According to current federal guidelines, Roth IRA conversions are only available to taxpayers with adjusted gross incomes of less than $100,000. That limit is being repealed in January, for most Americans, but Wisconsin residents will miss out on the opportunity for now, according to Tim Steffen, CFP and CFA at Robert W. Baird & Co.

Wisconsin residents who have already done a Roth conversion and exceed the income requirements could face several penalties, Steffen said. They include:

• A 3.3 percent early distribution penalty for the amount converted for taxpayers younger than 59.5 years old.
• Any amount that is rolled into a Roth IRA may be treated as a contribution and subjected to a $5,000 annual maximum. If the amount exceeds that limit, it may be subject to a 2 percent penalty.
• For 2010 conversions, the amount withdrawn from a traditional IRA will be taxable in Wisconsin for the year, even though federal law allows income to be spread over 2011 and 2012.

The state Department of Revenue has said previously that it will propose updating state tax code to adopt the federal changes. Those proposals have not yet been made, and would require legislative action, which will not occur until January, at the earliest.

“This means that a Wisconsin resident doing a conversion in early 2010 would face uncertainty as to the state tax treatment of the transaction,” Steffen said.

Those who wish to convert a portion of their holdings to a Roth account in anticipation of a law change can do so with little fear of negative consequences, Steffen said, because tax law allows accounts to be “re-characterized.”

“A re-characterization is essentially a way to undo the conversion transaction,” he said. “The converted amount would be rolled back into the traditional IRA and there would be no tax consequences for that year.”

Re-characterizations must be finalized by Oct. 15 of the year after the conversions, allowing Wisconsin residents until Oct. 15, 2011 if the state takes no action.

Baird’s contacts in Madison have told the company there are politicians who want to see state law changed, Steffen said.

“By all means, this is not a sure thing,” he said. “This would require bipartisan support. It’s not a done deal at all.”

PNC Financial Services Group Inc., the Pittsburgh-based corporate parent of PNC Bank, has announced that its conversion of former National City Bank branches in Wisconsin will be completed by June, 2010.

Last week, PNC finished converting 240 branches in Pennsylvania, Ohio and Florida. The former National City branches opened as PNC Bank branches last Monday.

“We wanted a seamless transition for our customers and I believe we have achieved that goal based on the teamwork of our employees and the investments being made,” said Thomas K. Whitford, the bank’s vice chairman and leader of the conversion effort. “The tremendous leverage we expected from this transition is beginning to benefit customers and have a positive effect on our performance.”

National City branches in Wisconsin will be converted at the same time as branches in Indiana, Illinois and Missouri. PNC will convert branches in Kentucky, northern southeastern Indiana and southern Ohio in February, 2010. National City branches in northern Ohio and Michigan will be converted in April.

West Allis-based Merge Healthcare expects to raise more than $27 million in direct stock offerings with selected institutional investors. The transaction is expected to close Wednesday, and consists of the sale of almost 9.1 million shares of Merge’s common stock at $3 per share.

The company intends to use the funds raised from the offering to repay senior debt and for working capital. Chicago’s William Blair & Co. acted as lead placement agent, while Craig-Hallum Capital Group and Robert W. Baird & Co. served as co-placement agents.

Ridgestone Bank provides $21 million in USDA lending

Brookfield-based Ridgestone Bank, the second leading USDA lender in the country, recently made nearly $21 million in USDA-backed loans to businesses in Wisconsin and Minnesota.

The loans were made to Racine-based Johnson Outdoors and Albany, Minn.-based Avon Plastics, and were made to finance growth and retain jobs, the bank said.

The American Recovery and Reinvestment Act of 2009 (ARRA) provided the USDA with nearly $28 billion in funding, which is expected to generate about $52 billion through several loan guarantee programs.

"Our focus on government-guaranteed lending has helped us to work with the USDA to support our business customers, says Eric Manke, senior vice president and commercial team manager in Brookfield. "The ARRA funds made available through the USDA provide a much-needed resource for businesses with locations in rural areas."

Associated Bank ordered to maintain elevated capital levels to offset losses

According to a Nov. 5 filing with the SEC, Associated Bank has been ordered by the federal Comptroller of the Currency (OCC) to develop, implement and maintain processes to improve the risk management of its loan portfolio.

Beginning March 31, 2010, the bank will maintain minimum capital ratios of 8 percent of Tier 1 capital to total average assets and 12 percent of total capital to risk-weighted assets. As of Sept. 30, Associated’s capital ratios were 8.33 percent and 13.11 percent.

“As a result of the MOU (memorandum of understanding), the bank’s lending activities and capital levels are now subject to increased regulatory oversight,” the SEC filing states. “The terms of the MOU may affect our liquidity.”

Chase to hire 1,200 loan officers

Chase, one of the nation's leading home lenders, plans to hire 1,200 mortgage loan officers by the end of 2010, increasing its sales force 60 percent to help more customers finance home purchases or reduce their monthly payments through refinances.

"We have made a number of strategic investments in our organization," said Dave Lowman, head of home lending at Chase. "We have invested in new systems, aggressively grown our capacity and now are looking to increase our sales force. With our vast branch network and growing customer base, the opportunity for Chase loan officers is tremendous."

A company spokesperson said the bank will only hire a handful of new mortgage lenders in Wisconsin. Most of the new hires will be in states that had a significant number of branches for Washington Mutual Inc., which was acquired by Chase in September, 2008.

New loan officers will serve customers through bank branches in 23 states - including key states such as California, Florida and Texas and key metro areas such as New York and Chicago, as well as metro markets outside the bank's branch footprint, such as Boston, St. Louis and Washington, D.C.

Safway to be acquired by New York private equity investors

Odyssey Investment Partners LLC, a New York-based private equity firm, has reached terms to acquire Waukesha-based ThyssenKrupp Safway Inc., a renter and erector of construction scaffolding that has 5,000 employees in the U.S. and Canada.

Terms of the acquisition were not disclosed. It is expected to close in the first quarter of 2010.

Safway is currently owned by ThyssenKrupp AG, a German industrial material and technology company.

“Safway has posted outstanding financial performance under ThyssenKrupp’s ownership,” said Douglas Rotatori, managing principal of Odyssey Investment Partners. “The company is a leader in the scaffolding sector, with strong prospects and acquiring this business presents an attractive opportunity to build on our record. We look forward to working with Safway’s management to enhance the company’s long-term value.”

Waukesha ultrasound company acquires Chicago firm

Waukesha-based MedPro Imaging, a provider of new and refurbished ultrasound solutions, has acquired MC Ultrasound LLC, an on-site ultrasound provider for high quality, reliable ultrasound staffing and services throughout the Chicago area.

"MC Ultrasound has an outstanding reputation for quality services and customer service," said Charles Jahnke, president and chief executive officer of MedPro Imaging. "We share the common goal of providing the right solutions to fulfill our customers' ultrasound imaging needs. This acquisition is a natural addition to our growing family of products and services."

MC Ultrasound, which was founded 10 years ago by Robin Hoffman, provides affordable services to private medical groups, community centers and facilities. The services include cardiovascular (adult and pediatric), vascular, women's health, abdominal, small parts and MSK exams.

"We are excited to become part of MedPro Imaging and the growth opportunity this affords," Hoffman said. "We are committed to offering services to a diverse array of patient populations. This acquisition will result in even greater services to our customers and their patients, further supporting our mission to provide high quality, reliable and professional on-site diagnostic medical sonography to all types of medical practices."

For many investors, investing typically begins with one stock or mutual fund. Over time, other selections are added because many people understand it may not be prudent to invest everything in a single security, even if it has a “blue chip” reputation.

However, just “spreading money around” in a haphazard way may create only an illusion of diversification.

If you have assembled a hodgepodge portfolio, you may not know the extent to which your investments are (or are not) consistent with your objectives.

A sound portfolio management strategy begins with asset allocation, dividing investments among equities, bonds and cash. Since each category has unique characteristics, they rarely rise or fall at the same time. Still two nagging questions remain: What factors guide the asset allocation process? How much of a portfolio should go into each category?

For more, click here.

Brookfield-based Vrakas/Blum S.C. recently hired Katherine Minckler, CPA as a manager in its tax department. Minckler worked previously for the accounting firms Benton & Bray, P.S. and BDO Seidman, LLP.

Minckler is a member of the American Institute of Certified Public Accountants (AICPA), Wisconsin Institute of Certified Public Accountants (WICPA) and the Beta Alpha Psi alumni association.

“Considering the extensive experience and knowledge Katherine brings to the table, adding her to our team was an easy decision for us to make,” said James A. Holmes, CPA, managing shareholder and president of Vrakas/Blum. “We are excited for her future contributions to the success of both our firm and our clients.”

Jacobus Wealth Management, Inc., a Wauwatosa-based comprehensive wealth management and financial planning firm, has promoted Brian Janecke, CPA, to director of taxation and planning. Janecke will work closely with clients and other tax professionals on tax advisory, compliance and financial planning services.

He has served associate director of accounting since 2005. 

“Brian’s experience in providing value-added, client-focused advisory tax services is an outstanding asset for our clients. We look forward to Brian’s involvement in deepening our financial planning services to meet evolving client needs,” said Richard Jacobus, chairman of Jacobus Wealth Management. 

Northwestern Mutual honors seven Milwaukee area financial reps

In recognition of their outstanding performance, seven Milwaukee area financial representatives were recently invited by Northwestern Mutual to its annual Northwestern Mutual Forum, held Nov. 8-11 in Scottsdale, Ariz.

The representatives were: Ronald V. Krizek, CLU, ChFC; Jerry J. David, CLU, CFP; Mark P. Schueller, CLU, ChFC; R. David Fritz Jr., CLU; Tim R. Neumann, CLU, ChFC; Patrick T. Horne, CLU, ChFC; and Patrick J. Marget, CLU, CFP.

Krizek is a representative with The Holter Financial Group, based in Elm Grove. Horne, Marget, Fritz Jr., and David are representatives with the Cornerstone Financial Group, based in Milwaukee. Schueller is a representative with The Holter Financial Group, based in Glendale.  Neumann is a representative with The Gruenstern Group, based in Germantown.

“Challenging times call for financial security strategies, and in Milwaukee, these representatives led the way this year, helping hundreds of families protect what matters most,” said Northwestern Mutual Senior Vice President Todd M. Schoon. “Today, in Milwaukee and around the country, the importance of a long-term financial strategy is crystal clear, and financial professionals like these seven have never been more valuable.”

Baird analysts predict slow but steady uptick in manufacturing, transportation and industrial areas

Manufacturing and transportation companies have seen falling order levels flatten out over the last six months and some sectors can expect a limited recovery in 2010, according to several analysts with Milwaukee-based Robert W. Baird & Co. that cover those sectors. Read more in this week’s edition of BizTimes Manufacturing Weekly.

Real estate experts say we’re in a ‘U-shaped’ recovery

The U.S. economy is in the midst of a “U-shaped” recovery that will continue to be sluggish in 2010 but pick up steam by 2011 and beyond.

That was the consensus outlook of a national panel of experts speaking at last week’s BizTimes Commercial Real Estate & Development Conference this morning at Potawatomi Bingo Casino. More than 400 people attended the conference.

For the short term, the panelists expect a “jobless recovery.”

They are encouraged that the nation’s gross domestic product improved in the third quarter. Employment will be the next lagging indicator, followed by occupancy rates at properties.

The panelists are most bullish on the industrial space market, and they said that should bode well for the Milwaukee region, rather than the coasts.

“I think Milwaukee and the Midwest in general is the best-positioned region in the United States. I would be rather upbeat. It will be slow, but it will be steady,” said Rhyne Brown, executive vice president of client development at NAI Global.

Jack Durburg, executive managing director of the Chicago region for CB Richard Ellis, and Ross Moore, executive vice president and director of market and economic research at Colliers International, agreed that the industrial property market is better-positioned for recovery than office or retail.

As jobs are created, consumer spending will rise, followed by the need for additional manufacturing and distribution, which will benefit the Midwest, according to panelist Maria Sicola, executive managing director and head of research for the Americas at Cushman & Wakefield Inc. in San Francisco.

Robert Bach, senior vice president and chief economist of Grubb & Ellis Co., said the industrial market is challenged by a shortage of demand, rather than an “over-supply” problem.

The panelists said they are “doves” about worrying about the threat of inflation, and they said the credit markets are slowly loosening.

Banks are engaged in a practice of “extend and pretend” in addressing distressed real estate liabilities on their balance sheets.

Brown predicted a “managed tsunami” of bad commercial real estate debt coming due, and he said up to 200 more banks may need to be closed by the Federal Deposit Insurance Corp. (FDIC).

Bittles notes ‘generational shift’ to more savings

The economy is undergoing a “generational shift” toward saving and investing, and the shift is paving the way for economic recovery, according to Bruce Bittles, chief investment strategist for Robert W. Baird & Co. Inc., and Rod Smyth, chief investment strategist and founding partner for Riverfront Investment Group.

Bittles and Baird offered their 2010 outlook as part of a Baird Market and Economic Outlook event last week.

Unquestionably, the past 18 months have been one of the most dramatic periods in the history of the U.S. economy and financial markets, Bittles said. The good news, according to Bittles, is that it appears the economy has survived, and there are signs of economic improvement.

"Fundamentally, we're experiencing a generational shift from borrowing and spending toward a renewed focus on saving and investing, and a movement away from risk," Bittles said. "It's encouraging that consumers are beginning to pay down some of their debt. This increase in savings and investing will lay the foundation for a new secular bull market."

Smyth added, "It is the paradox of thrift. While it is undoubtedly right for individuals to save in this environment - and there will not be sustainable growth without it - if everyone saves, no one spends. Policymakers are facing a difficult choice.”

The Wisconsin Bankers Association (WBA) will host a “Business Credit Availability Forum” on Thursday, Jan. 14 at the Monona Terrace, Madison. The event will be held in conjunction with the 2010 Wisconsin Economic Forecast Luncheon, also held at Monona Terrace.

The forum will outline the factors impacting credit availability to businesses in Wisconsin. UW-Madison Professor Jim Johannes will provide a background briefing on current lending trends. A panel discussion, including representatives from the banking industry, government and other sectors will follow. This year’s speakers are UW-Madison Business School Dean Michael Knetter and Federal Reserve Bank of Chicago Senior Economist Sam Kahan.

The Milwaukee Jewish Federation will present its annual Economic Forum today from noon to 1:30 p.m. in the Rubenstein Pavilion of the Jewish Home and Care Center at 1414 N. Prospect Ave., Milwaukee. The event will feature a presentation by Milwaukee Mayor Tom Barrett, who is a Democratic Party candidate for governor. Cost is $15 per person, and registration is available at www.milwaukeejewish.org.

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