2020 Annual Report

Market Area and Competition

The Company operates in the Twin Cities MSA, which had total deposits of $218.0 billion as of June 30, 2020, and ranks as the 14th largest metropolitan statistical area in the United States in total deposits, and the third largest metropolitan statistical area in the Midwest in total deposits, based on Federal Deposit Insurance Corporation, or FDIC, data. This area is commonly known as the “Twin Cities” after its two largest cities, Minneapolis, the city with the largest population in the state, and St. Paul, which is the state capital. The Twin Cities MSA is defined by attractive market demographics, including strong household incomes, dense populations, a resilient employee base and the presence of a diverse group of large and small businesses. As of December 31, 2020, the Company’s market ranked second in median household income in the Midwest and eighth in the nation, when compared to the top 20 metropolitan statistical areas by population size in each area, based on data available on S&P Global Market Intelligence. According to the U.S. Bureau of Labor Statistics, the population in the Twin Cities MSA was approximately 3.7 million as of December 31, 2020, making it the third largest metropolitan statistical area in the Midwest and 16th largest metropolitan statistical area in the United States. The resilient employee base continues to weather the COVID-19 pandemic, as reflected by an unemployment rate meaningfully lower than the national average at 4.5% as of December 31, 2020. While no market has been immune to the pandemic, the significant presence of national and international businesses across diverse industries operating within the Twin Cities MSA was critical in allowing the market to navigate the fluid environment. The Company operates in a competitive market area and competes with other, often much larger, retail and commercial banks and financial institutions. Two large, national banking chains, Wells Fargo and US Bank, together controlled 68.1% of the deposit market share in the Twin Cities MSA as of June 30, 2020, based on FDIC data and as displayed in the table below. By comparison, as of the same date, the Company had a deposit market share of approximately 1.1%, which ranked the Company ninth in the Twin Cities MSA overall and fourth in the Twin Cities MSA among banks headquartered in Minnesota.

Total

Market Share

State

Branch Count

Deposits ($000)

Rank

Institution

Headquarters

(%)

1 . . . . . . . . . . . . . . . . . . U.S. Bancorp 2 . . . . . . . . . . . . . . . . . . Wells Fargo & Co 3 . . . . . . . . . . . . . . . . . . TCF Financial Corp. 4 . . . . . . . . . . . . . . . . . . Bank of Montreal 5 . . . . . . . . . . . . . . . . . . Otto Bremer Trust 6 . . . . . . . . . . . . . . . . . . Ameriprise Financial, Inc. 7 . . . . . . . . . . . . . . . . . . Bank of America Corp. 8 . . . . . . . . . . . . . . . . . . Old National Bancorp 9 . . . . . . . . . . . . . . . . . . Bridgewater Bancshares, Inc.

MN CA

98 94 80 26 21

83,341,943 65,154,088 8,226,068 5,928,722 5,801,429 5,300,381 4,634,383 3,585,042 2,289,454 2,277,702

38.23 29.88

MI

3.77 2.72 2.66 2.43 2.13 1.64 1.05 1.04

N/A MN MN

2

NC

11 29

IN

MN

9

Associated Banc ဩ Corp Top 10 Institutions

10 . . . . . . . . . . . . . . . . .

WI

20

390 186,539,212

85.55

Total Bank Deposits

763 218,026,091

The market has experienced disruption in recent years due to acquisitions of local institutions by larger regional banks headquartered outside of the market. The Company seeks to attract customers by offering a higher level of responsiveness and by providing a more tailored array of products and services than larger competitors. Products and Services The Company offers a full array of simple, quality loan and deposit products primarily for commercial clients. While the Company provides products and services that compete with those offered by large, national and regional competitors, the Company additionally offers responsive support and personalized solutions tailored for each client. The Company emphasizes customer service over price, and believes in providing distinguishing levels of client service

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