The glassy new offices under construction in St. Paul are a clear sign that Associated Banc-Corp has emerged from cleanup mode.

The bank, Wisconsin’s largest with $24 billion in assets, kept a low profile in Minnesota in recent years. Forced to reshape itself after nearly capsizing in the downturn under a heavy load of construction and real estate loans gone bad, the Green Bay-based bank has rebuilt itself.

Now, regulators have lifted a consent order they slapped on Associated Bank in 2012 for being out of compliance with the federal Bank Secrecy Act/Anti-Money Laundering program. Free of those restrictions, Associated Bank says it’s turning a new chapter, hunting for ways to use its excess capital, including acquisitions.

The new offices rising on St. Paul’s Snelling Avenue illustrate the renewed energy. “It’s going to be clearly stating we’re invested in the market,” said David Prince, the bank’s top Minnesota executive.

The state’s No. 6 bank by deposits, Associated employs 430 people in the state. Despite the relatively small Minnesota presence, the lender’s wood-sided branch at Snelling and Selby in St. Paul, which will be replaced by the new building one block to the north, is Associated’s single largest deposit branch in the lender’s three-state retail footprint.

Associated sold the land to Ryan Cos., which is tearing the old branch down to build the Vintage, a housing complex with a Whole Foods. The deal is part of the bank’s strategy to rationalize its real estate.

Last summer, Associated moved its corporate headquarters to downtown Green Bay, consolidating employees from six offices into a renovated six-story building it designed with only glass walls to emphasize transparency and communication. “There are no solid-walled offices in this building,” CEO Philip Flynn said.

Recovery process

Flynn, 56, joined the bank in 2009 after 30 years at Union Bank in California. He moved quickly to write off Associated’s bad loans and raised nearly $500 million in capital. He also set about remixing the loan portfolio for greater diversity, closed or consolidated nearly 30 percent of the bank’s branches, built a specialized energy lending group run out of Chicago and Houston and added different channels to a mortgage business geared to jumbo and adjustable-rate mortgages that the bank keeps on its balance sheets.

The biggest task now, Flynn said, is one facing nearly every other bank: growing fee businesses. “It’s a big head wind,” he said.

Jon Arfstrom, bank analyst with RBC Capital Markets in Minneapolis, gives Flynn very high marks. Not only has he cleaned up the company and reduced the credit risk, he’s growing it. “I think he’s been able to do it all,” Arfstrom said.

While Associated has 21 retail locations in Minnesota, the bank’s commercial growth has been key in driving momentum. The commercial group targets businesses with revenue ranging from $25 million to $100 million, said Prince, senior vice president and commercial banking regional ­director.

It generated double-digit loan growth last year, although growth will be slower this year. Most of the growth has been taking market share from competitors as opposed to organic, he said.

In the Twin Cities the bank has hired more than a dozen people in recent years from rival BMO Harris after BMO purchased M&I. Associated sees itself as the only true regional commercial bank in the Twin Cities.

“We really feel like we’re filling a sweet spot of that middle space,” said Prince. “We can really react much more like a community bank.”

That’s the message of Associated’s new “a good fit” brand awareness ad campaign, with the bank’s signature green armchair. Locally, the television spots and billboards feature longtime Associated Bank client Mark Stutrud, founder of Summit Brewing. The television spots, running through November, show Stutrud in a fermentation cellar next to the green armchair that’s perched atop stainless steel beer kegs.

“Together we crafted a true success story,” Stutrud says.

In an interview, Stutrud called Associated an “incredible partner.” The bank helped finance a recent expansion that doubled Summit’s capacity and allowed the suds maker to put beer in cans for the first time, which spells big opportunity.

Looking to expand

Associated has other moves brewing.

Free of restrictions from the consent order, Flynn has made deploying the bank’s excess capital a top priority and is prowling for acquisitions.

“We’re actively out talking to potential banks,” Flynn said.

Of interest are those with assets above $500 million, he said, in places where the bank has existing operations. As much as he likes the Twin Cities, he said, there’s a scarcity of potential targets in the area.

The Twin Cities is noted for having big banks on one end, legions of small community banks on the other, with not much in between.

“It’s kind of a bifurcated market here right now,” said Craig Mueller, senior vice president at Oak Ridge Financial in Golden Valley.

Mueller said Chaska-based KleinBank and Anchor Bank in St. Paul might be potential targets. But both lenders are closely held and indicate they aren’t looking to sell.

Meanwhile, the bank is renovating its retail branches in Minnesota and working on sensible growth.

“We offer the traditional regional bank suite of services and that is what we will stick to,” Flynn said.