Terry Katsma to Run Pioneer Bank Leads BOLT Board SeesTerry Katsma to Run for Assembly 8 Pioneer...

Terry Katsma to Run for Assembly

8

Pioneer Bank Leads Rusk County Development

10

BOLT Board Sees ‘Resurgence of Community Banking’

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Volume 14, No. 3

May/June 2014

Richard BuschPRESIDENTROYAL BANK Committee member, Bank Services CommitteeICBA Federal Delegate Board, State DelegatesAssets: $320 million

Steve EagerPRESIDENT AND CEOUNION BANK & TRUST COMPANYSubcommittee on LendingAssets: $213 million

Paul Ho� mannPRESIDENT AND CEOMONONA STATE BANKSubcommittee on LendingAssets: $376 million

Daryll LundPRESIDENT AND CEOCOMMUNITY BANKERS OF WISCONSINPresident/CEO ICBA Federal Delegate BoardSRP Executive (ex-o� cio)

H. Butch PomeroyPRESIDENTTHE INTERNATIONAL BANK OF AMHERSTICBA PACAssets: $53 million

John SlatkyPRESIDENTBANK OF LUXEMBURGBank Operations & Payments CommitteeICBA Federal Delegate BoardAssets: $264 million

Paul McGuireEXECUTIVE VICE PRESIDENTNATIONAL SOLUTIONS [email protected]

Contact Paul McGuire for more information about ICBA. Phone: (202) 821-4417

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On our cover . . . Oostburg State Bank President Terry Katsma is running as a Republican in Wisconsin’s 26th Assembly District race this year. He faces Job Hou-Seye, of Sheboygan, in an Aug. 12 primary election. Turn to page 8 to read the full story.

10

PIONEER BANK Leads Rusk County Development

12 WISCONSIN COMMUNITY BANKERS ATTEND ICBA WASHINGTON POLICY SUMMIT

18 NORTH SHORE BANK Offers Personal, Digital Choices

20 THE INCREASING IMPORTANCE of Employment Agreements

24 ROUNDUP: WISCONSIN MERGER AND ACQUISITION UPDATES

— BOARD OF DIRECTORS — Stan Leedle, Choice Bank, Oshkosh

2013–2014 ChairmanJerry O’Connor, The First National Bank of Waupun

Chairman ElectFred Siemers, River Cities Bank, Wisconsin Rapids

Vice ChairmanPaul Hoffmann, Monona State Bank

Past ChairmanJim Tubbs, State Bank of Cross Plains

Secretary/Treasurer, Past ChairmanRick Busch, Royal Bank, Gays Mills

ICBA DirectorJohn Slatky, Bank of Luxemburg

ICBA DirectorDan Ravenscroft, Royal Bank, Mauston

BOLT Board Chairman

— REGIONAL DIRECTORS — – Northwest District – Paul Kohler, Charter Bank, Eau Claire

Tom Armstrong, First National Bank, Park FallsJim Loe, Pioneer Bank of Wisconsin, Ladysmith

– Northeast District – Marty Reinhart, Heritage Bank, MarshfieldBrad Grant, Calumet County Bank, BrillionSue Paoli, First National Bank of Niagara

– Southwest District – Steve Zeman, Union State Bank, West Salem

Doug Martin, Livingston State Bank 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 President

Sandra GruberDirector of Member Services

and Information Management

Shannon SchlueterDirector of Membership and Training

Jami EricksonDirector of Member Communications

and Association ProgramsLori Greene

Administrative Assistant

COMMUNITY BANKERISCONSIN

Published by Community Bankers of Wisconsin through 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 608.583.2084

Advertising: Jami Erickson, Director of Member Communications, at 608.833.2386 or contact Doris Green

Wisconsin Community Banker is provided at no cost to CBW members. The current and past issues are available on the CBW Web site: www.communitybankers.org.

Community Bankers of Wisconsin • 455 S. Junction Rd., Ste. 101 • Madison, WI 53719 • Ph: 608.833.4229 • Fax: 608.833.8114www.communitybankers.org • E-mail: [email protected]

COMMUNITY BANKERISCONSIN

May/June 2014 • Vol 14 No 3

4 Wisconsin Community Banker May/June 2014

Chairman’s View by Stan Leedle, CBW Chairman

Step Up: Your Role in the Future of Wisconsin Community BankingIf, at the end of a particularly challenging day

at the bank, you harbor any doubts about the future of our industry, reading the article on page 14 should relieve them. CBW’s BOLT Board of Directors respond to the question: “What is the future of community banking in Wisconsin?” and their replies are eloquent endorsements for the health, strength, and prospects of our industry. Clearly the future of community banking across our state is in good hands.

By the time you read this column, our first BOLT Summer Leadership Summit will be a much valued memory. It will undoubtedly result in enhanced leadership skills, new knowledge, and connections forged across our institutions. It will also build our banks’ abilities to remain profitable while offering customers of all ages and circumstances the products and services they need.

The BOLT Summer Leadership Summit is not the only opportunity for leadership develop-ment offered by your association. Beginning this fall, CBW is offering the “Leadership Develop-ment for Community Bankers” program, in partnership with the Center for Professional and Executive Development at the University of Wisconsin-Madison. To read the details, turn to CBW President and CEO Daryll Lund’s column on page 6.

You do not need to wait until September to learn and network with your CBW colleagues by participating in our new Leadership Develop-ment program or by attending our 2014 Manage-

ment Conference and Expo in Wisconsin Dells. If you have not yet registered for one of our ever-popular Member Appreciation Days, there is still time to sign up and attend the event on July 9 in Madison or July 14 in Altoona. For more infor-mation, visit www.communitybankers.org and click the Membership tab in the left column.

In addition to all the various meetings and educational workshops, I hope you will stay con-nected by reading our weekly Wisconsin Com-

munity Banker Today e-newslet-ter and CBW’s other email and print announcements.

This magazine offers multiple opportunities to learn and make new connections by reading about colleagues’ successes (and failures), ideas, and innovations.

Turn to page 10 to learn how Pioneer Bank has helped the city of Ladysmith thrive following the triple challenges in the past decade of the closing of a college, a tornado, and jobs lost during the Great Recession. Learn about North Shore Bank’s strategies for adopting new technologies on page 18, and turn to page 8 to read about one commu-nity banker’s decision to enter state politics.

However you like to connect, I invite you to take advantage of all the opportunities that Com-munity Bankers of Wisconsin makes available to its members.

Stan Leedle is Executive Vice President of Choice Bank in Oshkosh

CBW offers multiple opportunities to connect, learn, and build your skills.

Jeff NiesenMadison, WI 608.577.8081

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Announcing New ‘Leadership Development for Community Bankers’ ProgramCBW is excited to announce our new

“Leadership Development for Community Bankers” program. CBW launched this eight-day course in partnership with the UW-Madison Center for Professional and Executive Development.

Retirements of community bank presidents, chief financial officers, and other executives are on the rise. CBW’s newest program is designed to deepen the bench strength of community

bank leadership and retain talented managers. Participants will learn to foster high performance teams, respond to sweeping regulatory changes, and lead community economic development efforts.

Beginning in September, the program will offer higher level business and industry training to new and emerging community bank leaders. The educational program will consist of four two-day modules at The Fluno Center in Madi-son. An initial cohort of 30 participants from community banks across Wisconsin will com-plete the four modules by next spring:

Sept. 12–13, 2014—Leadership Beyond Bank Management

Nov. 7–8, 2014—Strategic Thinking and Per-formance Management

Jan. 16–17, 2015—Executing Strategy and Improvement

Mar. 20–21, 2015—Increase Influence and Lead Change Effectively

Designed by the Center for Professional and Executive Development at the Wisconsin School of Business, the educational program ensures

real-world learning. Each participant will apply their new knowledge in an individually selected project within their bank and/or community. This curriculum will bring actual ROI to the bank and its customers.

Faculty include Steve King, center director; Jim Johannes, Aschenbrener Professor of Bank-ing and Director of the Puelicher Center for Banking Education at the Wisconsin School of Business, and other UW-Madison faculty. Susan

Finerty, consultant and author of Master the Matrix: 7 Essentials for Getting Things Done in Com-plex Organizations, will also serve as a faculty member.

CBW will receive no revenue from the Wisconsin School of Business partnership. In fact, your

association’s Board of Directors is committed to this educational program and has authorized $250,000 for scholarship reimbursement to par-ticipants who successfully complete all mod-ules. Each participant completing the program will be eligible to receive $2,000 in scholarship reimbursement.

If you or a colleague is considering this new opportunity, I encourage you to register online soon at: tinyurl.com/communitybankersofwis-consin. Space is limited, especially this year, when our industry has a large pool of potential candidates who can benefit from it. And, I sus-pect that demand for this program will grow next year, as the members of our first cohort complete the modules and do great things in their banks and communities.

Reach Daryll J. Lund at [email protected].

Serving You Daryll J. Lund, CAE, CBW President and CEO

It will offer higher level business and industry training to new and emerging community bank leaders.

May/June 2014 Wisconsin Community Banker 7

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Terry Katsma to Run for AssemblyDoris Green

Oostburg State Bank President Terry Katsma

resigned his position in May to enter Wisconsin’s 26th Assembly District race. Running as a Republican, he faces Job Hou-Seye, of Sheboygan, in an Aug. 12 primary election.

If a chance encounter at the bank is any indication, Katsma has enthusi-astic support in his home community. Entering the bank, this reporter met Katsma in the lobby. As we shook hands, a bank customer approached. “I just need a minute,” said the man, who wore the work clothes of a Wis-consin farmer. “I wanted you to know: I’m going to vote for you.”

As we settled into his office, Katsma said, “I didn’t stage that!”

But there was no need to mention it. Any observer would not doubt the veracity of that true-to-the-core Mid-western customer.

With most of his banking experi-

ence in lending, Katsma places a high value on the customer relationships he has built over the years. “It’s been wonderful seeing the successes of our customers.”

Like community banking, politics is a people-centered profession. On learning about his candidacy, one community banking colleague told Katsma: “Politics and banking are similar. Both require diplomacy.”

Diplomatic experience can come in many ways. Katsma served on the vil-lage board for six years and with many other civic and nonprofit organiza-tions. “I am no more involved than any other community banker who is fully engaged in all aspects of his or her community.”

Katsma is deeply centered in his Midwestern roots. “I’m pretty mature in my beliefs. I feel very stable in where I am and look forward to hav-ing an influence and improving life for people across Wisconsin,” he said. “I can be an effective advocate for a

commonsense approach and provide a broad perspective.”

His priorities will sound familiar to many community bankers—less government intrusion in our lives, less regulation, and lower taxes. “I bring common sense and the notion of a citizen legislator.”

“I will work to control excessive spending, seek to cut the tax burden, and work to reduce excessive govern-ment regulations and allow for the free market to create jobs,” Katsma stated in the release announcing his bid. “It

Oostburg NativeBorn and raised in Sheboygan

County, Terry Katsma first worked as a summer intern at Oostburg State Bank. After graduating in 1980 with a degree in business administration from Dordt College, Sioux Center, Iowa, Katsma and his wife Nancy (also a Sheboygan County native) accepted a job in Chicago. There, he enrolled in DePaul University’s MBA program, and he and Nancy had the first of their three children.

While they enjoyed the excitement and cultural opportunities of the big city, when Oostburg State Bank asked him to return, the couple moved home, opting to raise their family in Oostburg.

Like most community bankers, Katsma got involved with a variety of public and nonprofit organizations, serving on the village board for six years, as well as on nonprofit, private school, and college boards of direc-tors/trustees, including that of his Dordt College alma mater. He cur-

rently serves with:Oostburg Area Chamber of Com-

merce (president elect)Citizen member of Sheboygan City/

County Shared Services CommitteeWorkbound, Inc. Board of Direc-

tors (past president)Board of Trustees Trinity Christian

College, Palos Heights, IL (corporate treasurer and chairman-finance and audit)

Board of Managers Sheboygan YMCA

Christian Reformed Church of Oostburg (elder)

Oostburg Kiwanis (member, also past president and past secretary)

Katsma began his 34-year career with the bank as assistant cashier and a loan officer. Working largely in lending, he served more than a dozen years as senior vice president, before becoming president in 2012. Katsma has never regretted the move back to community banking.

Case in point: When Katsma

moved back to Oostburg, he com-pleted his MBA program at Marquette University in Milwaukee. About this time Sears was going into banking through its Greenwood Trust Com-pany, issuer of Discover Card. Noting Sears’ move into financial services, a Marquette adjunct professor made light of small, community institutions like Oostburg State Bank.

But Sears, of course, later sold its various financial businesses. And now, Katsma likes to point out that history has proven that community banks can out-succeed the big banks.


Terry Katsma

is important for citizen-legislators to step up and accept the responsibility of public service.”

After announcing his run, Katsma initially concentrated on getting the signatures needed to get on the ballot. He is now working with his committee to create a website and other struc-tures. “It’s been a whirlwind the past few weeks.”

The Assembly 26th District seat is currently held by Republican Mike Endsley, who is not seeking a third term. The district encompasses south-eastern Sheboygan County along with the City of Sheboygan Falls and the southern portion of the City of Sheboygan, where Katsma is less well-known.

If Katsma is successful in the

August primary, he will face former Assemblyman Terry Van Akkeren, a Democrat who held the seat from 2002 to 2010.

To learn more about Terry Katsma and his Assembly campaign, email him at [email protected] or call 920-946-9391.

Waterstone Bank Partners with Sophia’s Heart to Record New Jingle VocalsWAUWATOSA—WaterStone Bank has released a new variation of its jingle featuring teen voices from the Milwaukee nonprofit youth choir Sophia’s Heart.

Founded by American Idol alum and Milwaukee native Danny Gokey, the Sophia’s Heart Foundation exists to help heal the hearts of children and families who have been touched by poverty, sickness, disease, broken families, and broken dreams.

This spring, the young members of the Sophia’s Heart choir met at Tanner-Monagle Studios in Downtown Milwaukee to record new vocals for the jingle of one of their corporate spon-

sors, WaterStone Bank. For most of the youths, it was their first experience in a professional recording studio.

“I have had the pleasure of viewing Sophia’s Heart choir a few times,” said Doug Gordon, president and CEO of WaterStone Bank in a media release. “These young men and women are not only talented but also have a passion for performing. Danny’s work to sup-port these kids mirrors WaterStone’s efforts to support the youth of our community.”

Sophia’s Heart has been changing Milwaukee teens’ lives since the orga-nization was founded in 2009.

“I’ve been in Sophia’s Heart since

8th grade,” said Esmeralda, one of the Sophia’s Heart choir members. “Before, I was a shy person, and this brought out my inner me. I never thought Sophia’s Heart would change me.”

A YouTube video of the Sophia’s Heart and WaterStone Bank record-ing session can be viewed at http://bit.ly/1kRwcRi.

The Sophia’s Heart Foundation was inspired by the life of Sophia Gokey, Danny’s first wife, who died from a heart condition at age 27. The founda-tion aims to touch the hearts of chil-dren who share a need for restoration in various areas of their lives.


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Pioneer Bank Leads Rusk County DevelopmentMary Lou Santovec

Like a phoenix rising from the ashes, Ladysmith is coming back from three economic blows of the past decade—the closing of Mount Senario College, a tornado that leveled the downtown, and the loss of jobs during the economic downturn. Pioneer Bank of Wisconsin is helping with the rebirth of Ladysmith, the county seat and largest community in Rusk County.

The closing of Mount Senario, the Catholic liberal arts college, in 2002 sent a shock wave through the com-munity. It wasn’t only the loss of pro-fessional jobs and economic impact that hurt Ladysmith but also “the culture that goes along with having a small, private college in your com-munity,” said Jim Loe, Pioneer Bank’s president. The campus has not had a steady occupant since, although a group of investors from Asia currently has plans to open a school for interna-tional and American students.

The 2002 tornado tore through downtown, leaving some $30 mil-lion in damage in its wake. “It hurts people’s psyche when you go through what they went through,” Loe said. “It’s a real testament to the commu-nity’s strength and leadership” that Ladysmith is thriving today. Loe also credits the “forward thinking of the city government” as a reason for the

rebound. In addition to agriculture, Rusk

County job opportunities can be found with window manufacturers Jeld-wen, Weather Shield, and Beech-worth Windows, a new division of James Hardie, which will make fiber-glass windows, as well as other manu-facturers such as Rockwell Automa-tion, Owens Corning, and Clearwater Paper Corporation.

Strategic Plan Guides, Steers A graduate of Gustavus Adolphus

College in history with a business minor, Loe earned his law degree from the University of Wisconsin and, in 2006, completed the UW’s Graduate School of Banking. “When you study history, you can see the interconnec-tions between the social, the eco-nomic, and the political,” he said. “It helped me develop perspective.” The law degree helps Loe bring “a problem

solving approach to banking.”

After college, Loe started a title com-pany in conjunction with a Minnesota bank. Looking for a new challenge, he took on a manage-ment role with the bank, later becom-ing part of the suc-cession plan for the former president of Pioneer Bank.

Hired at Pioneer in July 2009, by

November Loe had invited Pioneer’s board of directors to a strategic plan-ning process led by Harry Argue, consultant and former CEO of both the UW-Madison Graduate School of Banking and the Wisconsin Bankers Association. “When you’re coming out of a recession in a community that’s been hit hard by what Ladysmith was, it’s important that the board and management have a plan,” Loe said. The process helped the bank set goals; the plan remains a working document that is updated annually.

“The strategic plan was critical. It helped the board and management work together in a structured way,” he said. “We can be proactive rather than reactive.”

John Sieg, vice president of B.J. Wood Products, is one of the bank’s directors. Sieg said he would choose to bank with Pioneer because of its “friendly staff.” Sieg, whose business


Friendly, competent staff are just one reason why customers continue to bank at Pioneer.

Under the leadership of Jim Loe, Pioneer Bank president and CBW Board of Directors member, staff meet monthly to learn about new services, security updates, and community/customer events.

designs and manufactures store fixtures, has been a Pioneer customer for 20 years.

The strategic plan helped guide the bank through the Great Recession. “During the middle of the recession, we didn’t sit back and let it happen,” Loe said. “We were really aggressive.”

That aggressiveness resulted in the launch of remote deposit capture among the bank’s business customers. Pio-neer now offers 24-hour banking, online services, and mobile banking. It put up a Facebook page in November.

The Rusk County bank was remodeled in 2011, right-sizing the teller line to adjust to the new normal of mobile transac-tions and putting all of the offices on one floor to improve efficiency. “As tough as [the Great Recession] has been, I think we’re all better bankers,” Loe said. “We have been forged in the fire.”

Community Involvement, Development Community involvement is one of Pioneer’s key tenets. Loe

is involved in the local Chamber of Commerce, which ties together other organizations and projects. In 2013, Ladysmith was chosen to be part of the Wisconsin Economic Develop-ment Corporation’s Main Street program, which focuses on organization, promotion, design, and economic restructuring to revitalize a community’s downtown.

Pioneer Bank was one of the founding supporters for Lady-smith’s Main Street application, and Loe chairs the economic restructuring portion of the program. “It takes energy to keep rust from forming,” he said of his volunteer efforts. But there’s another reason for his altruism. “I believe that community development and community banks go hand in hand.”

Slow, Organic GrowthThe success of Ladysmith hinges on the bank’s success

and vice versa. Pioneer aims for “slow, organic growth,” Loe said. With the economic indicators brightening, the bank has increased its growth rate in a “careful” way. “We are fortunate in many ways that the bank has been conservative over the years.”

Pioneer has $66 million in assets, $56 million in deposits, and a $24 million loan portfolio. Pioneer has two locations and 16 employees.

Being a community banker “is the best job you can have,” Loe said. “You have a chance to build something, to work with families who are managing their day-to-day business, [and] work with the communities and … small businesses to help them grow and thrive.”

From all accounts, many of the local small businesses return the love. Kevin Andres, a farmer who milks 150 head of cows and grows 1,200 acres of corn and soybeans, said, “We started with Pioneer Bank with my father. We stayed with them because of service. They do everything for us.”

Doug DeWitt, president of Acrylic Design and Fabricating in Ladysmith, banks at Pioneer because it’s a “hometown bank and Jim has done a great job with us … Jim is an outstanding person and a great businessman.”

When asked what makes Pioneer Bank unique, Loe said, “What makes our bank unique now is what made community banks form back in the late 1800s. They were formed to help grow the community.”


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Wisconsin Community Bankers Attend ICBA Washington Policy Summit

More than 1,000 community bank-ers and industry advocates attended the ICBA Washington Policy Summit in May. They met with members of Congress and federal financial regulators to address key indus-try issues, including regulatory relief, housing-finance reform, and the credit union and Farm Credit System tax subsidies.

Wisconsin’s contingent to the Policy Summit included Rick Busch, Royal Bank, Gays Mills; Steve Eager, Union Bank & Trust, Evansville; Stan Leedle, Choice Bank, Oshkosh; Jerry O’Connor, The National Bank of Waupun; Butch Pomeroy, International Bank of Amherst;

John Slatky, Bank of Luxemburg; Gof Thomson, Bank of New Glarus; and Daryll Lund, CBW.

One of several federal speak-

ers addressing the Summit, Federal Reserve Chair Janet Yellen assured the gathering that her agency has taken steps to avoid a one-size-fits-all

approach to bank regulation. In particular she noted that the agency continues to address the nation’s too-big-to-fail threat in various ways including via stress testing and capital-planning requirements that do not apply to community banks.

In the following photos, CBW members met with these Wisconsin elected officials: U.S. Rep. Mark Pocan, U.S. Rep. Paul Ryan, U.S. Rep. Ron Kind, U.S. Rep. Sean Duffy, and U.S. Rep Gwen Moore.


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BOLT Board Sees ‘Resurgence of Community Banking’Community Bankers of Wisconsin

polled its BOLT Board of Directors in May, seeking their thoughts on the future of the industry. Here is their perspective on the health and prospects of community banking in Wisconsin.

Chairman: Dan Ravenscroft, Royal Bank, Mauston

I’m confident that with our relationship-based business model, the future of community banking in Wis-consin is bright. Well-run, well-managed com-munity banks are in a great position to differentiate themselves by provid-ing a superior customer experience. We’re starting to see the resurgence of community banking because we’re uniquely positioned to leverage our knowledge of the local economies and provide the human touch that con-sumers and small businesses crucially desire.

Chairman Elect: Scott Ducke, Park Bank, Madison

Community banks are the foundation of our local communi-ties. We under-stood the impor-tance of buying and being local long before it became a popular concept. Together, we know that com-munity banks are a strong force that provides innovative solutions to our friends and neighbors. We understand that today’s businesses and consumers need technology to make their lives

easier, but they also need face-to-face interaction for financial matters. And making sure you provide that unique combination in a way that matters is important.

Vice Chairman: Julie Redfern, Union Bank & Trust Co., Evansville

There is a bright future for the important and necessary role that com-munity banks have within our financial system. Community banks must be poised to respond and adapt to con-tinued changes in both technology and the regulatory environment; while at the same time, garnering financial strength from non-interest income sources ensuring we remain competi-tive and profitable.

Associate Member: Jeffrey Niesen, Bankers’ Bank, Madison

Opposite from what some of the so-called experts will tell you, I feel strongly that community banks will con-tinue to play an important role in the future of banking. The theory that community banks will be replaced or absorbed by much larger institutions will likely be overshadowed by the ongoing suc-cesses that community banks bring to their local economies.

Associate Member: Peter Wilder, Godfrey & Kahn, Milwaukee

The future of community banking is the people. Our industry is worth fighting for, and to do that, the next generation of leaders needs resources, educa-tion and mentoring … today. BOLT is a part of the solution, and I’m looking forward to seeing the results.

Northwest District: Travis Holt, Citizens State Bank of Loyal

Commu-nity banks are uniquely posi-tioned to serve the needs of Wis-consin’s diverse economy and will continue to pro-vide outstanding financial services career opportunities well into the future.

Northwest District: Melissa Wait, United Bank, Eau Claire

The future for community banks in Wis-consin is bright because of the bright futures of the communi-ties we serve. We will be a partner for our existing customers and the next generation of customers to support their financial success. Financial fads will come and go but community banks will remain

Dan Ravenscroft

Scott Ducke

Julie Redfern

Jeff Niesen

Peter Wilder

Travis Holt

Melissa Wait


strong and provide exceptional prod-ucts, services, and support. We are prepared to grow and develop our business to support the growth of our communities and the customers who live and work in them.

Northeast District: Leif Christianson, Peoples State Bank, Wausau

The com-munity banking industry in Wis-consin has a great opportunity to demonstrate all the great things we have to offer in our state. As community bankers we can lead the grassroots effort in building a strong economy for small businesses, which will sup-port communities [and their grow-ing] families. In adhering to our state motto, our efforts will continue mov-ing Wisconsin “Forward.”

Northeast District: Jim Lamack, Union State Bank, Kewaunee

AHEAD:Achieving

long lasting rela-tionships with

Hands-on personal service while

Expanding mobile channels

And Delivery systems

Northeast District: Craig Philipp, River Cities Bank, Baraboo

The future of community banking in Wis-consin is criti-cally dependent on our ability to continue provid-ing competitive financial prod-ucts, services, and structures. In addition, our com-

munity banks have to invest in their greatest resource, employees. Our greatest attribute is providing excellent financial advice and service from our well educated bankers at a local level.

Southwest District: Mike Gargaro, Coulee Bank, La Crosse

I would expect to see consolida-tions and merg-ers continuing among commu-nity banks for the next several years due to the rising cost of compliance and regulations. In order to compete with larger financial institutions, community banks must be able to demonstrate their ability to differenti-ate themselves through the financial products and services they offer while maintaining their quick response to their community needs. In addition, community banks must demonstrate their willingness to adapt and provide technology to allow customers access to their funds in a manner convenient to them.

Southwest District: Dan Kittleson, Oak Bank, Fitchburg

While com-munity banks currently see some progress in growth and prof-itability after the recent economic downturn, I feel that the future of community banking will continue to see pressure from enhanced regulatory burdens and big bank competition. In order to offset these threats to our industry, it is imperative that we take it upon ourselves to enhance, build, and mold our community banking leaders of tomorrow.

Southwest District: Kevin Piette, State Bank of Cross Plains, Waunakee

Commu-nity banking in Wisconsin is and will be viable and economically important to the success, growth, and development of Wisconsin’s commerce and small busi-ness and the communities they serve. Technology, education, and an invigo-rated community interest will ensure that this banking model continues to evolve to offer its communities best-in-class alternatives while preserving the relationship orientation that has become a marquee of community banking.

Southeast District: Eric Cerbins, First National Bank of Berlin

Community banking will never go away. There may be fewer of us in the future, but what we give back to our communities is too valuable to lose. For those that make it, it will be more important than ever before to differentiate ourselves in the market through attracting, developing, and retaining the brightest team members.

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Southeast District: Jon Reetz, Great Midwest Bank, S.S.B., Brookfield

Community banking is alive and well in Wisconsin. Consumers no lon-ger take for granted the one-on-one approach often missed by our competi-tors and have a greater appreciation for “Buy Local” options.

Southeast District: Derrick Hermann, Waldo State Bank

It’s simply this: stability, depend-ability, and mobility. As a community bank that’s what we are and that’s what we do.

Jon Reetz

Derrick Hermann

Loan Quality Improving, Lending Up at State-Chartered BanksMADISON—Loan quality continued to improve and total lending grew by 1.7 percent at Wisconsin’s state-chartered banks in the first quarter of 2014, according to data released by the Federal Deposit Insurance Corp.

Compared to the first quarter in 2013, Wisconsin’s 191 state-chartered banks:

• Reduced past due loans to 2.45 percent, down from 3.24 percent.

• Increased net loans and leases to $30.7 billion, up from $30.2 billion.

• Grew their capital ratio to 11.59 percent, up from 11.52 percent.

• Recorded a return on assets of 0.91 percent, down from 0.98 percent.

• Posted net income of $104.1 million, down from $112.5 million.

“In many respects, the first quarter was a continuation of a solid 2013 for Wisconsin banks,” said Wisconsin DFI Secretary Peter Bildsten in a statement following the release. “Capital levels are strong, lending is up, and loan portfolios are very solid. Those are all positive signs for Wisconsin banks and the state’s economy.”

Mike Mach, Administrator of DFI’s Division of Banking, said that nearly 98 percent of state-chartered banks were profitable in the first quarter. He added that the past due loan ratio of 2.45 percent outpaced the U.S. average of 3.39 percent and is “at or approaching pre-recession levels.”

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North Shore Bank Offers Personal, Digital Choices Mary Lou Santovec

Community bankers are at the forefront of disruptive change—

especially technological—in the way they conduct business. Banks located in larger municipalities, such as North Shore Bank, have seen the demand for online and mobile services skyrocket. They’re working hard to balance the differing expectations between the generations while vetting the latest in technology and social media.

Headquartered in Brookfield with 47 branches scattered throughout eastern Wisconsin and northern Illi-nois, North Shore Bank looks to pro-vide its customers with choices, said Gary Messing, vice president, branch administration. “As we interact with our customers and develop better and deeper insights, we see how things are beginning to change in terms of consumer expectations and the gen-erational implications.”

With its $1.7 billion in assets and $1.4 billion in deposits, the bank has significant groups of customers rep-resenting Millennials, Gen-Xers, and “bifurcated” Baby Boomers—those below 55 and those above. Each group has very different comfort levels with technology.

Older Boomers and the Silent Generation haven’t adopted the self-

service approaches that younger Boomers, Gen-Xers, and Millennials have. They want to interact with a banker at a branch. Some complicated transactions are only accomplished satisfactorily through the connection with a human. The bank understands that and looks to leverage its technol-ogy in order to give great service.

Early AdopterNorth Shore could be considered

an early adopter in its engagement with technology and social media. “We were into social media early before some financial institutions were even knowing how to think about it.”

With the bank’s overarching strat-egy being customer engagement and service delivery, it seeks to make its digital strategy as personal as its face-to-face activities. “North Shore’s point of differentiation is that we’re high touch,” which is reflected in its tag

line, “The Bank of You.” The bank launched its first “remote”

teller in the Mequon branch when it connected a lobby customer with a banker who was behind a wall in the drive-through. From there, “we extended what we learned into a dif-ferent environment,” Messing said, connecting customers in the bank’s Kenosha branch remotely to a live banker located in the Brookfield office.

Social media allows the bank to “go where people congregate.” Messing likens it to the real world. “It provides us with an opportunity to inform different communities of things that would be helpful to them.” To prevent problems, the bank has developed skills in how it interacts with its cus-tomers using social media.

Messing admits that the bank spends a lot of time thinking about security to ensure it has the best tools and protection in the business. “It’s vitally important to us to prevent a breach. Our reputation is jealously guarded and protected.” Fiserv pro-vides the bank’s online banking core platform.

The bank moves electronic interac-tions to a different channel when war-ranted to protect confidentiality and protect proprietary customer infor-mation. “Personal relationships with customers are sensitive.”

Mobile Banking PopularOver the past couple of years,

North Shore has launched an online account open-ing process using technology to validate who is at the other end of the connection. It’s finding that its customers’ rate of adoption of mobile banking is “staggering.”

Currently North Shore offers mobile deposit and

a digital wallet, acting as the principal agent bank with MasterCard on the



latter. The MasterPass Digital Wallet enables customers to conduct a retail transaction without the need for cou-pons, rewards cards, and credit or debit cards. If all of those items are contained in a digital wallet, the customer does not need to carry them and the transaction will reflect it.

While North Shore rolled out its digital wallet for online purchases, the bank hasn’t yet fully committed to its use in the physical world. Currently, it’s watching to see if its customers are using it and how they are using it, waiting to judge whether or not the tool adds value to the customer’s relationship with the bank. “We have a ways to go if we’re going to increase our commitment.”

Messing notes that the bank does a lot of piloting before adopting new technology. “We have done things that

we’ve decided really don’t add value and have

moved away from them.” For example, the bank launched My Money on Facebook, which allowed its customers to access their account balances while on the social media site instead of having to leave the site and move to online banking. Lack of customer adoption led the bank to drop the service.

Products are regularly measured in a disciplined way for their performance and adoption rate. Decisions regarding a product’s expansion or termination are made on solid data. “We’re learning from everything we do.”

The bank markets its technology

and social media products through traditional brochures, statement mes-saging, e-mails, and banner ads on its website. Newspaper ads also reference the website. North Shore Bank has a

YouTube video and a Twitter account. It sends out a monthly digital pub-lication to its custom-ers with

e-mail. All are designed to integrate the marketing message instead of sep-arating the digital from the physical. And most are low- or no-cost.

Regardless of the specific technolo-gies involved, North Shore Bank will continue to learn from its custom-ers. Said Messing, “All we’re really doing is becoming acclimated to the way things are trending. We’re sort of adapting to what our customers’ preferences are.”

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COUNSELOR’S CORNER

The Increasing Importance of Employment Agreements(If you don’t have them, why not? If you have them, are they up to date?)John T. Reichert, member, Financial Institutions Practice Group at Godfrey & Kahn, S.C.

The success of most businesses revolves around the experience

and skill of its employees and the relationships those employees can attract and retain. The very common observation that “Our most valuable assets go home every night,” applies equally to law firms, banks, and anyone in the knowledge or service industry.

When applied to community banks, the importance of a few key individu-als becomes magnified. A good presi-dent sets the tone for the entire orga-nization. He or she becomes the face of the bank with the customers, the community, the shareholders, and the regulators. A talented CFO is not only technically sound, but he or she stays abreast of industry developments and best practices and finds ways to apply them to your bank. A seasoned lender may have a loyal portfolio of custom-ers that represent a meaningful per-centage of the bank’s assets. These are just three examples of people whose departure would potentially (perhaps likely) harm the bank and set back any strategic plan by months, if not years. In addition to the obvious void cre-ated when key people leave, it can be difficult, time consuming, and costly to find a replacement. Many banks can tread water or struggle along for years looking to replace key people. And, finally, some of these people will sur-face at a competitor, thus compound-ing the bank’s loss even further.

A prudent and relatively easy step is to enter into employment agree-ments with people deemed key to the success of your organization. In most cases, there is very little, if any, down-side and significant upside to such

arrangements.

Common Obstacles We hear several common expla-

nations for why community banks don’t utilize employment agreements with their senior executives more fre-quently, including:

“We don’t need one. We trust each other.”

It’s not about trust. It’s about unforeseen circumstances and pro-tecting each other’s interests. As unlikely as it may seem, things can change quickly.

“We don’t want to be criticized by shareholders for having all these contracts.”

If the bank doesn’t secure the ser-vices of its key people, your directors may be doing the shareholders a disser-vice and be criticized if you lose those key employees. When done properly, employment contracts are easily explained and will serve as a critical tool in attracting and retaining talent.

“I don’t know how to bring it up with my board.”

Part of the reason for this article is to help serve as an opening for such discussions with your board. Coun-sel can also talk to boards (with or without management) regarding the pros and cons of “locking up” key employees.

“We want to retain our flexibility.” (aka “Keep our options open.”)

If the bank’s people are good, how does “flexibility” possibly help the bank? Give the employee the commit-ment and security they’ve earned and protect the bank and its shareholders in the process. Any “flexibility” the bank has also applies to the employee. They’re free agents and could be swept away by the first good offer that comes along.

“Most of our competitors don’t utilize employment agreements, why should we?”

What everyone else is or isn’t doing is not the same thing as “industry best practices.” If employment agree-

ments make sense, and we believe that in many situations they do, who cares what the bank across the street is doing with its executives?

Getting Agreements in Place If your bank doesn’t already have

employment agreements in place, there are a few relatively simple steps it can take to remedy that situation.

First, get the topic on your board agenda. Until the directors agree with the concept of employment agree-ments, there’s no point in wasting your time.

Assuming the board has bought in to the benefits of utilizing employment agreements, who are the key employ-ees that need to be covered?

Why? What are the bank’s objectives?

Most of our clients develop a template agreement that can serve most of their needs. Such agreements will typically:

Identify duties, compensation, and benefits.

Identify a term of employment.Identify the circumstances in which

each side can terminate employment, including with and without “cause.”

Provide for a “change in control” payment or severance payment in cer-tain circumstances.

Ensure that the employee cannot compete for a reasonable period of time in certain circumstances.

It is critically important when pre-paring an employment contract that you consult with people conversant in tax and employment law issues. The bank is making an investment in its people. You want to make sure the key provisions in any employment agree-ment are enforceable and that you don’t inadvertently trigger any nega-tive tax consequences for the bank or the employee.

Consider all regulatory require-ments and implications. There are cer-tain things that can and cannot be in an employment agreement. The FDIC has several regulations and guidelines that apply. Depending on the health


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of your institution, you may also need prior regulatory approval before enter-ing into certain agreements.

Timing Agreements with Potential M&A

There is one more thing worth considering. A lot of banks are (or will be) exploring M&A opportunities in the coming months and years. While change in control provisions can add to the cost of a deal, many suitors want assurances that key employees of any target are “locked up.” They don’t

want to buy a bank and have all the talent go across the street and start competing with them.

If you wait until your bank has begun exploring deals, it will be too late to enter into employment agree-ments. At that point, the motives for such contracts will be questioned and subject to criticism and any buyer may be reluctant to proceed for fear of shareholder suits.

Point being, if there’s any chance your bank may engage in a strategic transaction in the foreseeable future,

you should consider employment agreements for key people before too long. If you have agreements in place, it may be wise to revisit them and determine whether any changes are required (or desired) before you get too far down the path toward a strate-gic transaction.

John Reichert may be reached at 414-287-9674 or at [email protected].

Wisconsin Bankers Step up to Serve on ICBA CommitteesWASHINGTON, D.C.—Congratulations to these CBW members who have accepted committee and subcommittee appoint-ments with Independent Community Bankers of America:

Bank Operations & Payments Committee—John Slatky, Bank of Luxemburg

Bank Services Committee—Rick

Busch, Royal Bank, Gays MillsICBA Federal Delegate Board—

Daryll Lund, CBW ICBA Political Action Commit-

tee—Butch Pomeroy, International

Bank of AmherstSubcommittee on Lending—Steve

Eager, Union Bank & Trust, EvansvilleSubcommittee on Lending—Paul

Hoffmann, Monona State Bank.

John Slatky Rick Busch Daryll Lund Butch Pomeroy Paul HoffmanSteve Eager

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Wisconsin Community Bank

• A NNIVER SAR IES •Of the 17 Wisconsin community

banks celebrating June anniversa-ries, only three mark decade bench-marks. Please join your industry colleagues on congratulating the fol-lowing member banks!

80 YearsLadysmith Savings and Loan,

on June 1First National Bank, Darlington,

on June 14

70 YearsWaukesha State Bank,

on June 15


First Bank Celebrates 120 Years of Continuous Service

On March 3, First Bank, located in Tomah, celebrated 120 years of continuous service to the Monroe County area.

President Cynthia Erdman com-mented, “This anniversary is a testa-ment to the supportive partnership with our community and to the business acumen and leadership of our boards, management, and asso-ciates throughout the years.”

First Bank was organized by Frank Drew and his brother Socrates and their associates in 1893 under the name of Drew Brothers Bankers. Earlier that year Frank had moved to Tomah from the Dakota Territory where he and his brother had been engaged in the banking business. They opened their private bank in a small building on Supe-rior Avenue with total capital of $10,000.

After the failure of Thayer Bank during the financial Panic of 1893, the Drew brothers purchased Thayer from the receiver and increased their capital to $25,000. They con-verted to a state bank charter on March 3, 1894, and renamed the institution “The Bank of Tomah.”

The first readily available State-ment of Condition dates from

Jan. 2, 1899, five years after the bank organized. It lists total resources of $109,675, with stock amounting to $25,000, a surplus of $7,372, and deposits totaling $76,390.

The Bank of Tomah changed its name to First Bank of Tomah in 1967 to commemorate its status as the oldest bank in continuous oper-ation in the local market. Unlike its competitors, the bank never closed down during the Great Depression.

In 1988, the First Bank of Tomah was sold to Bancorp of Tomah, Inc. a Wisconsin bank holding company. In January of 2000, First Bank of Tomah changed its name to First Bank, to better reflect its market position within Monroe County.

Then, in 2007, First Bank’s stock was sold to Partnership Commu-nity Bancshares, Inc., which in turn changed the institution’s name to First Community Bancshares, Inc. The holding company also pur-chased Town and Country Bank in Watertown.

Also in 2007, the bank was completely remodeled into a retail financial store to reflect its mission of “making banking easy.” Additions included a community Internet café,

video advertising, and retail mer-chandising including displays from local businesses and nonprofits.

“In Monroe County, we’ve con-sistently partnered with our local realtors and have enjoyed success as the number one mortgage lender for the past few years,” Erdman noted. “As a community bank, we continu-ally focus our efforts on supporting small business—the lifeblood of our community. This partnership has made it possible for us to be awarded the top Wisconsin SBA lender award for a bank of our size for two years running.”

In December 2012, First Bank opened a new office in Cedarburg and in December 2013, added a branch location in Grafton under the name of Partnership Bank. It is set to open a third office in Mequon this summer. “This is a tremendous growth and service opportunity for our entire bank team,” Erdman said. “We’re proud of our heritage and look forward to new partnerships in the communities we serve.”


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Roundup: Wisconsin Merger and Acquisition UpdatesStephenson Moves Forward with Merger to Bank North

MARINETTE—Stephenson National Bancorp, the parent company of The Stephenson National Bank & Trust (SNTB), is moving forward with the previously announced collaborative merger with PWB Bancshares Inc., the parent company of Bank North.

PWB Bancshares, headquartered in Wausaukee, will merge into Stephen-son National Bancorp in June. Each bank will continue to function inde-pendently for the next several months under their current name until Bank North merges into The Stephenson National Bank & Trust in October.

“We are extremely proud that our

partnership is based on mutual vision and the cooperative nature that we’ve shared throughout the years,” said Daniel Peterson, president and CEO of SNTB. “Both banks have a talented team of employees and are driven by a culture of people committed to pro-viding excellent customer service and supporting their communities.”

When finalized, the collaboration will result in eight banking offices under the name of The Stephen-son National Bank and Trust. The branches are located in Wausaukee, Crivitz, Amberg, Pembine, Marinette, and Oconto, as well as Menominee and Marquette, Mich. The new entity will have assets of over $430 million and a trust and investment depart-ment with over $440 million in assets under management.

Town Bank Acquires Talmer’s Wisconsin BranchesROSEMONT, Ill.—The Delafield-based Town Bank, a subsidiary of Wintrust Financial Corp., announced

it will acquire the 11 Wisconsin branches of Talmer Bank and Trust.

Talmer purchased the 11 branches (with $360 million in deposits as of March 31), when it bought the failed First Banking Center in Burlington from the FDIC in 2010. The branches are located in Burlington, Lake Geneva, Kenosha, Albany, Darlington, Walworth, Monroe, Wind Lake, and Genoa City. Talmer also operates 94 branches in Michigan, Ohio, Indiana, and Illinois.

With the acquisition, Town Bank will pay about $13.5 million more than the net book value of Talmer’s deposits. The Troy, Mich.-based Talmer will keep its loan portfolio in the transaction, which is expected to close during the third quarter pending regulatory approval. Talmer’s employ-ees will keep their jobs at all the loca-tions until the transaction is complete.

Town Bank Purchases Pewaukee BranchDELAFIELD—Town Bank has agreed to purchase the Pewaukee branch of

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THE National Bank of Bettendorf, Iowa, gaining $40 million in deposits, $90 million in performing loans, the branch, its property, and other assets.

The deal is expected to close during the third quarter pending regulatory approval. THE National Bank has branches in Iowa and Illinois.

Thrifts to MergeWAUKESHA/MILWAUKEE—Waukesha-based First Federal Bank of Wisconsin and Milwaukee-based Bay View Federal Savings and Loan Association have announced plans to merge mid-year pending regulatory approval.

The resulting federal savings asso-ciation will be called First Federal Bank of Wisconsin with headquarters located at First Federal’s location at 1617 E. Racine Ave., Waukesha. The combined bank would have some $255 million in assets.

In addition to the Racine Avenue location, First Federal currently has two other Waukesha offices, one at 1801 Summit Ave., and another at 134 Wisconsin Ave. It is also building a new Brookfield branch.

Bay View Federal has one office at 3974 S. Howell Ave., which will become a First Federal branch. All employees will be retained and the company plans to hire additional staff in residential and commercial busi-ness development.

Merger FinalizedDURAND—Security Financial Services Corporation, the parent company of Security Financial Bank, Durand, and Bloomer Bancshares, Inc., the parent company of Peoples State Bank of Bloomer, merged on May 15. Security Financial Bank and People’s State Bank of Bloomer will continue to operate as separate and distinct entities until mid-August, when People’s State Bank will be merged into Security Financial Bank.

The combination of the two com-munity banks will allow the custom-ers of each bank to be able to enjoy enhanced services and products, and the benefits of a larger branch network. In addition to the newly acquired Bloomer location, Security Financial Bank has offices located in Durand, Eau Claire, and River Falls, as well as a wealth management office, Security Financial Solutions, in Eau Claire.

Horicon Bank Opens New BranchHORICON—The former Green Lake Bank, a division of Baraboo National Bank, has a new identity. The Green Lake institution has reopened as a branch of Horicon Bank, which acquired the fixed assets of the branch, loans, and deposits.

With its new branch in Green Lake, Horicon Bank now has branches in 11

communities and assets of some $600 million.

First Business Expands Kansas City PresenceMADISON—First Business Finan-cial Services, Inc., will acquire Aslin Group and its subsidiary Alterra Bank, enabling First Business to expand into the Kansas City market. The company already operates a national equipment finance business in the city, but the deal will give First Business its first two banking offices in a metro area outside of Wisconsin.

First Business Financial Services is a $1.3 billion Wisconsin-based bank holding company that special-izes in focused financial solutions for businesses, key executives, and high net worth individuals. Its companies include First Business Bank–Madison; First Business Bank–Milwaukee; First Business Bank–Northeast; First Busi-ness Trust & Investments; First Busi-ness Equipment Finance, LLC; and First Business Capital Corp.

The suburban Kansas City Alterra Bank has assets of $223 million and was ranked as Kansas City’s number one Small Business Administration lender in 2012 and 2013.


COMMUNITY INVOLVEMENT

State Bank of Cross Plains Announces Superhero Winner

Sharon Marshall and Jenny Aune, both of Verona

CROSS PLAINS—On May 15, the State Bank of Cross Plains announced the winner of its 2014 Celebrate Your Superhero Contest.

Everyone knows someone who is “super”—that special person who goes above and beyond the call of duty. Whether it’s someone who has over-come adversity or who has just done

something super in your eyes, the State Bank of Cross Plains awarded one local “superhero” $1,000 and a super prize pack.

This year’s winner was Sharon Marshall, nominated by her daugh-ter, Jenny Aune for her strength and beauty.

My mom has always been there to support me and the rest of her family. She would travel near and far to be my number one fan at races. She became the best grandma ever once my kids were born and continues to be the most kind and thoughtful person to everyone she meets. My mom was diagnosed with pancreatic cancer this month and continues to remain positive and strong through this journey. I know my mom will be a survivor and fight this with all of her strength. For this and for who she has been to me the last 37 years she is my HERO!As the 2014 Super Hero, Sharon

Marshall received the $1,000 prize along with $700 worth of items includ-

ing a Kindle Fire and gift cards for dinner and a spa day. Daughter Jenny Aune received a $250 prize along with $300 worth of items including a spa day and dinner gift certificates.

Heritage Bank Celebrates by Giving

SPENCER—Heritage Bank celebrated April Community Banking month through giving. Bank employees collected items for the The Ronald McDonald House and volunteered to pack lunches for the “Feed My Starv-ing Children” program.

SNBT Celebrates Community Banking MonthMARINETTE—The Stephenson National Bank & Trust (SNBT) cel-ebrated both Community Banking Month in April and National Teach Children to Save Day on April 11.

SNBT annually supports its com-munities through the donation of time and money. In 2014, the amount of volunteer time pledged by SNBT employees is 7,550 hours, encom-passing 113 organizations, or the equivalent of 3.6 full-time employ-ees for a year. In terms of monetary support, in 2013 SNBT distributed over $100,000 to more than 100 area organizations.

Throughout April, SNBT employ-

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ees wore shirts that read “I Love My Community Bank,” as a reminder of how local banks make a positive impact on area neighborhoods.

In observance of National Teach Children to Save Day, SNBT gave nearly 40 presentations, teaching some 650 children about positive money habits.

Badger Bank Partners with Area SchoolsFORT ATKINSON—Employees at Badger Bank partnered with area schools to improve financial literacy. This year, using picture books focus-ing on saving money and making wise spending choices, bank volunteers presented lessons to students in pre-K through second grades.

Bank Reaches Out to Schools WISCONSIN DELLS—The Bank of Wisconsin Dells helped local students learn the importance of saving money and financial responsibility through-out the month of April as part of the national Teach Children to Save® campaign. Throughout this campaign, financial professionals from the bank spoke with students in grades K – 12

from Reedsburg, Wisconsin Dells, Lake Delton, and Portage.

Lake Mills Bank Donates to Uniforms

LAKE MILLS—The Bank of Lake Mills donated $1,693 to the Water-town Goslings Youth Lacrosse pro-gram to purchase uniforms for the team’s inaugural season. The bank has two locations in Lake Mills and Watertown.

Gifts Add Up!OCONOMOWOC—First Bank Financial Centre recently donated to the following area organizations:

4 $1,000 to the Oconomowoc Area Senior Center (OASC).

4 $1,000 to the Mequon Nature Preserve

4 $1,500 to the Logemann Com-munity Center, home to the Mequon

Historical Society 4 $1,000 to the Wisconsin Breast

Cancer Showhouse, annual Raise a Glass to Hope Preview Party event, which supports cancer research at The Medical College of Wisconsin

4 $1,000 to the Community Memorial Foundation’s 24th annual Spring Splendor fundraising gala sup-porting Froedtert and the Medical College of Wisconsin’s Community Memorial Hospital

Throughout the month of April, FBFC employees again celebrated Community Banking Month by “pay-ing it forward” to local citizens and organizations in the communities they serve throughout Waukesha, Ozau-kee, and Washington counties. From flowers to gift cards to free car washes, food drives, and movie tickets, FBFC employees brightened the day for hun-dreds of area residents.

CBW Legal & Compliance Consortium

Community 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.

As a member of the CBW/Godfrey & Kahn Legal Consortium, we recently were provided with unsolicited documents from Godfrey & Kahn addressing three hot topic issues: A “Loan Officer Compensation Policy” as required under new Reg Z rules; A Guidance document that addresses new “CFPB Mortgage Servicing Rules”; and a combination of a “Social Media Policy” and a “Social Media Risk Assessment.” These are rules that 260 Wisconsin community banks are trying to get their arms around and implement prior to their next exams. The Legal Consortium continues to provide our bank a great value when we are provided this level of service.

— Jerry L. O’Connor, President & CEO, The National Bank of Waupun

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].


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Member Appreciation Days Begin This Month

Now in its 13th year, CBW’s Mem-ber Appreciation Days offer three locations and dates to choose from, each with its own slate of topics and expert speakers. Each date features a morning educational component, a light lunch, and afternoon golf. Make this popular event part of your sum-mer schedule.

Dates and times are as follows:Tuesday, June 24, Irish Course at

Whistling Straits, Kohler — Whis-tling Straits only has room for 144 registered golfers. (The Irish course at Whistling Straits was ranked #39 in Golf Digest’s ranking of America’s 100 Greatest Public Golf Courses for 2013–14.) CBW will host a special Welcome Reception for all bankers planning to arrive early.

Wednesday, July 9, University Ridge Golf Course, Madison

Monday, July 14, Eau Claire Golf & Country Club, Altoona

Among this year’s program highlights:

“Compliance Change: How to Manage the Ever Changing Land-scape,” by John Moniak, senior man-ager, Wipfli, LLP

“Key Considerations in the M&A Process,” by John Behringer, director, financial institutions, and Nicholas Hahn, manager, McGladrey

“Succession Planning for Family-Owned Banks and Businesses,” by R. David Fritz, Jr., managing partner, Executive Benefits Network

“Evolving Regulatory Scrutiny of Interest Rate Risk Management,” by Kent Musbach, vice president, Finan-cial Institutions Group, BOSC, Inc.

Visit the CBW website, www.com-munitybankers.org, to learn more and register online. If you have ques-tions, please contact Jami Erickson at [email protected] or 608-833-2386.

Home Bancorp’s Successful Stock Offering MADISON—Home Bancorp Wiscon-sin, the holding company for Home Savings Bank, sold 899,190 shares in its recent stock offering. The shares, which sold for $10 apiece, were offered to help the bank convert from a mutual savings bank to a stock-based savings bank. Some 71,935 shares were acquired by the employee stock ownership plan.

The stock offering raised some $9 million, which will be targeted toward market flexibility and future growth. Stocks will trade under the ticker sym-bol HWIS on the Over-the-Counter (OTC) Bulletin Board.

The bank, with assets of $114.7 mil-lion, has three locations in Madison and one in Stoughton.

AnchorBank Continues to Improve MADISON—AnchorBank is making progress on improving the business practices that earned it several consent orders. Special orders requiring the bank to improve its financial condi-tion have been lifted.

In 2009, the bank and its parent company, Anchor BanCorp Wis-consin, received consent orders that ordered them to address the losses from bad loans. In 2010, the bank received a special order to address those losses immediately, which it did with new management and a pre-packaged bankruptcy.

The holding company reported first-quarter net income of $1.9 mil-lion or 21 cents per share up from a net loss of $17.5 million or 82 cents per share during the first quarter of 2013. Total assets were $2.1 billion at the end of the first quarter, which is down from $2.4 billion a year earlier.

Bank First Breaks Ground on New OfficeMANITOWOC—Bank First National officials kicked off the official groundbreaking ceremony for their new Two Rivers office on May 22. Joining them were officials from A.C.E. Building Service, the City of Two Rivers, the Chamber of Manitowoc County, and The Kubala Washatko Architects Inc.

A.C.E. Building Service is the gen-eral contractor of the $1.5 million project, which is expected to be com-pleted in early 2015. The new building will span more than 4,600 square feet.

“Our new Two Rivers office will align with the recent renovations made throughout our organiza-tion, bringing an updated look and consistency to our network,” stated First Bank President and CEO Mike Molepske in a news release. “In addi-

Compliance Program Highly Rated by Wisconsin Community BankersFor the twelfth straight year CBW is sponsoring the Community Bankers for Compliance Program (CBC) in 2014 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 Web site 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]


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tion, this new office will provide a much more efficient interior layout and improved traffic flow for our drive thru customers.”

Bank Partners with Realtors Group BROOKFIELD—North Shore Bank, in collaboration with the Greater Mil-waukee Association of REALTORS, is producing a new quarterly report that offers a different perspective on the southeastern Wisconsin housing market.

Instead of just looking at the sales price, the new report looks at the monthly home payments. It finds that most homes in and around metro Milwaukee can be owned for a monthly payment of less than $1,000. The full report is available online at http://northshorebank.com/housingaffordabilityguide.

Waukesha Purchases Bowling Alley for BranchWAUKESHA—Waukesha State Bank purchased a piece of property that’s currently home to Hartbrook Lanes Bowling Alley at 550 Hartbrook Drive in Hartland.

The bowling alley was built in 1975. The property has an assessed value of $1.23 million according to Waukesha County records. The bank plans to demolish the building and build a new 5,500-square-foot bank branch on the property.

The bank has branches in Wauke-sha, Brookfield, Delafield, Mukwo-nago, Muskego, New Berlin, Ocono-mowoc, Pewaukee, and Sussex but so

far none in Hartland.

Blackhawk to Open New BranchBELOIT—Blackhawk Bank plans to open a new branch in downtown Janesville. The Janesville Plan Com-mission has given the green light to the bank to lease a 2,800-square-foot building at 200 W. Milwaukee St. The bank plans to open the new branch early in the third quarter 2014. It will lease the building for three years with an option to buy the property at the end of the lease.

Blackhawk Bank has eight locations in southern Wisconsin and northern Illinois.

Westbury Initiates Stock Buy-backWEST BEND—Westbury Bank’s par-ent company has initiated a stock buy-back program. The company plans to purchase up to 250,000 shares of its issued and outstanding shares of common stock, representing about 5 percent of those shares.

The bank went public in April 2013 and has more than 5 million issued and outstanding shares of common stock.

Westbury Renovates Brookfield BranchWEST BEND—Westbury Bank is improving the experience for its customers at the North Avenue and Calhoun Road branch in Brookfield. The bank is spending some $1.5 mil-lion to renovate the building’s first and second floors and to add an ATM and

a business lending hub. Upgrades will be made to the entryway and to the exterior ATM location.

The renovation will allow the bank to add five or six new employees and the branch will become the main hub for the bank’s commercial lending and wealth management areas. Once the Brookfield location is completed, Westbury plans to remodel its Jackson and Germantown branches in the next 12 to 18 months. The bank has 12 locations in Milwaukee, Washington, and Waukesha counties.

Park Bank Hosts Seminar on Women’s FinancesMILWAUKEE—Park Bank, along with Godfrey & Kahn S.C. and Heartland Advisors, hosted a seminar, “Mine, Yours, Ours: Navigating Money and Relationships,” at the InterContinental Hotel in Milwaukee on May 29. The event is part of the Financial Finesse luncheon series for professional women that covers money and the economy.

The seminar featured Dayna Yochim, the Motley Fool’s consumer finance expert and senior editor, who discussed financial conversations within relationships.

Named a ‘Preferred Lender’MAZOMANIE—Peoples Community was named a “preferred Lender” by the U.S. Department of Agriculture’s Farm Service Agency. The designation is the highest possible in the guaran-teed farm lending program. It rewards experienced lenders by streamlining the loan application process and expe-diting approvals.

Peoples Community Bank has branches in Mazomanie, Arena, Barneveld, Plain, and Spring Green.

First Business Recognized MADISON—First Business was recognized as one of the top 40 com-munity banks in the nation by Ameri-can Banker Magazine in May. The publication annually ranks the top community banks and thrifts with less than $2 billion of assets by three-year average ROE. >>>

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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 3/31/14

$ in 000's3/31/13

$ in 000’sChange from One Year Ago

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

Number of Banks 256 263 -2.7%

Number of Employees 18,259 18,238 0.1%

Total Assets $74,921,396 $74,136,411 1.1%

Total Deposits $61,312,379 $60,597,265 1.2%

Net Loans & Leases $50,367,145 $49,577,786 1.6%

Total Securities $13,753,019 $13,294,396 3.4%

Net interest income $622,848 $621,057 0.3%

Total noninterest income $285,604 $292,926 -2.5%

Net Income (Year-to-date) $178,055 $200,477 -11.2%

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

Profi table Banks 95.70 95.06% 0.7%

Banks with Earnings Gains 42.58 49.05% -13.2%

Net Interest Margin 3.61 3.63% -0.6%

Noncurrent loans to loans 1.91 2.58% -26.0%

Net charge-off s to loans 0.34 0.52% -34.6%

Loss allowance to loans 1.92 2.16% -11.1%

Net loans and leases to deposits 82.15 81.82% 0.4%

Return on Assets 0.95 1.07% -11.2%

Return on Equity 7.94 9.24% -14.1%

Equity Capital to assets 12.13 11.78% 3.0%

Wisconsin Banconomics Lending BenchmarksWisconsin FDIC Insured Banks Less Than $5B 3/31/14

$ in 000's3/31/13


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

Net Loans & Leases $50,367,145 $49,577,786 1.6%

All real estate loans $38,977,478 $38,891,510 0.2%

Construction and land development $2,538,776 $2,567,228 -1.1%

Commercial real estate $15,008,940 $14,990,970 0.1%

1–4 family residential $15,288,907 $15,606,873 -2.0%

Farm loans $2,689,824 $2,624,535 2.5%

Commercial & industrial loans $6,827,213 $6,361,809 7.3%

Loans to individuals $1,915,208 $1,909,977 0.3%

Credit cards $428,479 $433,060 -1.1%

Small business loans of $1M or less $6,578,786 $6,684,286 -1.6%

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 3/31/14

$ in 000's3/31/13


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

Number of Banks 256 263 -2.7%

Number of Employees 18,259 18,238 0.1%

Total Assets $74,921,396 $74,136,411 1.1%

Total Deposits $61,312,379 $60,597,265 1.2%

Net Loans & Leases $50,367,145 $49,577,786 1.6%

Total Securities $13,753,019 $13,294,396 3.4%

Net interest income $622,848 $621,057 0.3%

Total noninterest income $285,604 $292,926 -2.5%

Net Income (Year-to-date) $178,055 $200,477 -11.2%

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

Profi table Banks 95.70 95.06% 0.7%

Banks with Earnings Gains 42.58 49.05% -13.2%

Net Interest Margin 3.61 3.63% -0.6%

Noncurrent loans to loans 1.91 2.58% -26.0%

Net charge-off s to loans 0.34 0.52% -34.6%

Loss allowance to loans 1.92 2.16% -11.1%

Net loans and leases to deposits 82.15 81.82% 0.4%

Return on Assets 0.95 1.07% -11.2%

Return on Equity 7.94 9.24% -14.1%

Equity Capital to assets 12.13 11.78% 3.0%

Wisconsin Banconomics Lending BenchmarksWisconsin FDIC Insured Banks Less Than $5B 3/31/14

$ in 000's3/31/13


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

Net Loans & Leases $50,367,145 $49,577,786 1.6%

All real estate loans $38,977,478 $38,891,510 0.2%

Construction and land development $2,538,776 $2,567,228 -1.1%

Commercial real estate $15,008,940 $14,990,970 0.1%

1–4 family residential $15,288,907 $15,606,873 -2.0%

Farm loans $2,689,824 $2,624,535 2.5%

Commercial & industrial loans $6,827,213 $6,361,809 7.3%

Loans to individuals $1,915,208 $1,909,977 0.3%

Credit cards $428,479 $433,060 -1.1%

Small business loans of $1M or less $6,578,786 $6,684,286 -1.6%


CHANGING SCENE

At the time of the ranking, First Business had a three-year average ROE of 13.27 percent.

Nicolet National Bank Breaks GroundGREEN BAY—Nicolet National Bank is building a new office in Medford, where community and bank leaders recently celebrated the groundbreak-ing of the $3 million project. The new building will cover more than 10,000 square feet.

Medford Mayor Mike Wellner says the project is sign of growth in Medford.

“We have a new hospital, we’re redoing a lot of things in our city, and this bank will be very visible to people as they drive through,” Wellner said.

The new building is expected to be completed by this fall.

Business Microloan Program Gets BoostMADISON—The Wisconsin Eco-nomic Development Corp. has announced a $100,000 grant from its Capital Catalyst Program matched by $100,000 more from five Northeastern Wisconsin banks. The infusion gives the microloan program $584,000 in available money and boosts its assets to more than $1 million.

Since its founding in 2011, the program has made 27 loans valued at $900,000 to 19 companies. Five bor-rowers repaid their loans in full and one defaulted owing $70,000. The

loss was shared by the chamber and the banks that support the program. That compares with a Small Busi-ness Administration default rate of 10 percent.

Twelve Northeastern Wisconsin banks provided money to the pro-gram, including Associated Bank Green Bay, Bank First National, Bay-lake Bank, Citizens Bank (now First-Merit Bank), Denmark State Bank, Johnson Bank, BMO Harris Bank, Nicolet National Bank, The Business Bank, Union State Bank, Wisconsin Bank & Trust, and Wells Fargo Bank.

Five—Bank First National, Nicolet National, The Business Bank, Union State, and Wisconsin Bank—provided money to match WEDC’s grant, which includes $34,000 to provide as grants to businesses. The grant money might be used for such items as contracting with a patent attorney or an accoun-tant to help set up a business.

The program loans between $5,000 and $100,000 to growing and startup businesses that are considered too risky for traditional bank lending. It also can serve as a gap lender when banks don’t want to lend the full amount needed.

Minnesota Woman Gets Prison TermST. PAUL, Minn.—A suburban Twin Cities woman received a three-and-a-half year sentence in a federal prison for robbing five banks: two in western

Wisconsin and three in Minne-sota. Ranya Al-Huthaili, 23, of Roseville, Minn. was also ordered to pay back what she stole—over $20,000 in all.

Al-Huthaili was arrested last September after she bought a laptop with the money she stole from the Dairy State Bank at Menomonie. The other Wisconsin heist occurred at

First State Bank & Trust in Hudson. In each hold-up, she handed a note

to a teller, demanding money. “I have a gun,” the note read. “Do not make noise. You have one minute to give me the money.”

Al-Huthaili was apprehended after she left a cell phone in the restroom of the Hudson bank.

A report in The Daily Beast on May 10 noted that Al-Huthaili, who emigrated from Saudi Arabia with her mother at age 17, was involved with a “Thomas Rubino.” He claimed that he needed $50,000 to escape his life of organized crime. After she gave him some money, he changed his story, claiming that he had cancer and needed to pay for treatment.

Spring Bank FeaturedBROOKFIELD—Spring Bank’s strat-egy to reduce compliance costs was featured in the ABA Journal of May 9. The bank, which opened in 2008, hires out its compliance officer, Judy Etta.

She has been in banking for 50 years, beginning her career at a com-munity bank while still in school. Starting as a consultant to Spring Bank, Etta eventually became an employee, working four days a week while retaining her other clients. In addition, Spring Bank promoted her expertise in compliance tasks—for hire. The staff-for hire arrangement gives the bank flexibility, and client banks have full confidentiality when Etta works for them.

FNB Fox Valley to Expand NEENAH—First National Bank – Fox Valley (FNB Fox Valley), has announced plans to expand with the construction of an additional branch located on Northland Avenue in Appleton.

FNB Fox Valley’s new branch will be located across from Northland Mall at 835 W. Northland Ave. The bank will occupy approximately 4,200 square feet, leaving additional square footage available for lease from Bom-ier Properties. FNB currently has loca-tions in Neenah, Menasha, Oshkosh, and the east side of Appleton.

Construction is on track for

www.iss-wi.com


CHANGING SCENE

expected completion by winter of 2014.

Veteran-Owned Businesses BenefitOCONOMOWOC—First Bank Financial Centre (FBFC) has been rec-ognized by the SBA as a leader in their Veteran’s Initiative program, designed to increase lending for veteran-owned businesses. In February 2013, FBFC

signed a five-year pledge to support the Veteran’s Initiative, which had a goal of increasing the veteran lend-ing activity by over 5 percent of the prior year’s performance. In just the first year, FBFC exceeded their goal, extending 18 SBA loans to veterans in the amount of $3,903,000.

FBFC is Wisconsin’s #1 SBA lender and ranked 28th in the nation for loan volume.

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Hensen Announces RetirementSUN PRAIRIE—Alice Hensen, presi-dent of the Bank of Sun Prairie, has announced her retirement effective Dec. 31.

Hensen has spent 48 years with the Bank of Sun Prairie and was named president in 2006. At the time she was the only woman in Dane County to head a bank and one of the few in the state.

A native of Cottage Grove, Hensen started her banking career at the age of 20, working in the back room proofing transactions. She learned on the job and took training courses that led her to customer-facing roles as a teller and head teller, to eventually learning mortgage and commercial lending, which opened the door to the executive level.

“I am very fortunate to have been given so many great opportunities here at Bank of Sun Prairie,” Hensen said in a news release. “I give credit to the people around me who saw my potential early on and my desire to learn. Today, I give all the credit to everyone at Bank of Sun Prairie. I truly couldn’t have done this without their dedication to making this the best community bank.”

A national search for a new presi-dent of Bank of Sun Prairie has been launched.

Werner New CEO at Park BankMILWAUKEE—David Werner has

taken the helm at Park Bank. He suc-ceeds Michael Mahoney as chief exec-utive officer. Werner will retain the title of president, which he assumed in 2010.

Mahoney will transition to chair-man of the board of directors.

Park Bank has assets of $870 mil-lion and 135 employees.

Thompson to Head Denmark State Bank DENMARK—Denmark State Bank has named Scot Thompson as presi-dent and CEO. Thompson will also become president of the $450 million Denmark Bancshares Inc., the parent company of the bank.

Thompson brings more than 27 years of financial experience to his new position. He comes to Denmark after a stint as senior executive vice president, senior lender with Investors Community Bank.

Community State Bank Promotes TwoUNION GROVE—Community State Bank has promoted two new officers. Kim Ligocki has been pro-moted to the position of human resources officer and Gregory Wall has been pro-moted to the position of assistant vice presi-dent and marketing director.

Ligocki joined CSB in 2003 and has served as the assis-

Alice Hensen

Kim Ligocki

Gregory Wall


tant to Human Resources Director Kris Bernstein since 2005. “Kim is a wonderful part of the CSB Team,” Ber-nstein said. “She’s detailed, organized, and brings a positive attitude to every-thing she does.”

“Greg has been very instrumental in the marketing success at CSB and we look forward to that continuing in his new leadership role,” said Community State Bank President Scott Huedepohl.

AnchorBank Welcomes BrandtMADISON—Dan Brandt was named assistant vice president for Anchor-Bank’s Milwaukee commercial real estate division. Previously serving as an analyst for M&I Bank’s commer-cial real estate division in Milwaukee, Brandt will be responsible for building and maintaining relationships with commercial real estate investors and developers in Southeast Wisconsin.

Wisconsin Dells Hires New CFOWISCONSIN DELLS—Bank of Wis-consin Dells has hired Tracey Pierce

as senior vice president and chief financial officer. Pierce will manage the bank’s operations department, as well as accounting and the financial reporting systems.

Pierce has 18 years of banking experi-ence and joins Bank of Wisconsin Dells from another finan-cial institution where she also served as CFO. In addition, she has experi-ence in the customer service depart-ment, lending department, informa-tion systems, and many other areas in the banking industry.

“We are excited that Pierce accepted the CFO position,” said Jon Bernander, CEO and president of Bank of Wisconsin Dells, in a media release. “Tracey is well experienced in banking and has a diverse background which will be beneficial to the bank.”

Pierce is a graduate of St. Norbert College in De Pere, Viterbo Univer-sity in accounting, and the Graduate School of Banking in Madison.

She fills the position previously held by Larry Gehrke who retired in April.

Gillespie Named COO at WaterstoneWAUWATOSA—Waterstone Mort-gage Corp., a wholly owned subsidiary of Waterstone Bank, has named Kevin Gillespie as the company’s first chief operating officer.

Gillespie comes to the company from Envoy Mortgage in Houston and BBVA Compass in Dallas. In his new role he will oversee the loan operations, sales, secondary market, and talent acquisition departments at the com-pany’s Pewaukee headquarters, as well as work with its management team.

Since opening in 2000, the mort-gage company, has grown from three employees to more than 680. It reports more than $1.9 billion in assets.

Zimmel Joins Prairie Financial GroupWAUKESHA—Stephen Zimmel has joined Prairie Financial Group, a divi-sion of Waukesha State Bank, as senior trust administrator.

Zimmel was most recently a vice

president and director of trust and estate services at BMO Harris Private Bank. A certified financial planner and a certified trust and financial advisor, Zimmel brings more than 15 years of experience in trust services with him to his new position.

Scheider Earns PromotionOCONOMOWOC—First Bank Financial Centre has promoted Jacob Scheider to assistant vice president.

Promotions at Tri CityOAK CREEK—Tri City National Bank has promoted Dave Pike to senior vice president and Jo Anne Meyer to vice president.

Promotions at Park BankMILWAUKEE—Park Bank has pro-moted several staff to new positions. Bryan Swanson is now first vice presi-dent, commercial sales and strategies; CJ Dykstra is vice president, human resources; Mechelle King is now assis-tant vice president, digital marketing; Karen Lanser is assistant vice presi-dent, business information systems; Cheree Elder is now credit officer, and Jennifer Webster-Menzynski is appraisal services officer.

Lawrence PromotedBRODHEAD—Bank of Brodhead has promoted Dawn Lawrence to the position of human resources officer.

Dott Joins First Business BankMADISON— First Business Bank has hired Tom Dott as vice president-busi-ness development officer. Dott comes to First Business with over 20 years of commercial banking experience serving privately owned companies throughout Wisconsin.

Thomas New SVP at AnchorBankMADISON—Eric Thomas was named senior vice president and market manager for AnchorBank’s Milwaukee

Tracey Pierce

Dawn Lawrence

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commercial division. Thomas will be responsible for growing the bank’s commercial business line in the Mil-waukee area.

Thomas comes to AnchorBank from Fifth Third Bank where he served as managing director for the bank’s Wisconsin region.

The bank also named Matt Sell vice president of commercial real estate for AnchorBank’s Milwaukee market.

Sell, who will be located at the bank’s Brookfield branch, will be responsible for Anchor’s commercial

real estate loan portfolio in the greater Milwaukee region.

Sell was most recently vice presi-dent for BMO Harris Bank’s commer-cial real estate division in Milwaukee.

First Business’s Multhauf Earns CertificationMADISON—Alton Multhauf of First Business Bank recently earned his Certified Treasury Professional certifi-cation and is a mem-ber of the Associa-tion for Financial Professionals.

Wisconsin Bank & Trust Names Murphy PresidentMADISON— Patrick Murphy was named president for northeastern Wisconsin at Wisconsin Bank & Trust, a subsidiary of Heartland Financial USA, Inc.

Harpold Joins Capitol BankMADISON—Ken Thompson, President and CEO of Capitol Bank, has announced the hiring of Kari Harpold as treasury management officer. She has over 18 years of banking experience.

Settlers Bank Hires FinkDEFOREST—Settlers Bank has hired Anne Fink as wealth banking man-ager and Ken Pesik as vice president

of wealth banking for its new wealth banking division.

Christie Joins InvestorsBankWAUKESHA—InvestorsBank wel-comes Kacey Christie as assistant con-troller. Christie previously worked for Robert W. Baird & Co. Inc.

WBD works with lending partners like you to provide fixed rate

financing and help hundreds of small businesses each year fund growth and cultivate success.

www.WBD.org | 800.536.6799

VICE PRESIDENT – MORTGAGE MANAGER

Community State Bank, an inde-pendent $300mm community bank in Racine and Kenosha Counties, is looking for a Manager to take on the operational, origination and servicing areas of the Mortgage Dept. Knowl-edge/experience in the following is beneficial:

• Leadership and development of a team

• Product knowledge in govern-ment and conventional loans

• Software that creates efficiencies

• Sales and marketing success• Underwriting, processing and

closing experience• Investor relations & Fannie/Fred-

die servicingIf you feel you are qualified for

this position please send a current resume and a short summary explaining why you feel you would be the best fit to:

Community State Bank, Attn: Kris Bernstein, 1500 Main St., Union Grove, WI

53182 or to [email protected].

An Equal Opportunity Employer

Alton Multhauf

Kari Harpold

Your Wisconsin Balance Sheet Solutions Team:

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

ICBA Securities is a member of FINRA/SIPC

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

Balance Sheet

Solutions

The Importance of Deposit Pricing Assumptions This update is intended to reemphasize the importance

of deposit pricing assumptions used in the asset/liability

modeling process.

Asset/liability model results (earnings at risk and

economic value of equity) are extremely sensitive to the as-

sumptions used. Perhaps the most critical of these assump-

tions are those used to estimate expected deposit pricing.

Indeed, regulators are placing greater emphasis on these

assumptions and encouraging institutions to develop their

own set of deposit pricing assumptions.

Given their importance to the risk identification process,

management should carefully consider how to best estimate

expected deposit pricing actions and decay rate behaviors.

First and foremost, deposit pricing assumptions should

reflect management’s expected response to a changing rate

environment and competitive mark conditions.

One approach to assumption development is to

analyze the historical pricing and account attrition behaviors

that occurred in previous rate environments (core deposit

studies). These studies aid in the development of account

decay rates (account attrition) and pricing betas (manage-

ment’s pricing action relative to a market index) for each

type of deposit account. This approach is appealing from an

objective, analytical perspective, but may suffer from imper-

fect data. Consider the following key issues.

• Accurate historical data may be scarce. With less than

full historical data, the statistical results may not be

reliable

• Historical account attrition rates may not reflect current

or prospective marketing efforts or service levels.

• Pricing betas may show little, if any, statistical correla-

tion between actual deposit pricing and a market index

(i.e., the pricing betas would not accurately forecast

future rate changes).

• Core deposit studies may not accurately portray the

behavior of surge deposits that flowed into the bank-

ing system during the financial crisis and subsequent

recession.

Because of the shortcomings associated with core

deposit studies, management should augment these studies

using a qualitative, subjective approach that incorporates

management’s expected deposit pricing behavior. Manage-

ment should consider the potential competitive environ-

ment, which may include competition from banks and/or

other investment alternatives, and balance that with the

need to economically retain deposits in a rising rate environ-

ment.

Keep in mind that an overly optimistic set of deposit

pricing assumptions may mask existing interest rate risk.

Carefully combining the quantitative results of the core de-

posit study with an analysis of the qualitative factors which

affect depositor behavior will allow management to develop

meaningful assumptions that will greatly enhance the use-

fulness of asset/liability management modeling results.

If you would like to know more about asset/liability

management modeling or assumption development, please

contact your Wisconsin Balance Sheet Solutions Team.

Rick Redmond, Director-Balance Sheet Strategies

Deposit Pricing Assumptions

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

The banking landscape is continually changing; we identify how these changes affect your institution and

suggest the most efficient and effective plan of action based on our knowledge of your institution and the

banking industry. We serve thousands of financial institutions nationwide and understand the challenges and

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

Experience the power.

Go to www.mcgladrey.com or call 800.274.3978.

Power comes frombeing understood.®

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