On Friday, Racine-based Bank of Elmwood became the first Wisconsin bank closed by regulators since the recession began. To date, federal officials have closed 106 banks around the country.

The Wisconsin Department of Financial Institutions ordered the bank to close and asked the Federal Deposit Insurance Corp. (FDIC) to act as receiver. Oak Creek-based Tri City National Bank purchased all of Bank of Elmwood’s deposits and most of its assets.

The Wisconsin DFI closed Bank of Elmwood because its level of non-performing loans could not be overcome, said Michael Mach, administrator of the division of banking with the state agency.

As of Sept. 30, Bank of Elmwood had $327.4 million in total assets and about $273 million in deposits.

Tri City National Bank purchased Bank of Elmwood through a competitive bidding process facilitated by the Federal Deposit Insurance Corp. (FDIC).

With the purchase of Bank of Elmwood, Tri City has 44 branches.

“This acquisition complements (Tri City’s) existing network of branches, increasing our branch footprint from two to seven locations in the Racine and Kenosha marketplace, fits well with our strategic growth plans and increases our overall branch network in southeastern Wisconsin,” said Ronald Puetz, chairman and CEO of Tri City Bankshares Corp., the corporate parent of Tri City National Bank.

“We believe this acquisition allows us to efficiently leverage our strong capital base to continue to grow the company while providing Elmwood customers with expanded services from a well capitalized financial institution.”

The FDIC estimates that the cost to its deposit insurance fund will be about $101 million, and that Tri City’s purchase of Bank of Elmwood was the least costly resolution to the situation.

The most recent bank closure in Wisconsin was on Jan. 1, 2008, according to Kurt Bauer, president and CEO of the Wisconsin Bankers Association. The relative scarcity of bank closures here says much about the state’s banking culture, he said.

“The conservative lending culture of Wisconsin banks has served our state and industry well,” Bauer said. “Economic conditions across Wisconsin are weak and because of that fact, banks will continue to face challenging times. The most important thing for the public to remember is that insured deposits are safe and that Wisconsin banks as a whole are stronger than peers nationally. While the state is clearly not immune to the effects of the economic downturn, Wisconsin banks continue to outperform their peers nationally in many key categories, including profitability, lending, deposit growth and liquidity. Wisconsin banks also report fewer problem loans than U.S. banks as a whole."

Milwaukee-based PyraMax Bank recently re-opened its location at 1605 W. Mitchell St. on Milwaukee’s south side.

The 4,242-square-foot branch was expanded and now features three drive through lanes, a walk-up ATM, and now features an Internet café and children’s play area. The $2 million project represents the bank’s commitment to serving the growing Hispanic community in the neighborhood, said Karen Murphy, senior vice president of retail banking.

“We want our customers to feel at home when they visit the bank,” she said. “We’ve added a courtyard with lots of green space and created a warm color scheme with rich earth tones and terra cotta.”

More importantly, a large portion of the staff that works at PyraMax’s Mitchell Street branch is bilingual.

The Mitchell Street branch has served as a bank for more than 95 years. Before PyraMax operated a branch there, the building was the corporate office of Mitchell Savings Bank.

National City acquisition fuels growth for PNC Financial

The PNC Financial Services Group Inc. has reported net income of $559 million, or $1 per diluted common share, for the third quarter, up from $259 million, or 70 cents per share, in the same period a year ago.

The Pittsburgh-based company said its acquisition of National City Corp. on Dec. 31, 2008, continued to exceed expectations. The transaction was accretive to year-to-date earnings and is expected to be accretive for the full year

The first major conversion of National City customers to the PNC platform is scheduled for completion by Nov. 9, with the remaining conversions to be completed by June 2010. The consolidation of bank charters is planned for early November 2009.

The company continues to expand its presence in the Milwaukee market.

"PNC continued to demonstrate its resiliency in the economic downturn with strong third quarter earnings growth," said James Rohr, chairman and chief executive officer. "Once again, we delivered pretax pre-provision earnings significantly in excess of our credit costs resulting in growth in capital. We strengthened our balance sheet, which we believe is well-positioned as the economy begins to recover and the pace of credit quality deterioration eases. Sales across the franchise were strong, and we see growing momentum as we added clients and deepened customer relationships in the quarter. We are building on the value of our combined company and are well prepared for the first wave of National City client conversions in early November. As our results demonstrate, we continue to execute against our plans to deliver significant shareholder value now and in the future."

U.S. Bank moves forward without TARP strings

U.S. Bancorp has posted third quarter net income of $603 million, or 30 cents per share, compared with $576 million, or 32 cents per share, in the same period a year ago.

Early in the third quarter, U.S. Bancorp repurchased the 10-year warrant issued to the U.S. Treasury, effectively concluding its participation in the federal Troubled Asset Relief Program (TARP).

"The cost of repurchasing the warrant was $139 million and was recorded as a reduction to shareholders' equity. We now move forward with the capacity to continue to invest, unencumbered, in our franchise and fee-based businesses, as we remain profitable during this difficult business cycle, generating capital for growth opportunities and our shareholders," said U.S. Bancorp chairman, president and chief executive officer Richard Davis.

Quarterly earnings for the Minneapolis-based parent company of U.S. Bank were driven by record total net revenue of $4.3 billion, the result of strong year-over-year growth in both net interest income and fee revenue.

The company's net charge-offs and nonperforming assets increased, but the rate of growth moderated to 12.1 percent and 9.4 percent, respectively, on a linked quarter basis

"We are operating in a challenging and uncertain economic environment, but our vision into the future is clearer today than it was just three months ago,” Davis said. “We are seeing signs of stabilization and even some improvement in the economy. While unemployment has not peaked, the rate of increase has moderated. The housing sector is weak, but the pressure on housing prices has lessened. Our commercial customers are not yet increasing the usage of their lines of credit for new investments or expansion, but they are efficiently managing their businesses through the cycle. Credit costs remain high, but the rate of deterioration has slowed. These are all indications of progress in this otherwise difficult environment."

Northern Trust reports profitable quarter

Northern Trust Corp., a Chicago-based bank that operates an office in downtown Milwaukee, reported a third-quarter profit of $187.9 million, or 77 cents per share, a vast improvement over a loss of $148.3 million, or 66 cents per share, in the same period a year ago.

The company's total quarterly revenue was $927.6 million, down 1.2 percent from a year earlier.

Frederick Waddell, president and chief executive officer of Northern Trust, said, "The financial markets continue to send mixed signals. Although equity markets improved compared with the second quarter, they remain well below year-ago levels and interest rates have fallen dramatically year-over-year. Amidst these crosscurrents, we experienced strong growth in client assets, with assets under custody increasing 11 percent and assets under management increasing 9 percent in the quarter. Our focused business model, strong balance sheet, and conservative financial management continue to position us well to serve the evolving needs of our personal and institutional clients."

During the quarter, Northern Trust repurchased the warrant that was issued to the U.S. Department of the Treasury under its Capital Purchase Program at a cost of $87 million, thereby relieving the company of any obligations to the Troubled Asset Relief Program (TARP).

Bank Mutual's provision for loan losses continues to rise

Milwaukee-based Bank Mutual Corp. reported third quarter net income of $1.2 million, or 3 cents per share, compared with $1.6 million, or 3 cents per share, in the same period a year ago.

Bank Mutual's provision for loan losses was $5.2 million in the most recent quarter, compared with $1.1 million in the same period last year.

"Our third quarter performance was affected by deterioration in the value of certain commercial and investment real estate properties that secure several of our loans,” said Michael Crowley Jr., chairman, president, and chief executive officer of Bank Mutual. “Although the impact this development had on our earnings is a disappointment to us, we are very pleased that our level of non-performing loans did not increase during the quarter. We are also pleased that our year-to-date earnings continue to exceed the previous year's results in what has proven to be a very difficult operating environment for financial institutions."

M&I seeks to balance its books by selling more stock

Marshall & Ilsley Corp., which lost $248.4 million in the third quarter, announced that it has commenced a public offering of $775 million of its common stock for sale to the public.

The Milwaukee-based parent company of M&I Bank intends to use the net proceeds of the offering for general corporate purposes and may contribute some portion of the net proceeds to the capital of its subsidiaries, which will use the contributions for their general corporate purposes.

M&I also may use a portion of the net proceeds of the offering to repurchase portions of its outstanding indebtedness.

The company today reported a third quarter net loss of $248.4 million, or 68 cents per share, compared with net income of $83.1 million, or 32 cents per share, in the same period a year ago.

M&I's provision for loan and lease losses was $578.7 million in the third quarter of 2009, which was a slight improvement over the $619.0 million in the previous quarter. The company's net charge-offs for the period were $532.7 million, which was slightly better than $603.3 million in the second quarter.

The company's early stage loan delinquencies fell $218 million, or 21 percent, from the second quarter.

"Our financial results during the third quarter of 2009 were negatively impacted by bank holding company loans and housing-related credits," said Mark Furlong, president and chief executive officer of Marshall & Ilsley Corp. "The company remains focused on the aggressive resolution of these loans in order to return M&I to profitability as soon as possible. There are some encouraging early signs that credit quality is improving, but we realize it will take a few more quarters to fully address our problem loans."

Milwaukee electrical distributor expands into Indianapolis market

Vision Control & Automation, a division of Milwaukee-based Standard Electric Supply Co., has acquired the Indianapolis location of Ohio-based distributor Richards Electric.

Vision is a family-owned electrical distributor with four locations serving Wisconsin, Illinois and Indiana and $6 million in annual sales.

Larry Stern, president of Vision, said, "Vision's goal as an electrical distributor is not only to deliver quality products on time, but also to help customers reduce their overall operating costs and increase productivity. Our new Indianapolis location also establishes Vision's commitment to become the Midwest's leading distributor of ABB products."

In addition to ABB products, Vision will also stock complimentary products in Indianapolis from suppliers such as Rittal Enclosures, Brady, Red Lion, Woodhead, Thomas & Betts and several others.

Further solidifying Vision's strength in the marketplace is its recent opening of a location in Chicago to provide industrial customers with enhanced support of ABB products.

C. Brant Ahrens has been named chief operating officer of PrivateBancorp Inc., replacing John B. "Jay" Williams, who continues as chairman of The PrivateBank Milwaukee.

Ahrens joined The PrivateBank in October 2007 and most recently served as chief strategy and marketing officer. He will continue to oversee those departments and will add oversight of the human resources, operations and information technology groups to his responsibilities.

"Brant is one of the architects of our strategic growth plan and has a deep understanding of our business objectives," said Larry Richman, president and chief executive officer. "We are pleased that he is taking on this important leadership role as we continue to build the infrastructure necessary to support our long-term growth aspirations."

Prior to joining Chicago-based PrivateBank, Ahrens was group senior vice president and head of LaSalle Bank's Financial Institutions Group.

Ahrens is on the board of directors of the Illinois Bankers Association and is chairman of the associates board of the Brain Research Foundation.

Artisan Partners CEO to purchase Erin Hills golf course

Andrew Ziegler, the co-founder and chief executive officer of Milwaukee-based Artisan Partners Limited Partnership, an institutional investment management firm, plans to purchase the Erin Hills golf course from Robert Lang, the former owner of the Lang Cos.

Located in the Washington County Town of Erin, Erin Hills opened in 2006 and received rave reviews from the golf world, which was impressed with the course's natural setting in the hilly Kettle Moraine area.

The course hosted the U.S. Women's Amateur Public Links Championship in 2008 and will host the U.S. Amateur Championship in 2011. Lang said his ultimate dream was to someday host the men's U.S. Open at the course and previously said that the United States Golf Association was considering Erin Hills for that tournament in the future.

No financial details of the transaction were disclosed.

"After 11 years as the owner and developer of Erin Hills, I welcome and support Andy Ziegler, who has the commitment and resources to take Erin Hills to the height of her potential," Lang said.

Lang has agreed to continue his relationship with Erin Hills through a 10-year consulting arrangement.

Ziegler said the course would remain open for public play.

"I see this transaction as essentially a philanthropic investment. It is a chance to do something good for the state and local community, and to give something back to golf," Ziegler said. "We intend to continue in the direction Bob Lang has started by making the investments necessary to allow Erin Hills to achieve its potential as a championship venue."

Generac plans stock offering

Privately held Generac Holdings Inc. intends to become a publicly traded company.

The Waukesha-based manufacturer of portable residential generators has filed a registration statement for a public offering of its common stock with the U.S. Securities and Exchange Commission.

Generac intends to sell its stock on the New York Stock Exchange under the ticker symbol "GNRC."

Generac was founded in 1959 in entrepreneur Robert Kern's Waukesha garage. Kern, who sold a controlling stake of the company in 2006 to CCMP Capital Advisors LLC, a Manhattan-based private equity firm, received the BizTimes Bravo! Entrepreneur Award in 2006.

J.P. Morgan Securities Inc. and Goldman, Sachs & Co. will be joint book running managers of the stock offering.

The offering will be made only by means of a prospectus. When available, copies of the preliminary prospectus relating to the offering may be obtained from: J.P. Morgan Securities at National Statement Processing, Prospectus Library, 4 Chase Metrotech Center, CS Level, Brooklyn, New York, N.Y., 11245, Phone: (718) 242-8002; or Goldman, Sachs & Co., Attn: Prospectus Department, 85 Broad St., New York, N.Y., 10004, Phone (866) 471-2526 or Prospectus-ny@ny.email.gs.com.

Chicago Fed to host conference on foreclosures in Wisconsin
The Chicago Federal Reserve Bank will host a day-long conference titled "Foreclosure in Wisconsin: Responses and Resources for Living Beyond the Bubble" on Thursday, Nov. 5, from 7:30 a.m. to 4:45 p.m. 
The event will take place at the Clarion Hotel and Conference Center on Milwaukee's south side at 5311 S. Howell Ave.
The conference will address the issues and concerns surrounding Wisconsin's increasing number of mortgage foreclosures.
The conference will be hosted by the Chicago Fed's Consumer and Community Affairs Division, in co-sponsorship with the City of Milwaukee, Marquette University Law School, the University of Wisconsin Extension, U.S. Department of Housing and Urban Development, and the Wisconsin Housing and Economic Development Authority.
Speakers will include: Milwaukee Mayor Tom Barrett; Ron Sims, deputy secretary, U.S. Department of Housing and Urban Development; and David Wilson, chancellor of the University of Wisconsin.
For additional information about the event, click http://www.chicagofed.org/news_and_conferences/conferences_and_events/2009_wisconsin_foreclosures_announcement.cfm.

Banking

• Wisconsin Department of Financial Institutions 
• Federal Deposit Insurance Corp.
• Wisconsin Bankers Association 
• Community Bankers of Wisconsin
• Wisconsin Mortgage Bankers Association
• American Bankers Association
• Bankers Association for Finance and Trade
• Commercial Finance Association 
• Risk Management Association

Mergers & Acquisitions

• Association for Corporate Growth 
• International Business Brokers Association 
• Mergers.com

Wealth Management/Financial/Retirement Planning

• Financial Planning Association
• Financial Planning Association of Southern Wisconsin
• Investment Management Consultants Association
• National Association of Personal Financial Advisors (NAPFA)

Other 

• Society of Financial Service Providers
• Small Business Administration
• State public awareness campaign
• Wisconsin Credit Union League
• CFA Institute
• CFA Society of Milwaukee
• Wisconsin Angel Network