Going Mobile
Community banks investing in on-the-go customers

By Becky Nelson

Mobile banking may not yet be a high priority for current and potential customers, but savvy community bankers are preparing for it to happen.

Today about one-fourth, or 27 percent, of community banks offer mobile banking services, with many planning to introduce or expand the service in the next 18 months, according to a national survey by Banc Investment Group.

“Many community banks are full steam ahead in the evaluation phase, with a lot of community banks having deployed a mobile solution already. There’s very strong interest currently – I would say urgent interest in some cases, even in the current environment,” said Amy Wilkinson, a product manager for Fiserv Mobile Solutions.

As people increasingly access the Internet using smartphones – more than 50 percent of cell phone users are expected to have them by 2015 – the potential for banks to pique the public’s interest in mobile banking will only continue to grow.

An estimated 58 percent of Americans used a mobile device for non-voice activities such as texting, e-mailing, taking pictures or capturing video, or looking for directions, according to the Pew Internet & American Life Project Survey in late 2007.

“Community bankers across the country view mobile banking as a must-have to meet both retail and commercial demand,” said Chris Nichols, CEO of Banc Investment Group, in a news article. “Banks that already have a mobile platform have a temporary competitive advantage that
will narrow as more banks offer the service.”

In Wisconsin, as elsewhere, banks vary widely in the pace at which they are offering mobile banking options to their customers.

PyraMax Bank in Milwaukee, with close to $500 million in assets, launched a mobile banking pilot program two years ago and has steadily enhanced its offerings. Bank of Sun Prairie, a $311 million bank near Madison, introduced mobile banking earlier this year and is focusing on adding users.

Aiming Younger
Three years ago, PyraMax Bank took a closer look at its demographics and found the average age of its customers was 58. When the mutual savings bank decided to shift its focus and try to attract more 20- to 40-year-olds, “we noticed that almost all of them were carrying cell phones,” said Karen Murphy, senior vice president – retail banking.

“We needed to make it easier for the individual sitting in the parking lot, watching their kids at soccer practice from their car, to do their banking,” Murphy said.

A short time later, the bank agreed to participate in a pilot for their core processor’s mobile banking product, which relied upon a secure ATM line to conduct mobile transactions. The four-month program was “slightly successful,” Murphy said.

Because the technology was still in its infancy, the company had to negotiate agreements with each cellular carrier in order to offer the service to that carrier’s customers. As a result, many of PyraMax’s customers initially could not use the service.

That soon changed when the bank began offering customers a mobile browser-based service.

Now, any customer with Internet access on his or her phone could check balances, transfer funds and more. In May, PyraMax introduced a branded iPhone application, available to download online.

A new account – meChecking – offers customers freebies and deals on concert tickets and iTunes downloads along with free online banking, bill payment and of course, mobile banking.

Adoption has increased significantly in 2010, Murphy said. In the first year and a half, about 100 customers used mobile banking; now close to 500 do.

For Bank of Sun Prairie, the age of its current money between accounts; or perform other transactions available via online banking. The adoption rate has “not been as fast as we hoped, but we’re slowly gaining some new users every month,” said Deb Krebs, marketing manager.

Nationally, the adoption rate was 2 percent in 2007; 7 percent in 2008; and 11 percent in 2009, according to Mercatus Advisory Group in Bank Technology News.

A New Channel
The top 200 banks in the nation, defined by asset size, have already invested in mobile banking – and the top 50 are “pushing the envelope compared to what mobile banking and payments have been defined as,” said Calvin Grimes, Fiserv mobile product manager.

Now, many of them are moving to their next phase. “Some of the earlier products that were available in the mobile space were limited in their channels,” Fiserv’s Wilkinson explained. “Now many of those that
already had a solution in place are re-evaluating to consider offering all three channels.”

The three major types of mobile banking that dominate right now are expected to continue through at least 2013, according to Juniper Research. They are:
• Message-based mobile banking, which uses text (SMS) messages to alert customers of account activity.
• Mobile browsers, which allow users to view an abbreviated version of the bank’s online banking site and conduct certain transactions.
• Downloadable applications, which are often tailored to each specific kind of smartphone and offer the ability to view account balances, transfer funds and pay bills.

Nearly 90 percent of community banks that offer mobile banking are considering an enhancement to their existing platform, the Banc Investment Group survey found, such as adding smartphone apps for the iPhone, BlackBerry and Android.

“Financial institutions really need to understand that No. 1, mobile is a separate channel. It’s not Online 2.0, and you do need to think about it differently,” Grimes said. “Think about consumers that aren’t online bankers today. Those are the consumers that are walking around with a mobile device even though they may not have easy access to a PC, which is maybe a barrier for them using the online channel.”

When online banking and bill pay were introduced, consumers were worried about security and value – the same issues that concern customers about mobile banking. Banks need to devote adequate resources to marketing to address these issues, Grimes continued.

Finally, bankers should not assume that mobile banking is all about reaching the Gen Y crowd, Grimes said.

“The economy over the last couple years has definitely increased the amount of time and amount of effort consumers spend looking at their finances. This is a tool to help you monitor your finances while you’re out on the go,” he said. “Maybe you’re shopping, and you want to know, ‘Do I have enough money to make this a debit transaction or do I need to pull out my credit card?’ ”

Or, as Jim Bruene wrote on the NetBanker blog: “If you are still unconvinced that mobile will overtake online for banking tasks, here’s a thought: Consider how often you go online now to check the local weather. A waste of time – right? – when all you have to do is press a button on your smartphone. The same near-instant response will happen for basic banking info.”

Nelson is a freelance writer for the Wisconsin Bankers Association.

Aloe often takes top billing for soothing scrapes, sunburns and more, but a tiny berry called sea buckthorn is the main ingredient in a gentle, multi-purpose botanical blend that has generated overnight relief from skin damage, irritation, itching and scarring.

Boise, Idaho (PRWEB) July 20, 2010 — Painful skin conditions take time, TLC and sometimes, a boost from nature to heal.

Seeking a gentle way to treat the every-day scrapes and scratches of her four children, BodyVerde.com founder Sue Donnellan went to the lab to develop a mix of botanicals to speed skin’s natural ability to heal itself. Her research led her to time-tested plant and sea extracts, including a tiny berry native to Asia called sea buckthorn.

In all, there are 16 skin-healing extracts in BodyVerde’s Miracle Skin Renew Serum.

“It literally began working overnight to heal wounds and prevent scars,” Donnellan said. “I knew we had hit upon a safe, effective remedy, but the proof truly was in the results that my family, friends and customers experienced.”

Donnellan found many other types of injuries on which to try her new formula, such as sunburns, cuts and insect bites. There were her own complaints as a busy working mom: cracked hands, chapped lips and wrinkles. She even tried it on the family dog’s sores. Miracle Skin Renew Serum worked time and time again.

She continues to hear of new uses. “I have it in every bathroom (and diaper bag, too). I use it as my under-eye night treatment and it has reduced my redness significantly in just a few weeks. I use it on my cuticles from the dry winter air. And, most importantly, I use it on my kids. Since it’s all natural, I can use it when my son’s fingernails cut his face and not worry about him digesting chemicals,” wrote Tracey Tanner in Boston.

Another customer wrote to describe how the serum healed a zip line injury on her son’s neck in five days. A man experiencing hair loss wrote that Miracle Skin helped soothe his itchy scalp. One talked of nearly eliminating the red, scaly eczema between her fingers within the first few days. Some even included before-and-after photos.

The serum’s main ingredient is sea buckthorn, which has long been used for skin therapy. Rich in healing vitamins, carotenoids and fatty acids, sea buckthorn has also been used to treat chemical and radiation burns – in fact, Russian cosmonauts used it to protect them from cosmic radiation.

Unlike many other topical treatments available, Miracle Skin Renew Serum contains no preservatives, parabens, propylene glycol, mineral oil or color. As BodyVerde pointed out in a recent e-report, the typical U.S. consumer uses about 10 health and beauty products every day that contain an average of 126 different chemicals.

BodyVerde’s Miracle Skin Renew Serum sells for $10.99 at www.bodyverde.com/bv/products/miracle-skin-renew-serum.

About BodyVerde:
Nature’s perfection is the inspiration for BodyVerde’s effective and affordable skin care products. We apply our family values to our product development, using only safe and gentle botanical ingredients to promote self-healing from within. Go to www.bodyverde.com to sign up for Body Buzz, our e-newsletter, and receive as a bonus a new e-report, The Secret to Beautiful Skin: 10 Reasons to Choose Natural Skin Care Products for You and Your Family.

Contact: Becky Nelson, public relations
BodyVerde
(608) 513-9203
(608) 513-9203
www.bodyverde.com
# # #

Voice of Experience
New WBA Chairman Bob Just relies on member support to prevent banking from taking any more of the blame

By Becky Nelson

Ask Bob Just whether he finds it daunting to become the Wisconsin Bankers Association chairman during a recession and an election year, and he will calmly say that there has never been a time when the industry was not demanding.

“As I look back on my career, it’s been pretty steady that way. Banking has taken it on the chin; we’ve not received a lot of good publicity. Most of it has been unwarranted and that’s very disappointing to all of us,” said Just, president and CEO of Mound City Bank, based in Platteville.Just acknowledges that the next year will be a busy time as lawmakers grapple with economic recovery and attempt to refine financial reform legislation.

He brings to his role 39 years of banking experience and a work ethic that took him from teller to bank president during that time. Yet he maintains a sincere humility about his achievements. “I was the beneficiary of a great opportunity,” he said, quick to acknowledge the efforts of others.

‘Standards Have Not Changed’
Just grew up in Wauwatosa, where he graduated from high school in 1965. He attended the University of Wisconsin-Platteville, where he met his wife, Joan, and earned a degree in political science and history.

With teaching in mind, he attended one semester of graduate school at Northern Illinois University – but Platteville was already home, and Joan already had a teaching job there.

Seeking a temporary job, Just became a teller at Mound City Bank in 1971. The bank had just $16 million in assets then, with two locations and eight employees. Just also spent time working in the trust department, then operations and consumer lending.

He was managing the bank’s securities portfolio and regulatory reporting by the time the previous president, Morlan Melby, announced his retirement.

“I had gained his trust and respect,” Just said. “He taught me everything he knew about banking. Things have changed, obviously, since his time, but he introduced me to a lot of standards that have not changed – standards that remain important today.”

Just became president of the bank in 1986, toward the end of the agricultural crisis. “We faced some troubled times with our agricultural loan portfolio. The year I took over, the bank reported its first loss
to shareholders, and it took us two or three years to get back to a satisfactory profit,” he said. “But we came through it in good shape; we minimized foreclosure activity. We negotiated a lot of problems without getting into confrontations with our borrowers.”

Mound City Bank added its second branch in Cuba City (the first was in Belmont) in 1992, doubled the size of the main office in 1995, and built a new motor branch across the street from the main office in 1996. Additional branches followed in Mount Horeb in 2007 and Mineral Point
in 2008.

Just said that one of his – and his bank’s – most significant accomplishments was the creation of a holding company in 1997, which allowed the bank to retain its independence. Today the bank has 66 employees and $256 million in assets.

‘Many Don’t Understand’
Just completed the Graduate School of Banking program at the University of Wisconsin-Madison in 1986, the year he became president, and rounded out his education with leadership in organizations including the United Way, Chamber of Commerce board, the Jaycees, the Southwest Health Center, and Platteville Business Incubator, Inc.

He learned from other bankers by serving on the board of directors for Bankers’ Bank in Madison under the leadership of Helge Christiansen. “I received far more than I gave,” Just said of his six-year term.

He got involved with the Wisconsin Bankers Association through the
Government Relations Committee (GRC) – a natural fit with his interest in politics. After serving as chair of the GRC, Just joined the WBA Board of Directors.

“Having a feel for the legislative process, and understanding the issues under consideration, was valuable in helping our bank in the planning process,” Just said.

“One of the biggest surprises from visiting our representatives in Washington and Madison is what little understanding they have of banking issues,” he continued. “Remarkably, many don’t even understand that credit unions don’t pay taxes – and even more disturbing, they don’t understand the competitive advantage
afforded them over banks or the long-term effects the policy will have on future tax revenues.”

‘We’ve Been Fortunate’
Happily, the economic recession has not made a dramatic impact on Mound City Bank.

“We’ve been pretty fortunate in Platteville,” Just said, noting that the bank’s foreclosure rate remains one to three per year, the same as before the recession. “The credit problems that we are experiencing are similar to what the other banks in Wisconsin are experiencing, and that’s in regards to commercial loan participations. We are working our way through those, and our exposure has been reduced significantly over the past year.”

From a regulatory perspective, Just said his bank is fortunate to be at a size to afford a full-time compliance officer and an internal auditor on staff, which is not the case for all community banks.

“Some of the newer policies within the regulatory reform bill will do further damage to our community banks and make it that much more difficult for them to be profitable, at very little advantage for the
consumer,” he said.

Mound City Bank also has committed the staff to keeping up with technological advances and social media trends. “Because we’re in a university community, it’s important to us to be current on banking
delivery systems,” Just said.

All WBA member institutions – in particular, smaller community banks – could benefit by using the association’s resources more extensively, he said. “Most of our members do, and can see that benefit, but there are others that are not utilizing products and services that would allow them to take full advantage of their WBA membership.”

‘There is Definite Concern’
“It is more important today than ever before for bankers to remain engaged with WBA,” Just said. “There is a definite concern that discouragement over bad PR for the industry, combined with troubling asset quality and less-than-optimum earnings will result in fatigue for
our bankers.”

The answer, he believes, is getting more members more involved with the association – through participating in a committee or section, attending conferences and continuing education events, enrolling a future senior manager in the Leadership Program and more.

Broader member participation would allow for “the exchange of ideas from bankers who are currently not communicating with us – and that would have a positive impact on the entire banking community,” resulting in a more unified voice for the industry, Just told the WBA Board and staff as he was inducted as chairman on June 9.

Strengthening grassroots advocacy will be Just’s biggest priority for the year ahead. “Our lobbyists do a fantastic job, but the loudest and most clear voice is going to come from the banker himself or herself,” he said.

The goal is threefold: to increase grassroots communications from bank leaders and staff to their elected officials; to improve fundraising to “increase the power of our purse strings,” and to encourage bankers, directors, employees and associates to get out the vote for banking- and business-friendly representation.

As he begins the role of WBA chairman, Just will have the support of his family – and his bank family.

He and his wife, Joan, have two children and four grandchildren. Daughter Sara and her husband, Tom Koeppen, live in Burlington with their two sons, Ryan, 8, and Joey, 5. Son Michael and his wife Katie also live in Burlington with their daughter Hayden, 3, and son Robbie, 2. “We find a lot of excuses to go to Burlington,” Just said.

The couple also enjoys playing golf, fishing and watching UW-Platteville Pioneers basketball, Badgers football and basketball, Brewers and Packers games.

Joan is a volunteer for Southwest Health Center and other community organizations.

The emphasis on family extends to work as well. “We have the most amazing family environment imaginable. We see each other through the good times and the bad times,” said longtime internal auditor Patti Cullen.

“I’ve worked with Bob for 30 years and watched him evolve from a loan and trust officer to becoming Mound City Bank’s reputable bank president,” she continued. “He’s consistently genuine to his stockholders, directors, employees, customers and community.”

Nelson is a freelance writer for the Wisconsin Bankers Association.

Don’t Overlook the Details in a Robbery Situation
Despite increase in takeovers, banks are keeping their bank staff and customers safe

By Becky Nelson

Wisconsin bank robberies aren’t increasing in number, but they are becoming more violent.

Of the 95 bank and credit union robberies in 2009, 19 were takeover-style crimes and two ended in shootouts with suspect fatalities, according to Federal Bureau of Investigation (FBI) statistics. To banks’ credit, no employees or customers were seriously injured.

When it comes to preventing or solving these crimes, sometimes the devil truly is in the details.

Efforts such as keeping windows free of obstructions and greeting each customer when they walk in can help deter would-be robbers. A visit from a bank executive and providing immediate counseling services can help restore employee trust should the unthinkable occur. And having tellers call 911 them-selves and putting a GPS tracking device in the stolen money can help catch criminals.

“Any time you are robbed, the person has evaluated your branch in advance and has found it to be weak,” said Barry Thompson of New York-based Thompson Consulting Group LLC and a past speaker at the annual WBA Security & Financial Crimes Conference.

Preventative Measures
Ben Hruz, bank robbery coordinator for the FBI in Milwaukee, collects data from each robbery to track numbers and trends and to look for similarities. The agency also helps local law enforcement with investigations, particularly in violent or serial crimes.

So far in 2010, there have been 33 bank robberies in the state, and it’s common to see more of them in the fall, he said.

“We try to reiterate with banks that they follow the security procedures they’ve been trained on and not become complacent,” Hruz said. “Things like opening procedures and taking different routes home from the bank. Making sure that tellers make eye contact with people that enter the bank. Asking them to remove sunglasses and hats – that can have an effect on stopping less violent offenders.”

WBA, along with the FBI, the Department of Justice and the Milwaukee Police Department, kicked off a No Hats, No Hoods, No Sunglasses, No Guns program last July to coincide with the opening of the movie “Public Enemies.” (See www.wisbank.com/nohatsnohoods for free
signage and information.)

Debbie Cottone, branch manager and security officer for Milwaukee-based Layton State Bank, said that the policy helped her bank avoid a robbery in late April.

A man came into the bank’s Forest Home branch at 4:30 on a Monday afternoon, wearing a stocking cap, hooded sweatshirt and sunglasses,
Cottone said. A teller loudly asked the man to remove his sunglasses as he approached, asking for change for a $5 bill. When he refused, the teller repeated the request. When the man began to remove his hands from his pockets, the teller noticed he had on blue latex gloves. When a security guard approached him, he left without incident.

A man with the same appearance – wearing the same blue gloves – robbed a bank in another community a few days later.

Layton State Bank implemented the policy about a year ago, Cottone said. “At first customers kind of laughed about it, especially regulars. We let them know that this is our policy, and we take it seriously because of the security risk.”

Dean Koepke, security officer at River Valley Bank, Wausau, and a member of the WBA Financial Crimes Committee, encouraged his bank’s senior management to implement such a policy after a national franchise urged citizens to take advantage of their right to carry weapons openly. The policy doesn’t seem to be an issue with customers, he said.

“You cannot be selective,” cautions Thompson. “If you require it of a blue person, you must do the same with a yellow person. Whether it would be a threat or not determines how you enforce the policy.”

As part of his consulting business, Thompson conducts security assessments to help banks prevent problems. By inspecting banks during the day and at night, he looks to see whether an institution is inadvertently making itself a target for crime through inadequate lighting; tall plantings that give robbers a place to hide; or a lobby that is not visible to the street, either by design or by having blinds or advertising signage obscuring a robbery from passers-by.

Sometimes just a simple “hello” can help prevent crime, as proven by the FBI’s SafeCatch program in Seattle, a banker training program that
reduced the number of bank robberies by 51 percent in its first decade.

“We can stop a robbery if someone would just speak to a person as they’re looking at the teller line or standing at a check-writing desk. If we’re very friendly, they will probably leave,” Thompson said.

Solvable Crimes
The percentage of takeover-style robberies, in which a suspect displays a weapon and takes control of the bank, has remained around 20 percent for the past few years, up from 5 percent to 10 percent of all robberies previously, the FBI’s Hruz said.

Although more than half (56) of all bank robberies occurred in the five-county Milwaukee metro area, violent incidents occur elsewhere as well. Recent holdups have occurred in the Madison and Eau Claire areas, and one of the fatal shootouts occurred last fall in Sawyer County in rural northern Wisconsin. A suspect was killed after he led police on a chase and shot at them. The other happened on a spring morning in Fox Point, a small Milwaukee-area suburb, when officers pulled over the suspect’s car and he fired at them.

Wisconsin recently had its first case of recovered loot using a GPS-tracking device. When a robber leaves a bank with a GPS device in the money, an alert goes out to police dispatch and to the FBI to help local law enforcement catch him or her within that first critical five to 10 minutes, Hruz explained.

“They’re smaller and less noticeable by offenders,” he said. “They might cost a little bit more than dye packs, but we know they work.”

The best leads are those from victim tellers, citizen witnesses and tips that come in after a case is in the media – which is why it’s important that banks install the best video equipment possible, Hruz said.

Thompson emphasized the importance of having the victim teller call 911 immediately after the robber leaves and the doors are locked. “He or she is immediately giving the best information available directly to the police,” he said. It also helps the teller to regain control over the situation, which can be critical from a psychological perspective.

He recommends that by the next day, the bank CEO or other high-ranking officer should visit the branch that was robbed. “I like to see flowers for the ladies and something for the men, like t-shirts or a dinner – anything to say thank you. It’s not a part of their job,” Thompson said.

Counseling should begin right away, with an agency that has been put in place before a robbery occurs.

To date, 72 percent of Wisconsin’s 2009 robberies have been solved with arrests made. Because robbers often keep committing crimes until they are caught, communication between agencies and jurisdictions is critical. (WBA offers member banks access to a free online database to track robberies and other crimes at www.fincrime.com.)

“We have a good relationship with local law enforcement and the banking community,” Hruz said. “We need bankers aiding us – they are our first responders.”

Nelson is a freelance writer for the Wisconsin Bankers Association.

EZ Waterless Shave from BodyVerde.com is changing the way men and women shave by cutting shave time in half, with no lathering or rinsing, no waste of water and an all-natural formula.

BOISE, Idaho (PRWeb) April 22, 2010 – BodyVerde is introducing a brand-new waterless shave formula just in time for summer. EZ Waterless Shave cuts shaving time in half and saves water, making it easier to shave anywhere, at any time, with botanical moisturizers that minimize razor burns and bumps.

With EZ Waterless Shave from BodyVerde.com, there’s no lathering or rinsing. Traditional shaving typically uses three to five gallons of water at a sink or up to five gallons per minute in a shower, according to research from University of Minnesota-Extension.

Both men and women can easily make the transition to eco-shaving. Here’s how it works: Apply the ready-to-use cream, shave directly over the lotion with any razor, and rub any excess directly into skin for a smooth, non-irritating, moisturizing shave. The all-natural botanical ingredients are absorbed rather than being rinsed away, leaving skin feeling soft all day.

The special biodegradable formula of chamomile, olive oil, green tea, aloe and essential oils is unique to BodyVerde. It’s designed for use on the face or body, with a light, refreshing citrus scent that appeals to both genders.

The creative spark for EZ Waterless Shave came from soldiers deployed in the desert, who need to dry shave when water is scarce. The formula is also especially useful while traveling and staying away from home.

BodyVerde believes in offering all natural, effective and affordable skin care products that are as safe for the earth as they are for the body. That’s why all BodyVerde products are non-toxic and biodegradable, made with no parabens, no phthalates, no mineral oil, no petroleum, no synthetic preservatives, no sulfates, no propylene glycol and no color. Products are made in the USA and are not tested on animals.

Go to www.bodyverde.com to read more about natural beauty tips in the free report The Secret to Beautiful Skin: 10 Reasons to Choose Natural Skin Care Products for You and Your Family. BodyVerde also offers skin care tips via Twitter: www.twitter.com/bodyverde.
# # #
About BodyVerde:
Nature’s perfection is the inspiration for BodyVerde’s effective and affordable skin care products. We apply our family values to our product development, using only safe and gentle botanical ingredients to promote self-healing from within.

Contact information:
Becky Nelson
(608) 513-9203

By Becky Nelson

No one wants to see a bank fail, particularly in one’s own backyard. But should that situation occur a well-positioned peer institution could make an acquisition almost overnight.

When the Wisconsin Department of Financial Institutions closed the Bank of Elmwood in Racine last October, a familiar competitor – South Milwaukee-based Tri City National Bank – assumed ownership of the bank less than a week after submitting its bid.

But before that, the senior management team and board of directors at Tri City National did their research.

That’s an essential first step in a process that moves quickly once initiated. “Preparation months in advance pays off. You do not want to be in a position where you’re learning about the process and bid structures, analyzing the target institution and getting your team together at the last minute,” said R. Clark Locke, vice president at Hovde Financial, who assisted Tri-City National with the transaction.

According to the 2009 Bank Executive Survey conducted by Grant Thornton and Bank Director magazine, 42 percent of the 246 bank executives responding were interested in bidding on a failed institution. Only 2 percent of respondents had acquired a failed bank in the last year, and 7 percent had bid unsuccessfully.

With 702 banks on the FDIC’s problem list as of Dec. 31, and 37 bank failures so far this year as of March 19, qualified acquirers will see more opportunities ahead.

The Process
A bank must register on the FDIC-connect Web site to receive notices of bid opportunities and get approval from its primary regulator before bidding.

Generally, banks must be rated 1 or 2 and be at least twice the size of the failing institution, explained Brian Buchholz, a partner at Wipfli LLP in Eau Claire.

Ron Puetz, chairman and CEO of Tri City National Bank, had begun board discussions about purchasing another bank in late 2008.

In early 2009, Tri City had approached Bank of Elmwood about a possible acquisition or purchase of one or more branches. Tri City
conducted due diligence; Bank of Elmwood consulted with regulators, but no deal could be reached.

In October, after learning that the bidding process for Bank of Elmwood had begun, Puetz viewed information about the bank online and scheduled a two-day on-site due diligence appointment for four staff members.

Bank management and directors also reviewed the 86-page non-negotiable purchase and assumption agreement.

The bank team returned from the due diligence visit and met with executive management on a Thursday evening, followed with a special board meeting on Saturday. Tri City submitted its bid, due by Monday morning.

On Tuesday, Puetz learned the bid was successful. By Wednesday, the 76 examiners began making their way into town and on Thursday afternoon they met with Tri City National principals. On Friday at closing time, DFI’s Mike Mach announced Bank of Elmwood’s closing to staff and an FDIC representative shared the news that Tri City had acquired the bank.

Tri City National grew from two locations to seven, with more than $1 billion in assets. “Being in a deep recession that a fellow banker has been unable to survive – this kind of situation is not the way we planned to grow our bank,” Puetz said. “But we’re pleased that we have been successful in maintaining the Bank of Elmwood’s former customers.”

Tri City also retained Bank of Elmwood’s 80-person staff, including its former chief executive and son of its founder, Jess Levin.

“Jess is a good man. We saw the need to show his loyal customers that he’s still here,” Puetz said.

Best Practices
Tri City National followed what another consultant calls one of the best practices for potential failed-bank acquirers: making contact with the other institution before it fails.

“More often than not, these institutions are open to that type of
a dialogue and sometimes even open to sharing documents for due diligence purposes,” said John Adams, director of mergers & acquisitions at Sheshunoff & Co. Investment Banking in Dallas, Texas.

Banks must be able to objectively visualize the bank after the acquisition. “What are you left with in terms of operations, earnings and your core institution?” Adams said. “Then there’s the idea that this is, after all, a bank failure. There’s a lot of negative publicity involved and there is going to be some customer base deterioration – that needs to be factored into the analysis.”

Each piece of information becomes critical when the clock is ticking to make a bid. Adams cautions bankers that they may encounter unfamiliar accounting practices during the course of FDIC-assisted transactions.

Bidders can choose to bid with or without a loss-sharing arrangement with the FDIC, with the first being much more common.

Under a loss-sharing arrangement, the bid is comprised of a premium
on deposits (the median is 0.20 percent) and a discount on the assets (here the median is 11.9 percent), calculated net of the equity being acquired. The FDIC develops a “stated threshold” below which the FDIC shares losses 80/20 and above which they are covered 95/5.

“The acquirers’ bid should include discounts for estimated losses not covered by the FDIC and other expenses not covered by the FDIC, such as increased cost for collecting, monitoring and reporting to the FDIC for up to 10 years,” Wipfli’s Buchholz said.

Tri City’s successful bid of negative $110 million did not include loss sharing. The bank acquired approximately $290 million in loans, equal to about $190 million less the discount, as well as $250 million in deposits. Before the acquisition, the bank had a Tier 1 leverage ratio of 13.25 percent and a risk-based capital ratio of 18.4 percent.

“Would I have done anything differently? Sure,” Puetz said, citing what he calls a million-dollar mistake. “We’re still working through all of it. We believe that we have adequate discount for all of the loans, but only time will tell as we work through each and every credit, dispose of each and every piece of other real estate owned, and modify or call each of the impaired loans so that they meet our standards.”

Nelson is a freelance writer for the Wisconsin Bankers Association.

I wrote The Secret to Beautiful Skin: Top 10 Reasons to Choose Natural Skin Care Products for You and Your Family for BodyVerde, an all-natural skin care products line based in Boise, Idaho. The information is eye-opening and the products are divine.

Head on over to BodyVerde.com to read the e-report!

On a Cost-Cutting Crusade
Banks save money and resources in ways that benefit customers and staff

By Becky Nelson

Wisconsin banks are finding ways both small and large to trim facilities and operations costs, often saving energy and reducing waste in the process.

For one bank, controlling costs means handling maintenance and repairs internally rather than outsourcing. For another, it means investing upfront in more efficient fixtures that will significantly reduce electric bills in the future. Yet another focuses on renegotiating service contracts. Some rely upon a dedicated facilities manager; some on operations officers; and some even get the entire staff involved.

But no matter the bank’s assets, number of locations or staff size, there are ways to reduce spending that don’t require a great deal of additional effort.

Lydia Bessert has shared many of her ideas with fellow members of the WBA Retail Section Board. (See “Saving Money While Managing Your Facility” in the December 2009 Wisconsin Banker.) As vice president, facilities and building, at Sturgeon Bay-based Baylake Bank since 2005, Bessert has learned through experience as the bank expanded from nine to 28 locations and grew to $1 billion in assets.

She keeps careful records and prepares a quarterly report for her supervisor that details the projects she is working on and how much they have saved.

The savings are not always reflected on the bottom line, Bessert points out. “Often, the savings is money that is not spent in the first place,” she said.

It may require making an initial investment that will be repaid incrementally, as was the case with a project to install LED lighting in the outdoor signs at nine of Baylake’s locations. Focus on Energy provided rebates to cover between up to 18 percent off the cost of the project. The energy savings began immediately, totaling more than $6,000 in the first partial year.

“It’s the right thing to do, but it will take a few years to get the payback,” Bessert said. The lights have an expected lifespan of 75,000 hours, or about 17 years.

Emphasis on Efficiency

Black River Falls-based Jackson County Bank, a $212 million institution with five locations, installed new energy-efficient interior lighting. Although the payback time on the investment is four years, employees and customers noticed a difference immediately in the brighter, more natural light, said President John Drace.

The bank also replaced the water-cooled compressor on the air conditioning system with three smaller units that turn on as needed. The new system reduces water and energy usage – and results in a lower sewer tax, explained Fred Goettl, executive vice president, who is in charge of the bank’s facilities management.

But perhaps what saves the bank the most money is the “can-do” spirit of its 50-plus employees.

“We have an employee who’s pretty handy. She has the attitude, ‘We aren’t going to pay anybody to have that done; I can do that,’ ” Goettl said. Using parts from an old machine that another bank no longer wanted, she has repaired the bank’s three single-pocket proof machines to keep them running.

To reward employees, the bank has offered incentives such as a $25 gift card presented at a staff meeting for an idea that saves the bank $100 or more in a year.

“For us, it’s a culture. Our folks don’t spend or use what they don’t need,” Drace said. “There is an emphasis on always taking a look at how we can be more efficient and more cost-effective, which allows us to give better pricing to our customers.”

Less Outsourcing

Park Bank in Madison has also relied more on internal resources over the past decade. Rick Jowett, facilities manager, handles the day-to-day operations. He and Sandra Schettl, senior vice president of operations, share long-range planning responsibilities and meet weekly to discuss their role in meeting the bank’s strategic goals.

A facilities staff of one full-time and one part-time employee do much of the work at the $803 million bank’s 12 locations. They take care of most of the landscaping, lawn service, and daily garbage removal from parking lots, minor snow removal, painting, and small repairs to buildings and equipment. The software program Track-It! helps the maintenance staff prioritize their day.

“In general, our bank’s philosophy is doing things ourselves when we can versus outsourcing the service,” Schettl explained. When a branch has an immediate need, “it’s nice to have somebody on your staff to attend to it who is not wearing a business suit,” she said.

Both Schettl and Bessert, of Baylake Bank, said they participate in networking groups to generate new ideas to save on operations and facilities costs. Bessert is a member of the International Facilities Management Association, which has a Banking Institutions and Credit Unions Council and an online discussion forum. Schettl has met other operations managers through her data processor’s quarterly meetings.

More Money Savers

Reviewing contracts carefully is a must, Bessert said. As an example, her floor mat vendor raised rates by 18 percent recently, when the contract specified that rates could increase by just 6 percent annually.

Jody Moore, assistant vice president — administration for Layton State Bank, a $130 million bank based in Milwaukee, pays close attention to the bank’s snow removal contract. Rather than a contract that sets rates by the job or the hour, negotiate to pay for a set number of inches. (Moore suggests 70.)

“If snowfall for the season exceeds the stated amount in inches per your contract, you only pay for the additional inches. If snowfall is under, then smile and pay nothing extra,” she said. “The seasonal contract gives you the ability of knowing in advance what your initial costs will be, which is great for budget planning.”

“Always ask questions and request discounts,” Moore added. “Most service providers are agreeable to negotiating the cost of their services.

Other ideas that Wisconsin banks have implemented include:

• Reducing cleaning services from five days a week to fewer, longer sessions;
• Washing windows twice annually rather than monthly in the summer;
• Reviewing phone bills and disconnecting unused phone lines;
• Asking for trade-in allowances when purchasing new equipment;
• Replacing annuals with perennials in outdoor landscaping;
• Requesting a discount for prepayment (such as for fertilizer/lawn services);
• Organizing a supply swap among locations to redistribute everyday items such as file folders, binders and paper clips;
• Purchasing supplies internally rather than using a service;
• Programming thermostats to reduce heating and cooling costs at night;
• Eliminating personal heaters;
• Adding light timers;
• Reviewing and changing automated sprinklers; and
• Scaling back on interoffice deliveries.

Getting employees to help make the changes usually isn’t a hard sell, said Bessert, who has become an invaluable resource to staff not just for their everyday needs but when disaster strikes as well. She has dealt with a fire, flood, lightning strikes, and a car driving into one of the branches in just four years. “My motto is to manage buildings so managers can manage people. That’s what I keep drilling into them,” she said.

“It really comes from the top down,” Schettl said. “We try to instill the culture, ‘If you owned this company, what would you do?’ ”

Focus on Energy

Focus on Energy evaluates businesses’ energy use; offers financial assistance for energy efficiency projects and renewable energy systems; and provides technical expertise. There is no cost to participate, but to qualify for incentives the business must be served by a participating utility. Go to www.focusonenergy.com or call 1-800-762-7077 to get started.

Nelson is a freelance writer for the Wisconsin Bankers Association.

The Ascent:
An interview with Tamara Sales
Chief Financial Officer, Bioaxxess, Inc.
San Diego, California

By Becky Nelson

Standing at the base of Half Dome at 4 a.m., Tamara Sales craned her neck to look up the 5,000-feet-tall vertical granite formation that she would soon be climbing. What she felt was not fear, nor uncertainty, but rather adventure – the adrenaline coursing through her veins, preparing her for the 12-hour trek ahead. She would be navigating strenuous, narrow trails that lead to a cable-assisted vertical climb to the top. The 47-year-old looked around at her friends and family, took a deep breath, and began her steep ascent with one dedicated first step.

Only one week earlier, Tamara was sitting in her office, considering not her future attack on Half Dome, but the cash flow of the company where she was director of finance. In an interview with TFW, Tamara explained how being dedicated and focused on life’s adventures can help build a successful career.

Uphill challenge: Tamara has navigated through career challenges all along. At one point, she took a break from her own career while supporting her husband on a two-year assignment in Switzerland. Concerned that suspending her career would stifle her ambition, she sometimes questioned her decision. But she took that time to begin her family – and what she did not know was that she was setting the foundation for her future success. “You may never know what the hidden dangers are on your career path; likewise, you may never see a hidden opportunity.”

Getting on track: Back in the states, Tamara’s career took off after she earned her Certified Public Accountant (CPA) license and sharpened her technical skills. “That’s when I felt like I had a serious foundation for a career path – not just to be an accountant, but a CFO,” she says. She landed a position with a small biotech firm that had foreign operations in Switzerland, the United Kingdom and Germany. (Coincidentally, the CEO of the biotech firm was from the same village in Switzerland where she had lived.)

Tamara worked through several mergers and acquisitions that prepared her for opportunities and required that she travel internationally. She has since made other strategic professional moves, providing her with extensive business experience in the European and Asian markets.

Continuing the climb: In the workplace, knowledge and confidence are key. “Every board meeting I’ve ever been in, I’ve been the only woman – and I could have let that limit me,” she said. “But I don’t feel like I have any limitations. Your limitations are only what you think they are, what you perceive them to be.” Tamara is exploring her options for earning an executive masters in business administration, specializing in international business. “I’m 47, in the midplace of my career. If I could’ve done anything differently, I would have focused on advanced education early on,” she says. “I don’t know that you necessarily need it to do your day-to-day job, but it builds confidence.”

Help along the way: Although she doesn’t frequent networking events, Tamara credits other accountants, lawyers and professionals who helped her move up. “Our professional community is really very small, so it’s really important to foster relationships,” she says. She also made valuable connections before she needed them. “Earlier in my career, I built a relationship with a small private bank,” Tamara says. “Later, when I was part of a management buyout, I was able to get a $1 million unsecured loan from that bank that I may not have gotten otherwise.”

Support system: Tamara credits her parents and her husband’s parents for playing a key role in her career as well. “My son and daughter are very close with their grandparents, and I think that has a lot do to with all those band tournaments and orthodontist appointments they drove them to. Also, my husband, Ivan, has a fantastic career as an engineer but he was a very hands-on dad.” She is proud of the way that she and her husband raised their children, who are now in college. In the workplace, she still finds that women’s support for other women is lacking. “Sometimes women are reluctant to help other women, when in reality we should be each other’s biggest supporters. I try to mentor, train and teach each person that is working for me. It’s better for them and better for me,” she said.

Serious fun: Tamara has never believed in working 80 hours a week. “I take my work very seriously, but I equally take my play time very seriously,” she said. For Tamara and her husband, that has included volunteering countless hours with their children’s school activities, including high school marching band. When she is not golfing, hiking, biking, finding the best microbrews in San Diego, or hanging out with close friends and family, she is vacationing in a little-known remote country.

No novice to the dedication and focus one must embody to be successful, Tamara’s adventurous spirit makes her a success in the workplace and in life. Tamara and Ivan walked away from Half Dome as the only two of their party to complete the treacherous climb to the summit. “I don’t always take the safe or easy path in life,” she said, “and that makes the end result much more rewarding.”

More About Tamara
Recently read: Cradle to Cradle: Remaking the Way We Make Things by William McDonough and Michael Braungart and Twilight by Stephenie Meyer – “to see what all the hype is about.”

Best sources of info: CNN web site; American Institute of Certified Public Accountants

Can’t live without: iPhone and golf clubs