community bankers of wisconsin

Volume 13, No. 4July/August 2013Community Bankers. . .

Soaring to new heights!

A Very Special Presentation

Lessons from the

Miracle on the Hudson

Jeff Skiles, Co-PilotU.S. Airways Flight 1549

2013 Management Conference & ExpoSePtember 10 & 11, 2013monona terrace Convention Center, madison

When something happens to your home or car, it may not be a disaster. But whatever it is, you always deserve fast and fair service from your insurance company.

West Bend provides a Silver Lining, no matter what the claim may be. When the Bauers’ truck and trailer were damaged in an accident, getting them back on the road quickly was important. So that’s just what we did.

And with West Bend’s Home and Highway,® you’ll find a Silver Lining in many other ways, like coverage for just about everything you own; a 5% cash back award if you don’t have a claim; and one policy, one premium, and one deductible. You even get a special discount just for being a member of the Community Bankers of Wisconsin.

Sometimes little things mean a lot. And every day, when something bad happens to someone, West Bend makes sure our customers experience the Silver Lining. Because the worst brings out our best.®

To find out more, visit thesilverlining.com.

Silver Lining.®You deserve a

July/August 2013 Wisconsin Community Banking News 3

Forward—�In Madison, Washington, and Across Wisconsin!Paul Hoffmann, CBW Chairman and President and CEO, Monona State Bank

This issue we’re pleased to present a Q-and-A session with Peter

Bildsten, Secretary of the Wisconsin Department of Financial Institutions (p. 4). Most community bankers will likely find points of agreement, as well as points for discussion in his answers. Even though he sees a likelihood of more mergers and acquisitions in the improving economy, he also sees a likelihood of new Wisconsin bank launches.

Even in this time of increasing online banking, many people appreciate the accessibility, friendliness, and per-sonal service of our brick-and-mortar branches. I still believe what I said last September: Every community needs a community bank.

I think we all believe that the eco-nomic vitality of the state is tied to the success of community banks across Wisconsin.

Thank you for allowing me to serve as your association chairman. It has been an honor. We have an association and staff that you all can be incredibly proud of. I have been fortunate to see that firsthand. The year has flown by and been filled with opportunities to meet CBW members and associate mem-bers around the state. Thanks for your comments and collective wisdom. I’ve learned that the state of our industry is

overwhelmingly healthy and staged for long-term success. We can all be proud to say we are inde-pendent commu-nity bankers!

I’ve also appre-ciated discussions with our elected state and national leaders, as well as the opportunity to work with ICBA. We are fortunate to have outstanding leadership and advocacy teams on both the state and national levels.

Especially now that I know how rewarding the role of your association chairman can be, I strongly encourage you to consider your own role within CBW. There are many different ways to engage and I can guarantee that you will not be disappointed. Whatever you put into the association will be returned to you tenfold.

One of the best ways to explore your interests within our association is to attend the annual CBW Management Conference and Expo, set for Tues-day and Wednesday, Sept. 10 – 11, in Madison. I look forward to seeing you there and welcome your ideas and any questions you may have about volunteer opportunities within our association. See you in Madison!

Respectfully yours,Paul Hoffmann

—� BOARD OF DIRECTORS —��Paul Hoffmann, Monona State Bank

2012-2013 ChairmanStan Leedle, Choice Bank, Oshkosh

Chairman ElectJerry O’Connor, The First National Bank of Waupun

Vice ChairmanJim Tubbs, State Bank of Cross Plains

Past ChairmanSteve Bell, Community State Bank, Union Grove

Secretary/TreasurerRick Busch, Royal Bank, Gays Mills

ICBA DirectorJohn Slatky, Bank of Luxemburg

ICBA Director

—� REGIONAL DIRECTORS —��—� Northwest District —��

Paul Kohler, Charter Bank, Eau ClaireTom Armstrong, First National Bank, Park Falls

—� Northeast District —��Fred Siemers, River Cities Bank, Wisconsin Rapids

Marty Reinhart, Heritage Bank, Marshfield

—� Southwest District —��Steve Zeman, Union State Bank, West Salem

Mary Bomkamp, Highland State Bank

—� Southeast District—��Bill McDonald, Greenwoods State Bank, Lake Mills

Dennis Doyle, Great Midwest Bank, BrookfieldThomas Oehler, Peoples Bank, Elkhorn

—� CBW STAFF —��Daryll Lund

President and CEORick McGuigan

Executive Vice PresidentSandra Gruber

Director of Member Services and Information ManagementShannon Schlueter

Director of Member Relations and Public AffairsJami Erickson

Director of Member Programs and Association Administration

Community Bankers of Wisconsin455 S. Junction Rd., Ste. 101

Madison, WI 53719Ph: 608.833.4229 Fax: 608.833.8114

E-mail: [email protected]

Published by Community Bankers of Wisconsinthrough Client CommunicationsDoris Green, Editor and PublisherMary Lou Santovec, Contributor

Lisa Imhoff, Grey Horse Studio, Art DirectorEditorial or subscriptions: e-mail Doris Green at

[email protected] or fax 608.583.2084Advertising: Jami Erickson, Director of Member Programs and

Association Administration, at 608.833.2386or contact Doris Green

Wisconsin Community Banking News is provided at no cost to CBW members. The current and past issues are available on the

CBW Web site: www.communitybankers.org.

Inside… 4 A Conversation with Peter

Bildsten: Measured Optimism for Community Banks

10 Delay in Pay or Play: Information on Changes in Health Care Reform

14 The Future of Community Banking: Threat or Opportunity?

28 Community Banks Acquire Branches of Regional, Mega Banks

On our cover ... Thanks to outstanding educational programs, opportunities to network with com-munity bankers from across the state, and dedicated associate and corporate members, CBW’s annual Management Conference & Expo always earns excel-lent reviews. See pp. 12–13 for lists of our 2013 exhibitors and sponsors.

4 Wisconsin Community Banking News July/August 2013

A Conversation with Peter BildstenMeasured Optimism for Community BanksDoris Green

Peter Bildsten, secretary of the Wisconsin Department of Financial

I n s t i t u t i o n s , recently sat down with Wis cons in Community Banking News for a wide-ranging conversation on the financial services industry. Read on to learn his current thinking on topics from payday lending to Too-Big-to-Fail.Payday Lending

WCBN: How big of a problem is pay-day lending in Wisconsin?

Bildsten: It’s a growing issue nation-wide with wide variability from state to state. We’re considered one of the more permissive states and yet the percent of Wisconsin adults who use payday

loans is near the national average—��five percent in Wisconsin over the last five years, compared to 5.5 percent nation-ally. Regardless of regulations and how restrictive they are, this rate hasn’t changed much.

We need to acknowledge there is a need out there for short-term loans, and some banks also are offering deposit advance products.

WCBN: Would you like to see more banks offering these products?

Bildsten: Yes, because of the need, because of the market demand. Some banks have shown that it can work. This will never be a big asset class but they are serving their customers.

Some borrowers that have used pay-day lenders have gotten hurt and some have used them in a responsible way, but when they have been hurt [regard-less of whether they or the lender is responsible], it can come back to dam-age their relationship with their bank through overdrafts and delinquencies and the impact on other bank loans …. The average payday lender user takes out eight loans a year and pays $525 in fees and interest.The CFPB

WCBN: What will be the impact of the Consumer Financial Protection Bureau?

Bildsten: The CFPB is charged with payday lending, so I expect to see more national standards. This is probably a good thing in order to bring consistency from state to state. The CFPB will also bring more lending standards in general, as we’ve seen so far in mortgage lending rules. Wisconsin has a history of making good quality loans … these lenders have nothing to fear from the CFPB.Health of the Industry

WCBN: Wisconsin has a long, suc-cessful banking history.

Bildsten: Wisconsin banks are doing very well. Many are reporting record earnings even as they’re dealing with a different regulatory environment. But the average bank is a community bank, and they are at a competitive disadvan-tage with large banks that have more resources to apply to new regulatory

responsibilities. Wisconsin is a com-munity banking state.Tiered Regulation and TBTF

WCBN: In your opinion is a two-tiered national banking system a realistic possibility?

Bildsten: There is a need for tiered regulation. All of us at DFI are an advo-cate for this when we talk with our coun-terparts in Washington, DC—��whether it’s the FDIC, the Federal Reserve, CFPB, or others. We’re heading in this direc-tion. I’m confident we’ll see more tiered regulations and I think that will be good for Wisconsin banks.

Dodd-Frank won’t go away, but we hope we’ll see more responsibility put on the big national and regional banks. By definition, this will level the playing field. By definition, a tiered regulatory system puts more responsibility on the biggest banks where the greatest risk lies. This will help solve Too-Big-to-Fail.Surprises, Disappointments

WCBN: You came to your current position with a very broad and deep understanding of Wisconsin’s financial services industry. What has surprised you in your position as secretary of the Department of Financial Institutions?

Bildsten: Five years into this reces-sion and three years since passage of Dodd-Frank, we still have a small hand-ful of troubled banks that are blaming Dodd-Frank for lending decisions that they made before Dodd-Frank was even enacted. At the same time, that same small number of institutions is counting on regulatory relief. I’m a little disap-pointed that a small number continue to blame their problems on regulations.

The vast majority of Wisconsin com-munity banks are doing so well. The vast majority of Dodd-Frank provisions have nothing to do with Wisconsin. Most provisions focus on big banks, though there are some that affect every single bank, large and small.Industry Growth

WCBN: Do you expect to see more mergers and acquisitions?

Bildsten: I expect that as earnings continued on page 6

Bildsten Brings Deep Experience to DFI

A native of Baraboo, Peter Bild-sten had spent more than 30 years in the financial services industry when in late 2010 Governor Scott Walker asked him to serve as secretary of the Department of Financial Insti-tutions. Bildsten’s career includes 10 years in the mortgage insurance business and executive positions at banks and credit unions in the Baraboo, Madison, and Milwaukee markets.

As DFI secretary, Bildsten heads the agency that oversees Wiscon-sin-chartered banks, credit unions, corporate and consumer services, and the securities industry. He also serves as co-chair of the Governor’s Council on Financial Literacy. In May, Bildsten was elected as an at-large member to the Conference of State Bank Supervisors Board of Directors in Washington, D.C.

Bildsten earned a degree from the University of Wisconsin-Whitewa-ter, where he also did post-graduate work.


GSE Reform: What This Means for Community BanksMost community bankers (and

most Americans) support Fannie Mae and Freddie Mac reform in the wake of the recession and foreclosure crisis when these agencies enlarged their portfolios with risky investments. As reported in our Wisconsin Community Banker Today e-newsletter, both the House and Senate are considering separate bills reforming Fannie Mae and Freddie Mac, along with the Federal Home Loan Banks.

These government-sponsored enterprise (GSE) reform efforts will receive greater attention when our elected officials refo-cus on their work in Washington in Sep-tember. In fact, GSE reform may be the next big battle for community banks. GSE reform is a key arena in which our industry needs to continue differentiating community banks from the large Too-Big-To-Fail (TBTF) banks.

CBW and ICBA advocacy efforts will continue to emphasize—��through in-per-son contacts, testimonies, releases, and publications—��that community banks did not cause the recent mortgage crisis and thus should not be penalized with any legislative outcome that negatively impacts their ability to continue to make mortgage loans.

Late last month, the House Financial Services Committee approved housing reform legislation that would do away with Fannie Mae and Freddie Mac, and move toward a fully private system. The bill, titled Protecting American Tax-payers and Homeowners (PATH) Act, would set a five-year time limit to end the conservatorship of the GSEs and subject them to receivership, at which point the companies would be liquidated and any remaining assets sold off.

In place of the GSEs, the bill would establish a private, nonprofit National Mortgage Market Utility that would set best practices for the private origination, servicing, pooling, and securitizing of mortgages, and operate a publicly-acces-sible “securitization outlet” to match mortgage originators with investors.

Community bankers have concerns about the PATH Act, including the ini-tiative to move toward full privatization of the GSEs, a move that will only help the largest banks. Fannie Mae and Fred-die Mac have played a significant role in providing many community banks with access to the secondary mortgage market—��not to mention fulfilling the American Dream of home ownership for many lower and middle income consumers, particularly those in rural

areas where commu-nity banks often pro-vide the only easily accessible mortgage options.

The PATH Act, if enacted as originally proposed, would likely succeed in pre-

venting possible future taxpayer bailouts, but only at a great price. It would poten-tially reduce the number of American homeowners, make home mortgages an unattainable dream for many, increase

mortgage rates, and lower home prices.In the Senate, housing reform legisla-

tion is also in the works, in the form of a bill introduced by Sens. Bob Corker (R-TN) and Mark Warner (D-VA). While it would also do away with Fan-nie Mae and Freddie Mac, unlike the House bill, the Senate bill would provide a federal government backstop through the creation of the Federal Mortgage Insurance Corporation. The Senate bill offers more hope for an eventual reform package that both solves the GSE prob-lem of risky investments and retains their benefits for community bankers and their customers.

Daryll Lund, CAE,CBW President

and CEO

CBW Legal & Compliance ConsortiumCommunity Bankers of Wisconsin offers its Legal and

Compliance Services Consortium to provide CBW members with fast, easy access to compliance and legal services at a flat annual fee. Godfrey & Kahn renders written or oral legal advice that can

be maintained in bank records and provided to regulators. Consortium members become clients of Godfrey & Kahn.

Consortium members have received answers to questions related to permissible compensation arrangements for mortgage loan originators, honoring powers of attorney, access to safe deposit boxes, overdrafts, financial privacy, FDIC insurance coverage, flood insurance, federal and state consumer loan disclosures—��and many more issues. Clients often request written advice and conclusions to follow-up on Godfrey & Kahn discussions.

Consortium members can rest assured that they have specialized legal advice backing up their unique compliance questions and concerns.

For more information, contact Jami Erickson at [email protected].

Community bankers have

concerns about the move

toward full privatization of

the GSEs, a move that will

only help the largest banks.


and capital levels and the real estate market continue to improve, we’ll see an accelerated pace, which is neither good nor bad. It won’t be just because of the regulatory challenge, but due to the health of the industry.

I also expect new bank launches to pick up. Analyses of high-performing banks show that some of the most profitable are very small. They stick to their knitting, know who they are, make quality loans, and manage their expenses. They thrive regardless of size. When we see more new banks, that will be the clearest sign yet that this industry is attractive enough for new investment.

WCBN: If you were a community banker today how would you grow your bank?

Bildsten: If I were a community banker today, maybe more so than ever, I’d remain focused on finding quality loans, man-aging expenses, and growing my institution in a responsible way. Credit quality will never go out of style.

Everyone’s learned a lot from this economic crisis: Stay focused on the things that really matter. Credit quality and expense management are as important as ever and I’d encourage community bankers to work toward any regulatory changes that will lead to tiered regulations, which will lead to resolution of Too-Big-to-Fail. At the same time, bankers should not expect regulatory responsibility to go away. I expect to see some tweak-ing but none of us should expect it to go away, nor should it.Outreach and Engagement

WCBN: Have you ever thought about writing a blog?Bildsten: While I have yet to write a blog, having regular

contact with DFI stakeholders is very important. For example, I meet one-on-one with bank and credit union executives around the state. It’s very informal but it’s a great way to stay in contact with Wisconsin bankers.

Over the past two years, DFI has hosted more than 20 roundtable discussions with industry executives across the state. The feedback we receive helps us do our jobs better. The latest roundtable discussions were held in Madison, Oshkosh, Oconomowoc, and Eau Claire and were part of a national effort driven by the Federal Reserve and Conference of State Bank Supervisors. We enthusiastically participated in holding town hall meetings with banks and the feedback is now being summarized. Federal Reserve Chairman Ben Bernanke will announce the findings at an October meeting in St. Louis that I will be attending along with Banking Administrator Mike Mach. In addition, we were allowed to invite one banker. Tom Spitz, founder and CEO of Settlers Bank, De Forest, has accepted our invitation and will represent Wisconsin’s com-munity banks at this important conference.

Bank First National Acquires St. Louis FirmMANITOWOC—�Bank First National’s financial technology unit, United Financial Services, Inc. (which is also partially owned by Baylake Bank of Sturgeon Bay), recently acquired Missouri Valley Technologies of St. Louis, Mo.

The deal, which closed June 28, will add additional data processing services to United Financial Services’ stable of cli-ents. UFS provides data processing services to 43 Wisconsin community banks while the St. Louis acquisition has provided service to 13 community banks in four states.

Liquidity Planning

Strategic Planning

Regulatory Assistance

Stock Valuations

Capital Markets

Expansion &� De Novo Bank Charters

Internal Audit

Information Technology

Recruitment &� Human Resources

Lending &� Loan Review

Compliance

Policy Development

Young & Associates, Inc.

Bankers Working For Bankers

800.525.9775younginc.com


Cyber threats come from online, in-house or overseas. At Travelers, we understand

how cyber attacks can affect your business. Just one stolen laptop or one resourceful

hacker can cause a data breach with enormous consequences for your business and

reputation. It’s not a question of if a company will suffer a breach, but when—no matter

the size of your firm. Speak with your independent agent, or visit travelers.com/cyberrisk

to learn how Travelers’ cutting-edge cyber insurance can help protect against the

expenses and liability associated with these complex, fast-emerging security risks.

travelers.com

©2013 The Travelers Indemnity Company. All rights reserved. Travelers and the Travelers Umbrella logo are registered trademarks of The Travelers Indemnity Company in the U.S. and other countries. The Travelers Indemnity Company and its property casualty affiliates. One Tower Square, Hartford, CT 06183

Secure Password? LOL.


Community involvEmEnt

Starion Financial Supports Ministry MIDDLETON—� Starion Financial pledged a $100,000 gift to the Middleton Outreach Ministry’s (MOM) Building Hope Strengthening Communities capi-tal campaign. The $1.8 million capital campaign will help fund the purchase and renovations of the food pantry and office where clients access all of the orga-nization’s services.

“Starion chose to support MOM because of its mission to prevent home-lessness and end hunger, and the posi-tive impact it has had on the Middle-ton community,” said Bill McDonough, Madison market president. “Our hope is that the financial support will allow MOM to reach more people in need, and … encourage others to join Starion in supporting the … campaign.”

Oak Bank Partners with Humane SocietyFITCHBURG—� Oak Bank will partner with the Dane County Humane Society

for the bank’s annual Great Pumpkin Give Away event. This is the 13th year that Oak Bank will host their Great Pumpkin Give Away. Every year the bank partners with a local non-profit organization to be the recipient of all cash donations. “The work that Dane County Humane Society does in our community is so important,” said Karen Virnoche, Oak Bank marketing man-

ager. “We are thrilled to be able to help them with this partnership.”

The Great Pumpkin Give Away will be held Saturday, Oct.19, at Oak Bank. Families are invited to come pick out a pumpkin and enjoy kids’ activities, refreshments, prizes, and horse and carriage rides provided by Rocking L Acres.

·COMMERCIAL LENDING

·BUSINESS

·REAL ESTATE

When Litigation Becomes Inevitable,Count on Your Legal Department.

FBFC Supports Theatre on Main

from left: Becky Miller, FBFC; Thomas Jacobsen, Director of Chicago; Sandy Manfin, Theatre on Main; Jodi Schwefel, FBFCOCONOMOWOC—� First Bank Finan-cial Centre (FBFC) recently donated

$2,500 to Oconomowoc’s Theatre on Main to help sponsor their production of “Chicago.”

Set in Prohibition-era Chicago, the story is a satire on corruption in the administration of criminal justice and the concept of the “celebrity criminal.” The sharp-edged show features a daz-zling score and staging by renowned choreographer Bob Fosse.

Theatre on Main is a nonprofit, vol-unteer organization that has become a staple in the Oconomowoc community over the past eight years.


freedom of choice

Choose an EFT Network Invested in YouWhile some would like community financial institutions to have fewer choices and less control,

SHAZAM believes that community financial institutions must remain in control of their own futures.

SHAZAM is owned and operated by community financial institutions. We understand who you are and what you believe in. We’re here for you, providing the cost-effective technology that makes you more effective.

You do have a choice in EFT networks. Choose the only EFT network invested in your success.

www.shazam.net (800) 537-5427


Delay in Pay or PlayInformation on Changes in Health Care ReformKaren Breitnauer, JD, Compliance Attorney, M3 Insurance

On July 2, 2013, the Department of Treasury announced that there

would be a delay in the information reporting requirements and Shared Responsibility provisions of the Affordable Care Act (ACA) until Jan. 1, 2015. This one-year delay was confirmed in Internal Revenue Service (IRS) Notice 2013-45 issued on July 9.Background

There are two areas of the ACA affected by the delay:

Reporting requirements. Sections 6055 and 6056 of the ACA provided that insurers, self-insuring employers, gov-ernment agencies, and other providers of health coverage must report certain annual information to the federal gov-ernment. In addition, these provisions required applicable large employers to report on the health insurance they pro-

vide to their full-time employees.Shared Responsibility. Section

4980H imposes penalties on employ-ers, either for not offering minimum essential coverage or for offering cover-age that is unaffordable or not valuable to full-time (30+ hour) employees. The reporting provisions and the penalties were scheduled to go into effect for plan years starting on or after Jan. 1, 2014.Transition Relief

In order to provide additional time for stakeholders to participate in for-mulating workable guidance and to simplify the reporting requirements, the 6055/6056 reporting requirements and the 4980H Shared Responsibility requirements are delayed until 2015. The government expects to issue rules regarding the reporting requirements in the summer of 2013, and employer and other entities are encouraged to vol-untarily comply with those rules once issued. However, the government will not assess any Shared Responsibility penalties against employers until 2015.

The government encourages volun-

tary compliance in 2014 in order to pro-vide a smoother transition for employers in 2015.

Individuals will still be eligible for premium tax credits in the marketplaces if their household income is within a specified range and they are not eligible for minimum essential coverage, includ-ing an employer-sponsored plan that is affordable and provides minimum value. All other provisions of the ACA are also still applicable.Key Takeaway

Employers will not be penalized for failure to comply with the Shared Responsibility requirements in 2014; however they are strongly encouraged to voluntarily comply with the reporting rules (not yet issued) prior to January 2015. No other provisions of the ACA were changed by this delay. Employers could use this extra time to finalize their processes to ensure a smooth transition in 2015 when enforcement of the report-ing requirements and Shared Responsi-bility provisions begin.

Congratulations to Wisconsin’s Top Performing Community Banks!Noted in ICBA’s magazine, Indepen-

dent Banker: A list of the top performing community banks featured several from Wisconsin. Congratulations to Citizens State Bank in La Crosse, which just eight years ago was the second smallest bank in the state. Today, the $125 million-asset, Subchapter S corporation bank has four offices, 55 employees and a strong fiscal performance. In 2012 it reported an ROA of 3.45 percent and an ROE of 39.73.

“We’ve seen the right opportunities and taken advan-tage of them,” Dennis Vogel, the bank’s presi-dent and CEO, told Independent Banker. Citizens State Bank opened its first location in La Crosse, moving its headquarters from Clayton. It added branches in 2008 and 2011 and a loan production office in Eau Claire in 2010.

While Citizens State Bank has no set expansion and acquisition plan, it remains on the lookout for the right opportunities. Loan demand for Citi-zens State Bank has been brisk, and the bank picked up commercial custom-ers in 2008 and 2009 when large banks decided those businesses were no longer right for them.

Vogel’s biggest concern for the future is that some big banks have cash stock-piled and are ready to lend. “They are throwing out ridiculously long-term,

low-fixed rates,” he told Indepen-dent Banker. “It’s hard to compete against that.”

In an effort to reach out to younger demograph-ics, Citizens State Bank sponsored an exhibit at the Children’s Museum of La Crosse with a mini version of Citizens State Bank, including a working ATM.

To remain operationally efficient and control costs, Vogel continues to focus on staying on top of technology and compliance; thinking nonstop about taking care of customers and employees; maintaining margins and fee income; reducing overhead; and, perhaps most of all, continuing to avoid troubled loans, according to Independent Banker. “It’s gotten more challenging, but I have a passion for it despite all the challenges,” he says. “We’ll shine even more.”

Several Wisconsin banks making the Top Performers list this year were also Top Performers in 2012:

• WaterStone Bank, SSB, Wauwatosa• American Bank, Fond du Lac• Choice Bank, Oshkosh• Bank of Prairie du Sac (also in 2012)• Cleveland State Bank (also in 2012)• Charter Bank Eau Claire (also in

2012)• Farmers and Merchants Bank of

Kendall (also in 2012)

Focus on taking care of customers and

employees and most of all avoiding

troubled loans.


Visit These ExhibitorsCBW Management Conference & Expo, Sept. 10–11

ACCOUNTANTS/AUDIT/COMPLIANCE

Baker TillyCliftonLarsonAllen LLPContinuity ControlFIPCOExperis FinanceMcGladreyWipfli LLP

APPRAISAL MANAGEMENTRegional Appraisal Management, LLC

ARCHITECTURAL/DESIGN/BUILDLaMacchia Group, LLCThe Redmond Company

ASSET LIABILITY MANAGEMENTBOSC, Inc.ICBA Securities

ATM/SALES/SERVICEIntegrated Security Solutions

AUCTIONHansen & Young Inc.

BANK EQUIPMENTCASEIntegrated Security SolutionsSPC

BANK FUNDING AND LIQUIDITYPMA Financial Network, Inc.Zions Bank Correspondent Banking

BANK OWNED LIFE INS. (BOLI)Bank Compensation Consulting Inc.Executive Benefits Network

CAPITAL MARKETSBMO Capital MarketsBOSC, Inc.

CHECKS/CHECK PROCESSINGMain Street Checks, Inc.Premier Check

CONSULTING SERVICESBank Compensation Consulting Inc.Center for Financial TrainingExecutive Benefits NetworkJohn M. Floyd & AssociatesLaMacchia Group, LLCM3 InsuranceNetwork Solutions, LLCThe Redmond CompanySecure Banking Solutions LLCWipfli LLP

CORE/DATA PROCESSINGFiserv, Inc.Jack Henry Banking

CORRESPONDENT BANKINGBankers’ BankBMO Capital MarketsZions Correspondent Banking

ECONOMIC DEVELOPMENTWHEDAWisconsin Business Development

EFTElan Financial ServicesSHAZAMPULSE

ELECTRONIC PAYMENT SERVICESElan Financial ServicesElite Payment SystemsFiserv, Inc.

FEDERAL BANK REGULATORComptroller of the Currency

FINANCIAL CONSULTINGSpectrum Investment Advisors

FINANCIAL SOLUTIONSBancVue

INSURANCECentral States Health & Life CompanyCommunity Bankers Financial ServicesFinancial Insurance AdministratorsM3 InsuranceTravelers InsuranceWest Bend Mutual Insurance Co.

INVESTMENTSPMA Financial NetworkSpectrum Investments Advisors

LENDINGBankers’ BankHarland Financial SolutionsiHELP Private Student Loan ProgramMortgage Services III, LLCWHEDA

MARKETING/PRINTED PRODUCTSMidwest Printing Services

MATERIAL MANAGEMENTSystemax Corporation

MERCHANT PROCESSINGElite Payment Systems

MORTGAGE LENDINGFirst Community Mortgage (FCM)Moneywise Mortgagebot, LLCMortgage Services III, LLCWisconsin Business Development

PRIVATE STUDENT LOANSiHelp Private Student Loan Program

REVERSE MORTGAGESMoneywise

SECURITY & RISK MANAGEMENTContinuity ControlExperis FinanceHarland Financial SolutionsLocknetSecure Banking Solutions, LLC

SECURITIESICBA Securities

TAX CONSULTING/SERVICESMcGladrey

TECHNOLOGY SOLUTIONSCASEDCS NetlinkFIPCOJack Henry BankingLocknet Mortgagebot, LLCNetwork Solutions of Wisconsin, Inc.

TRAINING/EDUCATIONCenter for Financial TrainingICBAJohn M. Floyd & Associates

WEB SITE DEVELOPMENTBancVueSPC


Thanks to Our Sponsors CBW Management Conference & Expo, Sept. 10–11

as of July 30, 2013

PLATINUM LEVELCommunity Bankers Financial Services

Federal Home Loan Bank of ChicagoICBA Securities

ICBA Services NetworkSpectrum Investment Advisors

Travelers Insurance

GOLD LEVELBankers’ Bank

Executive Benefits NetworkGodfrey & Kahn, S.C.

McGladrey Wipfli, LLP

SILVER LEVELAssociated Bank-Correspondent

Bell State Bank & TrustBOSC, Inc.

CliftonLarsenAllen LLPPULSE

SHAZAMWest Bend Mutual Insurance Co.Wisconsin Business Development

Young & Associates, Inc.

BRONzE LEVELAmerican Deposit Management

Baker TillyBank Compensation Consulting Inc.

BMO Capital MarketsCenter for Financial Training

Chubb Group of Insurance CompaniesFinancial Marketing Corporation

FiservMortgagebot, LLC

Secure Banking Solutions, LLCShannon Law Office, LLC

SAPPHIRE LEVELM3 Insurance

SPC

Risk Advisory • Tax • Finance & Accounting

SUSTAINABLE GROWTH IS HUMANLY POSSIBLEWhat are you doing to grow your business? At Experis™ Finance,

we’ve built a reputation for results-driven project solutions

and experienced talent that can create a lasting competitive

advantage and increase the bottom line. With a deep understanding

of your industry, processes and business issues, we bring solutions and

talent together to take on your risk advisory, tax, and finance & accounting

challenges including: internal audit, compliance, loan review and IT audit.

We help you capitalize on new opportunities to drive performance, cut costs,

manage risk and increase revenue. And you can watch your company flourish.

experis.com

Appleton Madison Milwaukee 920.738.6204 608.828.2730 414.347.2345

©2011 ManpowerGroup. All rights reserved. Experis Finance is a not a certified public accounting firm.


The Future of Community Banking: Threat or Opportunity?Mary Lou Santovec

As the Great Recession recedes, there’s a trail of debris left behind

in the form of new regulations—��some yet to be created. The brave new world has never been more perilous or full of opportunity.

The Great Recession taught every-one that “banks are very important in a capitalistic economy,” said Dr. James Johannes, the Aschenbrenner Professor of Banking at UW-Madison’s School of Business, “and they’re very ‘fragile.’”

Johannes joined Jim Sheriff, senior partner, Godfrey & Kahn (and general counsel to the Community Bankers of Wisconsin) and Edward Wehmer, presi-dent/CEO of Wintrust Financial Cor-poration, the parent company of Town Bank, at a community banking forum held in Waukesha in June.

So just what havoc did the Great Recession wreak? Dodd-Frank, BASEL III, and the Consumer Financial Pro-tection Bureau (CFPB) are among the results behind a “one-size-fits-all” pre-vention strategy. But the prevention is likely to be worse than the cure.

You can’t, no matter how hard you try, mitigate systemic risk, said Johannes. There are always opportunities for “cre-ative behavior” (London Whale any-one?). The cookie cutter approach to regulation makes banks more alike and more prone to systemic risk while not eliminating moral hazard.

So how could this get addressed? The way to start is by identifying what it is banks really do. What needs regulating and what can we leave to the free market to correct?

The only thing that regulators should protect is the payment systems, said Johannes, who admitted he loves com-munity banks for their “agility.” He recommends stripping out checking accounts and holding them in special-ized banks that would make money by charging a fee for every check written. Other suggestions: create a big wall between payment system and lending. Eliminate FDIC insurance. Develop spe-cialized banks that buy and hold long or buy and hold short.

The impact on community banks

would be drastic. Those that survive will set themselves apart. They’ll find a niche and fill it. They will be nimble, involved in their communities and offer a culture of personal service not a list of corporate rules. They will make money at the margins. Few “Lone Rangers” will remain.

And it’s coming—��the market will change because technology will change it.

Many in Congress believe that the financial system was irretrievably bro-ken in 2008. They, and the regulators, look to Dodd-Frank to fix it with a one-size-fits-all solution. All decisions would be data-driven and each borrower would fit into the same box. An Increase in Mergers, Acquisitions

Dodd-Frank will likely impact those who live in rural areas hardest. Some 12 to 14 million people will find it dif-ficult to access the credit they need for their businesses, farms, and residences, according to Sheriff. Customers of com-munity banks would be at a disadvan-tage, unable to get balloon mortgages and other products.

Dodd-Frank is expected to hasten the number of mergers, consolidations, and acquisitions of community banks. “Rather than strengthen the safety and soundness of the banking system,” Sheriff said, “Dodd-Frank will lead to consequences for the nation’s economy.” It will accelerate the trend toward too-big-to-fail and could potentially leave the United States like Canada, with five large banks.

If Dodd-Frank’s proposed mortgage servicing rules hold, community banks would also be at a disadvantage. Some will cease servicing mortgages because of the new rules while the TBTF banks will outsource their servicing to India or other sites abroad. When a borrower defaults on a loan, the bank will incur a civil liability.

There are some positive signs. The U.S. Senate has proposed S.798 requiring the nation’s largest banks to hold more capital. The bill also seeks to limit the U.S. government’s safety net eliminating deposit insurance on entities like AIG, GE Capital, etc. Banks would not have to send privacy notices to their custom-

ers. There would be a bank examina-tion ombudsman to help with contested exams.

The House is following suit with the Community Lending Enhancement and Relief Act. The CFPB is making changes—��including eliminating the 43 percent debt-to-income ratio—��at the request of community banks. CFPB would make it a federal offense for banks to treat any customer in an abu-sive manner.

“Meaningful financial service reform,” Sheriff said, “should be pre-mised on a two-tier regulatory frame-work in my opinion.”Diversification is Key

Calling Wintrust “George Bailey on steroids,” Wehmer outlined what he saw as the challenges facing commu-nity banks and his solution. Wehmer, who started the $17.5 billion bank hold-ing company in 1991, did so to lever-age economies of scale. He believes his model with its nine charters and 18 acquisitions is the future of commu-nity banking.

This “multi-chartered, locally branded enterprise” can leverage opera-tional expenses and develop and offer better products than the big guys, he said. The larger size allows Wintrust to easily access the capital market and use a “one wallet” approach to wealth management.

One third of the company’s portfo-lio is niche or specialty lending. “Con-centrations kill” in your loan portfolio. Banks today need a diversified asset lending base. Wehmer predicted:

• Banks under $1 billion in metro-politan areas will not survive.

• Rates as we knew them are gone for the time being.

• Many small banks are still suffering balance sheet stress.

• Management, boards, and share-holders are tired.

• Capital will remain a rare commodity.

The bottom line: “stay the course, pay the higher rates, pray for both regulatory relief and a marked improvement in the economy.”


Always Your Partner, Never Your Competitor™

Scott KriegerEau Claire, WI 715.271.0937

Jeff NiesenMadison, WI 608.577.8081

Rob ShetterSterling, IL

815.441.2656

www.BankersBankUSA.com Madison, WI • Des Moines, IA • Indianapolis, IN • Springfield, IL

Think of us as your backroom.

The banking industry is always changing. Our staff of experts are continually investing in and utilizing the latest in education and technology. Access to our skills and resources minimizes the investment you need to make. How may we help you?


Highlights: July 10 Member Appreciation DayWhether you attended Member

Appreciation Days in Eau Claire, Madison, or Saukville, you likely came away with much useful information about your Community Bankers of Wisconsin association and the industry. Here are a few highlights from the July 10 meeting in Madison.CBW Update

Paul Hoffmann, CBW chairman and president and CEO, Monona State Bank, reviewed 2013 changes in the structure of the board of directors, inviting mem-bers to get involved on the board and with other CBW committees.

CBW President and CEO Daryll Lund described various member ser-vices, beginning with the upcoming annual Management Conference and Expo, set for Sept. 10–11, at the Monona Terrace Convention Center, Madison.

Lund also provided an update on an initiative the board has been working on for some time. CBW has engaged WIPFLI and put together a task force of 25 to address succession planning in the industry.

In addition, Lund noted the associa-tion’s work in introducing a bill in the Wisconsin Senate and Assembly related to the public deposit guarantee account, which now contains $48 million to cover municipal deposits in the event of a bank failure. The bill proposes to increase coverage from $400,000 to $750,000, so that combined with FDIC insurance, a municipal account would have up to $1 million in coverage. The Senate has passed this proposal, but the Assembly has not yet done so. This will be a CBW priority when the legislature returns in the fall. Nationally, the priority contin-ues to be on ending Too-Big-to-Fail.Cyber Threats: Are You Covered?

In his introduction of presenter Jill Howe, account executive officer with Travelers, CBW Executive Vice Presi-dent Rick McGuigan noted, “It used to be that the largest sources losses came from embezzlement, but in the future they will be cyber.”

Howe concurred and ticked off the sobering trends:

The frequency and severity of online breaches are increasing.

Cyber security has become a problem at banks of all sizes.

Cyber thieves are no longer just col-lege thrill seekers; today they are usually organized criminals seeking a big profit.

According to one survey, 32 percent of breaches attributable to hackers, and 19 percent were attributable to employ-ees. Another survey found that one half of data breaches resulted from lost or stolen mobile devices.

Liabilities include costs to indem-nify victims and financial institutions, as well as legal defense costs. Consider, too, expenses related to notifying victims, remediation, business interruptions, repair of internal network, data resto-ration. The nightmarish list goes on.

A first line of defense is to create and audit information security protocols. A second is to ensure that all employ-ees trained. And, a third is to review your insurance portfolio, to cover all the bases:

• Viruses• Privacy• Denial of service• Defense costs• Employee data• Paper (hard copies, disks)

Don’t Ignore International Banking

“Don’t let your customers’ interna-tional needs outgrow your bank,” pre-senter Troy Ruegsegger, assistant vice president for deposit operations and international money services, Bankers’ Bank, urged his audience. He empha-sized the need for all banks to offer these services, “or you’re pushing your customers out the door.” Ruegsegger encouraged the bankers not only to make these services available, but to also make them “obvious on your website.”

International banking encompasses diverse customer needs—��to name a few:

• World travelers• Import/export businesses• Internet sales • Study abroad programs• International employee payroll • Estate settlements• Gifts, disaster reliefRuegsegger identified a few factors

to consider when offering international

services—��for example, added opera-tional costs and risks for payments. But common sense can go a long way in mitigating risk: If a customer wants to send $5,000 to Malaysia to collect a $1 million lottery win, ask questions!

Beware of different regulations in different countries and authenticate requests. If your bank receives email instructions from a customer to wire funds overseas, call the customer—��their email account may have been hacked.

In sum, international services can be an excellent customer retention tool, when used with common sense.Economic Update

The current economy presents good news and “not so good news,” Sanjay Bhasin, executive vice president, Federal Home Loan Bank-Chicago, reported.

First, the good news: The average non-farm payrolls figure has risen and the unemployment rate has dropped to 7.6 percent.

The not so good news: “We have 2 million fewer jobs than we did in 2007.” And, in July, the largest numbers of new jobs were in the fields of leisure and hos-pitality—��neither high paying industries.

Of the 2 million job shortage, 1.5 million of these are construction jobs, although this is improving along with the housing market. “In 2013 we’ve seen a 12 percent increase in housing prices… and fewer home sales are foreclosed properties,” Bhasin said. This is good news for construction workers, who are seldom cross-trained and wait to go back to work in construction.

Another positive sign is a grow-ing “quit rate” (the number of people voluntarily resigning from jobs who believe they can find another job). The quit rate has increased to 2.2 million from 1.8 million during the height of the recession.

Despite the positive news, Bhasin expects the Fed to keep not raise rates until the unemployment rate drops to 6.5 percent and inflation rises to 2.5 per-cent. “Projections suggest that we won’t reach 6.5 percent unemployment until mid 2015.”


©20

13 C

lifton

Lars

onAl

len

LLP

RELATIONSHIPS BUILD BUSINESSStrengthen connections to your customers by using advisors with a strong professional network.

CLAconnect.com608-662-8600

Audit Tax Consulting Outsourcing Wealth AdvisoryInvestment advisory services are offered through CliftonLarsonAllen Wealth Advisors, LLC, an SEC-registered investment advisor.


2013 Member Appreciation Days Golf ResultsCBW’s 12th annual Member Appreciation Days took place

at the Eau Claire Golf & Country Club on June 20; Uni-versity Ridge Golf Course, Madison, on July 10; and The Bog, Saukville, on July 15. The event also featured state and national association updates, program, luncheon, awards, and dinner. The winners at each location received clubhouse gift certificates.

Eau Claire Golf & Country Club

Eau Claire first place team with a 66, left to right, above: Daryll Lund, CBW; David Fritz, Executive Benefits Network, Milwaukee; Travis Holt, Citizens State Bank of Loyal; Gary Weirauch, Citizens State Bank of Loyal.

Flag events winners: Marty Reinhart, Heritage Bank; Rick Steckel, Ladysmith Federal; David Fritz, EBN; Greg Roth, Shell Lake State Bank; Mark Zulliger, Forward Financial Bank, and Jeff Niesen, Bankers’ Bank.

Eau Claire hole winners, left to right, above: Marty Reinhart, Heritage Bank, Marshfield; Rick Steckel, Ladysmith Federal Savings & Loan; David Fritz, Executive Benefits Network, Milwaukee; Greg Roth, Shell Lake State Bank; Mark Zulliger, Forward Financial Bank, Marshfield; Jeff Niesen, Bankers’ Bank, Madison.University Ridge Golf Course

University Ridge first place winners with a 61, left to right (see next column): Mark Kharitou, BOSC, Inc.; Scott Sitter, Choice Bank (Oshkosh); Matt Lemke, Bancroft State Bank; John Knellwolf, First National Bank (Darlington).

University Ridge flag events winners, left to right (see next column): Rob Reichert, Middleton Community Bank; Don Buchert, Walworth State Bank; Ernie Webnar, Bank of Brod-head; Jim Hegenbarth, The Park Bank (Madison); Sigurd Bringe, Bank of Deerfield.

The Bog

First place team with a 57, left to right, above: Jon Reetz, John Eimon, Mark Loeffel, and Dennis Doyle, all from Great Midwest Bank.

Flag event winners: Daryll Lund, CBW; Tom Jensen, First National Bank of Berlin; Rob Muren, Sunset Bank & Savings; Jim Judd, Farmers and Merchants Bank, Rudolph; Jeff Klei-man, Union State Bank; Dennis Doyle, Great Midwest Bank; Jim Rothenbach, Fox Valley Savings Bank, and John Eimon, Great Midwest Bank.

University Ridge first place winners

University Ridge flag events winners


Noteworthy Community Bank Anniversaries

Commercial Bank Celebrates Centennial

Commercial Bank Board of Directors accept Community Bankers of Wisconsin’s 100th year award from Daryll Lund, CBW (right). Directors (from left): Michael Kachel, Arthur Lein, Crystal Singer, Dr. Robert Koenitzer, Lolita Kachel, and Jon Kachel. Not pictured: Jeff McDonald.

To celebrate its centennial, Commercial Bank took customers back in time with an old-fashioned picnic and vintage stagecoach and carriage rides through downtown Whitewater.

100 Years at Nekoosa-Port Edwards

Daryll Lund, CBW, presents a centennial certificate to Robb Sigler, Nekoosa-Port Edwards State Bank president, as board members look on. The Wisconsin Rapids Daily Tribune published a video tour of the bank led by Sigler, pointing out many of its historic features. http://www.wisconsinrapidstribune.com/VideoNetwork/2168397389001/Nekoosa-Port-Edwards-State-Bank-celebrates-100-years

Farmers State Bank Marks 100th AnniversaryDaryll Lund presents an anniversary certificate to Carol Jefferies, Farmers State Bank, which marked its centennial in Hillsboro in January.

Banks celebrating key anniver-saries during the summer can take advantage of the warm weather to hold events outdoors, like Livings-ton State Bank, which hosted a Beef Month-themed event downtown where the Grant and Iowa County Cattlemen served steak sandwiches and the Rewey Lucky Stars 4-H Club sold ice cream. Customers could sign up to win a $100 Visa card raffle at each of the bank’s three locations in Livingston and Platteville.

Two 2013 sesquicentennial banks with October anniversaries took advantage of summertime to cele-

brate now. First Citizens State Bank, Whitewater played host to the reign-ing Alice in Dairyland, Kristin Olson. “Alice” and the community were welcomed with milk, string cheese, yogurt, and samples of Culver’s frozen custard. Nearby, PremierBank, Fort Atkinson, provided ice cream cones for the first 150 customers at its main locations in Fort Atkinson, Jefferson, Johnson Creek, and Sullivan. Cus-tomers could also register to win $15 gift certificates for area merchants at all locations.

Congratulations to the following community banks with anniversaries

in July and August.110 Years

First National Bank of Bangor, on July 1

Bank of Sun Prairie, on Aug. 8Livingston State Bank, on Aug. 14Walworth State Bank, on Aug. 17Union State Bank of West Salem,

on Aug. 25100 Years

Commercial Bank, Whitewater, on July 310 Years

Fox River State Bank, Burlington, on Aug. 15


Banconomics®

REPORT

455 S. Junction Road, Ste. 101 • Madison, WI 53719 • Ph: (608) 833-4229 • Fax: (608) 833-8114E-mail: [email protected] • www.communitybankers.org

Wisconsin Banconomics BenchmarksWisconsin FDIC Insured Banks Less Than $5B 3/31/13

$ in 000's3/31/12

$ in 000’sChange from One Year Ago

Wisconsin Banking Indicators Total (Sum) Total (Sum) %

Number of Banks 263 270 -2.6%

Number of Employees 18,238 18,431 -1.0%

Total Assets $74,139,622 $75,127,351 -1.3%

Total Deposits $60,597,264 $61,259,638 -1.1%

Net Loans & Leases $49,598,612 $50,735,687 -2.2%

Net interest income $621,139 $647,507 -4.1%

Total noninterest income $293,023 $281,933 3.9%

Net Income (Year-to-date) $200,569 $151,368 32.5%

Wisconsin Banking Performance Ratios (Year to Date) % % %

Profi table Banks 95.06 91.11% 4.3%

Banks with Earnings Gains 49.05 68.52% -28.4%

Net Interest Margin 3.63 3.76% -3.5%

Noncurrent loans to loans 2.57 3.63% -29.2%

Net charge-off s to loans 0.52 0.90% -42.2%

Loss allowance to loans 2.16 2.32% -6.9%

Net loans and leases to deposits 81.85 82.82% -1.2%

Return on Assets 1.07 0.80% 33.8%

Return on Equity 9.24 7.36% 25.5%

Equity Capital to assets 11.78 11.12% 5.9%

Wisconsin Banconomics Lending BenchmarksWisconsin FDIC Insured Banks Less Than $5B 3/31/13

$ in 000's3/31/12

$ in 000’sChange from One Year Ago

Wisconsin Lending Indicators Total (Sum) Total (Sum) %

Net Loans & Leases $49,598,612 $50,735,687 -2.2%

All real estate loans $38,844,892 $40,282,664 -3.6%

Construction and land development $2,567,228 $2,900,117 -11.5%

Commercial real estate $14,943,927 $15,353,479 -2.7%

1–4 family residential $15,606,938 $16,464,483 -5.2%

Farm loans $2,624,535 $2,576,637 1.9%

Commercial & industrial loans $6,411,394 $6,160,949 4.1%

Loans to individuals $1,909,977 $2,051,619 -6.9%

Credit cards $433,060 $461,997 -6.3%

Small business loans of $1M or less $6,684,286 $6,982,408 -4.3%

Banconomics®

RepoRt


We’ve Upgraded. New Look. Same Wisdom.

©2013 EBN

BOLI & Deferred Compensation Experts 800.780.4EBN ebn-design.com


Call us for quick response, competitive rates and flexible underwriting.

Gary Keller3100 13th Ave. S.Fargo, [email protected]

Member FDIC 4949

Make your opportunity a “done deal”... fast!• Participation loans

(commercial, agricultural, construction, operating lines and term loans)

• Bank stock & ownership loans

• Bank building financing

• Business & personal loans for bankers

• Multi-family long-term permanent financing

For Regulators, Cybersecurity Takes Center StageBy Lindsey White

Lindsey White is a reporter and columnist with SNL Financial. The views and opin-ions expressed in this piece are those of the author and do not necessarily represent the views of SNL.

Cyberattacks have become a central issue for bank regulators in recent

months. As the financial system faces more sophisticated cyberthreats, some say there is room for more government involvement in cybersecurity.

In the coming weeks, the Securities Industry and Financial Markets Associa-tion will lead a cybersecurity exercise to test the financial services sector’s response, resolution, and coordination processes in the face of a cyberattack. The drill was originally scheduled to take place June 28, but, according to what SIFMA spokeswoman Liz Pierce told SNL on June 20, it has been delayed due to the heavy demand from the finan-cial industry. “Obviously cybersecurity has become one of the most significant issues for the industry,” she said.

The later date will allow more firms to sign up. As of June 20, there were more than 50 participants registered, includ-ing small, medium, and large financial firms; the exchanges; the U.S. Depart-ment of the Treasury; the Department of Homeland Security, and the SEC.

The Federal Financial Institutions Examination Council recently formed a Cybersecurity and Critical Infrastruc-ture Working Group to foster better coordination between federal and state banking regulators on cybersecurity issues. Cybersecurity was one of several issues the Financial Stability Oversight Council highlighted in its 2012 annual report, released in April.

Kevin Streff, president of Secure Banking Solutions, said cybersecurity has been “a bit of a back-burner” issue for regulators in recent years, as they dealt with fallout from the financial crisis. “Now that the loan crisis issue is under control, this is becoming the front-burner issue,” he said. “The good news is that they’re getting around to

it, they’re forming the working groups, they’re starting to look at the regulation, [and] they’re starting to provide more guidance to bankers.”

The OCC has been particularly active in addressing cyberthreats of late. The regulator just hosted a Webinar for com-munity banks to raise awareness on the topic. In its Semiannual Risk Perspective for spring 2013, the OCC highlighted cybersecurity as one of the biggest risks facing the banking industry. Large banks are dealing with cyberthreats on a very regular basis, and the OCC is concerned that this risk could migrate to midsize and community banks.

Michael Kaiser, executive director of the National Cyber Security Alliance, agreed that cybersecurity is not just a threat for big banks. “Any small bank or financial institution has to realize that they’re a target,” he said. Cybercriminals know that small financial firms are “the lowest-hanging fruit.”

“The major financial institutions, the large banks, they’ve been invest-ing for years in their defenses … and they’re on alert all day long, all the time,” Kaiser told SNL. “So it’s likely that cybercriminals will move down the chain on the assumption that maybe a smaller bank might be less defended, or might have less resources to defend themselves.”

During a June 18 press conference to discuss the OCC’s risk report, the regulator called on banks of all sizes to develop heightened controls to deal with increasing cyberthreats. “Cyberthreats continue to increase in both sophisti-cation and volume and require height-ened awareness,” Deputy Comptroller for Operational Risk Carolyn DuCh-ene said. She emphasized the fact that cybersecurity needs to be a bankwide endeavor that management incorporates into strategic business decisions.

DuChene said OCC-regulated banks are generally well prepared and con-tinue to make the necessary adjustments to identify, prevent, and respond to attacks. Banks are taking a variety of steps, technological and otherwise, to address their vulnerabilities. “Some-


Your Business Is Our Business.It’s a challenging time for community banks. But you don’t have to meet those challenges alone.The banking-industry experts at BOSC can help you address today’s most-pressing issues, while capturing the most-promising opportunities. Backed by decades of experience and a wealth of resources, we’ll craft strategies to help you:

• Improve margins • Maintain regulatory compliance • Boost earnings • Manage interest rate risk • Generate operating efficiencies

Your local BOSC team understands your industry and your market. With a combination of banking expertise and top-notch service, we’ll help you overcome today’s challenges and keep your bank running efficiently and profitably.

Asset/Liability Modeling and Model Review | Institutional Fixed Income | Portfolio Accounting and Safekeeping Municipal Credit Analysis | Municipal and Agency Debt Underwriting | CD Underwriting

Milwaukee | 414.292.9625 | www.boscinc.com

© 2013 BOSC, Inc. A subsidiary of BOK Financial Corporation. Broker/Dealer Services and Securities offered by BOSC, Inc., an SEC registered investment adviser, a registered broker/dealer, member FINRA/SIPC. Asset/Liability Modeling and Model Review, CD underwriting and Safekeeping Services are provided by BOKF, NA dba Bank of Oklahoma, an affiliate of BOSC, Inc.


times the weakest link in the security chain is the human element, so we continue to focus on making sure that there is heightened awareness and a cul-ture of security within the institution,” DuChene said. “That involves, again, heightened awareness and heightened training … which can be fairly low cost and very effective.”

But according to Streff, cyberthreats can be a very expensive problem, espe-cially for the industry’s smaller players. He said banks should be doing annual penetration tests, where they hire a pro-fessional to try to break into the network just like a hacker would. They should be hiring an auditor to look at their entire information security program and report on what is working and what is not. They should be running social engineering tests to make sure people are shredding things and not throwing away sensitive data.

“Banks have a desire to protect their information and protect their money, but these are very expensive problems to fix,” Streff told SNL. The typical com-munity bank lacks the resources for all of these measures, however, and as a result, he said, corners get cut and sometimes leave an entryway for cybercriminals.

The OCC is not alone in its focus on cybersecurity. DuChene said there is a great deal of information sharing, col-laboration, and coordination between federal banking regulators on the topic of cybersecurity.

However, there are no plans to develop concrete regulation around cybersecurity. “Examiners will con-tinue to review banks’ information security policies and practices as part

of our examination process to ensure that banks operate in a safe and sound manner,” DuChene said in a statement e-mailed to SNL. “There are no plans to develop a separate exam for cybersecu-rity outside of what is already included in our supervisory examinations.”

This is likely music to bankers’ ears. Many in the industry are already strug-gling to cope with a heavy regulatory burden and would be loath to add to it. But some observers believe the gov-ernment should play a larger role in cybersecurity.

“The regulators have a responsibility to ensure the safety and soundness of our financial system. And IT regula-tion, security, and privacy is part of their responsibility and their jurisdiction,” Streff said. “If we can’t keep this stuff safe, private and secure, then our elec-tronic financial system is vulnerable.”

The current administration has taken some steps to address cyberthreats. For example, in February, President Barack Obama issued an executive order to improve cybersecurity surrounding the nation’s critical infrastructures. Among other things, the order called for the development of a framework to reduce cyberrisks to critical infrastruc-ture, including the financial system. The cybersecurity framework will include a set of standards and best practices for responding to cyberthreats. A draft is due to be published this fall.

But for the most part, the cyberse-curity issue has been frozen, said Jamie Barnett, a partner in Venable’s cyber-security practice. While the industry recognizes the threats, it is afraid of regulation and legislation around cyber-

security, as evidenced by the controversy surrounding the Cyber Intelligence Sharing and Protection Act, or CISPA, which would allow private businesses to share some of customers’ personal information with the government. The bill passed the House in April.

Barnett said there is a greater role for the government in cybersecurity. For example, he suggested that the govern-ment should create a form of a “cyber firefighting brigade” that companies could send in when they were under attack. He also proposed tax breaks for companies that improve their cyberse-curity or hire third parties to perform monitoring and detection services.

“The industry says, ‘we don’t want the government to regulate us,’ and the privacy advocates say, ‘we don’t want the government getting involved in this.’ Instead, what we need to say is, ‘what positive things can we do to reinforce the private sector?’” he told SNL.

CBW Announces New Associate MembersMADISON—�Community Bankers of Wisconsin has announced two new associate members:Continuity Control, New Haven, Conn.

Contact: Jim Kisch at 888-932-6759 or [email protected]

Continuity Control is an award-win-ning compliance platform that combines advanced software with personalized service to help community financial institutions effectively manage their reg-ulatory burden. The platform includes: Unified Monitoring & Reporting, Expert Compliance Strategy Team, Policy Man-agement, Compliance Management, Audit Management, Risk Management, Vendor Management, Organizational Management, Business Process Automa-tion, and Independent Audit. BancVue, Austin, Texas

Contact: Deanna Anderson at 877-342-2557 or [email protected]

BancVue provides innovative prod-ucts like Kasasa and dynamic support services such as marketing and con-sulting to help community financial institutions compete and win against megabanks.

“Where Compliance Makes $ense”

Badger Compliance ConsultingPO Box 460, Cambridge, WI 53523

Phone: (608)-492-2209Email:[email protected]

Badger Compliance Consulting was founded by a community banker forcommunity banks. We provide Loan and Deposit Reviews, BSA & ACHAudits, Training and Compliance Officer Support on a customized basis.

Contact us today to find out how we can help you manage the regulatoryhurdles in the coming year.

Charles W Geimer, CRCM, AMLCA


With OpteView® Resolve,™ what you see is a well-connected, effi cient ATM network.

Diebold’s availability management solution is yet another example of industry-leading products and services. It enables institutions to integrate

self-service delivery into their operations in a way that is cost-effi cient, secure and compliant. Big picture: It’s an unparalleled catalyst for growth. And

another reason why Diebold has remained a leader for more than 150 years.

For the entire story, visit www.diebold.com/boldinnovation.

1.800.806.6827 www.diebold.com [email protected]

die8780-09_OpteView_Spidr_CommBank_Wisc_v01AR_20130711.indd 1 7/11/13 11:29 AM


CBW’s Telephone/Webcast training sessions bring the latest regulatory information right to the desks of your bank employees:

Most webinars run from 2:00 p.m. to 3:30 p.m. However, the webinar on Sept. 10 begins at 10:00 a.m. For questions on any of these conferences or about the Webcast itself, please call Sandy Gruber at (608) 833-4229 or email [email protected]. Visit CBW’s Web site, select the desired workshop, and follow the link to register online.

Tuesday, Aug. 20: Consumer Debt Resolution Series: Modifications, Workouts, & Rescue Options

Wednesday, Aug. 21: Managing IRA Beneficiary Designations & Distributions

Thursday, Aug. 22: Recognizing Red Flags in Board Reports

Tuesday, Aug. 27: Tax & Account-ing Strategies for Health Care Reform

Thursday, Aug. 29: FFIEC Guid-ance on IT Security Awareness: Employee, Customer, & Com-munity Programs

Wednesday, Sept. 4: Protecting the SBA Guarantee Start to Finish

Thursday, Sept. 5: CFPB Examina-tion Procedures for Mortgage Loan Originators: Effective Jan. 10, 2014

Monday, Sept. 9: Trust Operations: Overview, Compliance, & Exam-iner Issues

Tuesday, Sept. 10: Director Series: Technology ‘Crash Course’ for Directors

Thursday, Sept. 12: From Pros-pect to Customer: Skills & Tools for Successful Business Development

Tuesday, Sept. 17: Deposit Rules Operations Must Know

Wednesday, Sept. 18: Legally Han-dling a Bank’s Right of Setoff on Deposit Accounts & Loans

Thursday, Sept. 19: The Future of Branch Banking: The New Defi-nition of Convenience

Tuesday, Sept. 24: Security Officer Reports to the Board: Fulfilling Your Annual Requirement

Wednesday, Sept. 25: Underwrit-ing Basics: Interviewing, Credit Reports, Debt Ratios, & Regula-tion B

Thursday, Sept. 26: Advanced Commercial Loan Documentation

Bank Acquisitions SimplifiedJeff Gerrish, Gerrish McCreary Smith Consultants, LLC, and member, Ger-rish McCreary Smith, PC, Attorneys

Many community banks are cur-rently considering an acquisi-

tion of another financial institution. Although some directors and officers are highly skilled in acquisitions, others may be unaware of the multiple steps involved. The steps of a typical com-munity bank acquisition are:

The bank acquisition process begins with a bank marketing itself for sale. This process generally involves the identifica-tion of potential acquirers, execution of confidentiality agreements, and provi-sion of confidential marketing materials containing information about the seller.

In the “acquisition analysis,” the potential acquirer “runs the numbers” to determine at what price the trans-action will be accretive to its earnings per share and otherwise enhance share-holder value.

Next, the selling institution’s board of directors will evaluate each of the offers considered.

The acquirer will then draft a term

sheet or letter of intent, which is non-binding and negotiated between the parties. It summarizes the expected structure, price, due diligence require-ments, confidentiality requirements, handling of target employees, and other key aspects. It also serves as the basis for the Definitive Merger Agreement.

Next, the acquirer will perform due diligence on the seller’s business opera-tions and condition, completing a com-prehensive review of the seller’s loans, contracts, fixed assets, and other mate-rial operational components, as well as the projected Fair Value of the target’s assets and liabilities as determined by FASB 141(R).

During due diligence, the acquirer’s counsel will draft a Definitive Merger Agreement, which acts as the actual con-tract for purchase and includes repre-sentations and warranties, conditions to closing, termination provisions, and the like. Counsel for both parties will nego-tiate any changes and eventually arrive at an agreement acceptable to both parties.

The Merger Agreement is presented to the buyer’s and seller’s boards for approval. The Agreement is typically

accompanied by a detailed analysis pro-vided by each board’s counsel.

Following the execution of the Merger Agreement, the acquirer will draft and submit all required regula-tory applications and will work with the regulators to resolve any issues in order to get the transaction approved.

The next step is to submit the acqui-sition to the shareholders for their approval. If the transaction is an all-cash transaction, only the seller’s sharehold-ers will vote. If the deal includes stock consideration, the buyer’s shareholders may be required to approve the transac-tion depending on the number of shares being issued and applicable state law. The shareholder approval process typi-cally involves the distribution of detailed proxy materials.

Following regulatory and shareholder approval and the expiration of any man-datory waiting periods, the acquisition transaction is closed through the filing of the Articles of Merger or other appro-priate documents and the exchange of purchase consideration.Contact Jeff Gerrish at [email protected].


Paid Advertisement


Community Banks Acquire Branches of Regional, Mega BanksMore and more, Wisconsin com-

munity banks are adding branch offices that once were owned by larger financial institutions—��including these two recent examples.

Greenwoods to Acquire Associated BranchLAKE MILLS—��Greenwoods Financial Group of Lake Mills has agreed to pur-chase the Lake Mills branch of Associ-ated Bank. Greenwoods is the parent company of Greenwoods State Bank. The acquisition is expected to close in November pending regulatory approval.

Acquiring the Associated branch will give Greenwoods State Bank six loca-tions with branches in Lake Mills, Mon-ticello, Evansville, and Rio. The bank will have some 40 employees with total assets of $155 million.

Waukesha State Bank Cuts Ribbon in New BerlinWAUKESHA—�Waukesha State Bank recently held a ribbon-cutting at its

newest full-service office in New Berlin, on the corner of National Avenue and Sunnyslope Road. The ceremony was attended by local business leaders, gov-ernment officials, and bank staff, includ-ing Waukesha County Executive Dan Vrakas, New Berlin Mayor Dave Ament, State Senator Mary Lazich, Ty R. Taylor, bank president and CEO, and Monica Fransen, New Berlin Bank Manager.

This is Waukesha State Bank’s 14th full-service office. All are located within

Waukesha County. Waukesha State Bank purchased the building from BMO Financial Group in December 2012. It was originally built as a Lincoln State Bank, and was bought by BMO Finan-cial Group’s Harris Bank in 2008, and was operating as a Harris Bank when it closed in October 2012.

The New Berlin office features 5,800 square feet of interior space, three drive-up windows, and a drive-up ATM. It also offers a large community room that is provided at no charge to local com-munity non-profits and civic groups.

Waukesha State Bank also has full-service offices in Brookfield, Delafield, Mukwonago, Muskego, Oconomowoc, Pewaukee, Sussex, and Waukesha. Its wealth management services include a trust and qualified plan division.

It’s a jungle out there...

NuSource Financial understands the ever-changing business climate in

today’s banking industry. You can’t afford to lose a client to the competitor

down the street and an ATM can be your first , or last

impression. Today over 400 Financial Institutions trust NuSource to provide

outstanding ATM service, for the best value.

Contact us today for afree EMV evaluation

of your ATM Program.

Our Wisconsin Technicians live and work in your communities!888/786-7560 (Phone)

NuSource Financial, Inc.

ChanGinG SCEnE

Bancroft Bank New Post Office HubBANCROFT—�When the Bancroft area post office cut its hours to just four hours a day, Bancroft State Bank stepped in with a solution. The bank opened a postal center in its headquarters. Cus-tomers will be able to buy stamps, mail flat-rate shipping boxes, and pick up and drop off their mail along with conduct-ing their banking transactions.

Horicon Bank Opens Geothermal Branch

Horicon Bank staff and Oshkosh Chamber of Commerce members cut the ribbon on the new bank office.

OSHKOSH—�Horicon Bank is bringing its nature-themed bank brand to Osh-kosh. “Our bank has always been closely

identified with the Horicon Marsh—��the largest freshwater cattail marsh in Amer-ica,” said President Frederick Schwert-feger. “We wanted to bring [the bank’s] history and environment to Oshkosh but put it in a fresh, contemporary, and dynamic context.”

The unique elements of Horicon Bank’s building, designed by Pittsburgh architect John Cullen, include geother-mal and solar energy systems and an exterior that reflects the colors and patterns of the marsh and its wildlife. A three-piece hanging glass sculpture by nationally exhibited local glass art-ist, Michael Meilahn, adds a finishing touch to the distinctive features of the architecture.

A wing-shaped awning covering the drive-up area reflects a goose floating across the water. Vertical impressions in the exterior brickwork climb the outside walls to mimic growing cattails while layers of blue and green striations wrap their way around the perimeter of the office to give the effect of the horizon lines of the marsh. From the 25-foot high tower hang Meilahn’s three distinc-tive corn-shaped glass sculptures.

“Our tagline is ‘The Natural Choice’,” Schwertfeger said “and our new build-ing reflects how seriously we take that

continued on page 30


© 2013 McGladrey LLP. All Rights Reserved.

When you trust the advice you’re getting, you know your next move is the right move. Backed by our experience serving more than 1,500 financial institutions across the country—

including many right here in Wisconsin—we help bank leaders navigate complex reporting, governance and regulatory issues in times of rapid change.

That’s what you can expect from McGladrey. That’s the power of being understood.

To learn how we can help you, contact John Behringer at [email protected] or 414.298.2855.

www.mcgladrey.com

Power comes from being understood.SM


statement.”

North Shore AcquisitionBROOKFIELD—�North Shore Bank has agreed to purchase the assets of the failed Bank of Kenosha. The Banks of Wisconsin, doing business as the Bank of Kenosha, is the first Wisconsin bank to fail in two years. The bank had two branches in the Kenosha area—��at 5117 Green Bay Road and 8056 39th Ave.

The two branches, which had $134 million in assets, will bring to 47 the number of North Shore Bank offices in eastern Wisconsin and northeastern Illinois. With assets of $1.74 billion, North Shore currently has a branch in Kenosha.

River Valley Exits TARPWAUSAU—�River Valley Bank is due for some celebrating. It recently exited the TARP program and topped $1 bil-lion in assets.

The bank’s parent company, River Valley Bancorporation Inc., repaid $15 million it received in 2009 as part of the U.S. Treasury’s TARP program during the financial crisis. The bank was profit-able during the downturn but accepted

the money to use for making loans. The bank raised $11 million in

2012 to pay down the loan and paid the remaining balance in May from its earnings.

First Bank Named Top Place to WorkOCONOMOWOC—�The Milwaukee Journal Sentinel has named First Bank Financial Centre to its Top Workplaces list for 2013. The bank was named sec-ond among midsized companies for its collaborative work environment and flexibility.

The recognition helps the bank recruit talent in areas where they’ve opened new branches and lacked name recognition.

Partnership Buys Two BranchesGRAFTON—�Partnership Bank plans to buy two Ozaukee County branches from Tri City National Bank.

The bank will purchase Tri City’s branches in Cedarburg and Grafton pending regulatory approval. In the deal Partnership will acquire the two facili-

ties and the customers with Ozaukee County ZIP codes. Tri City will not only retain its customers with Milwaukee and Waukesha county ZIP codes, but it will also keep all the loans at both facilities as well as deposits from its commercial customers.

Partnership is a branch of First Bank Tomah that was purchased by the former CEO of Ozaukee Bank, Dean Fitting. The transaction is expected to close dur-ing the third or fourth quarter of 2013 pending regulatory approval.

Waterstone to Go PublicWAUWATOSA—�Waterstone Financial Inc., the parent company of WaterStone Bank SSB, announced plans to take the bank public. The reorganization will convert the former bank mutual hold-ing company into a fully public stock holding company.

Waterstone Financial, Inc., has assets of $1.63 billion and eight branches in the metropolitan Milwaukee market. It also has mortgage banking offices in 12 states.

CIB to Acquire Mortgage CompanyWAUKESHA—�CIB Marine Bancshares is acquiring Avenue Mortgage Corp. of Naperville, Ill. pending regulatory approval.

Avenue had total assets of $9 mil-lion at the end of 2012. It will become a division of CIBM Bank subsidiary. With $465 million in assets, CIB Marine has 11 locations in central Illinois, Wiscon-sin, and Indiana.

Home Savings Files for IPOMADISON—�Home Savings Bank filed for an initial public stock offering, which would offer up to 1.25 million shares of stock at a tentative price of $10 per share. Customers who had at least $50 in deposits as of Sept. 30, 2011, would be offered first chance at purchasing the stock followed by employees, other depositors, and then Dane County resi-dents. After that the shares would be offered to the public.

The decision to take the bank public means it would need to convert from a mutual savings bank to a stock-based

continued on page 32

WISCONSIN HOUSING AND ECONOMIC DEVELOPMENT AUTHORITY201 West Washington Ave. � Madison, WI 53703

800.334.6873 � www.wheda.com

Down payment assistance.

WISCONSIN HOUSING AND ECONOMIC DEVELOPMENT AUTHORITY800.334.6873 � www.wheda.com

With a WHEDA Advantage mortgage, your borrowers may qualify for the Easy Close Advantage. This down payment assistance loan has a low-cost, fi xed interest rate for 10 years and is designed to help your borrowers get into a home sooner with a mortgage they can afford long-term. Discover the WHEDA Advantage! Income and loan limits apply and home buyer education is required. Interest rates are subject to change daily. To learn, go to www.wheda.com/MortgageLenders.

What is our WHEDA

Advantage®?


Solutions that ICBA Securities can provide to your bank:

• Investment Products/Analytics - Using proprietary analytical tools, ICBA Securities assists community banks in achieving and maintaining high performing investment portfolios, in conjunction with overall balance sheet concerns/goals.

• Interest Rate Solutions - Increasing spread and income in the loan portfolio through interest rate swaps & support of all types (offered through ICBA Securities’ affiliate, Vining Sparks Interest Rate Products, LLC)

• Asset/Liability Support - More than typical data analysis, reports & reviews, ALCO meetings (your partner all the way through review, strategy & execution)

• Investment Advisory Services - Investment subsidiary asset management support (offered through ICBA Securities’ affiliate, Vining Sparks Asset Management, LLC)

• Wholesale Funding - Full-service wholesale funding support (issuing Brokered CDs, Repos/Reverse Repos, FHLB Advances Analysis, etc)

• Loan Portfolio - Market makers in all loan types for community banks (SBA, USDA, Ag, Residential & Commercial, Performing & Non-Performing, etc), profit maximization, origination support, etc

• M&A and Valuation Services - Capital raises, mergers/acquisitions, strategic planning, valuations, ESOPs, stock options & more (offered through ICBA Securities’ affiliate, Vining Sparks Community Bank Advisory Group)

• News, Analysis & Strategies - Timely Market Updates, Online Portfolio Management, Regulatory Compliance, Webinars/Seminars.

A name you’ve known and trusted for over 20 years.

Your Wisconsin Balance Sheet Solutions Team:

Fred Kelly • Jonathan Ferebee • David Holsted 877-506-7075

ICBA Securities is a member of FINRA/SIPC

Providing Wisconsin Community Bankers comprehensive balance sheet solutions.

Exclusively Endorsed by

Securities execution services are offered by ICBA Securities Corporation a registered broker-dealer and Member FINRA/SIPC. Other services and products mentioned are not insured by SIPC and may be offered by separate but affiliated companies. Please visit our website for additional important disclosures and information. www.icbasecurities.com

Attention: Convention AttendeesHear

Craig DismukeChief Economist, ICBA Securities

September 11, 2013General Sessison, Monona Terrace

Economic OutlookThe U.S. economy will likely be weighed down for

many years as fiscal and monetary policymakers

confront difficult realities in exiting their historically

unprecedented policies. In this session, we will discuss

the outlook for the U.S. economy and interest rates

given those challenging headwinds. We will also

discuss how the pace of growth in the labor market is

affecting monetary policy decisions.


savings bank. It would also need to form a holding company.

Home Savings has three offices in Madison and one in Stoughton. The bank has assets of $123 million and 35 employees.

Wipfli Adds Wausau OfficeMILWAUKEE—�Wipfli LLP has acquired the Wausau office of Baker Tilly. The accounting and consulting firm has more than 1,100 associates in 22 offices around the U.S. Wipfli’s new Wausau office has one partner and 104 associates.

New Name, President for Wealth Management DivisionWAUKESHA—�Waukesha State Bank’s wealth management division has a new name, Prairie Financial Group®. For-merly Waukesha State Bank Wealth Management Services, the new name will eliminate any geographical limitations. Prairie Financial Group® now offers a broader range of services throughout Wisconsin and beyond. The group works with individuals, businesses, non-prof-its, and academic institutions to deliver a variety of services, including: trust and trustee services, retirement services, investment management, estate services, financial planning, enhanced cost man-agement, and planned giving.

The new name is a blast from the past when Waukesha was called Prairieville

during the 1800s. Waukesha State Bank also pro-

moted Kristin Reilly to president of its rebranded division. “We will continue to grow our business based on mutual trust and relationships that span generations,” Reilly explained. “As a privately-owned company, we have the independence and freedom to serve our clients with the financial choices that are right for them, at the right time, for the right reasons.”

Reilly replaces J. Bernard Fiedler who will remain as executive vice president of Prairie Financial Group®, leading its new product development, special assets initiative, and the growth of its alliance partnerships.

Upbeat StatisticsState and federal agencies are begin-

ning to report improved economic num-bers for Wisconsin.

The number of new business enti-ties formed in Wisconsin as of June 30 was 19,567, an increase of 2.9 percent compared to the first six months of 2012, according to data released by the Department of Financial Institutions. The business formation data is compiled by DFI, which is the filing office for the creation of business entities in the state. DFI tracks new business entity creation on a monthly basis and posts the data on its Web site.

The Federal Reser ve Bank of Philadelphia predicted in late July that Wis-consin’s economy will grow 3.14 percent on an annualized basis over the next six months, second best among all states. Only New Hampshire at 3.3 percent had a higher “lead-ing index” for June in numbers designed to fore-

cast changes in economic performance going forward.

In addition, Home Loan Bank lend-ing to U.S. lenders is growing, according to second-quarter data. The FHLBanks’ total assets increased by 1.6 percent at June 30 from Dec. 31, 2012, and advances outstanding increased 7.7 percent due to higher member borrowing.

Investment balances declined 3.4 percent due primarily to a decrease in securities purchased, and mortgage loans declined 5.7 percent as a result of principal repayments that continued to exceed purchases. Total GAAP capital increased 1.6 percent.

Wisconsin Business Development Receives National Award MONONA—�Wisconsin Business Development Finance Corporation (WBDFC) recently received the award of Large CDC (Certified Development Companies) of the Year from the U.S. Small Business Administration (SBA). The awards ceremony took place in June during the SBA’s National Small Business Week ceremonies in Washington, D.C.

In fiscal year 2012, WBDFC worked with 114 Wisconsin financial institu-tions and obtained 302 loan approvals, totaling over $228 million and making WBDFC third in SBA 504 loan approvals out of 255 CDCs. WBD holds the sixth largest loan portfolio, having provided over $550 million in financing to small businesses.

“This recognition was earned through the exceptional work of the WBD staff to assist Wisconsin businesses in recovering from the recession,” said Joe Wolfe, CEO of WBD. “Working with the SBA and lending partners, we were able to allow over 300 businesses to grow their compa-nies and help keep Wisconsin working.”

SBA also honored a Wisconsin business that has succeeded with the assistance of WBDFC. Tom and Kathy Nieman from Fromm Family Foods in Mequon, were honored as the Wiscon-sin Small Business Persons of the Year. Fromm Family Foods, which produces premium lines of pet food, worked with WBD to gain access to SBA financ-ing for expansions to their Columbus facility.

Kristin Reilly


PEoPlE

Prent Eager Celebrates 65 Years in BankingEVANSVILLE—�Leonard Prentice “Prent” Eager, Jr., board member and former president of Union Bank & Trust Company, was recently recognized for 65 years of service with the bank. At age 91, he still comes to work in his office at the bank Monday through Thursday mornings. Eager began working at the bank in 1948, becoming a director and cashier in 1958.

The history of UB&T is the history of the Eager family, ever since Gertrude Eager purchased the Grange Bank in 1916 and her son, Leonard P. Eager, Sr., began his banking career.

Prent Eager’s younger brother Alan is another former president of the bank. Following Alan Eager’s retirement as president in 2003, Chris Eager, Alan’s son, took the helm until he, too, retired earlier this year. Current president is Chris’ brother, Steve Eager.

Lawton New SVP at Bank MutualBROWN DEER—��Patrick Lawton has joined Bank Mutual as senior vice presi-dent/director of investment real estate lending. In his role, he will direct the bank’s investment real estate division.

Lawton, who has 24 years of expe-rience in the financial industry, most recently served as senior vice president/director of commercial real estate at BMO Harris.

Bruss Named COO of WaterstoneWAUWATOSA—�William Bruss has been named chief operating officer of Waterstone Financial Inc., the parent company of WaterStone Bank.

Bruss has been with the bank since 1997. He’s been an executive officer of the company since 2005 and most recently served as senior vice president, general counsel, and secretary.

Waukesha State Bank Promotes Brierton WAUKESHA—�Waukesha State Bank has promoted Paula Brierton to presi-dent of its payroll services division,

Payroll Complete. In her new position, Brierton will be responsible for new business development, customer relations and servicing, and new product development and implementation. Payroll Complete prepares payroll for hundreds of compa-nies and provides tax reporting and payment, custom report preparation, and other key payroll services.

Hart PromotedMADISON—�Ken Thompson, presi-dent & CEO of Capitol Bank, recently announced the pro-motion of Justin Hart to vice president of commercial lending. Hart joined Capi-tol Bank in 2007 as a credit analyst and became a commercial lender in 2010.

Changes at Wisconsin Bank & TrustMADISON—� Kevin Tenpas, president of Wisconsin Bank & Trust has added the title of chief executive officer. Tenpas succeeds CEO Tom Wilkinson who will remain as chairman.

Wisconsin Bank & Trust has pro-moted Kim Smith to the position of senior vice president and senior opera-tions officer. In this role, he will be responsible for managing all operational and financial functions for the bank’s

10 branch offices in Wisconsin. Smith joined Wisconsin Bank & Trust in 2011. He spent the previous 23 years as CFO in the fleet management industry, 15 years of which was with ULTEA, a for-mer Heartland Financial-owned affiliate. Smith is a graduate of UW-Platteville and a CPA.

Wisconsin Bank & Trust has wel-comed Maggie Stauff as treasury man-agement vice president. Stauff has 10 years of banking experience and an MBA from the University of Phoenix. In her new role, Stauff will help support the bank’s treasury management portfolio.

Steve Marshall has joined the bank as senior vice president-commercial bank-ing at the bank’s DePere office. Marshall brings with him 20 years of experience in commercial lending and private bank-ing to his new position.

First Business Promotes HoeschMADISON—�First Business Bank has promoted Josh Hoesch to vice president. Hoesch joined the bank in 2012 and has over eight years of experience in commercial banking with expertise in manufacturing, distribution, and service companies.

Hoesch will be responsible for rela-tionship management and business development for the bank.

Park Bank Hires VPs MADISON—�Park Bank recently announced that John Wyss has joined the bank as vice president of business banking. Wyss brings to Park Bank over 20 years of experience in the banking

Paula Brierton

Justin Hart

Pace of Regs May SlowWhen Paul Hoffmann, CBW chair-

man and president and CEO of Monona State Bank, met in Chicago with FDIC Chairman Martin Gruenberg and nine other community bankers, Gruenberg noted that while community banks hold 14 percent of US banking assets, they are responsible for 48 percent of all small business lending. And 20 percent of US counties are served only by a commu-nity bank.

Hoffmann asked whether the FDIC would continue to support a multi-tiered

approach to bank regulations. Gruen-berg replied, “Yes,” as not all banks are alike. He assured the bankers present that there would be no one from the CFPB accompanying FDIC examin-ers on any onsite exams of community banks.

Asked about the challenge of new regulations, Gruenberg observed that their pace would likely soon slow, as the agencies have worked through many of the Dodd-Frank provisions impacting community banks.


industry and has extensive training in Small Business Administration lend-ing combined with a background in the operations and management of several independently owned multi-million dol-lar companies. Wyss is a graduate from the UW-Madison.

In addition, Kristi Austin has joined Park Bank as its vice president of private banking. She comes to Park Bank with more than 20 years of financial service experience.

Staff Changes at Southport KENOSHA—�Southport Bank has promoted Gwen Becker to senior vice president of marketing and retail devel-opment. Becker, who has more than 30 years of experience in banking, joined Southport in 2012.

Paul Otto was also promoted to vice president and chief financial officer for both the bank and Southport Financial Corp. Otto has been with the bank since 2001 and previously served as vice presi-dent and audit supervisor.

Jennifer Somerlott was named vice president of compliance and Bank Secrecy Act.

Kaehny Joins Horicon BankHORICON—�Andrea Kaehny has joined Horicon Bank as vice president and mortgage lender at the bank’s West Bend office.

Promotion at PyraMaxGREENFIELD—�PyraMax Bank has promoted Eric Hurd to vice president of commercial lending. He has been

employed with PyraMax Bank since 2009 and has 10 years of business bank-ing experience.

Staff Changes at WBDMADISON—�Joe Wolfe has been appointed CEO of Wisconsin Business Development Finance Corp. Formerly the company president, Wolfe was instrumental in forming Wisconsin Business Development Finance Corp.’s (WBDFC) affiliate companies and was a key player in the enactment of the SBA 504 Temporary Refinance program. He will continue to lead the strategic direc-tion of WBD and coordinate the initia-tives of the affiliate companies.

Dan Schneider has been promoted to president and COO of the WBDFC. He has over 30 years of experience assist-ing small businesses and has been with WBD for 10 years. Schneider now will be responsible for spearheading the com-pany’s lending operations, which are currently present in nine offices across Wisconsin.

Pam Rich was promoted to executive vice president and CFO. She will lead the company’s finance and administra-tion department. In addition, she will serve as the general manager of Lincoln Opportunity Fund, LLC (LOF), a Certi-fied Development Financial Institution (CDFI) created to provide financial solu-tions for under-served populations in Milwaukee.

Tom Wolfe was appointed vice presi-dent and chief credit officer. He will con-tinue to serve as chief credit officer of Wisconsin Business Development Ser-vice Company, an affiliate of WBDFC. In addition, he now will be responsible

for handling the credit review process of loan underwriting, portfolio man-agement, loan compliance, and loan servicing.

Denise Cameron was promoted to the position of vice president. She will continue to lead the SBA 504 loan clos-ing department.

WBD hired Al Kraus as vice president for finance and controller. He comes to the company with over 20 years of financial experience, mainly in the credit union industry.

New Partner at WIPFLIMILWAUKEE—�A new partner has been elected in the Financial Institu-tions Practice of Wipfli LLP (Wipfli). Lee Christensen is among a group of four associates who were elected to the partnership this year in the firm.

With over 27 years of experience in pub-lic accounting specializing in serving financial institutions, Christensen pro-vides a wide range of audit and account-ing services to Midwest financial institu-tions. In his position, he primarily man-ages financial statement audits, reviews, and compilations, but also provides consulting services to clients in areas such as allowance for loan and lease loss methodology, due diligence and accounting for business acquisitions, and regulatory issues. Due to his depth of technical experience, Christensen is a member of the firm’s Financial Institu-tions Technical Issues Committee.

DirECtory oF Community BankinG SErviCE ProviDErS

Superior Safe & Security LLCElectronic & Physical Security Products

Access Control Modular VaultsAlarm Monitoring Night DepositoriesAlarms Point to Point SystemsAudio Systems SafesClose Circuit T.V. Safe Deposit BoxesDrive Up Systems Security SystemsFire Safes Teller CountersMedia Safes Vault DoorsMetal Undercounter Cabinets Walk Up Windows

Sales, Installation & Service800-626-0888

Community bankers, you have a choice.You can spend your valuable time finding

one prime candidate to fill your mid- to upper-level position, or you can call me. I will present you with the

right person for the job in less timewith less hassle.

office location:155 E. Capitol Dr., Ste. 5

hartland, Wi 53029Phone: (262) 369-8109

Fax: (262) 369-8028email: [email protected] Garcia

Lee Christensen

www.icba.org

Tenacity

Thy name is ICBA

Independent CommunityBankers of America®

Grow your bank with us.

Financial InstitutionProducts & Services

Offered by Your Association◆ Financial Institution Bond

◆ Directors and Officers Liability

◆ Property, Casualty, and Workers’ Compensation

◆ Forced Placed Property Mortgage Protection

◆ $9.00 Life of loan flood determinations

Community Bankers Financial Services offers a wide variety of products and ser-vices for the benefit of you, our members. For additional information on any

of our financial institution programs call CBFS at 651.687.9080.

455 S. Junction Rd., Ste. 101Madison, WI 53719www.communitybankers.org

Kevin Christians Denise Davis

Compliance Program Highly Rated by Wisconsin Community BankersFor the eleventh straight year CBW is sponsoring the Community Bankers for Compliance Program (CBC) in 2013 with Young & Associates, a nationally recognized compliance consulting firm that

specializes in community banking. The CBC program is CBW’s most highly rated educational program.

The CBC program includes quarterly full-day seminars based on the most recent industry and regulatory developments, access to the Young & Associates toll-free compliance hotline, and a CBC Members Only website hosted by Young & Associates that provides timely compliance information and tools.

The quarterly compliance seminars offer peer networking and include a regulatory update and a comprehensive discussion of one or more compliance regulations. Attendees receive a compliance manual each quarter that is generally in excess of 200 pages that can and is used as a reference to the changing regulations and as a training manual for other employees.

If you have questions, contact:Sandy Gruber at 608.833.2384, [email protected]

or Rick McGuigan at 608.833.2382, [email protected]

community bankers of wisconsin

Documents