Milwaukee-based Guaranty Bank was issued a cease and desist order by the Central division of the U.S. Office of Thrift Supervision last week, in which the bank was ordered to “cease and desist from any unsafe and unsound practice,” which resulted in diminished capital, poor earnings, high levels of classified assets, and inadequate policies and procedures that were discovered in a July, 2008 report by the OTS.

The bank’s board of directors, according to the report, must approve a plan to reduce its levels of poorly performing assets by mid May. It must also review that plan’s performance every quarter, beginning June 30. The board must also report the plan’s progress to the OTS’ regional director.

The order states that Guaranty Bank, after June 30, must maintain a Tier 1 core capital ratio of at least eight percent and a total risk-based capital ratio of at least 12 percent after establishing an appropriate allowance for loan and lease losses.

The cease and desist order is not reflective in what the order asks Guaranty Bank to do, said Kurt Bauer, president and CEO of the Wisconsin Bankers Association.

“When you’re looking at this action, it’s called cease and desist,” he said. “It doesn’t necessarily reflect what they’re asking the bank to do in this case. They’re asking Guaranty to raise capital.”

Doug Levy, president and CEO of Guaranty Bank, said the order asks the bank to raise capital and discusses how it can return to profitability.

“This agreement is a mutual, formal agreement with the OTS issued as a result of our ongoing work with federal regulators and outlines a strategic plan and timeline as we continue our work with regulators toward a common goal of improved financial performance,” he said. “In fact, the agreement does not refer to any specific ‘unsafe’ or ‘unsound’ practice.”

Guaranty Bank, from Dec. 1, 2008 to the end of February, issued more than $1.2 billion in residential first mortgage loans and expects another $400 million to close by the end of this month. The bank voluntarily stopped issuing second mortgages last year, Levy said, and is working with its borrowers that have problem loans.

While the order from OTS is serious, the bank is continuing with its plans to return to profitability, including many of its lending operations, Levy said.

“While we are taking the agreement very seriously, we are moving forward according to plan,” he said. “We are not, however, being asked to cease and desist from any of our basic operating practices.”

On Monday, President Barack Obama announced plans to allocate economic stimulus funds to immediately reduce small-business lending fees and increase the government guarantee on some U.S. Small Business Administration (SBA) loans to 90 percent.

The plan will temporarily raise loan guarantees under the Small Business Administration’s 7(a) loan program to up to 90 percent and waive borrowing fees for many borrowers within the 504 Certified Development Company loans. The changes were made effective Monday.

“U.S. small businesses employ about half of our nation’s workers and over the last decade have created about 70 percent of all new jobs,” said Darryl K. Hairston, acting administrator of the SBA. “But their access to credit and lending markets has dried up, making it harder every day for small businesses to keep their doors open and their employees working.”

Additionally, the Obama administration announced Monday that the U.S. Treasury Department has committed up to $15 billion to purchase small business loan securities that are currently frozen in the secondary markets. The administration believes this action will unlock these markets and therefore free up additional capital to jumpstart small business lending.

“We hope that businesses will take the opportunity to ask their banks about the SBA loans that might be available to them,” Hairston said. “And we encourage community banks and other lenders to work with us to reach as many qualified borrowers as we can during these difficult times.”

To assist individuals in calculating how much they will need to provide for themselves and their families after retirement, Northwestern Mutual has created a new Lifespan Calculator – an online survey designed to tell participants how long they might live.

“If people can estimate how long they’re going to live, they can take control of their financial future sooner rather than later and think about ways to make their life savings last,” said Meridee Maynard, senior vice president. “Living a longer life is wonderful on many levels, but it’s important for people to take a holistic look at lifestyle, health and financial challenges.”

The Lifespan Calculator asks questions about diet, exercise, drinking, smoking and stress to estimate life expectancy. To take the quiz, click here.

Park Bank moves to new Brookfield location

Park Bank has relocated its Brookfield office to 14870 W. Greenfield Ave. in Brookfield, from its previous location at 15850 W. Bluemound Road The new Park Bank branch is the anchor tenant on the east end of the Brookfield Marketplace development, which includes a grocery store and chain restaurant.

“Given the amount of congestion on Bluemound Road and the desire to upgrade our facility for customer convenience and service, we’re extremely pleased with our new location,” said Dave Werner, senior vice president and market manager of the branch.

The new branch was designed to accommodate the bank’s commercial, personal, mortgage and investment customers.

A public grand opening will be held next Monday through Friday, with refreshments, prize giveaways and raffles held each day.

Pleasant Prairie firm, backed by PE group, seeks first acquisition

Devicor Medical Products LLC, a Pleasant Prairie based firm headed by Tom Daulton, former general manager of Cardinal Health’s Interventional Sciences and Med Systems divisions, is seeking its first acquisitions in the medical device area.

The company is backed by GTCR Golder Rauner LLC, a Chicago private equity firm, which has pledged $250 million of equity capital to grow Devicor.

The company is now looking to acquire established interventional medical device businesses that sell to hospitals, surgery centers or ambulatory clinics. Initial acquisitions need to have infrastructure and personnel in manufacturing, R&D, engineering, sales and marketing, finance and human resources.

For more information, visit Devicor’s web site here.

Name: Jay McKenna

Title: Senior Vice President, Chief Financial Officer and Treasurer

Company: North Shore Bank

City of Residence: Brookfield

Family: Wife, Lisa; sons, James (10), Christopher (7) and Patrick (4)

What's new at your company this year? “We continue to navigate the challenging business environment along with everyone else, building on the careful decisions, prudent lending practices and long-term customer commitment that have made North Shore Bank one of the strongest and most secure institutions in the country. Customer-oriented growth initiatives are a major focus for 2009, including new branches in southeastern Wisconsin and northern Illinois and new products for our customers.”

What was the best investment/client/project you've been involved with? “In 2000, North Shore Bank purchased Milwaukee-based Marquette Savings Bank. It was a good business move for North Shore Bank, but also a pioneering move for the banking industry because it marked the first time a mutually owned thrift bought a mutual holding company. The deal was fascinating – to bankers and people with accounting backgrounds like me, at least – because of the unique capital structures of the two entities and the careful timing and planning that was required. We received some nice publicity as an industry trailblazer, but, most importantly, it’s also a win-win situation for North Shore Bank and Marquette Savings Bank shareholders, customers and employees.

What was the funniest or most interesting moment of your career? “At my previous job as an auditor in a large public accounting firm, I was working at a small town bank. Being an eager young auditor, I was working late, but soon discovered I had been locked inside the bank all alone after all the employees had left. Knowing the doors were alarmed, my first call was to the local police department. They didn’t seem too interested in helping me out. Luckily, I was able to find a phone book and call one of the employees at home to come unlock the door. For a while, I thought I’d be spending the night in the bank.”

First Bank Financial Centre recently promoted Sarah Andritsch to commercial associate lender. Andritsch has eight years of banking experience at First Bank Financial Centre, with more than four of those years focused on commercial lending as a portfolio manager. 

Fitch places MGIC’s ratings on negative

Fitch Ratings has placed MGIC Investment Corp. and its subsidiaries on its negative rating watch list.

MGIC’s long term issuer default rating has been rated BBB-; its $200 million in senior notes due on Sept. 15, 2011 are rated BBB-; its $300 million in senior notes due on Nov. 1, 2015 are also rated BBB-; and its $390 million in convertible junior subordinated debentures due in 2063 are rated BB.

“(Last week’s) rating action results from MGIC Investment’s decision to defer interest payments on its $390 million convertible junior subordinated debentures due 2063,” Fitch Ratings said in a release. “The ‘BB’ rating assigned to the convertible junior subordinated debt reflected Fitch’s view of MGIC Investment’s liquidity pressures and the risk that MGIC Investment would exercise its option to suspend payments. Notwithstanding, the announced deferral on $390 million of MGIC Investment’s debt obligations is an indicator of the increasing financial pressure facing the company and the mortgage insurance sector as a whole.”

Actuant reorganizes business segments

Butler-based Actuant Corp. announced Monday that the company's financial reporting segments are being modified to reflect changes in the portfolio due to acquisitions, as well as business reporting lines.

The company's former industrial segment is being divided into two reporting segments, industrial and energy, to provide additional transparency to its growing energy-related businesses.

The new industrial segment includes Enerpac, Simplex, Milwaukee Cylinder, Precision Sure-Lock and TT Fijnmechanica (TTF).

The energy segment will consist of the Hydratight joint integrity business and the recently acquired Cortland rope and cable business.

The electrical segment is virtually unchanged from the company's previous segment reporting, except for the addition of the Turner Electric business from the previous Engineered Products segment.

The former engineered products and actuation systems segments, with the exception of Turner Electric, will be combined into the new engineered solutions segment.

MMAC economic indicators continue to decline

All but three of the 21 local economic indicators tracked by the Metropolitan Milwaukee Association of Commerce deteriorated in January compared with a year ago, reflecting the deep recession.

"The employment situation in the metro area took a steep turn downward in 2008’s final

two months and now into early 2009," said Bret Mayborne, economic research director for the MMAC. "Over this time period job losses accelerated and the unemployment rate moved sharply upwards, giving pause to any suggestion of a short-term turnaround."

Some of the key indicators for the month included:

• Nonfarm employment levels fell at a 2.8-percent pace in January. Overall, metropolitan Milwaukee has lost 23,300 jobs over the past 12 months.
• Seven of 10 major industry sectors registered January job losses compared with a year ago. The educational & health services sector, up 3.1 percent from over year ago, posted the largest percentage increase. The largest sector decrease of 15 percent came in the construction, mining & natural resources sector.
• New car registrations fell 28 percent.
• The number of unemployed in metro Milwaukee rose against year-ago levels for the fourth consecutive month, up 49.1 percent to 56,200.
• Existing home sales numbered 470 in the metro area for January, a 14.4-percent fall from year-ago levels. Likewise, mortgages recorded in Milwaukee County fell 27.4 percent from one year ago.
• Air passenger usage at General Mitchell International Airport fell 18.3 percent in January to 487,279.
• The value of signed construction contracts, as reported by F.W. Dodge for December, was $26.7 million, down 74.7 percent from December 2007.

Johnson Controls to raise cash by selling additional securities

Johnson Controls Inc. plans to sell more than $500 million in new securities to shore up its credit and general operations.

The Milwaukee-based company intends to use the net proceeds from the offerings for general corporate purposes, including the repayment of short-term indebtedness that the company has incurred to finance its working capital requirements.

J.P. Morgan Securities Inc., Citigroup Global Markets Inc. and Merrill Lynch & Co. are serving as joint book-running managers for the offerings, and Barclays Capital Inc. is acting as a joint book-running manager for the convertible senior notes offering.

Johnson Controls recently announced a joint venture to produce the batteries for Ford Motor Co.'s new hybrid vehicles.

“Private Equity Funding: Is It the Right Choice for Your Business?” seminar will take place Wednesday, March 25 from 3-4:30 p.m. at the American Club, 419 Highland Dr., Kohler. The event, presented by Schenck Business Solutions, will include a panel discussion made up of Lou Banach and Jim Gettel of Schenck M&A Solutions, Ben Holbrok and Jay Radke of Mason Wells Buyout Funds, and Steve Peterson of Brass Ring Capital. There is no cost to attend. For information, call (920) 996-1261 or click here to register.

World Trade Center Wisconsin will present its “Successful Cross-Cultural Negotiations” seminar on Tuesday, March 24 from 7:30 a.m. to noon at the University Club of Milwaukee, 924 E. Wells St. The event will feature keynote speaker Eric Etchart, president of Manitowoc Crane Group, as well as presentations on negotiation strategies, regional differences and a case study. Cost is $65 for WTC members and $85 for non-members. For information or to register, call 414-274-3840.

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 

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