Volume 13, No. 6 November/December 2013

Staff members of Spectrum Investment Advisors flank Jack Harbaugh (center) before the firm’s quarterly Coffee House Educational Series held in September at the firm’s Mequon offices.

Jack Harbaugh addresses Spectrum Investment Advisors’ coffee house educational series. ICBA_5927 WPS Ad Resize_Layout 1 10/2/13 11:37 AM Page 1 Why We Do What We Do — BOARD OF DIRECTORS — Stan Leedle, Choice Bank, Oshkosh Stan Leedle, CBW Chairman and (see p. 20), there are dozens upon dozens 2013-2014 Chairman Executive Vice President of Choice of other examples. The concept of giving Jerry O’Connor, The First National Bank of Waupun Bank, Oshkosh back extends to our associate members Chairman Elect as well. For example, I hope you will read Fred Siemers, River Cities Bank, Wisconsin Rapids Vice Chairman his is one time of the year when the article about a Paul Hoffmann, Monona State Bank I’m most happy to be a community new program by Past Chairman Tbanker. The relationships that we build Spectrum Invest- Jim Tubbs, State Bank of Cross Plains and nurture throughout the year often ment Advisors (p. Secretary/Treasurer, Past Chairman Rick Busch, Royal Bank, Gays Mills come home to bless us. The greetings 8). Yes, Spectrum’s ICBA Director from customers and colleagues seem Coffee House Edu- John Slatky, Bank of Luxemburg warmer. Holiday cards fill our mailboxes cational Series is ICBA Director and brighten counters and desktops. a marketing effort — REGIONAL DIRECTORS — And many of our employees and (as is our Go Local — Northwest District — community banks get into the spirit campaign), but it also performs a real Paul Kohler, Charter Bank, Eau Claire of the season through their support of service. Tom Armstrong, First National Bank, Park Falls local tree lighting ceremonies, school Efforts like ICBA’s Go Local cam- Jim Loe, Pioneer Bank of Wisconsin, Ladysmith programs, and other events. paign can also strengthen our relation- — Northeast District — I was happy to be quoted in a CBW ships with elected officials and help Marty Reinhart, Heritage Bank, Marshfield media release supporting the ICBA Go them to view community bankers as the Brad Grant, Calumet County Bank, Brillion Local campaign, which encourages con- principals we truly are in the economic Sue Paoli, First National Bank of Niagara sumers to do their holiday shopping growth of our regions. Our voice counts — Southwest District — Steve Zeman, Union State Bank, West Salem in their local communities. It reminds as we support many grassroots efforts to Doug Martin, Livingston State Bank people that their simple decision as to build healthy local economies. Mary Bomkamp, Highland State Bank where to purchase a holiday gift really However you celebrate this holiday — Southeast District— does make a difference. The Go Local season, I hope that you will take a few Bill McDonald, Greenwoods State Bank, Lake Mills campaign is also one more way we can moments to appreciate how fortunate Dennis Doyle, Great Midwest Bank, Brookfield demonstrate our support for the educa- we are to be community bankers. Build- Thomas Oehler, Peoples Bank, Elkhorn tion, health, and economic well-being of ing relationships with our customers, — CBW STAFF — our communities. supporting our local communities, and, Daryll Lund While this issue of our magazine yes, telling our story, are all rewarding President and CEO highlights a few ways that community aspects of our careers in this great indus- Rick McGuigan banks give back to their communities try. Happy Holidays! Executive Vice President Sandra Gruber Director of Member Services and Information Management Shannon Schlueter On our cover ... Director of Member Relations and Public Affairs Jami Erickson Director of Member Programs and Association Administration Lori Greene Administrative Assistant

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

Published by Community Bankers of Wisconsin through Client Communications Doris Green, Editor and Publisher Mary Lou Santovec, Contributor Lisa Imhoff, Grey Horse Studio, Art Director Editorial or subscriptions: e-mail Doris Green at [email protected] or fax 608.583.2084 Advertising: Jami Erickson, Director of Member Programs and Spectrum Investment Advisors hosts its quarterly Coffee House Educational Association Administration, at 608.833.2386 Series at its Mequon office. or contact Doris Green Current and prospectvie clients are invited to a free lunch, courtesy of Fiddleheads Wisconsin Community Banking News is provided at no cost to CBW members. The current and past issues are available on the Coffee Roasters, free coffee and an inspiring speaker. CBW Web site: www.communitybankers.org. The investment firm will host another of its quarterly events in January 2014.

November/December 2013 Wisconsin Community Banking News 3 Volatility: the Economic New Normal Mary Lou Santovec from recent wars also leave the Defense of homebuilders concur with Dismuke, Department spending less. reporting they’re optimistic for the he economy is comparable to a Private investment, which makes up future. man who applies for a job at a 20 percent of the economy, comprises The average home price dropped 30 zoo and is hired to impersonate three components: business spending percent during the Great Recession. Ta monkey. When the new employee on equipment and software, nonresi- Since then, it’s come back 12 percent accidentally falls into the lion’s den, he dential investment in equipment, and but needs to continue that upward trend. begs the lion not to eat him. nonresidential investment in structures. For most Americans, their greatest asset The lion’s response? “If you don’t shut The latter has dropped and won’t come and nest egg is their home. “We should up you’ll get us both fired.” back for a while. see a slow recovery in housing, but it It sometimes seems like there are no In the short term, businesses invest won’t catch fire like it did between 2003 good jobs anywhere, said Craig Dis- in software. In the middle term, they and 2006.” muke, chief economic strategist at the purchase buildings. They only add labor Dismuke forecasts home prices to be Memphis-based for the long term. up 3 to 5 percent next year. But like the Vining Sparks. The Housing Market real estate mantra of location, location, Although Dismuke The Great Recession took the wind location, for housing data, it’s “region, opened his presen- out of the sails of the residential housing region, region.” Wisconsin is expected tation at the Com- market, which represents 3 percent of the to increase only 1 percent. The higher munity Bankers of economy. New construction stood at 6.4 numbers will be reported on the coasts. Wisconsin’s annual percent before the downturn, when it Consumer Consumption Management Con- dropped to 2.4 percent. It now represents Representing 70 percent of the econ- ference and Expo 2.7 percent. New housing has the lowest omy, personal consumption remains with the zoo story, inventory since 1961. fairly weak. Growth in disposable the private econ- A primary factor in future economic income is up 2 percent since 2008. Con- omy is actually growing—just not at a growth will be housing. But mortgage sumers have deleveraged about as much rate one would expect coming out of a rates are trending up with a 30-year as they’re going to, dropping from 130 recession. mortgage hovering closer to 5 percent percent to 110 percent. Debt payments Dismuke gave an overview of the rather than the 3.5 percent average rate a are lower than in recent history. economy and read the economic tea short time ago. Higher rates slow growth A deep labor recession created much leaves in hopes of offering some near in the market but don’t totally shut it of the weakness in consumption. The term predictions. We caught up with down. The big question: What will hap- challenge is long-term and won’t be him several weeks later for an update. pen to housing if mortgage rates inch solved overnight. Dismuke estimated Though both private and federal even higher? that it could potentially take 10 years spending are now growing, neither is Home refinances are down 60 percent for the economy to get back to normal. growing as much as they should be fol- from the peak of the recession and inter- Income growth is the key that will lowing a recession, according to Dis- est payments have dropped by $300 bil- unlock the door. Until that time, the muke. Total GDP—the compilation of lion, a situation that has a direct impact economy will continue to “muddle consumption, government spending, net on household budgets—and on bankers’ along.” external trade, and private investment— bottom lines. Refinancing a mortgage Fed Monetary Policy hovers at 2.2 percent, while the private increases disposable income, improving Despite earlier announcements to the economy is growing by 3.2 percent. the economy without hurting the hous- contrary, the Federal Reserve has contin- Government spending is the biggest ing market directly. ued its monthly purchases of $85 billion laggard with state, federal, defense, and Both housing starts and sales appear in bonds. The Fed’s action has fueled entitlement spending all trending down. to be slowing. Improving that situation the record numbers the stock market Future spending looks to be flat for state will require changes to family income is registering as Wall Street follows the and local governments, which must pass and/or housing prices. Although wages mantra of “don’t fight the Fed.” a balanced budget each year. are stagnant, housing does remain afford- There are two components to stock The end of the stimulus spending able and inventories—even those in the prices: earnings and the amount that dropped federal spending by $180 bil- shadow market—are coming down. Not investors are willing to pay in the mar- lion. While that sounds like a huge drop, all shadow inventory has to work its way ket. As the Fed increases its purchases, it’s like not spending $5,000 the month through the system before housing starts investors are willing to take more risk. following a $5,000 vacation, Dismuke begin to increase. Many foreclosed prop- Because markets respond in a noted. erties should be torn down. “binary” fashion—buy or sell—Dismuke Entitlements, which represent 44 “I think we’re close to a point now expects them to remain volatile going percent of total government expendi- where supply and demand are positive tures, are down $18 billion. Draw-downs for new construction.” And 54 percent continued on page 6

4 Wisconsin Community Banking News November/December 2013 Year-End Review Points to Promising Future hanks to your continued support, and expand the liability protections for Daryll Lund, CAE, Tthe Community Bankers of bank subsidiaries. CBW also supported CBW President Wisconsin is once again ending the year a bill to modify several administrative and CEO in a strong financial condition. This fact rules at the Department of Financial is not something to be taken for granted; Institutions. rather it represents a committed, At the federal level CBW worked dedicated membership supporting closely with our national affiliate, the our industry over many years. It also Independent Community Bankers of provides an inspirational model for America (ICBA), to stop the proposed the future. Once more, thanks to your expansion of credit union business- support, volunteer service, and advocacy lending powers, raise the Securities success came early in December, when efforts, we are well positioned to carry and Exchange Commission registration the Wisconsin Business Development out our mission of exclusively serving threshold, and modify and delay Basel (WBD) presented its 2013 Friend of the Wisconsin community banking III capital rules. The Consumer Finan- Small Business Award to the Small Busi- industry in the coming year. cial Protection Bureau also listened to ness Lenders of Wisconsin—including Recently you received your 2014 CBW and ICBA input in the creation of the Community Bankers of Wisconsin CBW membership dues. CBW was its final “ability to repay/qualified mort- and its members. The award recognized pleased to report for the 10th consecu- gage” rule, which provides a compli- the importance and role community tive year our CBW dues schedule remains unchanged. This stability in dues rates is unusual and an example of the many Over 130 educational webinars attracted an estimated advantages that set CBW apart from 2,500 bankers. other trade associations. Your strong support of CBW services, training, and educational programs allows us to keep ance safe harbor for some loans held by banks make each and every day building our membership dues unchanged for the small creditors serving predominantly strong local communities—congratula- 10th consecutive year. rural or underserved areas. Finally, the tions to each of you for contributing to You also recently received your copy Securities and Exchange Commission this recognition and award. of the 2013 CBW Year in Review. I hope approved a final rule that exempts banks Thank you again for your support of you will read through this report to learn that provide only traditional banking CBW this past year. We look forward to more about your association activities— services to municipal customers from our continued partnership in the com- including among many other efforts registration as municipal advisors under ing year filled with new opportunities for CBW’s strong membership numbers, Dodd-Frank. the community banking industry and our over 130 educational webinars that Closely related to our advocacy for communities across Wisconsin. attracted an estimated 2,500 bankers, efforts, CBW continued to build pub- and our Legal & Compliance Services lic awareness of the positive impact of Consortium in partnership with God- community banks frey & Kahn. through marketing This year CBW also launched BOLT and media efforts, (Building Our Leaders of Tomorrow), such as Community designed to provide an environment for Banking Month and peer networking, educational growth, the ICBA-initiated and leadership development for the next and CBW-supported generation of community bankers. If Go Local holiday attendance (over 110) at the inaugu- shopping campaign. ral BOLT Leadership Summit in early Opinion pieces, our December is an indication of the future, quarterly Banco- this program will prove key in ensuring nomics report of a strong legacy for community banking industry trends for in Wisconsin. institutions of differ- In addition, one of CBW’s primary ent sizes, and other goals is advocacy on behalf of the Wis- informational pieces consin community banking industry. further advanced On the state level, CBW introduced bills CBW’s credibility. this year to raise coverage levels under One acknowl- the public deposit guarantee program edgement of CBW’s

November/December 2013 Wisconsin Community Banking News 5 forward with stock prices going up and a large population in the workforce to That latter reason explains why the bond rates remaining low. pay for the services for the elderly and economy will likely grow at a weak Monetary policy drives markets today less fortunate. “We need to incentivize rate for the next 10 to 15 years and will on both sides of the coin – fixed income people to go out and do it for themselves. remain stuck in a slow-growing phase. and equities. And it has spread across We need to give them opportunities to For clues as to the future take a look at the globe. Since 2007, balance sheets make money.” Japan’s lost decade, which began in the have grown $7 trillion while yields have The unemployment rate, as calcu- 1990s. come down. Although countries have lated by the Bureau of Labor Statistics, New Fed Chair different rates of growth, sovereign rates is not the best compilation of what the After a bit of a tussle between Larry are coming down in tandem, one of the real labor situation is. Although the Summers and Janet Yellen, Yellen is intended consequences of quantitative unemployment rate is dropping, it’s not poised to become the new chairman of easing. But it’s hard to achieve a real because people are finding jobs. Instead, the Federal Reserve when Ben Bernanke active market when central banks own many have left the work force, 70 percent steps down in January 2014. most of the assets. due to retirements. The remaining 30 Dismuke expects the transition to be Labor Demand percent are single income households, smooth, saying that Yellen is much like The Great Recession also created a those going to school or those living Bernanke in her outlook. “She’s brilliant drop in the demand for labor. A total with their parents. as an economist. As a leader, she’s very of 8 million payrolls were lost with Over the next 17 years, one of the good. She’s a consensus builder.” 1.8 million still to be recovered. The economy’s biggest challenges is that 30 But there are misconceptions about employment rate has flat-lined and million Americans will be eligible for Yellen as a dove, he said. She was one not improved since Dismuke spoke in retirement. This sea change in the labor of the first to recommend large-scale September. force will impact the economy in two asset purchases. “She believes strongly Fewer people who are in the produc- ways. Retirees generally change their in aggressive monetary policy.” Despite tive phase of the economy are work- consumption habits, reducing their her stellar qualifications, Yellen is likely ing, a situation that creates problems spending while the number of people to have a tough battle ahead. for funding Social Security and other who are working and supporting the Conclusions safety net programs. There needs to be retirees shrinks. What can community bankers expect going forward? The private economy remains stable. Because of the severity of the Great Recession and Fed policy decisions, job and income growth are stagnant and will likely remain so for some time. Low yields are the new norm. Expectations for GDP growth are lower today than ever before. The debt to GDP ratio remains over 100 percent, CBW Legal & Compliance Consortium which requires fiscal restraint on the Community Bankers of Wisconsin offers its Legal and part of the federal government. Any ris- Compliance Services Consortium to provide CBW members ing rates will have a bigger impact on with fast, easy access to compliance and legal services at a flat federal deficits. Housing is seen as the economy’s annual fee. Godfrey & Kahn renders written or oral legal advice that can golden goose. But it has a way to go to be maintained in bank records and provided to regulators. Consortium reach that point. members become clients of Godfrey & Kahn. While the future is not overly opti- mistic, Dismuke cautioned that this is Consortium members have received answers to questions related to not 1994 when the Federal Open Market permissible compensation arrangements for mortgage loan originators, Committee spooked the markets with its honoring powers of attorney, access to safe deposit boxes, overdrafts, financial first ever statement causing widespread privacy, FDIC insurance coverage, flood insurance, federal and state consumer concern over the health of the economy. loan disclosures—and many more issues. Clients often request written advice So fasten your seatbelts. It looks like and conclusions to follow-up on Godfrey & Kahn discussions. it’s going to be a bumpy ride ahead. 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].

6 Wisconsin Community Banking News November/December 2013 Think of us as your backroom.

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November/December 2013 Wisconsin Community Banking News 7 www.BankersBankUSA.com Madison, WI • Des Moines, IA • Indianapolis, IN • Springfield, IL Coffee House Educational Series Offers Learning, Razzle-Dazzle Mary Lou Santovec coaching collegiate ball. Quoting Packer pectrum Investment Advisors, a great Willie Davis in his CBW bronze corporate member, book, Closing the Gap, Semploys a creative marketing tactic Harbaugh observed that would be appropriate for many that it’s not the size of community banks to emulate. Its the car you drive or quarterly Coffee House Educational the kind of house you Series offers current and future clients a live in. It’s the legacy of learning opportunity with a bit of razzle- friends and family you dazzle. The series enables the firm to leave behind and the connect with clients in a low-key way, good memories of the serving them lunch and coffee at the life led that’s important, company’s in-house coffee house while he said, noting that his showcasing a dynamic speaker. family subscribes to that philosophy. Jack Harbaugh, father to Super Bowl XLVII coaches, John Having two sons in and Jim Harbaugh, entertained the crowd at Spectrum “Tell them what they can do.” the Super Bowl was Investment Advisors’ quarterly Coffee House Educational “totally unexpected.” Series in September. Although it was a “fantastic experience” in a series of life changing experiences The speaker in September was Jack and a chance to meet great people, once for the elder Harbaugh. His first was in Harbaugh, father of the 2013 Super Bowl the game actually began it was miser- 1954 in Crestline, Ohio, when he went XLVII head coaches, brothers Jim Har- able. Harbaugh and his wife, Jackie, had out to play junior high football, got hit baugh (San Francisco 49ers) and John to sit in the stands like “zombies,” show- on his very first play, and learned what Harbaugh (Baltimore Ravens). The elder ing no emotion so it didn’t seem they a love and passion he had for the game. Harbaugh is no stranger to the football were favoring one son over the other. His second was also learned on that field, retiring in 2002 after 45 years of Super Bowl XLVII was just the latest junior high football field—one related to attitude and facing your fears. The Harbaugh family uses two mantras as attitude changers. One is: “Who’s got it better than us? Noooobody.” The second: “We’re going to tackle this day with an enthusiasm unknown to mankind.” Coaching, teaching, and parenting are all the same to the elder Harbaugh. Creativity is key, along with believing in what the player, student, or child can do, not what they can’t do. That lesson was learned from Jack Elway, the father of NFL great, John Elway, when Harbaugh was coaching at Stanford. When the elder Elway asked Har- baugh about his sons’ talent, Harbaugh A WHEDA exclusive! started listing what they couldn’t do. The WHEDA Tax Advantage is an exclusive program that provides a special tax Elway interrupted saying that both of his credit to qualified home buyers that saves money and makes home ownership sons were going to have a lot of people more affordable. This special tax credit reduces a first-time home buyer’s federal telling them that. “You want to tell them income tax liability over the life of the mortgage. what they can do. … to let the kids hear To learn about the WHEDA Tax Advantage and all the advantages WHEDA has to how you feel about them.” No one can offer, go to www.wheda.com/MortgageLenders. Income and purchase price limits believe in themselves unless they know apply and home buyer education is required. someone believes in them. Spectrum will host its next Coffee Wisconsin Housing AnD Economic DEvElopmEnT AuTHoriTy House Educational Series at its head- 201 West Washington Avenue n Madison, WI 53703 800.334.6873 n www.wheda.com quarters on 6329 W. Mequon Road in January 2014. Visit the Web site at www. NMLS# 394409 spectruminvestor.com to learn more.

8 Wisconsin Community Banking News November/December 2013 You deserve a Silver Lining.®

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November/December 2013 Wisconsin Community Banking News 9 A Blind Spot for Community Banks Social Media — It Really Matters John T. Reichert, member, Financial the FFIEC Guidance below for an idea Do any of your social media activi- Institutions Practice Group, Godfrey & of what the regulators will be looking ties pose risks under RESPA, specifically Kahn, S.C. for next time they visit. related to giving or accepting a “thing Reactive Bank Use. Even if you do of value” in return for a referral? (What f your bank is like most other not have a proactive social media plan, if you “Like” a broker or post a link?) Icommunity banks, you probably you should have a reactive social media Have you considered and complied haven’t devoted plan. If customers or other people in with the Fair Debt Collection Prac- much thought to the community are using social media tices Act in all of your social media social media. That’s to criticize your bank or spread rumors interactions? understandable. and misinformation, how are you going What about UDAAP? You’ve had your to find out and how are you going to What about the advertising require- hands full with respond? ments related to the FDIC insurance credit issues, FFIEC Guidance logo and the Equal Housing Opportu- capital planning, Earlier this year, the FFIEC issued a nity legend? regulators, shareholders, and preparing proposed Guidance on Social Media. Do you have procedures to iden- for such treats as the new mortgage (For the regulators, it is remarkably short tify when something rises to the level regulations and revisions to Regulation at under 40 pages.) Among other things, of a complaint? Are you responding E. If your bank is technologically the Guidance states that “financial insti- and including it in your CRA file (if savvy and forward-looking, you may tutions should have a risk management applicable)? have begun to incorporate things program that allows it to identify, mea- What about privacy issues? such as Facebook, LinkedIn, and sure, monitor, and control the risks Do any of your activities constitute Twitter into your marketing efforts. related to social media.” Such a program unsolicited commercial messages sub- (Congratulations, you’re in the should include: ject to the CAN-SPAM Act or various minority.) Regardless of whether your • A governance structure laying out state law equivalents? bank is proactively utilizing social the roles and responsibilities for every- If any of your activities include media, you face many of the same risks. one involved minors, are you complying with the This article summarizes those risks, the • Policies regarding the use and mon- Children’s Online Privacy Protection applicable FFIEC Guidance on Social itoring of social media and compliance Act? Media, and explains why all community with all applicable consumer protection What about general “reputation banks need a Social Media Policy. laws and regulations risk?” Three Buckets • A due diligence process for select- As you can see, someone in Washing- There are three main ways in which ing and managing third-party service ton had a good time “issue spotting.” As social media can affect your bank; you providers with everything else you deal with, it’s up should give thought to each. • Training to you and your team to come up with Employees. Many of your employees • Oversight to monitor information answers and solutions to these issues. use social media, personal Web sites, posted to proprietary social media sites Conclusion blogs, and other Internet-based social • Audit and compliance functions While several clients have begun to forums for personal and business net- • Reporting to the board and senior roll out Social Media Policies, few have working. How do you establish limits management the time or resources to have sufficiently and guidelines on such usage without In addition, the regulators identified addressed all of the concerns identi- infringing upon the employee’s rights of the following as a preliminary list of fied in the Guidance. We believe this self expression during non-work time? possible risks the bank should evaluate: should be a high priority for community You want to make sure the employee is Are any disclosures triggered related banks. We also believe it will take time not sharing confidential information to Regulation E, Truth in Savings, Truth and, if done right, will be a collaborative regarding the bank or its customers, but in Lending, or RESPA? effort involving the bank’s employees, you also need to comply with applicable Do the bank’s social media activities, IT vendors and consultants, marketing labor and employment laws, including intentionally or inadvertently, give it partners, and, yes, lawyers. This will be interpretations issued by the Depart- access to information that could create an evolving and ongoing process for the ment of Labor. issues under the various fair lending laws? foreseeable future as technology and Proactive Bank Use. If your bank is (If you have access to someone’s Facebook social media issues continue to outpace finding ways to incorporate social media profile, you could be exposed to their the ability of the law and regulators to into your marketing efforts, have you age, gender, race, marital status, various keep up. considered the myriad risks and regula- health issues, etc., even if you don’t ask Contact John Reichert at 414-287-9674 tory implications? See the discussion of for, see, or consider the information.) or at [email protected].

10 Wisconsin Community Banking News November/December 2013 Your building, your vault, your money and your people: Protect them all.

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November/December 2013 Wisconsin Community Banking News 11

Client: Travelers Publication: Issue: Close: Ext: Wisconsin Community Banking News 00/00/00 11/22/13 11/19/13 Job Number: SPBIZ3PU401 File Name: SPBIZ3PU401_WCBN_8-37x10-87.indd Description: PBW Date/Time: 11/18/13

Bleed: 8.625" x 11.125" Creative Director: Name Trim: 8.375" x 10.875" Art Director: Name Live: 7.25" x 9.75" Copywriter: Name Media: FP 4C Bleed Production Artist: Herrmann Fonts: FreightSans Pro Book & Semibold Project Lead: Name Ink Colors: K Account Manager: Alex Steinman Notes: Save as a PDF/X-1a:2001 Noteworthy Community Bank Anniversaries Congratulations to three Wis- consin community banks celebrat- ing benchmark anniversaries in December! 105 Years Stratford State Bank, on December 11 100 Years Nekoosa Port Edwards State Bank, Waldo State Bank Nekoosa, on December 13 Receives Centennial 80 Years Award National Exchange Bank & Trust, From left, Pam Kelly, FIPCO; Derrick Bank Notes Fond du Lac, on December 20 Hermann, assistant vice president; Sesquicentennial Tom Reil, president; Ted Katsma, 150 years! CBW President and CEO operations officer; and Jeff Trimberger, Daryll Lund presents an anniversary assistant vice president, all of Waldo award to Nate Parrish (left), executive State Bank, which celebrated its vice president, and James Caldwell, centennial earlier this year, with Rick president, of First Citizens State Bank McGuigan, CBW. of Whitewater, which celebrated its sesquicentennial in October.

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For more information about our Banking & Financial Institutions Team, contact Tom Homberg at 414.287.9429, or [email protected].

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By Dave Schroepfer, Partner Wipfli LLP

November/December 2013 Wisconsin Community Banking News 13 From the Top The Giving Season Bill Loving, Chairman of ICBA

ike so many of my community banker brethren, I simply love the holidays. It’s a time for family, friends, and all- Young & Associates, Inc. aroundL good cheer. At Pendleton Community Bank, we deck the halls and everywhere else in between. We love to show our holiday spirit and show our customers and communities that Liquidity Planning we’re right there with them—celebrating the season’s special magic and meaning. We all know that the holidays are a par- Strategic Planning ticular time for giving, and as community bankers, giving is something we do best throughout the year. We do it when we make a character loan Regulatory Assistance to that small business that might otherwise not have been able to get start-up capital to open up down on Main Street. We do it when we lend to the young family that’s buying their first home Stock Valuations and do it when we help our customers plan for retirement. Giving is something that all of us community bankers do in various ways on a daily basis. Yes, we’re running a business, Capital Markets but there’s much more to it than that. We want to ensure that our banks make a difference, a real difference in the lives of Expansion & our customers and the health of our communities. And charitable work is no exception. As proven by ICBA’s De Novo Bank Charters National Community Bank Service Awards, community banks top the list in giving back to their communities in a philanthropic way. Community banks want to help their Internal Audit communities—not only because it’s the right thing to do, but also because it’s a good business practice. All community bankers know that a healthy local economy Information Technology is essential to a healthy community bank. By making our com- munities stronger, we thrive and our customers thrive—it’s all a win-win. It’s all part of that symbiotic relationship between Recruitment & the community bank and its community. And the best part Human Resources is that we get to positively affect the lives of local citizens and organizations along the way. ICBA is here to help you spread that message. While ICBA’s Lending & Loan Review Go Local initiative is a great way to highlight your community bank’s local efforts throughout the whole year, ICBA is once again making its Go Local for the Holidays campaign available Compliance to community banks. The campaign’s free materials feature easily customizable press releases and op-eds to help spread the Go Local message—showing your support for local small Policy Development business, along with your community banking pride. Find materials at www.icba.org/golocal. So go ahead and spread your holiday cheer as you always do. This is truly the community bank culture, and that’s something to truly be thankful for. 800.525.9775 younginc.com

Bankers Working For Bankers

14 Wisconsin Community Banking News November/December 2013 freedom of choice

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November/December 2013 Wisconsin Community Banking News 15 Mobile Technology: What Comes Next? Doris Green years. Not Science Fiction • Human knowledge doubles every Nike’s Fuelband is a wristband that here are more mobile phones two years. records your activities, from aerobics on the planet than people,” said • The rate of progress itself doubles class to yoga. A competitor product, “TKevin Moland, at the every 10 years. Fitbit Force, records how many stairs CBW Conference Not so long ago, we moved money you climb. Sony’s SmartWatch con- & Management around using armored cars. Then we nects to your Android smartphone, and Expo in September. began also using ATMs, and then tele- Google Glass is a wearable computer Yet, what’s really phone banking, followed by PC/home with a head-mounted display still in important for banking, and online banking until today, development. It displays information community banks, he when many people have begun making in a smartphone-like hands-free format said, is not the next their banking transactions through their and communicates with the Internet via big technology development, but the various mobile devices. voice commands. banks’ creation of a set of principles— “Strategically speaking, mobile Wearable computing uses cloth- or a framework or strategy—to guide devices are not the end game. They ing, headgear, wrist bands, and other whatever “the next big thing” turns out are—like all the technologies before items as interfaces between our physical to be. them—a bridge to whatever is next,” selves and the virtual world. Eventually, Moland, who is director of product Moland said. The device itself is just the Moland believes, people will actually management at ProfitStars Enterprise channel through which great informa- become the computer. He described Payment Solutions, began his presenta- tion flows. “What we want is the content, “vitamin authentication” in which an tion, “Mobile Doesn’t Matter!” with a the deliverable … New channels can give individual would ingest a pill, which few eye-opening facts about the expo- deliverers the ability to expand the scope would be battery-powered with stomach nential growth in the 21st century: of the content in meaningful ways, but acid to produce an 18-bit internal signal, • Transistors on integrated circuits even then the grail is still the content, not making your whole body a password. double every two years. the channel!” A brain-computer interface (BCI)— • 90 percent of all the data on the also called a mind-machine interface Internet was generated in the last two (MMI) or a brain machine interface When Litigation Becomes Inevitable, Count on Your Legal Department.

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November/December 2013 Wisconsin Community Banking News 17 (BNI)—is a direct communication path- Step 1: Decouple devices from way between the brain and an external strategy. “Device delivery decisions device. For example, an individual might are tactical, not strategic!” according to Make your be able to select a word on a screen by Moland. Decisions about how to serve thinking about that word, or as one customers should not be constrained by opportunity a University of Washington experiment the features of the latest device. Think demonstrated, allow one individual to beyond the current channel (tablet, “done deal”... fast! move the finger of another individual smartphone), so that your design will just by thinking about it. endure through the advent of newer, Researchers at Brown University have more sophisticated channels. As much • Participation loans created the first wireless, implantable, as possible, separate your core process- (commercial, agricultural, rechargeable, long-term BCI. About the ing from the programming that works construction, operating lines size of a pacemaker, the BCI transmits with new devices. and term loans) EEG data to a collection device. Wireless Step 2: Make the “foundation BCIs have been implanted in pigs and choices.” Define your community • Bank stock & ownership loans monkeys without issue. bank’s service philosophy in the broadest Smart dust is a system of tiny micro- terms. Consider what limits, if any, you • Bank building financing computers, each with processing, stor- would place on the personal or account age and wireless capabilities, that can data you distribute to customers. Think • Business & personal loans be deployed in an area—or inside a about the limits, if any, that you would for bankers person—to monitor light, temperature, place on various types or tiers of custom- or maybe the brain’s EEG activity. Smart ers with regards to system access. Finally, • Multi-family long-term dust could be deployed in the brain to ask what level of risk you are willing to permanent financing capture EEG, derive “thought intent,” accept regarding potential fraud perpe- and control external devices. trated through new technologies? Before long technology will leap the Step 3: Create a ‘Technology fences imposed by mobile devices, and Services Manifesto.’ Combine your each person’s technology will be embed- responses to the foundation questions ded in their physical being. In short, the into a Technology Services Manifesto. delivery channel will be eliminated and By clearly stating your beliefs, you estab- we will become one with the machine! lish a framework for analyzing new This embedded technology will carry delivery channels. When the “next big its own risks, but it will also allow users thing” comes along, you can analyze its to sense and manage data in dramatic potential for delivering services based on new ways the principles established in your Mani- festo. There’s no need to debate prin- What to Do? ciples every time a new device comes Establishing a focus group to talk along. There’s no need to continually about the tactics of banking when we are ask, “What in the world should we do Call us for quick response, our own interface is an impossible task, about this crazy new stuff?” competitive rates and but discussing the principles or vision flexible underwriting. pillars behind our strategies does make sense. Moland offers a three-step process Gary Keller to create a framework for the future: 3100 13th Ave. S. Fargo, N.D. 701.371.3355 Waterstone Financial to Offer Stock [email protected] WAUWATOSA—Waterstone Finan- public stockholders. cial, the holding company of Water- Current WaterStone depositors will Stone Banks SSB, is offering between get the first opportunity to buy stock. 18.7 million and 25.3 million shares of The general public will be invited to common stock for sale at $10 per share purchase any remaining shares. The as part of its plans to convert to a fully bank hopes to raise $253 million with public company. the offering. The stock offering represents the 73.5 percent ownership interest cur- rently owned by Lamplighter Financial MHC. When concluded, the holding 4949 Member FDIC company will be completely owned by

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November/December 2013 Wisconsin Community Banking News 19 Community Involvement North Shore Honors different charities, Habitat for Human- the winners in eight categories: ity days, shipping textbooks to Africa # Market Spark, rewarding innovation Alderman, Police through Rotary Books for the World, # Fresh Food Friend, involving local, BROOKFIELD—North Shore Bank blood drives, tutoring children, serv- sustainable food recently honored Alderman Joe Dudzik ing food at local pantries, and other # Green Angel, promoting environ- and Milwaukee police for their efforts in activities. mental stability chasing down robbery suspects at one of # Hometown Artist, recognizing an the bank’s Milwaukee branches located Premier Donates to artist committed to the community in the Jackson Park neighborhood on Humane Society # Dynamic Developer, recognizing a the city’s South Side. FORT ATKINSON—To support the developer who does projects that benefit Dudzik and the police were acknowl- Humane Society of Jefferson County’s the community edged at a community forum on crime quest for a new animal shelter, Premier- # Neighborhood Notable, recogniz- prevention. Bank pledged $15,000 to the Humane ing a person who takes the lead in a neighborhood Society’s capital campaign. Park Bank’s Volunteer # Bridge Builder, recognizing a per- Spirit Bank Honors Dane son who brings people together MADISON—The 185 employees at County Independent # Dane and Beyond, recognizing a Park Bank volunteer their time or raise person who uses new technology to con- money to help almost 50 local nonprofit Businesses nect Dane County to the world. organizations. Full-time employees get MONONA—Monona State Bank spon- Readers of the newspaper nomi- 16 hours and part-time employees sored the 2013 Isthmus Indie Awards nate and vote on the nominations. The receive eight hours of paid time off to Ceremony, an annual celebration of local awards ceremony, featuring a dinner and volunteer in the community. entrepreneurship hosted by the Isthmus, silent auction, was a benefit for Dane Volunteer options include partici- a local independent Madison newspa- Buy Local. pating in or raising funds for walks for per. This fourth annual event honored First Bank Financial Centre Teams Up to Donate Meals Wendy Quaden, Stacy Grafenauer, Sally Schoenborn, Tim Ros- kopf, all of FBFC; and David Knoll, Mark Ebert, and Ron Ebert, of Ebert’s Greenhouse; with, front, Todd Scheid, of FBFC. OCONOMOWOC—For the third consecutive year, First Bank Financial Centre (FBFC) and Ebert’s Greenhouse joined forces to raise money to purchase Thanksgiving meals for families in need. FBFC and Ebert’s partnered with Piggly Wiggly in Oconomowoc to purchase food items for the meals. This year, the team fed 63 families. Monies were raised during a fundraiser at Ebert’s Green- house. For every pumpkin sold during October, FBFC and Ebert’s each donated $1, for a grand total donation of $1,000. On Nov. 22, FBFC and Ebert employees assembled the 63 Top from left: Jessica Archie, Katie Waldorf, Tonya Esser, Chris meals at the First Congregational Church of Oconomowoc, Wanner, Kerri Yenor, all of FBFC; middle, from left: Mark Mohr, where families then came to collect their Thanksgiving dinners. First Bank Financial Centre Gives to Christmas Market From left: Mark Mohr, FBFC presi- of entertainment, food, and shop- dent, with German Christmas Market ping during Thanksgiving weekend board members Kathy Kaempf, Bob within more than 3,000 square feet Duffy, Sharon Manke, Jerry Noll, and of heated space, as well as outdoor Heidi Laatsch. attractions at the Village Green Park OCONOMOWOC—First Bank in downtown Oconomowoc. From Financial Centre (FBFC) again sup- pictures with Santa, to shopping the ported the German Christmas Mar- huts of 30 unique retail vendors, to ket (GCM), a festive, community- authentic German cuisine, there was driven event, with a $3,500 dona- something for everyone. tion. The market boasts an array

20 Wisconsin Community Banking News November/December 2013 Fine Points Parochial Agendas Camden Fine, President and CEO of of CoBank’s recently proposed $725 mil- longer afford to bear the weight of out- ICBA lion loan as part of a massive Verizon moded, counterproductive, and over- Communication buyout of Vodafone’s reaching government run amok. That’s ission creep, the bureaucratic holdings of Verizon Wireless is only a not rhetoric, it’s reality. Necessity will Mmaneuverings for the self- recent example of the desire of Farm drive this change. preservation Credit System lenders for unfettered This coming year, community bank- of government access to non-farm lending activities. ers should be ready to stand behind fiefdoms and The NCUA’s unrelenting efforts to lift ICBA to ensure Congress conducts backwater important restrictions on credit union hearings to address these unbridled ministries, has long small-business lending—a demand of examples of government overreach stalked the corridors only a few of its industry’s largest, most and excess. Once again, ICBA will ask of the nation’s bank-like players—represents years of lawmakers to end FCS subsidies of non- capital. It’s part of parochial bureaucratic manipulations. farm lending, and we will urge them to the transfiguring Transparently bold, these activities stop the credit union industry’s unfair sleight of hand in public policymaking represent classic turf-building. But, and unwarranted subsidies costing the that has given federal programs and subsidies virtual immortality. When a government agency, office, . . . a rising bipartisan awareness in Congress is confronting hard-edge limits to or program has outlived its usefulness or intended purpose, a deft adjustment the federal government’s once seemingly unlimited ability to spend and control. to arcane policy codes can provide self- justifying life that keeps rivers of govern- thankfully, the longstanding policymak- government urgently needed tax rev- ment funding flowing. It’s the law of the ing dynamics in Washington are shifting. enue. But this time lawmakers need to bureaucratic jungle. Once established, Seventeen years after President Clinton be persuaded to truly listen and disrupt no government entity willingly allows declared that the “era of big government the status quo. its own demise—at least not without a is over,” Uncle Sam desperately needs Mission creep may be alive in Wash- furious street brawl. cash, and the American economy des- ington, but community bankers can join Perhaps the King will live long (or perately needs relief from smothering together to make it a waning force. Our not), but the hive of officialdom will government red tape, strong-arm med- industry and our country have one of the hum on forever and ever. dling, and economic discrimination. best opportunities in years to achieve, ICBA has fought this backdoor pol- Through the calcifying gridlock seiz- in “We the people” fashion, greatly icy force, this stealthy mission creep, ing the nation’s capital, a rising bipar- needed and long overdue public policy for decades in Washington. It has fac- tisan awareness in Congress is con- corrections. tored into the association’s efforts to fronting hard-edge limits to the federal More than 1,000 people are following turn back overregulation of commu- government’s once seemingly unlimited Camden Fine’s tweets @Cam_Fine—are nity banks generated by too-big-to-fail ability to spend and control. Never have you? Visit www.twitter.com/cam_fine. institutions. But nowhere has it been a so many lawmakers acknowledged that more tenacious obstacle than in ICBA’s our country and its economy can no long, uphill fight to curb the entrenched, ever-expansionist, and self-aggrandizing agendas of the Farm Credit Adminis- “Where Compliance Makes $ense” tration and the National Credit Union Badger Compliance Consulting Administration. Both of these govern- PO Box 460, Cambridge, WI 53523 ment-industrial complexes have pur- Phone: (608)-492-2209 sued imaginatively permissive interpre- Email:[email protected] tations of their congressional mandates. They have done so, counterproductively Badger Compliance Consulting was founded by a community banker for to the American economy, to expand community banks. We provide Loan and Deposit Reviews, BSA & ACH their tax-exempt industries’ consider- Audits, Training and Compliance Officer Support on a customized basis. able government-subsidized advantages in direct, aggressive competition with Contact us today to find out how we can help you manage the regulatory tax-paying, heavier-regulated commu- hurdles in the coming year. nity banks. Charles W Geimer, CRCM, AMLCA Though egregious, the FCA’s approval

November/December 2013 Wisconsin Community Banking News 21 Changing Scene CBW Receives Friend of communities. WBD acknowledges the Much like the dating site, Match.com, Wisconsin financial industry trade asso- BankMyBiz allows users to post on Small Business Award ciations and their members who provide newsfeeds and explore other profiles. such great impact.” CBW received the Although only launching in Sep- award at a Monona Terrace luncheon tember, the company has been selected in December. to display its lending Web site in the The WBD mission is to “provide the Startup Spotlight at the South By knowledge, services, and resources to Southwest (SXSW) 2014 conference in foster economic development solutions Austin, Texas. BankMyBiz is one of 40 that grow jobs, businesses, and commu- companies (from among thousands of Pictured from left to right: Fred Siemers, nities.” Over the years, the company has applicants) to present their businesses in River Cities Bank; Joe Wolfe, CEO, developed its expertise in finding solu- the spotlight area at the internationally WBD; Daryll Lund, CBW; Stan Leedle, tions and strategies for small businesses acclaimed SXSW conference. Choice Bank; Rick Busch, Royal Bank; looking to grow. WBD’s staffs are located Paul Hoffmann, Monona State Bank in nine offices across the state. For more Ridgestone Reports MADISON—Wisconsin Business information, visit www.wbd.org. Earnings Development (WBD) presented its 2013 WaterStone Expands in BROOKFIELD—Ridgestone Financial Friend of Small Business Award to the Services reported solid earnings through Small Business Lenders of Wisconsin— Brookfield, Twin Cities the third quarter of 2013, with a net including the Community Bankers of WAUWATOSA—WaterStone Bank has income of $5.6 million compared with Wisconsin and the Wisconsin Bankers opened a branch in Maple Grove, Minn. income of $798,000 for the first nine Association, and their members. The Minnesota branch specializes in months of 2012. Third quarter earn- WBD’s statement on the award reads, commercial real estate lending and gives ings reached $1.4 million in 2013 com- “The small business lenders of Wiscon- the bank a presence in the Minneapolis- pared to earnings of $579,000 for the sin not only finance the growth of the St. Paul area. third quarter in 2012. The improvement business; they are financing the jobs that Heading up the Maple Grove team are resulted largely from continued growth will be created and the vitality of their two real estate veterans in commercial in government guaranteed lending, lending, Paul Muldoon and Peter Austin. net interest margin improvement, and Muldoon previously worked for Johnson reduction of expenses related to loan Capital, where he specialized in mortgage collection efforts. brokerage. Prior to that he was a senior Ridgestone Bank is a leader in SBA loan specialist at Freddie Mac. Austin lending, and has earned the following previously was a commercial mortgage rankings as of September 30th, 2013, for banker with Towle Financial Services, SBA lending in dollar volume: Minneapolis, as well as a commercial #1 in Illinois real estate lender with TCF Bank and a #2 in Indiana founder, co-owner, and manager of Welsh #3 in Wisconsin Capital LLC, a commercial loan broker- #7 in the nation age operation within Welsh Companies. Ridgestone Bank is a privately-held WaterStone announced in Octo- bank with locations in Brookfield, and ber that it will open a new full-service Schaumburg, Ill. Founded in 1995, the branch on West Capitol Drive in Brook- bank is a leader in small business and field in January. The new branch is the government guaranteed lending nation- first in seven years—and since the bank wide and also provides retail banking was known as Wauwatosa Savings Bank. services, including checking, money Established in 1921, WaterStone has markets, CDs, and other services at its eight other locations throughout sub- branch locations. urban Milwaukee and mortgage banking offices in 12 states. Branch Changes for Baylake BankMyBiz Matches STURGEON BAY—Baylake Bank is Lenders, Businesses continuing to revamp its footprint with MILWAUKEE—BankMyBiz.com is a the acquisition of a branch after com- new social network tool that enables pleting the sale of two others. Baylake lenders and business owners to create purchased a branch of Community Bank profiles and then suggests matches. & Trust located at 333 S. Nicolet Road

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© 2013 BOSC, Inc. A subsidiary of BOK Financial Corporation. Broker/Dealer Services and Securities offered by BOSC, Inc., an SEC registered investment adviser, a registered broker/dealer, member FINRA/SIPC. Asset/Liability Modeling and Model Review, CD underwriting and Safekeeping Services are provided by BOKF, NA dba Bank of Oklahoma, an affiliate of BOSC, Inc. November/December 2013 Wisconsin Community Banking News 23 in Grand Chute. As part of the acquisi- (3) organization and uses them to take OCONOMOWOC—First Bank Finan- tion, Baylake purchased the building and equity positions in for-profit early- cial Centre (FBFC) has broken ground some $14 million in deposits. stage companies. Earnings and return on their corporate headquarters expan- Baylake recently sold $26 million in of proceeds on investments made will sion project. The 20,000-square-foot branch deposits in its Berlin and Poy be reinvested again and again. BSW addition to the existing building at 155 Sippi locations to First National Bank works with government, educational W. Wisconsin Ave. in Oconomowoc is of Berlin, keeping the loans associated institutions, other charitable organiza- scheduled for completion during the with those branches, which are now tions, angel groups, and venture funds summer of 2014. The new space will closed. Baylake has 20 branches in four to identify, invest or co-invest in, mentor allow for continued growth, while Wisconsin counties. and promote fast growing early stage enhancing their ability to service their companies to create technology based valued customers. Baylake to Join Nasdaq jobs in Wisconsin. Listings Keating Heinemann co-founded the Anchor to Demolish, STURGEON BAY—Nasdaq Capital Wisconsin Angel Network in 2004. Since Rebuild Branch then, the number of angel networks in Markets added Baylake Corp., the hold- MADISON—Fresh off its reorganiza- Wisconsin has grown from four to 32 ing company for Baylake Bank to its tion, Anchor Bank plans to demolish its angel and venture funds. listings in November. The stock trades existing 6,700-square-foot branch build- under the symbol BYLK. First Bank Financial ing at 7401 W. Greenfield Ave. in West BrightStar Adds Centre Breaks Ground Allis. Once demolished, the bank plans Heinemann to Exec Team to build a new, $1 million, 3,400-square- foot branch on the same location and MILWAUKEE—Lorrie Keating Heine- sell an approximately 11,000-square- mann, secretary of the Department of foot piece of land it owns for future Financial Institu- development. tions under former Gov. Jim Doyle, has Fiserv Launches Mobile joined the Bright- App Star Wisconsin Foundation as vice BROOKFIELD—Fiserv has launched Pictured from left bottom row: Monica the CorPoint Mobile, a mobile applica- president. Stern, FBFC Board; Monica Swaagman, Heinemann, a tion that allows merchants already using Controller, AVP, FBFC; Bob Snyder, CorPoint: Order Manager to use their co-founder of Wis- Lorrie Keating FBFC Board; Mark W. Mohr, President consin Angel Net- Heinemann tablet or smartphone to order cash from and CEO, FBFC; Steve Peterman, TWP their financial institution. work, will head up the foundation’s new Architecture; Diane Gard, City Adminis- By using the CorPoint Mobile appli- Madison office. trator, Oconomowoc; Katie Miller, Execu- cation, all cash orders that come through Based in downtown Milwaukee, tive Director, Oconomowoc Chamber of a bank-branded interactive voice the BrightStar Wisconsin Foundation Commerce; Pete Roehl, FBFC Board accepts charitable donations as a 501(c) response telephone or Web site are also accessible via tablets and smartphones. People Financial institutions can also offer cash forecasting and credit checks. Once cash Park Bank Has New VP excited to have him return and join our orders are placed, they can be passed leadership team,” said David Blohm, MILWAUKEE—Park Bank has named to third-party vaults at specified times president and CEO. via network connections, which can be Jay Sciachitano as vice president of com- “We are celebrating accessed through a smartphone or tablet mercial banking. our 20th anniversary with CorPoint Mobile. Two New VPs at and Paul’s arrival will provide leadership Securant Opens Waterstone Mortgage depth as we prepare PEWAUKEE—Waterstone Mortgage for the next 20 years.” Mortgage Division welcomes Brenda Luce-Lechner as vice Northway will MENOMONEE FALLS—Securant Bank president-closing and Sherri Wolfmeyer oversee the business & Trust added a full-service mortgage as vice president-finance. banking team, as well Paul Northway division to its Hartland branch. The new as the sales and marketing department, division will offer a variety of fixed and Northway New Senior VP and serve as a member of the senior adjustable rate mortgages and construc- APPLETON—American National Bank management team. A graduate of the tion loans with interest-only payments. Fox Cities welcomes back Paul Northway University of Wisconsin-Green Bay, The bank has branches in Hartland, as senior vice president. “Paul started Northway also holds an MBA from the Slinger, Milwaukee, and Menomonee his banking career with us and we are continued on page 26 Falls.

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November/December 2013 Wisconsin Community Banking News 25 University of Wisconsin-Oshkosh and and account development and retention. State Bank of Whitewater. has completed the Graduate School of Banking in Madison. Machota Named Market Moseley Is New President President SHEBOYGAN—Community Bank & Miller Joins Bank Mutual MADISON—Stephen Machota, former Trust has named Scott Moseley to presi- BROWN DEER—Heather Miller has senior vice president at State Bank of dent and chief operating officer. joined Bank Mutual as vice president Cross Plains, was named Madison area Quartullo Joins Westbury of treasury management sales. market president at Wisconsin Bank & WEST BEND—Catherine Quartullo Trust. PyraMax Promotes has joined Westbury Bank as vice pres- Cottrell to VP Lifetime Service Award ident-commercial loan administration GREENFIELD—PyraMax Bank wel- for Knuteson manager. comes Michael Cottrell as vice Kasdorf New SVP president commer- APPLETON—The Business Bank wel- cial loan officer. He comes Matt Kasdorf as senior vice presi- has more than 10 dent and chief credit officer. Kasdorf years of experience brings with him 33 years of experience in commercial real to his new position, 30 of which were estate lending and spent in the Fox Valley area. He will be Douglas Menne small business loans responsible for reviewing the bank’s loan including expertise in SBA lending. portfolio and quality control. Menne Hired as SVP From Interim to CEO GREENFIELD—PyraMax Bank has PEWAUKEE—Foundations Bank has hired Douglas Menne as a sales man- CBW President and CEO Daryll named John Hazod as president and ager/senior vice president commercial Lund presents a Lifetime Service Award CEO, the bank’s first permanent leader lending. He brings with him over 20 to Ken G. Knuteson, senior vice presi- since 2011. Hazod had served as interim years of commercial real estate lending dent and a director with First Citizens president and CEO since October 2012.

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26 Wisconsin Community Banking News November/December 2013 With Operation 411, compliance isn’t a 911.

In the next few years, fi nancial institutions will face mandatory changes to the self-service channel. Diebold is responding now, with Operation 411: 4 compliance requirements, from 1 company with 1 request. With Diebold as a proactive partner, you’ll be effi ciently ahead of change to meet everything from Windows® 7 updates to PCI compliance. Operation 411. It’s another example of how Diebold never stops watching the future, as it helps you now. For the entire story, visit www.diebold.com/411.

[email protected] www.diebold.com. November/December 2013 Wisconsin Community Banking News 27

die8780-14_Operation 411_CommBank_Wisc_v01AR_20131115.indd 1 11/15/13 4:50 PM He had joined the de novo as chief finan- joined the State Bank of Cross Plains as ously served as president of the former cial officer prior to its 2005 launch and vice president of business banking. He Wisconsin State Bank in Random Lake. had previously served the FDIC as a has over 24 years of He is a graduate of the University of bank examiner. experience in many Wisconsin-Whitewater and the Gradu- Hazod’s permanent appointment areas of commercial ate School of Banking at the University comes as the bank exits a federal con- lending, includ- of Wisconsin-Madison. sent order implemented in 2010 by the ing investment real Collins State Bank has offices in Col- FDIC and the Wisconsin Department estate, owner occu- lins, Kiel, and Random Lake. of Financial Institutions. pied real estate, equipment and roll- CHIEF FINANCIAL OFFICER Our client, Bank of Wisconsin Dells, a $400M, Turk Joins PremierBank ing stock, and work- Dennis Haefer FORT ATKINSON—Russ Turk has ing capital lines of credit. well-established, independent community bank joined PremierBank as executive vice Haefer will be responsible for busi- located in Wisconsin Dells, is seeking a strong financial leader to join their executive manage- president/senior loan officer. He comes ness development in the Madison areas ment team. to his new position with over 25 years with an emphasis on the Verona and Reporting to the President/CEO, the CFO of management experience. Oregon markets. He is a graduate of will serve as an integral part of the executive Turk most recently served as presi- the University of Wisconsin-Madison. management team and will be responsible for dent and COO at TSB Bank, Lomira. Strum Joins Park Bank three key areas of the bank including: finance/ Kinate Joins Ridgestone MADISON—Park accounting, information technology, and opera- Bank Bank has hired Dan tions. Accounting, finance, asset liability, liquid- Strum as assistant ity, investment, deposit operations, electronic BROOKFIELD—Ridgestone Bank has banking, vendor management, human resources, added Joan Kinate to vice president of business banking. branch administration, and special projects will its SBA and USDA be at the direction of the CFO. This position will commercial lending Strum brings over seven years of bank- also provide critical input into the Bank’s strategic team as a vice presi- direction and will provide leadership to others dent, SBA Lending. ing experience from Dan Strum throughout the Bank. Located in DePere, national and regional The successful candidate will have a bach- she will provide banks to Park Bank. Strum will be located elor’s degree in accounting or finance (or equiva- diversified loan at the bank’s Sun Prairie branch. lent experience), 7-10 years of comprehensive options to small and Joan Kinate New President of Collins financial management and 5 years of staff man- mid-sized businesses in the Northeast agement and development experience within a Wisconsin market. Throughout her 30 State Bank financial institution. CPA designation desired. year career, Kinate’s commercial bank- COLLINS—Terry Van Engen, an Strong ethical standards, interpersonal skills, ing experience includes SBA lending, experienced com- desire to collaborate, and prioritization skills a small business and middle market com- munity banker, has must. mercial relationship management, com- assumed the presi- For immediate consideration, please send mercial real estate, asset-based lending, dency of Collins resume, cover letter and salary requirements in and audit. State Bank, suc- confidence to: ceeding Paul Olm. Wipfli LLP New VP at State Bank of Van Engen joined [email protected] Cross Plains Collins State Bank Attention: Bank of Wisconsin Dells-CFO CROSS PLAINS—Dennis Haefer has in 2009 and previ- Terry Van Engen Directory of Community Banking Service Providers Community bankers, you have a choice. Superior Safe & Security LLC Electronic & Physical Security Products You can spend your valuable time finding one prime candidate to fill your mid- to upper-level Access Control Modular Vaults Alarm Monitoring Night Depositories position, or you can call me. I will present you with the Alarms Point to Point Systems right person for the job in less time Audio Systems Safes with less hassle. Close Circuit T.V. Safe Deposit Boxes Office location: Drive Up Systems Security Systems 155 E. Capitol Dr., Ste. 5 Fire Safes Teller Counters Hartland, WI 53029 Media Safes Vault Doors Metal Undercounter Cabinets Walk Up Windows Phone: (262) 369-8109 Fax: (262) 369-8028 Sales, Installation & Service Del Garcia email: [email protected] 800-626-0888

28 Wisconsin Community Banking News November/December 2013 NAVIGATE the CFPB rules.

January 2014 is just around the corner— is your bank prepared to navigate the Consumer Financial Protection Bureau’s (CFPB’s) new regulations? Baker Tilly’s banking industry specialists understand the CFPB’s new rules and can help you navigate this regulatory labyrinth. With our CFPB readiness assessment, we’ll keep you on the path to success.

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bakertilly.com l 800 362 7301 Christine Fenske x5415 Mary Clare Miske x5320 Kevin Schalk x5428

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November/December 2013 Wisconsin Community Banking News 29 Mission Statement Building Exceptional Leaders Through Involvement

What Is BOLT?

BOLT = Building Our Leaders of Tomorrow

• BOLT’s goal is to provide an environment where energized and motivated CBW members have an opportunity for peer networking, educational growth, and leadership development. • BOLT members expand their leadership roles in the Wisconsin financial community. • BOLT provides a networking connection to others in the community banking industry with the same background and same work complexities. • BOLT Active Strike Forces: Professional Development Committee, Advocacy Committee, and Connections Committee.

What’s In It For Me?

• Opportunities to learn the skills needed to be a respected, contributing community banking officer able to handle increasing responsibility. • Opportunities to become more engaged in legislative, regulatory, and public affairs advocacy. • Access to a tremendous network of Wisconsin community bankers with a vast background of knowledge and experience who are willing to share it in a non- competitive environment. • Personal satisfaction in sharing the legacy of Wisconsin community banking.

For more information, contact Shannon Schlueter Director of Member Relations & Public Affairs Community Bankers of Wisconsin “Our goal is to provide 608/833-2385 Direct Line an environment where energized and [email protected] motivated members have an opportunity for peer networking, educational growth, and leadership development.”

30 Wisconsin Community Banking News November/December 2013 Interest Rate Risk Solutions

FDIC Issues Caution on Market Risk The FDIC issued a Financial Institution Letter entitled 3. In addition to regulatory capital ratios (which ex- “Managing Sensitivity to Market Risk in a Challenging cludes the AOCI adjustment), institutions should consider Interest Rate Environment.” The letter reminds banks of GAAP capital under changing rate scenarios. the importance of prudent interest rate risk oversight and 4. Finally, the FDIC guidance suggests banks consider expressed concerns about exposures to rising rates. In addi- the overall expected mark-to-market exposure on invest- tion, it specifically cautions banks about the price volatility ments and the impact of that exposure on capital adequacy exposure within investment portfolios, saying: and liquidity. • Examiners will continue to consider the amount of Given the FDIC’s new focus on GAAP capital as unrealized losses in the investment portfolio and the well as the capital adequacy and liquidity implications of degree to which institutions are exposed to the risk unrealized losses in securities (AFS or HTM), institutions of realizing losses from depreciated securities when which find that they have too much exposure to rising rates qualitatively assessing capital adequacy and liquidity will likely need to concentrate on the following options to and assigning examination ratings. mitigate that exposure: • Net unrealized losses on available-for-sale (AFS) debt 1. Reduce the risk in the investment portfolio directly securities flow through to equity capital as reported by selling more volatile securities. under U.S. generally accepted accounting principles 2. Offset the MTM risk in the investment portfolio (GAAP). Adverse trends in an institution’s GAAP eq- by using interest rate swaps. Obtaining hedge accounting uity can have negative market perception and liquidity treatment by tying the swaps to carefully selected balance implications. sheet items can mitigate earnings volatility while achiev- In the first of those two bullet points, by specifically ing desirable AOCI and market value impacts. For a more focusing on the exposure from unrealized losses (without in-depth explanation, see What’s Working – Protecting differentiating between AFS and HTM securities), the Investment Portfolio and Book Capital Values as well as FDIC indicates that it is focusing on overall risk without What’s Working – Protecting Investment Portfolio and regard for any perceived shelter from a HTM classification. Book Capital Values – Part II. Banks should be proactive in assessing their exposure Mark Evans, CFA - EVP to changing rates. Doing so requires banks: Vining Sparks/ICBA Securities 1. Ensure that they are robustly modeling their exposure to changing rates. This should include realistic We assist banks in both assessing and reducing assumptions about deposit repricing in rising rate scenarios these exposures. Please contact your Wisconsin in which competition for funding will be more aggressive. Balance Sheet Solutions Team at (800) 506-7075 2. Consider not only earnings simulations but also for further information. EVE exposures which may identify structural, longer-term mismatches between assets and liabilities.

Exclusively Endorsed by

Your Wisconsin Balance Sheet Solutions Team: Fred Kelly • Jonathan Ferebee • David Holsted 877-506-7075 ICBA Securities is a member of FINRA/SIPC 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 455 S. Junction Rd., Ste. 101 Madison, WI 53719 www.communitybankers.org

Compliance Program Highly Rated by Wisconsin Community Bankers For the 12th 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 website hosted by Young & Associates that provides timely compliance information and tools. The quarterly compliance seminars offer peer networking and include a regulatory update and a comprehensive discussion of one or more compliance regulations. Attendees receive a compliance manual each quarter that is generally in excess of 200 pages that can and is used as a reference to the changing regulations and as a training manual for other employees. If you have questions, contact: Sandy Gruber at 608.833.2384, [email protected] or Rick McGuigan at 608.833.2382, [email protected]

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Community Bankers Financial Services offers a wide variety of products and ser- vices for the benefit of you, our members.For additional information on any Kevin Christians Denise Davis of our financial institution programs call CBFS at 651.687.9080.