2020 MidWestOne Financial Group, Inc. Annual Report

KEVIN W. MONSON , Chairman CHARLES N. FUNK , Chief Executive Officer LEN D. DEVAISHER , President and COO

TO OUR SHAREHOLDERS

“The problem with the future is that it usually arrives before we’re ready for it.”

A rnold H. Glasow, at age 92 in 1995, wrote these words, and we can think of no better way to look back on the year 2020. Your company, MidWest One Financial Group, Inc., stood resolutely during this year and ended the year in a strong position. That said, the year was not without many struggles as we collectively faced issues and situations that we had never before seen. We began the year with optimism and momentum as we were coming off a year of record earnings in 2019. That optimism soon turned to concern and uncertainty as late February brought on the Pandemic. Little did we know then that we would be writing this 86th annual letter to our shareholders nearly one year later with COVID cases still abundant and the prospect of many months before we can truly return to “normal”. It would be an overstatement to say that our company was “ready” for the Pandemic. It would not be an overstatement to say that our company responded in a way that pleased our four core constituencies: our customers, employees, communities, and shareholders. The following list is not inclusive, but an indicator of extraordinary efforts to take care of our customers, our employees, and our communities: • We immediately supplied all employees and locations with ample supplies of sanitizer and masks. Further, we quickly implemented social distancing requirements for employees who were in our buildings. • We escalated our work from home capabilities and at one point in the year, had more than 40% of our employees working from home. In addition, after some returned to our buildings, we implemented “A” and “B” teams so that not everyone in one department would be together at the same time. • Twice during the year, we closed our lobbies due to COVID escalations in local communities and served customers who came to our offices via the drive-up lanes. For those customers who needed to come into our buildings, we required masks and prior appointments. Of course, our

technology, discussed later, allowed us to serve the majority of our customers digitally. • Thanks to our past investments in technology, we were not only able to allow our employees to work remotely, but also to accelerate the transition of our customers to digital channels. Although teller transactions have been declining at our company and in our industry for years, this accelerated in 2020 as our customers stayed in their homes. In the third quarter of 2019, we served about 650,000 transactions in our offices via the teller line. That number in 2020 was 526,000! At the same time, our digital transactions exploded. The result? We continued to serve our customers, we just served them differently in 2020. • When the U.S. Government established the Payment Protection Program, we were ready at MidWest One ! Were we ever! Over the period of a little more than a month, we were able to fund more than $345 million—roughly 10% of our loan portfolio—in PPP loans. We had about 3,500 of our customers who were served in this program and for some of them, these funds were the difference between staying open and shutting their doors. • Many of our employees are parents whose children were forced to learn at home. We supported these employees with generous and additional consideration in terms of paid time off. • In late summer, we gave all employees a “Just For You” gesture which included two additional paid time days off as well as a cash stipend. • A “hotline” was established through our Business Continuity Group (which met weekly and sometimes more frequently). All questions (there were many!) were quickly answered to assure strong communication. • In late spring, we earmarked an additional $150,000 to be given back to our communities throughout our footprint and our local leaders in each market identified worthy causes they believed to be most in need of additional funding.

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