Venture capital investing fell to its lowest level across the U.S. in 12 years in 2009 – to approximately $17.7 billion, according to the latest MoneyTree Report by PriceWaterhouseCoopers and the National Venture Capital Association. 2009’s venture investment level was a 37 percent decrease from 2008.

"The venture capital industry had no choice but to slow the investment pace in 2009," said Mark Heesen, president of the NVCA. “The weak exit environment resulting from an unstable public market combined with a challenged limited partner base sent a strong message to the venture community to pull back the reins – and the VC's listened.”

VC investing in Wisconsin fell even farther than the national trend. VC investors spend $22.2 million in the state last year, compared to $64 million in 2008. Deal volume also fell – from 18 investments in 2008 to 11 last year.

Deal volume increased in the second half of 2009. There were only four deals in the first six months of the year, compared to seven deals in the last six months. Dollar value increased dramatically in the second half of the year: VC investors spent about $6 million in the first two quarters of the year and about $16.2 million in the third and fourth quarters.

Venture investing is expected to recover around the country in 2010, as many investors saw their portfolios rebound in the last nine months of 2009.

“The seed and early stage pipeline needs replenishing across all industries and the health of the start-up community in the next decade will be dependent upon more robust first-time financings,” he said. “2010 should be the year to begin that process in earnest."

The Great Recession took its toll on the median sale price of privately held businesses in the Milwaukee area last year, according to a report released by BizBuySell.com, an online business-for-sale marketplace.

The median asking price for businesses in metro Milwaukee fell to $300,000 in the fourth quarter of 2009, compared to $368,000 one year earlier. Median revenues for privately held businesses for sale fell to $440,800, compared to $505,400 during the fourth quarter of 2009, the report says.

During the fourth quarter of 2009, business owners asked for a median revenue multiple of 0.98, compared to 1.02 one year earlier.

BizBuySell.com is predicting a slow but steady recovery in 2010 as demand continues to rise for privately held businesses for sale.

"Many business owners delayed plans to exit their businesses and retire in 2009," says Mike Handelsman, general manager of BizBuySell.com. "In the latter part of 2009, we started to see clear signs of recovery, and 2010 is now shaping up to be a much more productive year for selling and buying businesses."

M&I reports loss of $858.8 million for 2009

Marshall & Ilsley Corp. reported a fourth quarter net loss of $259.5 million, or 54 cents per share, which capped a fiscal year in which it lost $858.8 million, or $2.46 per share.

The company’s net loss for 2009 was actually an improvement over its 2008 performance, when the firm lost $2.0 billion, or $7.92 per share. The financial results for 2008 included a goodwill impairment charge of $1.5 billion after tax.

"Our aggressive approach to managing credit continued to impact M&I's financial results during the fourth quarter of 2009," said Mark Furlong, president and chief executive officer of the Milwaukee-based parent company of M&I Bank. "Despite the loss, there are some encouraging signs that credit quality has stabilized and core earnings trends have improved. M&I remains committed to returning the company to profitability as soon as possible."

M&I's average loans and leases totaled $45.3 billion for the fourth quarter of 2009, decreasing $4.9 billion or 10 percent compared with the fourth quarter of 2008. When adjusted for the targeted reduction in the corporation's construction and development portfolio, loans fell $1.2 billion or 3 percent vs. the same period last year.

In a conference call with analysts, M&I executives expressed confidence that the company’s performance is improving.

The company’s nonperforming loans were down for the second consecutive quarter. The $205 million decrease of nonperforming loans in the last quarter was down 9 percent form the previous quarter.

 “We continue to remain aggressive in dealing with tough credit issues,” Furlong said. “As we move into 2010, we intend to leave no struggling asset unaddressed. We are glad to put the last two years behind us.”

Greg Smith, chief financial officer for the company, said, “We are building confidence that a recovery is underway at M&I. Our non-performing loans continue to decline.”

Record revenues boost U.S. Bank

U.S. Bancorp reported fourth quarter net income of $602 million, or 30 cents per share, up from $330 million, or 15 cents per share, in the same period a year ago.

The Minneapolis-based parent company of U.S. Bank, which has a large Wisconsin presence, said its most recent quarter’s growth was driven by record total net revenue of $4.4 billion, the result of strong year-over-year growth in both net interest income and fee revenue.

The company's results were impacted by two significant items: a $278 million provision for credit losses in excess of net charge-offs and $158 million of net securities losses.

For the full fiscal year, U.S. Bancorp reported 2009 net income of $2.2 billion, down from $2.9 billion in 2008.

U.S. Bancorp chairman, president and chief executive officer Richard Davis said, "U.S. Bancorp's fourth quarter and full year 2009 earnings fully reflected the strength and quality of the company, as we achieved record total net revenue for both the quarter and the year. The strong growth in net revenue, the result of our expanding balance sheet and fee-based businesses, as well as recent investments in our branch network and various growth initiatives, was the primary driver behind the increase in fourth quarter earnings compared with the same period of 2008.”

Looking forward, Davis said, “Given the company's diversified revenue mix, stable businesses, industry-leading performance, capital generation, and its dedicated employees, I am confident that we will continue to grow and prosper in the coming year, as we continue to serve our customers, support our communities, assist the government in their efforts to stimulate and strengthen the economy, and create long-term value for our shareholders, all of which will serve to further distinguish U.S. Bancorp as one of the strongest leaders in the financial services industry today."

TCF continued earnings recovery in Q4 2009

TCF Financial Corp., the Minnesota-based corporate parent of TCF Bank, which has several Wisconsin locations, posted $19.5 million in fourth quarter 2009 earnings, an 11.5 percent increase over its third quarter earnings of $17.5 million. However, the bank’s fourth quarter earnings were almost 30 percent below its same-quarter earnings from one before, when it had $27.7 million in earnings.

“While credit issues remain at elevated levels, TCF has remained profitable throughout this economic crisis and our credit metrics have outperformed most of our peers,” said William A. Cooper, TCF chairman and CEO. “An improving economy and stabilizing home values may signal improvements in the credit cycle in the coming quarters. TCF’s conservative business model has proven its sustainability throughout the recent economic recession. I remain optimistic about the future of TCF going into this new decade.”

Bank Mutual Corp.’s earnings fall

Brown Deer-based Bank Mutual Corp. reported net income for the year of $13.7 million, or 29 cents per share, compared with $17.2 million or 35 cents per share in 2008.

The company’s net income for the fourth quarter of 2009 was $1.5 million, or 3 cents per share, down from $6.2 million, or 13 cents per share, in the same period a year ago.

Michael Crowley Jr., chairman, president, and chief executive officer, said, "Our recent earnings performance has been impacted by difficult interest rate and economic environments that continue to erode the yields on our loans and investments and challenge some of our customers' ability to repay their loans. However, we are committed to positioning our balance sheet for the future and maintaining conservative lending standards. Given our outlook for higher interest rates in the future, we believe this commitment will pay off in the long-run, but it may result in lower net interest income in the near term."

During 2009, Bank Mutual experienced increased levels of liquidity due to reduced portfolio loan demand and increased repayment activity in its loan and securities portfolios.

Income soars for parent company of National City Bank

The PNC Financial Services Group Inc., the parent company of National City Bank, posted 2009 net income of $2.4 billion, or $4.36 per diluted common share, up from with 2008 net income of $914 million, or $2.44 per diluted common share.

Fourth quarter 2009 net income was $1.1 billion, or $2.17 per diluted common share, compared with net income of $559 million, or $1.00 per diluted common share, for the third quarter of 2009.

"During the most challenging economic environment of our time, the execution of the PNC business model resulted in exceptional 2009 performance," said James Rohr, chairman and chief executive officer of Pittsburgh-based PNC Financial. "Our businesses performed well and customer growth and sales of products and services across the franchise were strong, giving us considerable momentum starting into 2010. We continue to focus on risk management and made significant progress in transitioning to a stronger balance sheet with strengthened loan loss reserves, liquidity and capital."

PNC acquired National City Corp. of Cleveland, Ohio, on Dec. 31, 2008. National City operates several branches in the Milwaukee market.

The U.S. Department of Justice filed a federal antitrust lawsuit against Dean Foods on Friday, challenging the company’s April 2009 acquisition of Foremost Farms USA's Consumer Products Division.

The acquisition included two dairy processing facilities in Waukesha and DePere.

Federal and state officials believe the acquisition eliminated competition between the two companies in the sale of milk to schools, grocery stores, convenience stores and other retailers in Illinois, Michigan and Wisconsin. The Department of Justice was joined by the state attorneys general from Illinois, Michigan and Wisconsin in the suit.

Dean Foods and Foremost Farms were the first- and fourth-largest milk processors in northeastern Illinois, the Upper Peninsula of Michigan and Wisconsin, federal officials said. Dean Foods now has approximately 57 percent of the market for processed milk in northeastern Illinois, the UP and Wisconsin.

In its suit, the Department of Justice seeks to force Dean Foods to sell the assets it purchased from Foremost Farms.

Dallas-based Dean Foods said it plans to fight the antitrust suit.

“The company believes that, from the time of the acquisition almost a year ago, this transaction has benefitted Wisconsin dairy farmers by providing a stable and growing outlet for their milk,” the company said in a news release. “In addition, the transaction already has produced important cost savings that will benefit customers and spur competition in and around Wisconsin. It promises to deliver even greater customer benefits once the DePere and Waukesha plants are fully integrated into the Dean network. The company believes an objective judicial review of the facts will reveal that competition is alive and flourishing in Wisconsin.”

Sally McCaughey, vice president and auditor of Waukesha State Bank, will retire her post on Friday after nearly four decades with the bank.
She began her career at the bank as a proof operator in 1973, becoming a computer operator in 1975 and progressing to the position of programmer/analyst. While working in the bank's data center, she met Paul McCaughey, a computer programmer. They got married in 1983, and were the only married couple who joined senior management during their careers at the bank. Paul retired from the bank in June 2009.
She was named a bank officer and coordinator of information systems in 1987. Although not considered necessary for her career advancement at the Bank, Sally returned to Carroll University part-time to finish the college degree she started 20 years earlier, earning her bachelor of arts in business administration in 1989. She was named vice president in 1989.


Brookfield-based Vrakas/Blum, S.C. has hired Briana K. Birenbaum and Scott M. Syrjala as staff accountants in its tax department. Birenbaum is a graduate of the University of Wisconsin-Whitewater, where she earned a master of professional accountancy degree in December 2009. Syrjala worked previously in a similar role at another local CPA firm. He is a 2006 graduate of the University of Wisconsin-Eau Claire, where he earned a bachelor degree in accounting.

Milwaukee-based RitzHolman CPAs, has promoted Matthew Rios, CPA, to partner.
Rios is a member of the tax and outsourcing teams and has been with the firm since 1997. His practice focuses on providing tax and consulting services to closely-held businesses and entrepreneurs. He also concentrates on the professional services and real estate industries, including performing audits of HUD and low-income housing tax credit properties.

Feingold will vote against another term for Bernanke

U.S. Sen. Russ Feingold has expressed his opposition to another term for Ben Bernanke as chairman of the Federal Reserve Board.

“A chief responsibility of the chairman of the Federal Reserve is to ensure a sound financial system. Under the watch of Ben Bernanke, the Federal Reserve permitted grossly irresponsible financial activities that led to the worst financial crisis since the Great Depression. Under chairman Bernanke’s watch predatory mortgage lending flourished, and ‘too big to fail’ financial giants were permitted to engage in activities that put our nation’s economy at risk. And as it responds to the crisis it helped to usher in, the Federal Reserve under chairman Bernanke’s leadership continues to resist appropriate efforts to review that response, how taxpayers’ money was being used, and whether it acted appropriately. When the full Senate considers his nomination, I will vote against another term for chairman Bernanke.”

In 1999, Feingold voted against repealing the Depression-era safeguards put in place to protect businesses, investors and consumers. In 2008, Feingold voted against the Troubled Asset Relief Program (TARP) and in 2009 voted against authorizing more funding for TARP.

Conference Board says economy is in ‘early recovery’

The leading U.S. economic indicators increased 1.1 percent in December and have risen for nine consecutive months, suggesting "that the pace of improvement could pick up this spring,” according to The Conference Board.

Eight of the 10 leading indicators improved in December, reflecting a broad-based gain that points to "an economy in early recovery," said Ken Goldstein, an economist for the Conference Board, a private research organization that analyzes economic data provided by other organizations.

The organization said, "Economic conditions should continue to improve in the near term.”

The Conference Board’s four coincident indicators - industrial production, payrolls, business sales, and income - are the same ones used by an academic committee of historians who rule on when recessions end and expansions begin. The committee has not made a judgment yet, but most economists believe that ultimately it will say the recession ended last summer.

In the past six months, the leading indicators have risen 5.2 percent, with eight of 10 indicators rising over that period.

In December, gains in the leading index were propelled by the interest-rate spread, building permits, jobless claims and stock prices. Consumer expectations, vendor performance, the real money supply and capital goods orders also improved. The other two leading indicators - factory workweek and consumer goods orders - were steady in December.

Baird and Johnson companies rank among best workplaces

Robert W. Baird and Co. Inc. in Milwaukee, Johnson Financial Group in Racine and S.C. Johnson & Son Inc. in Racine rank among Fortune Magazine’s “100 Best Companies To Work For” in 2010.

Baird ranks 11th on the list. Fortune magazine wrote: “No Wall Street blues here. Investment adviser continued to hire throughout 2008 and 2009, screening applicants via rigorous interviews to ensure that they passed the firm’s ‘no a—hole’ rule.” Fortune said Baird’s most common salaried job, a financial analyst, has an average annual pay of $117,650, while its most common hourly job, client relationship assistant, is paid $42,537.

“Being recognized as a great place to work helps us attract and retain the best people, which really goes to the heart of our ability to provide our clients with the best financial advice and service,” said Paul Purcell, chairman, president and CEO of employee-owned Baird. “That’s why our commitment to being a great place to work is a key strategic priority. It enables us to provide the expertise and continuity that our clients really appreciate, particularly in turbulent times like those we’ve experienced recently.”

Johnson Financial Group ranks 22nd on the list. Fortune magazine wrote: “Employees who fall on hard times know they can count on Johnson for support. For instance, pay will be kept intact while an associate is out due to crisis. Says CEO Richard Hansen: JFG will always, “do what is right.” Fortune said JFG’s most common salaried job, a commercial relationship manager, has an average annual pay of $112,296, while its most common hourly job, universal banker, is paid $41,446.

S.C. Johnson & Son ranks 83rd on the list. Fortune magazine wrote: “For the first time in 92 years no profit-sharing checks were issued, but the household-products maker was able to stick to its 123-year-old no-layoff policy.” Fortune said S.C. Johnson’s most common salaried job, senior research assistant, has an average annual pay of $113,381, while its most common hourly job, administrative assistant, is paid $46,473.

This is the 10th year that S.C. Johnson has earned a spot on the list. The company provides on-site child care for its employees.

"It is an honor to be recognized for the 10th time," said Fisk Johnson, chairman and chief executive officer of the company. "S.C. Johnson has a long history of being recognized as a great place to work and we are thrilled to be on the list, especially when many companies are facing uncertainties."

The top five-rated companies on the list were SAS, Edward Jones, Wegman’s Food Markets, Google and Nugget Market.

To view the entire list, visit http://money.cnn.com/magazines/fortune/bestcompanies/2010/full_list.

Wisconsin credit unions continue to grow

Wisconsin credit unions saved state residents almost $200 million on a range of financial services during 2009 and grew their membership by 2.39 percent in the 12 months ending September 2009, according to the new annual report for the Wisconsin Credit Union League.

While for-profit banks’ asset and loan levels declined during the year, according to the Credit Union National Association, not-for-profit credit unions saw growth in both those categories of 9.26 percent and 5.3 percent, respectively.

“Credit unions stepped up to help struggling consumers in ways other lenders wouldn’t, precisely because their role is to help people, not chase profits,” said Brett Thompson, president and chief executive officer of the Pewaukee-based Wisconsin Credit Union League.

“Members flocked to credit unions to refinance high-cost mortgages obtained elsewhere, consolidate debt, sort out budget issues or seek help when faced with a job loss or health problem,” said Kevin Hauser, CEO of Westby Co-op Credit Union and board chair of the state organization.

Hauser said small business owners increasingly turned to credit unions for loans as other lenders cut back.

“Many (entrepreneurs) had either been turned away by for-profit banks or - despite having significant equity, assets and stellar credit histories - had bank lines of credit inexplicably withdrawn, threatening job losses and even the viability of otherwise sound enterprises,” Hauser said.

Dan Fuss, vice chairman of Loomis, Sayles & Co. will present his “Market Outlook” at 12 noon, Wednesday, Jan. 27 meeting of the The CFA Society of Milwaukee, held at The Milwaukee Athletic Club, 758 N. Broadway, Milwaukee. Cost is $15 for members, $20 for non-members. For information, call (414) 768-7900, or e-mail kerri@dbamar.com.

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