Fitch Downgrades AMCORE Financial's IDRs to 'BB+/B'

CHICAGO--(Business Wire)--
Fitch Ratings has downgraded the following long- and short-term
Issuer Default Ratings (IDRs) on AMCORE Financial, Inc. (AMFI) and
AMCORE Bank, N.A.:

AMFI

--Long-term IDR to 'BB+' from 'BBB-';

--Short-term IDR to 'B' from F3'.

AMCORE Bank

--Long-term IDR to 'BB+' from 'BBB-';

--Short-term IDR to 'B' from F3'.

In addition, Fitch has revised the Rating Outlook to Negative from
Stable. (See complete list of all ratings at the end of this release.)

Fitch has downgraded AMFI's ratings and revised the company's
Rating Outlook given deteriorating trends in asset quality and
concerns regarding the severity of the impending credit-related
regulatory action. AMFI's level of nonperforming assets (NPAs) at
March 31, 2008 increased to 2.98% of loans, up significantly from
year-end 2007. The deteriorating asset quality pressured earnings, and
AMFI reported a significant loss for the quarter. Fitch expects
earnings to remain pressured throughout 2008 with higher levels of
nonaccrual assets and charge-offs.

In addition to operating with higher levels of problem credits,
AMFI will be faced with challenges posed by an impending Written
Agreement with regulators, which is related to weaknesses in the
bank's commercial lending area. This regulatory action will require
the bank to improve credit underwriting and administration practices,
and could potentially lead to the identification of higher levels of
problem credits in the future. AMFI's exposure to the commercial real
estate and residential construction markets elevates the company's
risk profile in light of a worsening credit environment, and the
Negative Outlook reflects the potential for further deterioration over
the next few quarters as the credit cycle progresses.

AMFI's capital base, good funding profile, and strengthened
reserve provide support for the credit at the new rating level. The
funding profile is sound with a reasonable reliance on wholesale
sources and a strong market share in its home market of Rockford, IL.
Positively, AMFI continues to transform its executive management team
by adding experienced industry veterans from larger Midwest banking
institutions. In the last 12 months, AMFI has replaced its CEO,
president, and CFO, and installed new leadership in three of its four
business lines. Although AMFI's new CEO has served as a board member
for AMFI since 1997, he has no other direct banking experience.

Fitch downgrades the following ratings, with a Negative Outlook:

AMCORE Financial, Inc.

--Long-term IDR to 'BB+' from 'BBB-';

--Short-term IDR to 'B' from 'F3';

--Individual to 'C' from 'B/C'.

AMCORE Bank, N.A.

--Long-term IDR to 'BB+' from 'BBB-';

--Short-term IDR to 'B' from 'F3';

--Individual to 'C' from 'B/C';

--Long-term deposits to 'BBB-' from 'BBB';

--Short-term deposits to 'F3' from 'F2'.

In addition, Fitch affirms the following:

AMCORE Financial, Inc.

AMCORE Bank, N.A.

--Support '5';

--Support Floor 'NF'.

Fitch's rating definitions and the terms of use of such ratings
are available on the agency's public site, www.fitchratings.com.
Published ratings, criteria and methodologies are available from this
site, at all times. Fitch's code of conduct, confidentiality,
conflicts of interest, affiliate firewall, compliance and other
relevant policies and procedures are also available from the 'Code of
Conduct' section of this site.

Fitch Ratings, Chicago
Julie Solar, 312-368-5472
Doris Hoffmann, 312-368-2057
or
Media Relations:
Kenneth Reed, 212-908-0540, New York

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