rate indices, changes in the shape of the yield curve, the effect of prepayments or
renegotiated rates, increased price competition on both deposits and loans, promotional pricing on deposits, changes in the mix of earning assets and the mix of liabilities, including greater than anticipated use of wholesale sources to fund the
Branch Expansion, and greater than expected loan delinquencies resulting in non-accrual status. Over a one-year horizon, AMCORE expects that its interest-rate risk will be greater during a period of rising interest rates than it will be during a
period of declining interest rates.

Provision for Loan Losses

Loans, the Companys largest income earning asset category, are periodically evaluated by management in order to establish an estimated allowance for loan losses (Allowance) that are
probable as of the respective reporting date and considered adequate to absorb probable losses. This evaluation includes specific loss estimates on certain individually reviewed loans where it is probable that the Company will be unable to collect
all of the amounts due (principal or interest) according to the contractual terms of the loan agreement (impaired loans) and statistical loss estimates for loan groups or pools that are based on historical loss experience, as adjusted for other loss
estimates that are based upon the size, quality, and concentration characteristics of the various loan portfolios, adverse situations that may affect a borrowers ability to repay, and current economic and industry conditions, among other
things. Additions to the Allowance are charged against earnings for the period as a provision for loan losses (Provision). Conversely, this evaluation could result in a decrease in the Allowance and Provision.

Actual loan losses are charged against and reduce the Allowance when management believes that the collection of principal will not occur. Unpaid interest
attributable to prior years for loans that are placed on non-accrual status is also charged against and reduces the Allowance. Unpaid interest for the current year for loans that are placed on non-accrual status is charged against and reduces the
interest income previously recognized. Subsequent recoveries of amounts previously charged to the Allowance, if any, are credited to and increase the Allowance. The Allowance is also subject to periodic examination by regulators whose review
includes a determination as to its adequacy to absorb probable losses.

The first quarter of 2006 Provision was $2.0 million, a decrease of
$500,000 from $2.5 million in the first quarter of 2005. The decline was primarily attributable to lower net charge-offs and lower non-performing loans. Net charge-offs were $2.0 million or 22 basis points of average loans in the first quarter of
2006, compared to $2.5 million or 31 basis points of average loans in the first quarter of 2005.

Non-Interest Income

Total non-interest income is comprised primarily of fee-based revenues from Investment Management and Trust, Bank-related service charges on deposits and
mortgage banking income. Net security gains or losses, gain on loan sales, increases in cash surrender value (CSV) and death benefits on Bank and Company owned life insurance (COLI), brokerage commission income and bankcard fee income are also
included in this category.



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Overview For the first quarter of 2006, non-interest income totaled $15.7 million,
an increase of $364,000 or 2% from $15.3 million in the first quarter of 2005. Increases in service charges on deposits, net security gains, bankcard fee income and brokerage commission were partly offset by lower other non-interest income and
investment management and trust income.

Investment management and trust income - Investment Management and Trust income
includes trust services, investment management, estate administration, financial planning, and employee benefit plan administration and recordkeeping services. Investment Management and Trust income totaled $3.7 million in the first quarter of 2006,
a decrease of $296,000 or 7% from $4.0 million in the first quarter of 2005. The decline was primarily attributable to lower mutual fund services and estate administration income.

At March 31, 2006, total assets under administration totaled $2.7 billion compared to $2.6 billion at December 31, 2005 and $4.4 billion at March 31, 2005. The decline from
March 31, 2005 reflects the combined impact of the Federated and West Banc transactions.

Service charges on
deposits - Service charges on deposits, currently the Companys largest source of non-interest income, totaled $5.6 million in the first quarter of 2006, a $387,000 or 7% increase over $5.2 million in the first quarter of 2005.
Service charges on personal deposit accounts was the primary driver of the increase and was affected by a 12% increase in average bank-issued deposits resulting from the Deposit Growth initiative.

Mortgage banking income - Mortgage banking income includes fees generated from the underwriting, originating and servicing of mortgage
loans along with gains realized from the sale of these loans, net of origination costs, servicing rights amortization and impairment.

For
the first quarter of 2006, mortgage banking income was $1.2 million, a decline of $83,000 from $1.3 million in the first quarter of 2005. Total closings were $80 million in the first quarter of 2006 compared to $85 million in the same period a year
ago. New purchase mortgage closings were $49 million or 61% of total closings in the first quarter of 2006, compared to $45 million or 53% of total closings in the first quarter of 2005.

The Company expects continued growth in new purchase mortgages as a result of additional mortgage originators, primarily in the Branch Expansion markets. New purchase mortgage growth could be
negatively affected by a number of factors beyond the Companys control, including heightened competition, higher mortgage interest rates, declines in new housing construction and adverse regulatory developments.

As of March 31, 2006, the carrying value of AMCOREs capitalized mortgage servicing rights was $13.5 million, with no impairment valuation
allowance. This compares to $13.3 at December 31, 2005 and $12.8 million at March 31, 2005, with no impairment valuation allowance. The unpaid principal balance of mortgage loans serviced for others was $1.5 billion as of March 31,
2006. This compares to $1.4 billion as of December 31, 2005 and $1.3 billion at March 31, 2005. The net carrying value of the Companys capitalized mortgage servicing rights, as a percentage of the unpaid principal balance of mortgage
loans serviced for others, was 0.91%, 0.97% and 0.98% as of March 31, 2006, December 31, 2005 and March 31, 2005, respectively.

COLI income  COLI income totaled $929,000 in the first quarter of 2006, a $21,000 or 2% increase from $908,000 in the first quarter of 2005. AMCORE uses COLI as a tax-advantaged means of financing its future obligations
with respect to certain non-qualified retirement and deferred compensation plans in addition to other employee benefit programs. As of March 31, 2006, the CSV of COLI was $133 million, compared to $132 million at December 31, 2005 and $128
million at March 31, 2005.

Other non-interest income For the first quarter of 2006, brokerage commission income,
bankcard fee income, gain on sale of loans, net security gains and other non-interest income totaled $4.3 million, a $335,000 or 8% increase from the first quarter of 2005. This included a $276,000 increase in net security gains, a $232,000 increase
in bankcard fee income and a $371,000 decrease in other non-interest income. A larger cardholder base, a benefit of both the Branch Expansion and Deposit Growth initiatives, greater card utilization and an expanded ATM network contributed to the
increase in bankcard fee income. First quarter of 2005 other non-interest income included a $280,000 gain from the merger of an ATM network in which the Bank held an interest.



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Operating Expenses

Overview  In the first quarter of 2006, total operating expense was $40.4 million, an increase of $5.6 million or 16%, from $34.8 million in the first quarter of 2005. The increase was primarily
due to a $3.9 million increase in personnel costs, a $730,000 increase in professional fees and an $822,000 increase in other operating expense.

The efficiency ratio was 70.70% in the first quarter of 2006, compared to 63.70% in the first quarter of 2005. The efficiency ratio is calculated by dividing total operating expenses by revenues. Revenues are the sum of net interest income
and non-interest income.

Personnel expense - Personnel expense includes compensation expense and employee benefits and is
the largest component of operating expenses, totaling a combined $25.1 million in the first quarter of 2006, and $21.1 million in the first quarter of 2005, an increase of $3.9 million or 19% in the first quarter of 2006 compared to the prior year
quarter. Direct personnel costs attributable to the Branch Expansion increased $1.5 million in the first quarter of 2006 over the same period a year ago. In addition, staffing increases in corporate support areas have been made as a result of the
Branch Expansion. Stock based compensation expense increased $753,000 in the first quarter of 2006 compared to the same period a year ago due to the adoption of SFAS 123R.

Professional fees Professional fees include legal, consulting, auditing and external portfolio management fees and totaled $1.7 million in the first quarter of 2006 compared
to $975,000 in the same period a year ago. The increase of $730,000 was primarily attributable to external portfolio management expenses and increased costs for external assistance with regulatory compliance matters. Subsequent to its sale, IMG
continues to provide certain portfolio management services for the Bank for a limited time. These services were also provided prior to the sale as a component of personnel expense. IMG results for prior periods have been re-categorized as
discontinued operations. While the expenses related to IMG portfolio management services should be stable or slightly declining from this point forward, the costs of outside assistance for compliance matters will continue and likely increase over
the remainder of the year.

Other operating expenses - Other operating expenses includes net occupancy expense, equipment
expense, data processing expense, communication expense, advertising and business development expenses and other costs, and were a combined $13.6 million in the first quarter of 2006, compared to $12.7 million in 2005, an increase of $938,000 or 7%.
The increase in 2006 was primarily due to higher courier and telephone expenses due to Branch Expansion, ATM-related and loan processing expenses due to increases volumes and recruiting expenses due to increased levels of hiring. These increased
expenses were partly offset by gains on the sale of other real estate owned during the first quarter of 2006 and lower depreciation and software costs related to the Companys core data-processing equipment and systems.

Income Taxes

Income tax expense
totaled $4.3 million in the first quarter of 2006, compared to $5.2 million in the first quarter of 2005. The decrease in income tax expense was mainly due to lower income before taxes. The effective tax rates were 29.0% and 30.0% in the first
quarters of 2006 and 2005, respectively. Effective tax rates are lower than the statutory tax rates due primarily to investments in tax-exempt municipal bonds and increases in CSV and death benefits on COLI that are not taxable.

Discontinued Operations

As a result
of the Federated and West Banc transactions (see Increasing Investment Management and Trust Income discussion), the Company has reclassified the results of IMG for the current and prior periods to discontinued operations.



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For the first quarter of 2006, net loss from discontinued operations was $69,000, compared to a net loss
of $78,000 in the first quarter of 2005. The net loss in the first quarter of 2006 includes additional expenses related to the sale of IMG, whereas the net loss in the first quarter of 2005 was from operations.

EARNINGS REVIEW BY BUSINESS SEGMENT

AMCOREs internal reporting and planning process focuses on four primary lines of business (Segment(s)): Commercial Banking, Retail Banking, Investment Management and Trust, and Mortgage Banking. Note 11 of the Notes to Consolidated
Financial Statements presents a condensed income statement and total assets for each Segment.

The financial information presented was
derived from the Companys internal profitability reporting system that is used by management to monitor and manage the financial performance of the Company. This information is based on internal management accounting policies which have been
developed to reflect the underlying economics of the Segments and, to the extent practicable, to portray each Segment as if it operated on a stand-alone basis. Thus, each Segment, in addition to its direct revenues, expenses, assets and liabilities,
includes an allocation of shared support function expenses. The Commercial, Retail and Mortgage Banking Segments also include funds transfer adjustments to appropriately reflect the cost of funds on loans made and funding credits on deposits
generated. Apart from these adjustments, the accounting policies used are similar to those described in Note 1 of the Notes to Consolidated Financial Statements included in the Form 10-K Annual Report for the year ended December 31, 2005.

Since there are no comprehensive authorities for management accounting equivalent to U.S. generally accepted accounting principles, the
information presented is not necessarily comparable with similar information from other financial institutions. In addition, methodologies used to measure, assign and allocate certain items may change from time-to-time to reflect, among other
things, accounting estimate refinements, changes in risk profiles, changes in customers or product lines, and changes in management structure.

Total Segment results differ from consolidated results primarily due to inter-segment eliminations, certain corporate administration costs, items not otherwise allocated in the management accounting process and treasury and investment
activities. The impact of these items is aggregated to reconcile the amounts presented for the Segments to the consolidated results and is included in the Other column of Note 11 of the Notes to Consolidated Financial Statements.

Commercial Banking

The Commercial Banking Segment (Commercial) provides commercial banking services to middle market and small business customers through the Banks full service branch and LBO locations. The services provided by this Segment include
lending, business checking and deposits, treasury management and other traditional as well as electronic commercial banking services.

Overview - Commercial represented 79% and 77% of total Segment earnings in the first quarter of 2006 and the first quarter of 2005, respectively. Commercial Segment total assets were $3.0 billion at March 31, 2006 and
represented 56% of total consolidated assets. This compares to $2.6 billion and 52% at March 31, 2005.

Commercial earnings for the
first quarter of 2006 were $7.9 million, an increase of $399,000 or 5% from the first quarter of 2005. The increase was primarily due to a $2.4 million increase in net interest income and a $701,000 decrease in Provision that were partially offset
by an $2.4 million increase in non-interest expense.

The increase in net interest income was driven by higher average commercial real
estate and commercial loan volumes, due in large part to the Branch Expansion, and by increased yields on both commercial real estate and commercial loans, net of higher interest expense adjusted for net cost of fund allocations. The increase in
interest expense, as adjusted for net cost of funds allocations, was primarily due to the increased funding needs associated



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with the loan growth combined with rising interest rates. The decline in Provision was primarily attributable to lower net charge-offs and lower
non-performing loans. The increase in non-interest expense was primarily due to higher personnel, loan processing and facilities expense, driven by Branch Expansion. Higher personnel costs also included stock-based compensation expense. Income taxes
were increased $255,000 due to higher earnings before tax.

Retail Banking

The Retail Banking Segment (Retail) provides retail-banking services to individual customers through the Banks branch locations in northern Illinois and southern Wisconsin. The services
provided by this Segment include direct and indirect lending, checking, savings, money market and CD accounts, safe deposit rental, ATMs, and other traditional and electronic retail banking services.

Overview - Retail represented 21% and 18% of total Segment earnings in the first quarter of 2006 and the first quarter of 2005,
respectively. Retail Segment total assets were $647 million at March 31, 2006 and represented 12% of total consolidated assets. This compares to $648 million and 13% at March 31, 2005.

Retail earnings for the first quarter of 2006 were $2.1 million, an increase of $303,000 or 17% from the first quarter of 2005. The increase was due to a
$1.9 million increase in net interest income and a $664,000 increase in non-interest income that were partially offset by a $2.0 million increase in operating expenses.

The increase in net interest income was due to increased funding credits on deposits generated due to Deposit Growth and increased interest income. These were partially offset by higher interest expense due to
increasing short-term interest rates and the promotional deposit pricing strategy, and by a decline in average consumer loan balances. The increase in non-interest income was mainly due to higher service charges on deposits that were attributable to
higher deposit balances resulting from the Deposit Growth initiative. Higher personnel costs also included stock-based compensation expense. The increase in non-interest expense was largely due to higher personnel and loan processing expense,
including increased allocations for support functions, all as a result of Branch Expansion. Income taxes increased $194,000 due to higher earnings before taxes.

Investment Management and Trust

The Investment Management and Trust Segment (IMT) provides trust
services, investment management, estate administration, financial planning, and employee benefit plan administration and recordkeeping services.

Overview - IMT represented less than 1% and 4% of total Segment earnings in the first quarter or 2006 and the first quarter of 2005, respectively. IMT Segment total assets were $13 million at March 31, 2006 and
represented less than 1% of total consolidated assets. At March 31, 2005, IMT total assets were $17 million, also less than 1% of total consolidated assets.

IMT reported income from continuing operations of $50,000 in the first quarter of 2006, a $379,000 decline from the first quarter of 2005 earnings from continuing operations of $429,000. The decline was primarily
attributable to higher non-interest expense and lower non-interest income.

The loss from discontinued operations in the first quarter of
2006 of $69,000 included additional expense incurred during the quarter related to the sale of IMG.

The decline in net income from
continuing operations was primarily due to a $494,000 increase in non-interest expense and a $216,000 decline in non-interest income. The decline in non-interest income was primarily attributable to lower mutual fund services and estate
administration income. The increase in non-interest expenses was due to higher personnel costs and professional fees. Higher personnel costs included stock-based compensation expense. Part of the IMG sale transaction included an agreement for IMG to
continue to provide certain portfolio management services for the Bank for a limited time. While these services mirror much of the services rendered prior to the sale, the prior year expenses were a component of personnel expense for IMG that have
been re-categorized as discontinued operations. The current period expenses appear as professional fees in continuing operations. Income taxes declined due to lower earnings on continuing operations before taxes.



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Mortgage Banking

The Mortgage Banking Segment (Mortgage) provides a variety of mortgage lending products to meet its customers needs. It sells most of the long-term, fixed-rate loans which it originates to the secondary market
and continues to service most of the loans sold.

Overview - Mortgage represented less than 1% of total Segment earnings in
each of the first quarters of 2006 and 2005. Mortgage Segment total assets were $286 million at March 31, 2006 and represented 5% of total consolidated assets. This compares to $250 million and 5% at March 31, 2005.

Mortgage results for the first quarter of 2006 reflected a loss of $43,000, a decrease of $135,000 from the first quarter of 2005. The decrease was due
to a $299,000 decline in net interest income and a $107,000 decline in non-interest income, which were partially offset by a $225,000 decrease in non-interest expense.

The decline in net interest income was primarily due to increased net cost of funds allocations, the result of increasing short-term interest rates. The increased cost of funds allocations more than offset the
increases in interest income, which resulted from increased real estate loan volumes and higher yields. The decline in non-interest income was primarily due to lower gains on the sales of mortgage loans into the secondary market during a period of
rising interest rates. The decline in non-interest expense was primarily due to gains on the sale of other real estate owned partially offset by higher personnel costs, the result of Branch Expansion. Higher personnel costs included stock-based
compensation expense. Income taxes were lower due to lower earnings before tax.

BALANCE SHEET REVIEW

Total assets were $5.4 billion at March 31, 2006, an increase of $6 million from December 31, 2005. Total liabilities increased $4 million over
the same period and stockholders equity increased $2 million. The following discusses changes in the major components of the Consolidated Balance Sheet since December 31, 2005.

Cash and Cash Equivalents - Cash and cash equivalents decreased $23 million from December 31, 2005 to March 31, 2006, as the cash used for operating activities of $773,000 plus
the cash used for investing activities of $31 million exceeded the cash provided by financing activities of $8 million.

Securities
Available for Sale - Total securities available for sale as of March 31, 2006 were $1.1 billion, a decline of $52 million or 4% from December 31, 2005. At March 31, 2006 and December 31, 2005, the total securities available
for sale portfolio comprised 22% and 23% respectively, of total earning assets, including COLI. The decrease in securities available for sale was primarily attributable to lower U. S. Government sponsored enterprises balances and the resale of a $15
million block of the Companys own issuance of a Trust Preferred security that it had repurchased a few years ago. As a result of the sale the Company realized an improvement in its regulatory capital, paid down short-tem wholesale borrowings
and reduced the level of required capital. Among the factors affecting the decision to purchase or sell securities are the current assessment of economic and financial conditions, including the interest rate environment, the liquidity needs of the
Company, and its pledging obligations. By not reinvesting cash flows from maturities and prepayments of investment securities, the Company expects to gradually migrate its balance sheet to a lower proportion of investment securities.

Mortgage and asset backed securities as of March 31, 2006 totaled $852 million and represented 75% of total available for sale securities. The
distribution of mortgage and asset backed securities includes $373 million of U.S. government-sponsored enterprise (GSE) mortgage-backed pass through securities, $454 million of GSE collateralized mortgage obligations and $25 million of private
issue collateral mortgage obligations, $15 million of which are rated Aaa and $10 million of which are rated B2.



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The $1.1 billion of total securities available for sale includes gross unrealized gains of $2 million and
gross unrealized losses of $32 million. Unrealized gains and unrealized losses is the difference between a securitys fair value and carrying value. The fair value of a security is generally impacted by two factors, market risk and credit risk.
Market risk is the exposure of the security to changes in interest rate. There is an inverse relationship to changes in the fair value of the security with changes in interest rates, meaning that when rates increase the value of the security will
decrease. Conversely, when rates decline the value of the security will increase. Credit risk arises from the extension of credit to a counter-party, for example a purchase of corporate debt in security form, and the possibility that the
counter-party may not meet its contractual obligations. The Companys policy is to primarily invest in securities with low credit risk, such as U.S. Treasuries, U.S. government agencies (such as the Government National Mortgage Association or
GNMA), government-sponsored enterprises (GSEs such as the Federal Home Loan Mortgage Corporation or FHLMC), state and political obligations, and mortgage-backed securities. Unlike agency debt, GSE debt is
not secured by the full faith and credit of the United States.

The combined effect of the Companys gross unrealized gains and gross
unrealized losses, net of tax, is included as accumulated other comprehensive income (OCI) in stockholders equity, as none of the securities with gross unrealized losses are considered other than temporarily impaired. If it is determined that
an investment is impaired and the impairment is other-than-temporary, an impairment loss is reclassified from OCI as a charge to earnings and a new carrying basis for the investment is established. As of March 31, 2006, none of the securities
are considered to be other than temporarily impaired.

For comparative purposes, at December 31, 2005, gross unrealized gains of $3
million and gross unrealized losses of $24 million were included in the securities available for sale portfolio. For further analysis of the securities available for sale portfolio, see Note 2 of the Notes to Consolidated Financial
Statements.

Loans Held for Sale - At March 31, 2006, mortgage origination fundings awaiting delivery to the secondary
market were $31 million, compared to $24 million at December 31, 2005. Residential mortgage loans are originated by the Mortgage Segment, of which non-conforming adjustable rate, fixed-rate and balloon residential mortgages are normally
retained. The conforming adjustable rate, fixed-rate and balloon residential mortgage loans are typically sold in the secondary market to eliminate interest rate risk, as well as to generate gains on the sale of these loans and servicing income. All
loans held for sale are recorded at the lower of cost or market value.

Loans - Loans represent the largest component of
AMCOREs earning asset base. At March 31, 2006, total loans were $3.8 billion, an increase of $53 million or 6% on an annualized basis from December 31, 2005, and represented 74% of total earning assets including COLI. The increase in
loans was attributable to total commercial real estate loans, including real estate construction loans, in the amount of $47 million. Commercial, financial and agricultural loans increased $3 million while residential real estate loans and
installment and consumer loans increased a combined $3 million.

Goodwill  Total goodwill at
March 31, 2006 was $6.1 million, unchanged from December 31, 2005.

Deposits - Total deposits at March 31, 2006 were
$4.2 billion, an increase of $27 million or 3% on an annualized basis when compared to December 31, 2005 due to an increase of $60 million in wholesale balances partly offset by a decline of $33 million in bank-issued deposits. The decline in
bank-issued deposits was due to seasonal factors. Non-interest bearing deposits declined $45 million and were partly offset by an increase of $21 million in time deposits. Bank-issued deposits represent 84% and 85% of total deposits at
March 31, 2006 and December 31, 2005, respectively.

Borrowings - Borrowings totaled $744 million at March 31, 2006
and were comprised of $375 million of short-term and $270 million of long-term borrowings. Comparable amounts at December 31, 2005 were $489 million and $170 million. While this represented a combined decrease in borrowings of only $15 million,
it reflected a strategic repositioning of funding, as $100 million of the $115 million decline in short-term borrowings was replaced with long-term borrowings. Coupled with sale of the longer-maturity investment securities discussed above, this
allowed the Company to mitigate a funding mismatch and reduce its interest rate risk sensitivity. See Notes 6 and 7 of the Notes to Consolidated Financial Statements.



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AMCORE has $40 million of Trust Preferred securities outstanding through AMCORE Capital Trust I (Capital
Trust). In the first quarter of 2006, $15 million, previously held by the Bank and disallowed as Tier 1 Capital, were sold. Following the sale, the entire $40 million qualifies as Tier 1 capital for regulatory purposes. These securities pay
cumulative cash distributions semiannually at an annual rate of 9.35% and are redeemable from March 25, 2007 until March 25, 2017, at a declining premium of 104.675% to 100.0% of the principal amount. After March 25, 2017, they are
redeemable at par until June 15, 2027, when redemption is mandatory.

The parent company had a commercial paper placement agreement
and a line of credit with an unrelated financial institution that provided for the issuance of non-rated short-term unsecured debt obligations at negotiated rates and terms. The agreement expired on March 1, 2006 and was not renewed.

Stockholders Equity - Total stockholders equity at March 31, 2006 was $401 million, an increase of $2 million or
1% from December 31, 2005. The increase in stockholders equity was primarily due to a $6 million increase in retained earnings and $2 million increase in paid-in-capital partly offset by a $5 million decline in OCI. The decline in OCI
relates to increases in net unrealized losses on the investment securities available for sale portfolio.

OFF-BALANCE SHEET ARRANGEMENTS
AND CONTRACTUAL OBLIGATIONS

Off-Balance Sheet Arrangements

During the ordinary course of its business, the Company engages in financial transactions that are not recorded on its Consolidated Balance Sheets, are recorded in amounts that are different than
their full principal or notional amount, or are recorded on an equity or cost basis rather than being consolidated. Such transactions serve a variety of purposes including management of the Companys interest rate risk, liquidity and credit
concentration risks, optimization of capital utilization, meeting the financial needs of its customers and fulfilling Community Reinvestment Act obligations in the markets that it serves.

Auto loan sales - Structured as sales pursuant to SFAS No. 140 Accounting for Transfers and Servicing of Financial Assets and Extinguishment of Liabilities, Auto
Loan Sales are a component of the Companys liquidity and credit concentration risk management strategy. The Auto Loan Sales are also helpful as a capital management tool.

In the Auto Loan Sales, indirect automobile loan receivables are transferred to a multi-seller variable-interest entity (VIE). Since the Company is not the primary beneficiary of the VIE,
consolidation is not required under the terms of Financial Interpretation No. (FIN) 46R, Consolidation of Variable Interest Entities. As a result, the net carrying amount of the loans is removed from the consolidated balance sheet and
certain retained residual interests are recorded. The Company's retained interests are subordinate to the interests of investors in the VIE and are subject to prepayment risk, interest-rate risk and credit risk on the transferred auto loans. The
Companys risk of loss attributable to credit and prepayment is limited to its interest in the Interest Only Strip. Neither the investors nor the securitization trust have any further recourse to the Companys other assets. Interest rate
risk could exceed the Companys interest in the Excess Spread, but such a possibility is not considered probable as of March 31, 2006. The Company also retains the rights to service the loans that are sold.

As of March 31, 2006, the balance of automobile loans serviced and not included on the Companys Consolidated Balance Sheet was $94 million,
compared to $111 million at December 31, 2005. The carrying value of retained interests was $6 million at March 31, 2006 and $7 million at December 31, 2005. The $6 million is net of a $173,000 temporary impairment valuation allowance
charged to OCI. See Note 5 of the Notes to Consolidated Financial Statements.



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Mortgage loan sales - The Company originates mortgage loans that it sells to the secondary
market. The Company typically retains the right to service the loans that are sold. As of March 31, 2006, the unpaid principal balance of mortgage loans serviced for others was $1.5 billion, compared to $1.4 billion at December 31, 2005.
These loans are not recorded on the Companys Consolidated Balance Sheets. In accordance with SFAS No. 140, the Company had recorded $14 million and $13 million, as of March 31, 2006 and December 31, 2005, respectively, of
capitalized mortgage servicing rights, net of impairment valuation allowances of zero for both periods. See Note 4 of the Notes to Consolidated Financial Statements.

Derivatives - The Company uses derivative contracts to help manage its exposure to changes in interest rates and in conjunction with its mortgage banking operations. The derivatives used most often are
interest rate swaps, and on occasion caps, collars and floors (collectively Interest Rate Derivatives), mortgage loan commitments and forward contracts. Interest Rate Derivatives are contracts with a third-party (the
Counter-party) to exchange interest payment streams based upon an assumed principal amount (the Notional Principal Amount). The Notional Principal Amount is not advanced to/from the Counter-party. It is used only as a
reference point to calculate the exchange of interest payment streams and is not recorded on the Consolidated Balance Sheets. AMCORE does not have any derivatives that are held or issued for trading purposes. AMCORE does not have credit risk
exposure to the Counter-parties. All Counter-parties, or their parent company, have investment grade credit ratings and are expected to meet any outstanding interest payment obligations.

The total notional amount of swap contracts outstanding was $172 million and $240 million as of March 31, 2006 and December 31, 2005, respectively. As of March 31, 2006, swap
contracts had a net negative carrying and fair value of $1.6 million, compared to a net negative carrying and fair value of $4.1 million at December 31, 2005. The total notional amount of forward contracts outstanding for mortgage loans to be
sold in the secondary market was $53 million and $39 million as of March 31, 2006 and December 31, 2005, respectively. As of March 31, 2006, the forward contracts had a net negative carrying and fair value of $196,000, compared to
$332,000 at December 31, 2005. For further discussion of derivative contracts, see Notes 8 of the Notes to Consolidated Financial Statements.

Loan commitments and letters of credit - The Company, as a provider of financial services, routinely enters into commitments to extend credit to its Bank customers, including performance and standby letters of credit. While
these represent a potential outlay by the Company, a significant amount of the commitments may expire without being drawn upon. Commitments and letters of credit are subject to the same credit policies, underwriting standards and approval process as
loans made by the Company.

At March 31, 2006 and December 31, 2005, liabilities in the amount of $300,000 and $183,000,
respectively, representing the value of the guarantee obligations associated with certain of the financial and standby letters of credit, had been recorded in accordance with FIN 45. These amounts are expected to be amortized into income over the
lives of the commitments. The contractual amount of all letters of credit, including those exempted from the scope of FIN 45, was $208 million and $204 million at March 31, 2006 and December 31, 2005, respectively. See Note 9 of the Notes
to Consolidated Financial Statements.

The carrying value of mortgage loan commitments recorded as an asset totaled $184,000 and $150,000
at March 31, 2006 and December 31, 2005, respectively. These amounts represent the fair value of those commitments marked-to-market in accordance with SFAS No. 138, Accounting for Derivative Instruments and Hedging
Activities and in accordance with Staff Accounting Bulletin No. 105. The total notional amount of mortgage loan commitments was $33 million at March 31, 2006 and $22 million at December 31, 2005. See Note 8 of the Notes to
Consolidated Financial Statements.

At March 31, 2006 and December 31, 2005, the Company had extended $938 million and $955
million, respectively, in loan commitments other than the mortgage loan commitments and letters of credit described above. This amount represented the notional amount of the commitment. A contingent liability of $884,000 has been recorded for
probable losses on unfunded commitments outstanding at March 31, 2006 compared to $732,000 at December 31, 2005. Prior to the third quarter of 2005, this liability was included as part of the Companys Allowance.



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Equity investments - The Company has a number of non-marketable equity investments that
have not been consolidated in its financial statements but rather are recorded either the cost or equity method of accounting. At March 31, 2006 and December 31, 2005, these investments included $5 million in private equity fund
investments that were reported under either the cost or equity method, depending on the percentage of ownership. Not included in the carrying amount were commitments to fund an additional $575,000 and $700,000, respectively, at some future date. At
March 31, 2006, the Company also has recorded investments of $4 million, $21 million, and $99,000 respectively, in stock of the Federal Reserve Bank, the Federal Home Loan Bank (FHLB) and the Federal Agricultural Mortgage Corporation. At
December 31, 2005, these amounts were $4 million, $21 million and $112,000, respectively. These investments are recorded at amortized historical cost or fair value, as applicable, with income recorded when dividends are declared.

Other investments, comprised of various affordable housing tax credit projects (AHTCP) and other Community Reinvestment Act investments, totaled
approximately $295,000 and $332,000 at March 31, 2006 and December 31, 2005, respectively. Losses are limited to the remaining investment and there are no additional funding commitments on the AHTCPs by the Company. Those investments
without guaranteed yields were reported on the equity method, while those with guaranteed yields were reported using the effective yield method. The maximum exposure to loss for all non-marketable equity investments is the sum of the carrying
amounts plus additional commitments, if any.

Other investments - The Company also holds $1 million in a common security
investment in the Capital Trust, to which the Company has $41 million in long-term debt outstanding. The Capital Trust, in addition to the $1 million in common securities issued to the Company, has $40 million in preferred securities outstanding.
The $40 million in preferred securities were issued to non-affiliated investors in 1997 and are redeemable beginning in 2007. The $15 million in preferred securities previously acquired by the Bank were sold in the first quarter of 2006. In its
Consolidated Balance Sheets, the Company reflects its $1 million common security investment on the equity method and reports the entire $41 million as outstanding long-term debt. For regulatory purposes, however, the $40 million in preferred
securities qualifies as Tier 1 capital.

Fiduciary and agency - The Companys subsidiaries also hold assets in a
fiduciary or agency capacity that are not included in the Consolidated Financial Statements because they are not assets of the Company. Total assets administered by the Company at March 31, 2006 and December 31, 2005 were $2.7 billion and
$2.6 billion, respectively.

Contractual Obligations

In the ordinary course of its business, the Company enters into certain contractual arrangements. These obligations include issuance of debt to fund operations, property leases and derivative transactions. During the
first quarter of 2006, the Company entered into three operating lease agreements. There are no residual value guarantees on these leases. Other than these transactions, there were no material changes in the Companys contractual obligations
since the end of 2005. Amounts as of December 31, 2005 are listed in the following table.



|                              |  |                        |           |                  |   |           |  |           |         |                   |   |         |  |   |        
|----------------------------- |  | ---------------------- | --------- | ---------------- | - | --------- |  | --------- | ------- | ----------------- | - | ------- |  | - | -------
|                              |  | Payments due by period
|Contractual Obligations       |  | Total                  |           | Less Than 1 Year |   | 1-3 Years |  | 3-5 Years |         | More Than 5 Years
|                              |  | (in thousands)        
|Time Deposits                 |  | $                      | 1,740,115 |                  | $ | 1,069,140 |  | $         | 501,382 |                   | $ | 138,387 |  | $ | 31,206 
|Long-Term Debt (1)            |  |                        | 168,862   |                  |   |          |  |           | 100,441 |                   |   | 432     |  |   | 67,809 
|Capital Lease Obligations (2) |  |                        | 2,795     |                  |   | 169       |  |           | 346     |                   |   | 345     |  |   | 1,935  
|Operating Leases              |  |                        | 29,792    |                  |   | 2,398     |  |           | 4,996   |                   |   | 3,809   |  |   | 18,589 
|Service Contracts (3)         |  |                        | 2,388     |                  |   | 597       |  |           | 1,194   |                   |   | 597     |  |   |       
|                              |  |                        |           |                  |   |           |  |           |         |                   |   |         |  |   |        
|Total                         |  | $                      | 1,943,772 |                  | $ | 1,072,304 |  | $         | 608,359 |                   | $ | 143,570 |  | $ | 119,539
|                              |  |                        |           |                  |   |           |  |           |         |                   |   |         |  |   |        

---

|(1) | Excludes Capital Lease Obligations.
|--- | -----------------------------------

|(2) | Includes related interest.
|--- | --------------------------

|(3) | Minimum payments on Bank investment portfolio management contract.
|--- | ------------------------------------------------------------------



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ASSET QUALITY REVIEW AND CREDIT RISK MANAGEMENT

AMCOREs credit risk is centered in its loan portfolio, which on March 31, 2006 totaled $3.8 billion, or 74% of earning assets including COLI.
The objective in managing loan portfolio risk is to quantify and manage credit risk on a portfolio basis as well as reduce the risk of a loss resulting from a customers failure to perform according to the terms of a transaction. To achieve
this objective, AMCORE strives to maintain a loan portfolio that is diverse in terms of loan type, industry concentration, and borrower concentration.

The Company is also exposed to credit risk with respect to its $133 million investment in COLI. AMCORE manages this risk by diversifying its holdings among various carriers and by periodic internal credit reviews. All
carriers have Secure ratings from A. M. Best that range from a low of A (Excellent) to A++ (Superior).

Allowance for Loan Losses  The Allowance is a significant estimate that is regularly reviewed by management to determine whether or not the amount is considered adequate to absorb probable losses. If not, an additional
Provision is made to increase the Allowance. Conversely, this review could result in a decrease in the Allowance. This evaluation includes specific loss estimates on certain individually reviewed loans, statistical loss estimates for loan groups or
pools that are based on historical loss experience, as adjusted for loss estimates that are based up on the size, quality and concentration characteristics of the various loan portfolios, adverse situations that may affect the borrowers
ability to repay, and current economic and industry conditions.

The determination by management of the appropriate level of the Allowance
amounted to $40.7 million at March 31, 2006, compared to $40.8 million at December 31, 2005, a decrease of $23,000. Decreases of $1.7 million in specific loss estimates on certain individually reviewed loans were essentially offset by
increases of $626,000 for statistical loss estimates on loan groups or pools based upon historical loss experience and $1.1 million for other loss estimates. Other loss estimates are based upon the size, quality and concentration characteristics of
the various loan portfolios, adverse situations that may affect the borrowers ability to repay or the Companys ability to collect, and current economic and industry conditions. The increase in other loss estimates was primarily
attributable to increased loss estimates associated with lender turnover in the newer markets.

As of March 31, 2006, the Allowance as
a percent of total loans and of non-accrual loans was 1.08% and 181%, respectively. These compare to the same ratios at December 31, 2005 of 1.10% and 188%. Net charge-offs were $2.0 million in the first quarter of 2006, a decrease of $468,000
from $2.5 million in the first quarter of 2005. This was 0.22% of average loans in the first quarter of 2006 versus 0.31% in the first quarter of 2005. Declines in net charge-offs of $239,000, $196,000 and $33,000 occurred in consumer/installment
loans, commercial loans and residential real estate loans, respectively. Improvements in overall credit quality and the improving economy led to the declines in net charge-offs as a percentage of average loans.

Non-performing Assets - Non-performing assets consist of non-accrual loans, loans 90 days past due and still accruing, foreclosed real estate and
other repossessed assets. Non-performing assets totaled $26.2 million as of March 31, 2006, a decline of $4.8 million or 16% from $31.0 million at December 31, 2005. The $4.8 million decrease consisted of a $5.3 million decrease in loans
90 days past due and still accruing, and a $265,000 decrease in total foreclosed assets. Partially offsetting these declines was a $790,000 increase in non-accrual loans. Total non-performing assets represented 0.49% and 0.58% of total assets at
March 31, 2006 and December 31, 2005, respectively.



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In addition to the amount of non-accruing and delinquent loans over 90 days past due, management is aware
that other possible credit problems of borrowers may exist. Credits are considered substandard assets due to either less than satisfactory performance history, lack of borrower's sound worth or paying capacity, or inadequate collateral. Loans
classified as substandard are monitored accordingly. As of March 31, 2006 and December 31, 2005, there were $1.5 million and $1.1 million, respectively, in this risk category that were 60 to 89 days delinquent and $1.7 million and $3.7
million, respectively, that were 30 to 59 days past due. In addition, as of March 31, 2006 and December 31, 2005, respectively, there were $10.9 million and $12.4 million of loans that were current, but had specific loss allocations of
$1.2 million and $2.3 million, respectively.

Concentration of Credit Risks

As previously discussed, AMCORE strives to maintain a diverse loan portfolio in an effort to minimize the effect of credit risk. Summarized below are the characteristics of classifications that
exceed 10% of total loans.

Commercial, financial, and agricultural loans were $822 million at March 31, 2006, and comprised 22% of
gross loans, of which 0.77% were non-performing. Annualized net charge-offs of commercial loans represented 0.45% during the first quarter of 2006, and 0.63% during the first quarter of 2005, of the ending balance of the category. There were no loan
concentrations within this category in excess of 10% of total loans.

Construction and commercial real estate loans were $2.2 billion at
March 31, 2006, comprising 58% of gross loans, of which 0.61% were classified as non-performing. Annualized net charge-offs of this category of loans represent 0.09% during the first quarter of 2006, and 0.14% during the first quarter of 2005,
of the ending balance of the category. This category included $530 million of loans to nonresidential building operators, which was 14% of total loans. There were no other loan concentrations within this category that exceeded of 10% of total loans.

Residential real estate loans, which includes home equity and permanent residential financing, totaled $461 million at March 31,
2006, and represent 12% of gross loans, of which 1.14% were non-performing. Annualized net charge-offs of residential real estate loans represent 0.08% in the first quarter of 2006 and 0.0% of the first quarter of 2005 of the ending balance of the
category. There were no loan concentrations within this category in excess of 10% of total loans.

Installment and consumer loans were $313
million at March 31, 2006, and comprised 8% of gross loans, of which 0.24% were non-performing. Annualized net charge-offs of consumer loans represented 0.66% and 0.95% of the ending balance for the first quarter of 2006 and the first quarter
of 2005, respectively. Consumer loans are comprised primarily of in-market indirect auto loans and direct installment loans. Indirect auto loans totaled $250 million at March 31, 2006. Both direct loans and indirect auto loans are approved and
funded through a centralized department utilizing the same credit scoring system to provide a standard methodology for the extension of consumer credit.

Contained within the concentrations described above, the Company has $1.2 billion of interest only loans, of which $818 million are included in the construction and commercial real estate loan category and $412
million are included in the commercial, financial, and agricultural loan category. In general, these loans are well-secured with an average maturity of less than two years. The Company does not have concentrations of negative amortization loans,
high loan-to-value loans, option adjustable-rate mortgage loans or loans that initially have below market rates that significantly increase after the initial period in excess of 10% of total loans.



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LIQUIDITY AND CAPITAL MANAGEMENT

Liquidity Management

Overview - Liquidity management is the
process by which the Company, through its Asset and Liability Committee (ALCO) and treasury function, ensures that adequate liquid funds are available to meet its financial commitments on a timely basis, at a reasonable cost and within acceptable
risk tolerances.

Liquidity is derived primarily from bank-issued deposit growth and retention; principal and interest payments on loans;
principal and interest payments, sale, maturity and prepayment of investment securities; net cash provided from operations; and access to other funding sources. Other funding sources include brokered CDs, Fed Funds purchased lines, Federal Reserve
Bank discount window advances, FHLB advances, repurchase agreements, the sale or securitization of loans, balances maintained at correspondent banks, and access to other capital markets. Bank-issued deposits, which exclude wholesale deposits, are
considered by management to be the primary, most stable and most cost-effective source of funding and liquidity. The Bank also has capacity, over time, to place additional brokered CDs as a source of mid- to long-term funds.

Uses of liquidity include funding credit obligations to borrowers, funding of mortgage originations pending delivery to the secondary market, withdrawals
by depositors, repayment of debt when due or called, maintaining adequate collateral for public deposits, paying dividends to shareholders, payment of operating expenses, funding capital expenditures and maintaining deposit reserve requirements.

Overall liquidity declined during the first quarter of 2006, as wholesale funding, which includes borrowings and brokered deposits,
increased $45 million. Wholesale funding represented 25% and 24% of total assets as of March 31, 2006 and December 31, 2005, respectively. The Company remains confident of its ability to meet and manage its short and long-term liquidity
needs.

Investment securities portfolio  Scheduled maturities of the Companys investment securities portfolio and
the prepayment of mortgage and asset backed securities represent a significant source of liquidity. Since December 31, 2005, proceeds from maturities and sales of investment securities not reinvested totaled $43 million. Approximately $30
million, or 3%, of the securities portfolio will contractually mature during the remainder of 2006. This does not include mortgage and asset backed securities since their payment streams may differ from contractual maturities because
borrowers may have the right to prepay obligations, typically without penalty. It is expected that a significant portion of the proceeds from maturities will be re-deployed to higher spread loans, buying back its common shares and increasing
dividends on its common stock, as the Company migrates to a lower proportion of investment securities on its balance sheet.

Loans - Funding of loans is the most significant liquidity need, representing 71% of total assets as of March 31, 2006. Since December 31, 2005, loans increased $53 million. Loans held for sale, which represents
mortgage origination funding awaiting delivery to the secondary market, increased $7 million. The scheduled repayments and maturities of loans represent a substantial source of liquidity. Loan growth from same-store and Branch Expansion continue to
be the greatest liquidity need of the Company.

Bank-issued deposits  Bank-issued deposits are the most cost-effective
and reliable source of liquidity for the Company. During the first quarter of 2006, bank-issued deposits decreased $33 million. The decrease in bank-issued deposits was primarily due to a seasonal decline in non-interest bearing deposits.

Branch expansion - The Companys Branch Expansion strategy poses the greatest challenge to short and long-term
liquidity. The Branch Expansion has required, and will continue to require, other sources of liquidity to fund the expected loan growth net of expected deposit growth and the remaining $66 million authorized capital investment. Through
March 31, 2006, Branch Expansion has required the funding of $1.5 billion in loans while generating $652 million in deposits.



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Parent company  In addition to the overall liquidity needs of the consolidated
Company, the parent company requires adequate liquidity to pay its expenses, repay debt when due and pay stockholder dividends. Liquidity is primarily provided to the parent through the Bank and other subsidiaries in the form of dividends. In the
first quarter of 2006, dividends from subsidiaries amounted to $10 million, compared to $9 million in the first quarter of 2005.

Other sources of liquidity - As of March 31, 2006, other sources of readily available liquidity totaled $1.1 billion and included $211 million of Fed Funds lines, unused collateral sufficient to support $425 million in
Federal Reserve Bank discount window advances, $370 million of unpledged debt investment securities, and $74 million of FHLB advances. These amounts totaled $1.1 billion at December 31, 2005. The Company also has capacity, over time, to place
sufficient amounts of brokered CDs as a source of mid- to long-term liquidity. The Banks indirect auto portfolio, which at March 31, 2006 was $250 million, is a potential source of liquidity through additional Auto Loan Sales subject to
eligibility criteria established by the securitization trust. The Bank also has a home equity portfolio of $218 million. Certain of these loans could also be packaged and securitized but the Bank has no current plans to do so.

Other uses of liquidity  At March 31, 2006, other potential uses of liquidity totaled $1.2 billion and included $938 million in
commitments to extend credit, $33 million in residential mortgage commitments primarily for sale to the secondary market, and $208 million in letters of credit. At December 31, 2005, these amounts totaled $1.2 billion.

The Company entered into a stock redemption agreement (Redemption Agreement) on October 16, 1989, as amended June 30, 1993, pursuant to
Section 303 of the Internal Revenue Code to pay death taxes and other related expenses of certain stockholders. Such redemptions may be subject to bank regulatory agency approvals or limited by debt covenant restrictions. During the second
quarter of 2006, the Company redeemed 86,000 shares, at a cost of $2.6 million pursuant to the Redemption Agreement. At this level, regulatory approvals were not required and debt covenant limitations did not apply.

Capital Management

Total
stockholders equity at March 31, 2006 was $401 million, an increase of $2 million or 1% from December 31, 2005. The increase in stockholders equity was due to a $6 million increase in retained earnings and a $2 million increase
in paid-in capital partly offset by a $5 million decline in OCI. The decline in OCI relates to an increase in net unrealized losses on the investment securities available for sale portfolio.

AMCORE paid $5 million of cash dividends during the first quarter of 2006, which represent $0.185 per share, or a dividend payout ratio of 44%. This compares to $0.17 per share paid in the first
quarter of 2005, which represented a payout ratio of 35%. The book value per share increased $0.08 per share to $16.14 at March 31, 2006, up from $16.06 at December 31, 2005.

In addition to the recently announced Repurchase Program and the Redemption Agreement, the Company does repurchase shares in open-market and private transactions in accordance with Exchange Act
Rule 10b-18. These repurchases are used to replenish the Companys treasury stock for re-issuances related to stock options and other employee benefit plans. Also repurchased are direct repurchases from participants related to the
administration of the Amended and Restated AMCORE Stock Option Advantage Plan. During the first quarter of 2006, the Company purchased 60,339 shares in open-market and private transactions at an average price of $30.23 per share.

AMCORE has outstanding $41 million of capital securities through the Capital Trust. Of the $41 million, $40 million qualifies as Tier 1 capital for
regulatory capital purposes, which is the $41 million reduced by the $1 million of common equity securities owned by the Company. Pursuant to regulations recently adopted by the Federal Reserve Board, the capital securities are expected to continue
to qualify as Tier 1 Capital.

As the following table indicates, AMCOREs total risk-based capital, Tier 1 capital and leverage ratios
all significantly exceed the regulatory minimums, as of March 31, 2006. The Bank, whose ratios are not presented below, is considered a well-capitalized institution based on regulatory guidelines.



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|                                         |  |        |           |                         |        |        |   |         |  |      
|---------------------------------------- |  | ------ | --------- | ----------------------- | ------ | ------ | - | ------- |  | -----
|                                         |  | Actual |           | Minimum CapitalAdequacy
|(dollars in thousands)                   |  | Amount |           | Ratio                   |        | Amount |   | Ratio  
|Total Capital (to Risk Weighted Assets)  |  | $      | 493,310   |                         | 11.29% |        | $ | 349,504 |  | 8.00%
|                                         |  |        |           |                        
|Tier 1 Capital (to Risk Weighted Assets) |  | $      | 452,558   |                         | 10.14% |        | $ | 174,752 |  | 4.00%
|                                         |  |        |           |                        
|Tier 1 Capital (to Average Assets)       |  | $      | 452,558   |                         | 8.45%  |        | $ | 214,305 |  | 4.00%
|                                         |  |        |           |                        
|Risk Weighted Assets                     |  | $      | 4,368,805 |                         |        |        |   |         |  |      
|                                         |  |        |           |                         |        |        |   |         |  |      
|                                         |  |        |           |                        
|Average Assets                           |  | $      | 5,357,634 |                         |        |        |   |         |  |      
|                                         |  |        |           |                         |        |        |   |         |  |      



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TABLE 1

ANALYSIS OF NET INTEREST INCOME AND AVERAGE BALANCE SHEET



|                                            |  |                                      |           |   |          |   |             |  |      |                |  |   |           |   |             |   |        |  |      |  
|------------------------------------------- |  | ------------------------------------ | --------- | - | -------- | - | ----------- |  | ---- | -------------- |  | - | --------- | - | ----------- | - | ------ |  | ---- | -
|                                            |  | For the Three Months ended March 31, |          
|                                            |  | 2006                                 |           |   | 2005     |  
|                                            |  | AverageBalance                       |           |   | Interest |   | AverageRate |  |      | AverageBalance |  |   | Interest  |   | AverageRate |  
|                                            |  | (dollars in thousands)               |          
|Assets:                                     |  |                                      |           |   |          |   |             |  |      |                |  |   |           |   |             |   |        |  |      |  
|Investment securities (1) (2)               |  | $                                    | 1,196,106 |   |          | $ | 13,643      |  | 4.56 | %              |  | $ | 1,231,746 |   |             | $ | 14,220 |  | 4.62 | %
|Short-term investments                      |  |                                      | 8,054     |   |          |   | 97          |  | 4.87 | %              |  |   | 4,871     |   |             |   | 31     |  | 2.58 | %
|Loans held for sale                         |  |                                      | 22,969    |   |          |   | 283         |  | 4.93 | %              |  |   | 21,074    |   |             |   | 233    |  | 4.43 | %
|                                            |  |                                      |           |   |          |  
|Commercial                                  |  |                                      | 811,689   |   |          |   | 15,183      |  | 7.59 | %              |  |   | 719,194   |   |             |   | 10,731 |  | 6.05 | %
|Commercial real estate                      |  |                                      | 2,160,772 |   |          |   | 38,915      |  | 7.30 | %              |  |   | 1,848,867 |   |             |   | 27,969 |  | 6.14 | %
|Residential real estate                     |  |                                      | 473,992   |   |          |   | 7,725       |  | 6.57 | %              |  |   | 424,095   |   |             |   | 6,143  |  | 5.83 | %
|Consumer                                    |  |                                      | 312,801   |   |          |   | 5,240       |  | 6.79 | %              |  |   | 319,705   |   |             |   | 5,102  |  | 6.47 | %
|                                            |  |                                      |           |   |          |   |             |  |      |                |  |   |           |   |             |   |        |  |      |  
|Total loans (1) (3)                         |  | $                                    | 3,759,254 |   |          | $ | 67,063      |  | 7.23 | %              |  | $ | 3,311,861 |   |             | $ | 49,945 |  | 6.11 | %
|                                            |  |                                      |           |   |          |   |             |  |      |                |  |   |           |   |             |   |        |  |      |  
|Total interest-earning assets               |  | $                                    | 4,986,383 |   |          | $ | 81,086      |  | 6.58 | %              |  | $ | 4,569,552 |   |             | $ | 64,429 |  | 5.70 | %
|Allowance for loan losses                   |  |                                      | (42,710   | ) |          |   |             |  |      |                |  |   | (42,072   | ) |             |   |        |  |      |  
|Non-interest-earning assets                 |  |                                      | 396,763   |   |          |   |             |  |      |                |  |   | 416,449   |   |             |   |        |  |      |  
|                                            |  |                                      |           |   |          |   |             |  |      |                |  |   |           |   |             |   |        |  |      |  
|Total assets                                |  | $                                    | 5,340,436 |   |          |   |             |  |      |                |  | $ | 4,943,929 |   |             |   |        |  |      |  
|                                            |  |                                      |           |   |          |   |             |  |      |                |  |   |           |   |             |   |        |  |      |  
|Liabilities and Stockholders' Equity:       |  |                                      |           |   |          |   |             |  |      |                |  |   |           |   |             |   |        |  |      |  
|Interest-bearing demand & savings deposits  |  | $                                    | 1,831,169 |   |          | $ | 11,912      |  | 2.64 | %              |  | $ | 1,563,000 |   |             | $ | 5,327  |  | 1.38 | %
|Time deposits                               |  |                                      | 1,200,419 |   |          |   | 10,724      |  | 3.62 | %              |  |   | 1,101,194 |   |             |   | 7,313  |  | 2.69 | %
|                                            |  |                                      |           |   |          |   |             |  |      |                |  |   |           |   |             |   |        |  |      |  
|Total Bank issued interest-bearing deposits |  | $                                    | 3,031,588 |   |          | $ | 22,636      |  | 3.03 | %              |  | $ | 2,664,194 |   |             | $ | 12,640 |  | 1.92 | %
|Wholesale deposits                          |  |                                      | 660,102   |   |          |   | 7,206       |  | 4.43 | %              |  |   | 644,732   |   |             |   | 5,336  |  | 3.36 | %
|Short-term borrowings                       |  |                                      | 530,751   |   |          |   | 5,841       |  | 4.46 | %              |  |   | 553,176   |   |             |   | 3,526  |  | 2.59 | %
|Long-term borrowings                        |  |                                      | 175,999   |   |          |   | 2,881       |  | 6.64 | %              |  |   | 166,889   |   |             |   | 2,420  |  | 5.88 | %
|                                            |  |                                      |           |   |          |   |             |  |      |                |  |   |           |   |             |   |        |  |      |  
|Total interest-bearing liabilities          |  | $                                    | 4,398,440 |   |          | $ | 38,564      |  | 3.56 | %              |  | $ | 4,028,991 |   |             | $ | 23,922 |  | 2.41 | %
|Non-interest bearing deposits               |  |                                      | 473,174   |   |          |   |             |  |      |                |  |   | 464,452   |   |             |   |        |  |      |  
|Other liabilities                           |  |                                      | 68,629    |   |          |   |             |  |      |                |  |   | 62,899    |   |             |   |        |  |      |  
|Realized Stockholders' Equity               |  |                                      | 414,482   |   |          |   |             |  |      |                |  |   | 387,509   |   |             |   |        |  |      |  
|Other Comprehensive (Loss) Income           |  |                                      | (14,289   | ) |          |   |             |  |      |                |  |   | 78        |   |             |   |        |  |      |  
|                                            |  |                                      |           |   |          |   |             |  |      |                |  |   |           |   |             |   |        |  |      |  
|Total Liabilities & Stockholders' Equity    |  | $                                    | 5,340,436 |   |          |   |             |  |      |                |  | $ | 4,943,929 |   |             |   |        |  |      |  
|                                            |  |                                      |           |   |          |   |             |  |      |                |  |   |           |   |             |   |        |  |      |  
|Net Interest Income (FTE)                   |  |                                      |           |   |          | $ | 42,522      |  |      |                |  |   |           |   |             | $ | 40,507 |  |      |  
|                                            |  |                                      |           |   |          |   |             |  |      |                |  |   |           |   |             |   |        |  |      |  
|Net Interest Spread (FTE)                   |  |                                      |           |   |          |   |             |  | 3.02 | %              |  |   |           |   |             |   |        |  | 3.29 | %
|                                            |  |                                      |           |   |          |   |             |  |      |                |  |   |           |   |             |   |        |  |      |  
|Interest Rate Margin (FTE)                  |  |                                      |           |   |          |   |             |  | 3.44 | %              |  |   |           |   |             |   |        |  | 3.57 | %
|                                            |  |                                      |           |   |          |   |             |  |      |                |  |   |           |   |             |   |        |  |      |  



|(1) | The interest on tax-exempt securities and tax-exempt loans is calculated on a tax equivalent basis (FTE) assuming a federal tax rate of 35%. FTE adjustments
totaled $1.1 million in 2006 and $1.2 million in 2005.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(2) | The average balances of the securities are based on amortized historical cost.
|--- | ------------------------------------------------------------------------------



|(3) | The balances of nonaccrual loans are included in average loans outstanding. Interest on loans includes yield related loan fees of $783,000 and $603,000 for 2006
and 2005, respectively.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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TABLE 2

ANALYSIS OF QUARTER-TO-QUARTER CHANGES IN NET INTEREST INCOME



|                                             |  |                                               |       |   |                              |   |        |   |  |   |        |  
|-------------------------------------------- |  | --------------------------------------------- | ----- | - | ---------------------------- | - | ------ | - |  | - | ------ | -
|                                             |  | For the Three Months endedMarch 31, 2006/2005 |      
|                                             |  | Increase/(Decrease)Due to Change in           |       |   | Total Net Increase(Decrease) |  
|                                             |  | AverageVolume                                 |       |   | AverageRate                  |   |       
|                                             |  | (in thousands)                                |      
|Interest Income:                             |  |                                               |       |   |                              |   |        |   |  |   |        |  
|Investment securities                        |  | $                                             | (408  | ) |                              | $ | (169   | ) |  | $ | (577   | )
|Short-term investments                       |  |                                               | 27    |   |                              |   | 39     |   |  |   | 66     |  
|Loans held for sale                          |  |                                               | 22    |   |                              |   | 28     |   |  |   | 50     |  
|                                             |  |                                               |      
|Commercial                                   |  |                                               | 1,498 |   |                              |   | 2,954  |   |  |   | 4,452  |  
|Commercial real estate                       |  |                                               | 5,140 |   |                              |   | 5,806  |   |  |   | 10,946 |  
|Residential real estate                      |  |                                               | 766   |   |                              |   | 816    |   |  |   | 1,582  |  
|Consumer                                     |  |                                               | (112  | ) |                              |   | 250    |   |  |   | 138    |  
|                                             |  |                                               |       |   |                              |   |        |   |  |   |        |  
|Total loans                                  |  |                                               | 7,268 |   |                              |   | 9,850  |   |  |   | 17,118 |  
|                                             |  |                                               |       |   |                              |   |        |   |  |   |        |  
|Total Interest-Earning Assets                |  | $                                             | 6,192 |   |                              | $ | 10,465 |   |  | $ | 16,657 |  
|                                             |  |                                               |       |   |                              |   |        |   |  |   |        |  
|Interest Expense:                            |  |                                               |       |   |                              |   |        |   |  |   |        |  
|Interest-bearing demand and savings deposits |  | $                                             | 1,046 |   |                              | $ | 5,539  |   |  | $ | 6,585  |  
|Time deposits                                |  |                                               | 706   |   |                              |   | 2,705  |   |  |   | 3,411  |  
|                                             |  |                                               |       |   |                              |   |        |   |  |   |        |  
|Total Bank issued interest-bearing deposits  |  |                                               | 1,930 |   |                              |   | 8,066  |   |  |   | 9,996  |  
|Wholesale deposits                           |  |                                               | 130   |   |                              |   | 1,740  |   |  |   | 1,870  |  
|Short-term borrowings                        |  |                                               | (149  | ) |                              |   | 2,464  |   |  |   | 2,315  |  
|Long-term borrowings                         |  |                                               | 137   |   |                              |   | 324    |   |  |   | 461    |  
|                                             |  |                                               |       |   |                              |   |        |   |  |   |        |  
|Total Interest-Bearing Liabilities           |  | $                                             | 2,360 |   |                              | $ | 12,282 |   |  | $ | 14,642 |  
|                                             |  |                                               |       |   |                              |   |        |   |  |   |        |  
|Net Interest Income (FTE)                    |  | $                                             | 3,832 |   |                              | $ | (1,817 | ) |  | $ | 2,015  |  
|                                             |  |                                               |       |   |                              |   |        |   |  |   |        |  

The above analysis shows the changes in interest income (tax equivalent "FTE") and interest expense
attributable to volume and rate variances. The change in interest income (tax equivalent) due to both volume and rate have been allocated to volume and rate changes in proportion to the relationship of the absolute dollar amounts of the change in
each. Because of changes in the mix of the components of interest-earning assets and interest-bearing liabilities, the computations for each of the components do not equal the calculation for interest-earning assets as a total or interest-bearing
liabilities as a total.



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TABLE 3

ASSET QUALITY

The components of non-performing loans and
foreclosed assets at March 31, 2006 and December 31, 2005 were as follows:



|                                                  |  |                |        |                  |   |       
|------------------------------------------------- |  | -------------- | ------ | ---------------- | - | ------
|                                                  |  | March 31,2006  |        | December 31,2005
|                                                  |  | (in thousands)
|Impaired loans:                                   |  |                |        |                  |   |       
|Non-accrual loans                                 |  |                |        |                  |   |       
|Commercial                                        |  | $              | 4,499  |                  | $ | 4,483 
|Real estate                                       |  |                | 10,948 |                  |   | 13,083
|Other non-performing:                             |  |                |        |                  |   |       
|Non-accrual loans (1)                             |  |                | 7,023  |                  |   | 4,114 
|Loans 90 days or more past due and still accruing |  |                | 3,198  |                  |   | 8,533 
|                                                  |  |                |        |                  |   |       
|Total non-performing loans                        |  | $              | 25,668 |                  | $ | 30,213
|                                                  |  |                |        |                  |   |       
|Foreclosed assets:                                |  |                |        |                  |   |       
|Real estate                                       |  |                | 341    |                  |   | 621   
|Other                                             |  |                | 166    |                  |   | 151   
|                                                  |  |                |        |                  |   |       
|Total foreclosed assets                           |  | $              | 507    |                  | $ | 772   
|                                                  |  |                |        |                  |   |       
|Total non-performing assets                       |  | $              | 26,175 |                  | $ | 30,985
|                                                  |  |                |        |                  |   |       
|Troubled debt restructurings                      |  | $              | 13     |                  | $ | 13    
|                                                  |  |                |        |                  |   |       

|(1) | These loans are not considered impaired since they are part of a small balance homogeneous portfolio.
|--- | -----------------------------------------------------------------------------------------------------

An anaylsis of the allowance for loan losses for the periods ended March 31, 2006 and 2005 is presented below:



|                                                                                              |  |                                     |        |   |      |   |        |  
|--------------------------------------------------------------------------------------------- |  | ----------------------------------- | ------ | - | ---- | - | ------ | -
|                                                                                              |  | For the Three MonthsEnded March 31, |       
|                                                                                              |  | 2006                                |        |   | 2005 |  
|                                                                                              |  | ($ in thousands)                    |       
|Balance at beginning of period                                                                |  | $                                   | 40,756 |   |      | $ | 40,945 |  
|Charge-Offs:                                                                                  |  |                                     |        |   |      |   |        |  
|Commercial, financial and agricultural                                                        |  |                                     | 1,001  |   |      |   | 1,422  |  
|Real estate - Commercial                                                                      |  |                                     | 715    |   |      |   | 675    |  
|Real estate - Residential                                                                     |  |                                     | 84     |   |      |   | 131    |  
|Installment and consumer                                                                      |  |                                     | 1,303  |   |      |   | 1,147  |  
|Direct leases                                                                                 |  |                                     |       |   |      |   |       |  
|                                                                                              |  |                                     |        |   |      |   |        |  
|                                                                                              |  |                                     | 3,103  |   |      |   | 3,375  |  
|Recoveries:                                                                                   |  |                                     |        |   |      |   |        |  
|Commercial, financial and agricultural                                                        |  |                                     | 84     |   |      |   | 315    |  
|Real estate - Commercial                                                                      |  |                                     | 60     |   |      |   | 108    |  
|Real estate - Residential                                                                     |  |                                     | 145    |   |      |   | 65     |  
|Installment and consumer                                                                      |  |                                     | 791    |   |      |   | 396    |  
|Direct leases                                                                                 |  |                                     |       |   |      |   |       |  
|                                                                                              |  |                                     |        |   |      |   |        |  
|                                                                                              |  |                                     | 1,080  |   |      |   | 884    |  
|Net Charge-Offs                                                                               |  |                                     | 2,023  |   |      |   | 2,491  |  
|Provision charged to expense                                                                  |  |                                     | 2,000  |   |      |   | 2,500  |  
|                                                                                              |  |                                     |        |   |      |   |        |  
|Balance at end of period                                                                      |  | $                                   | 40,733 |   |      | $ | 40,954 |  
|                                                                                              |  |                                     |        |   |      |   |        |  
|Ratio of net-charge-offs during the period to average loans outstanding during the period (1) |  |                                     | 0.22   | % |      |   | 0.31   | %
|                                                                                              |  |                                     |        |   |      |   |        |  

|(1) | On an annualized basis.
|--- | -----------------------



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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As part of its normal operations,
AMCORE is subject to interest-rate risk on the interest-earning assets it invests in (primarily loans and securities) and the interest-bearing liabilities it funds with (primarily customer deposits, brokered deposits and borrowed funds), as well as
its ability to manage such risk. Fluctuations in interest rates may result in changes in the fair market values of AMCOREs financial instruments, cash flows and net interest income. Like most financial institutions, AMCORE has an exposure to
changes in both short-term and long-term interest rates. In the near-term, AMCORE expects that its interest-rate risk will be greater should interest rates increase.

While AMCORE manages other risks in its normal course of operations, such as credit and liquidity risk, it considers interest-rate risk to be its most significant market risk. Other types of market risk, such as
foreign currency exchange risk and commodity price risk, do not arise in the normal course of AMCOREs business activities and operations. In addition, since AMCORE does not hold a trading portfolio, it is not exposed to significant market risk
from trading activities. During first quarter 2006, there were no material changes in AMCOREs primary market risk exposures. Based upon current expectations, no material changes are anticipated in the future in the types of market risks facing
AMCORE.

Like most financial institutions, AMCOREs net interest income can be significantly impacted by external factors. These
factors include, but are not limited to: overall economic conditions, policies and actions of regulatory authorities, the amounts of and rates at which assets and liabilities re-price, variances in prepayment of loans and securities other than those
that are assumed, early withdrawal of deposits, exercise of call options on borrowings or securities, competition, a general rise or decline in interest rates, changes in the slope of the yield-curve, changes in historical relationships between
indices and balance sheet growth.

AMCOREs asset and liability management process is utilized to manage market and interest rate risk
through structuring the balance sheet and off-balance sheet positions to maximize net interest income while maintaining acceptable levels of risk to changes in market interest rates. While achievement of this goal requires a balance between
earnings, liquidity and interest rate risk, there are opportunities to enhance revenues through managed risk. Interest rate sensitivity analysis is performed monthly using various simulations with an asset/liability modeling system. These analyses
are reviewed by the ALCO, whose actions attempt to minimize any sudden or sustained negative impact that interest rate movements may have on net interest income. ALCO reviews the impact of liquidity, capital adequacy and rate sensitivity, among
other things, and determines appropriate policy direction to maintain or meet established ALCO guidelines.

Based upon an immediate
increase in interest rates of 100 basis points and no change in the slope of the yield curve, the potential decrease in net interest income for the twelve-month period beginning April 1, 2006 would be approximately $2.1 million or 1.18% of base
forecasted net interest income. This analysis assumes no growth in assets or liabilities and replacement of maturing instruments with like-kind instruments. At the end of 2005, comparable assumptions would have resulted in a potential decrease in
2006 net interest income of $2.8 million or 1.64%. Thus, AMCOREs earnings at risk for rising rates have decreased since the end of 2005.

Conversely, an immediate decrease in interest rates of 100 basis points and no change in the slope of the yield curve would result in a potential decrease in net interest income for the twelve-month period beginning April 1, 2006 of
$1.5 million or 0.86% of base forecasted net interest income. At the end of 2005, a similar decrease in rates would have resulted in a potential decrease in net interest income of $1.4 million or 0.84%. AMCOREs sensitivity to declining
interest rates has increased slightly since the end of 2005. Factors that contribute to the continued negative sensitivity to declining interest rates include the negative convexity of the mortgage-backed products and the larger volume of floating
rate commercial loans.

The amounts and assumptions used in the rising and falling rate scenarios should not be viewed as indicative of
expected actual results. In addition to rising or falling interest rates, AMCOREs net interest income can be significantly impacted by a variety of external factors, such as those previously noted. In addition, as interest rates move, the ALCO
is likely to adjust interest rate risk management strategies to limit, to the extent possible, the adverse impact that such changes in interest rates might otherwise have on AMCOREs net interest income, as well as maximize potential positive
impacts such movements might have.



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ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

The Companys management, with the participation of the Companys Chief Executive Officer and Chief Financial Officer, has evaluated the
effectiveness of the Companys disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the Exchange Act)) as of the end of the period
covered by this report. Based on such evaluation, the Companys Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of such period, the Companys disclosure controls and procedures are effective.

Changes in Internal Controls

There have not been any changes in the Companys internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fiscal quarter to which this report relates that
have materially affected, or are reasonable likely to materially affect, the Companys internal control over financial reporting.

PART II-Other Information

ITEM 1.Legal Proceedings

Management believes that no litigation is threatened or pending in which
the Company faces potential loss or exposure which will materially affect the Companys financial position or results of operations. Since the Companys subsidiaries act as depositories of funds, trustee and escrow agents, they
occasionally are named as defendants in lawsuits involving claims to the ownership of funds in particular accounts. This and other litigation is incidental to the Companys business.

ITEM 1A. Risk Factors

There has not been any material change in the risk factors disclosure from
that contained in the Companys 2005 10-K for the fiscal year ended December 31, 2005.

ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds



| | (c) | The following table presents information relating to all Company repurchases of common stock during the first quarter of 2006:
| | --- | ------------------------------------------------------------------------------------------------------------------------------

Issuer Purchases of Equity Securities



|                      |  |                                |  |                                  |       |                                                                                 |   |                                                                                                    |  
|--------------------- |  | ------------------------------ |  | -------------------------------- | ----- | ------------------------------------------------------------------------------- | - | -------------------------------------------------------------------------------------------------- | -
|Period                |  | (a) Total # of SharesPurchased |  | (b) Average Price Paid per Share |       | (c) Total # of Shares Purchased as Part of Publicly Announced Plans or Programs |   | (d) Maximum # (orApprox. Dollar Value) of Sharesthat May Yet BePurchased Underthe Plans orPrograms
|January 1  31, 2006  |  | 34,644                         |  | $                                | 30.14 |                                                                                 | 0 |                                                                                                    | 0
|February 1  28, 2006 |  | 5,395                          |  |                                  | 30.34 |                                                                                 | 0 |                                                                                                    | 0
|March 1  31, 2006    |  | 20,300                         |  |                                  | 30.36 |                                                                                 | 0 |                                                                                                    | 0
|                      |  |                                |  |                                  |       |                                                                                 |   |                                                                                                    |  
|Total                 |  | 60,339                         |  | $                                | 30.23 |                                                                                 | 0 |                                                                                                    | 0
|                      |  |                                |  |                                  |       |                                                                                 |   |                                                                                                    |  

The Companys Board of Directors authorized a share repurchase program on May 3, 2006.
The repurchase program allows the repurchase of up to 3 million shares for a 12-month period and will be executed through open market or privately negotiated purchases. The Company regularly repurchases shares in open-market transactions in
accordance with Exchange Act Rule 10b-18 through a limited group of brokers to replenish the Companys treasury stock for re-issuances related to stock option exercises and other employee benefit plans. Included in the repurchased shares above
are direct repurchases from participants, at their discounted price, related to the administration of the Amended and Restated AMCORE Stock Option Advantage Plan. Also included are 10,405 shares tendered to effect stock option exercise transactions.



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ITEM 6. Exhibits



|     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|---- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|3    |  | Amended and Restated Articles of Incorporation of AMCORE Financial, Inc., dated April 8, 1986 (Incorporated by reference to Exhibit 3 of AMCORE's Quarterly Report on
Form 10-Q for the quarter ended March 31, 1986); as amended May 3, 1988 to Article 8 (Incorporated by reference to AMCORE's definitive 1988 Proxy Statement dated March 18, 1988); and as amended May 1, 1990 to Article 5
(Incorporated by reference to AMCORE's definitive 1990 Proxy Statement dated March 21, 1990).
|     | 
|3.1  |  | By-laws of AMCORE Financial, Inc., as amended February 11, 2004. (Incorporated by reference to Exhibit 3.2 of AMCOREs Annual Report on Form 10-K for the year ended
December 31, 2003).                                                                                                                                                                                                                                                                                                      
|     | 
|10.1 |  | AMCORE Financial, Inc. Annual Incentive Plan                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|     | 
|31.1 |  | Certification of CEO pursuant to Rule 13a-14 and Rule 15d-14 of the Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of
2002.                                                                                                                                                                                                                                                                                                                                       
|     | 
|31.2 |  | Certification of CFO pursuant to Rule 13a-14 and Rule 15d-14 of the Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of
2002.                                                                                                                                                                                                                                                                                                                                       
|     | 
|32.1 |  | Certification of CEO pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                                                                                                                                                
|     | 
|32.2 |  | Certification of CFO pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                                                                                                                                                



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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly
caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



|                   |  |                        |  |                             
|------------------ |  | ---------------------- |  | ----------------------------
|                   |  | AMCORE Financial, Inc.
|                   |  |                       
|Date: May 10, 2006 |  |                        |  |                             
|                   |  |                       
|                   |  | By:                    |  | /s/ Donald H. Wilson        
|                   |  |                        |  | Donald H. Wilson            
|                   |  |                        |  | Executive Vice President and
|                   |  |                        |  | Chief Financial Officer     



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EXHIBIT INDEX



|     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|---- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|3    |  | Amended and Restated Articles of Incorporation of AMCORE Financial, Inc., dated April 8, 1986 (Incorporated by reference to Exhibit 3 of AMCORE's Quarterly Report on
Form 10-Q for the quarter ended March 31, 1986); as amended May 3, 1988 to Article 8 (Incorporated by reference to AMCORE's definitive 1988 Proxy Statement dated March 18, 1988); and as amended May 1, 1990 to Article 5
(Incorporated by reference to AMCORE's definitive 1990 Proxy Statement dated March 21, 1990).
|     | 
|3.1  |  | By-laws of AMCORE Financial, Inc., as amended February 11, 2004. (Incorporated by reference to Exhibit 3.2 of AMCOREs Annual Report on Form 10-K for the year ended
December 31, 2003).                                                                                                                                                                                                                                                                                                      
|     | 
|10.1 |  | AMCORE Financial, Inc. Annual Incentive Plan                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|     | 
|31.1 |  | Certification of CEO pursuant to Rule 13a-14 and Rule 15d-14 of the Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of
2002.                                                                                                                                                                                                                                                                                                                                       
|     | 
|31.2 |  | Certification of CFO pursuant to Rule 13a-14 and Rule 15d-14 of the Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of
2002.                                                                                                                                                                                                                                                                                                                                       
|     | 
|32.1 |  | Certification of CEO pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                                                                                                                                                
|     | 
|32.2 |  | Certification of CFO pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                                                                                                                                                



51