The number of troubled banks in the United States jumped to 702 in the fourth quarter, according to the latest report by the Federal Deposit Insurance Corp.

The FDIC said U.S. banks essentially broke even in the October-December period. They earned $914 million in the quarter, compared with a $37.8 billion loss in the fourth quarter of 2008.

For all of 2009, U.S. banks earned $12.5 billion, up from $4.5 billion in 2008.

Still, the number of banks on the FDIC's confidential "problem" list increased to 702 from 552 in the third quarter, the most since the height of the savings-and-loan crisis of the early 1990s.

For the first time in three years, more than half the 8,000 federally insured banks and thrifts reported higher income compared with the year-earlier quarter.

However, delinquencies on commercial real estate loans remain a source of concern, and a wave of defaults on such loans could cause more banks to fail, FDIC officials warned.

Last year, 140 federally insured banks failed and were shut down by regulators.

The FDIC expects U.S. bank failures to cost the insurance fund around $100 billion through 2013.

According to the most recent filing by the FDIC, 83 of Wisconsin’s 281 banks lost money in the fourth quarter of 2009. They include:

• Milwaukee-based M&I Bank lost about $235 million
• Green Bay-based Associated Bank lost about $167 million
• Kenosha-based Southport Bank: $7.6 million
• Menomonee Falls-based Securant Bank & Trust: $6.07 million
• Burlington-based First Banking Center: $5.9 million
• Milwaukee-based Guaranty Bank: $5.17 million

However, the majority of Wisconsin’s banks had positive earnings for the fourth quarter of last year. Some of the banks with the highest earnings in the state included Oak Creek-based Tri City National Bank ($14.8 million), Madison-based FPC Financial ($11.1 million), Waupaca-based First National Bank ($3.8 million), Milwaukee-based Northwestern Mutual Wealth Management ($2.2 million), and Fond Du Lac-based National Exchange Bank & Trust ($1.99 million).

Duane Kullberg, former managing partner and CEO of Arthur Anderson & Co. will participate in a panel discussion titled “The Future of the Audit Profession” at 7:30 p.m. tonight in Carthage College’s Todd Wehr Center, 2001 Alford Park Dr., Kenosha.

Kullberg retired from Arthur Anderson in 1989 and served as the company’s CEO from 1980 until that time. He is also Carthage’s Executive in Residence for spring 2010.

Joining Kullberg on today’s panel will be William Goodman, president of the Wisconsin Institute of Certified Public Accountants (WICPA), and attorney and financial columnist Jim Peterson, who formerly wrote for the International Herald Tribune.

1492 Capital Management, a Milwaukee-based small cap investment firm, was recently honored for its small cap value strategy by PSN, an investment manager database, who named the firm to its PSN Top Guns for 2009.

The firm’s strategy ranked among the top 10 managers in PSN’s small to mid cap value category for three of the last four calendar quarters and for 2009.

“Our team’s focus on individual company research among dividend paying small cap companies and our emphasis on valuation worked well again in 2009,” said Rodney Hathaway, small cap value portfolio manager.

The annual BizTimes Access to Capital directory, a directory of commercial lending, mergers and acquisitions, accounting, legal and related financial services providers in the Milwaukee area, will remain open for submissions until 5 p.m. Monday, March 8.

The directory will be printed in the March 19 issue of BizTimes Milwaukee and will be posted online that day. For more information or to submit your company to the directory, visit http://www.biztimes.com/site/capital.

PNC Bank to convert National City branches in Wisconsin in June

The PNC Financial Services Group Inc. will convert all of the National City Bank branches in Wisconsin to PNC Banks in June.

The Wisconsin conversions will be included in the fourth and final phase of the rebranding of National City Banks to PNC Banks.

Pittsburgh-based PNC has successfully completed the conversion of 1.1 million customers and 320 branches from National City Bank to PNC Bank in central and southern Ohio along with Kentucky and southern Indiana.

"The process of converting customer accounts is proceeding smoothly as the acquisition of National City continues to exceed our own expectations," said Thomas Whitford, PNC vice chairman and co-leader of the National City integration. "We remain on track to complete the account conversion process by mid-year, which is ahead of our original schedule."

"We see opportunities to gain individual and business customers across our expanded franchise and provide them with our full range of products and services," said Shelley Seifert, co-leader of the integration for PNC.

The conversion will mark another name change for customers of National City Bank in Wisconsin. PNC acquired National City Corp. of Cleveland, Ohio, in December 2008. National City had purchased MAF Bancorp Inc., the Chicago-based parent of MidAmerica Bank, in 2007. MAF Bancorp previously acquired St. Francis Bank in 2003.

Quad/Graphics acquires stake in HGI Company

Quad/Graphics Inc. has formed a strategic partnership with HGI Company, a Burlington-based full-service, multi-faceted commercial printer.

Under terms of the agreement, Quad/Graphics will purchase a minority interest in HGI, providing HGI with additional financial resources to continue its aggressive investment and product diversification strategy, and to further its goal of enhancing, expanding and replicating its commercial platform across more geographies.

Craig Faust will retain majority ownership of HGI and will continue to lead the company as its president and chief executive officer.

HGI has 245 full-time employees at its three facilities in southeastern Wisconsin. The company reported sales of $45 million in 2009.

Through the partnership, HGI will build upon its current market diversification, flexibility and range of capabilities.

Both entities will share best practices in manufacturing, management, customer service, procurement and more, while creating numerous advantages and opportunities for clients, employees and shareholders.

"The ability for both our companies to leverage resources and industry knowledge in our respective business segments will create one of the most unique and diverse product offerings in today’s print marketplace," Faust said. "Through this partnership, HGI will be able to make investments that will allow us to execute more quickly on our growth strategy in short- to medium-run length commercial print. We'll also leverage Quad/Graphics' cutting-edge technology and capabilities and operational expertise to better serve our clients and give them the most value for their print spend."

"We are proud to be partnering with an aggressive, forward-thinking company like HGI, which shares our same commitment to advancing the effectiveness of print in a multi-channel media world," said Joel Quadracci, chairman, president and CEO of Quad/Graphics. "Craig and his management team have expertly guided the strategic growth of HGI, assembling a group of distinctively branded companies that serve diverse but complementary markets, and that provide an incredible range of commercial print services. Our investment will serve as an important springboard to its growth."

Bemis completes acquisition of Food Americas

Bemis Company Inc. has completed its acquisition of the Food Americas operations of Alcan Packaging, a business unit of Rio Tinto plc.

Under the terms of the $1.2 billion transaction, Bemis acquired 23 Food Americas flexible packaging facilities in the United States, Canada, Mexico, Brazil, Argentina and New Zealand, which recorded 2009 net sales totaling $1.4 billion.

These facilities produce flexible packaging principally for the food and beverage industries and will augment Bemis' product offerings and technological capabilities. The transaction is expected to be accretive to both diluted GAAP earnings per share and adjusted earnings per share, beginning in 2010.

Under the terms of an order signed by the U.S. District Court for the District of Columbia on Feb. 25, two of the facilities, located in Menasha, Wis., and Tulsa, Okla., must be divested. The 2009 net sales associated with the facilities to be sold was approximately $100 million.

"We are pleased to welcome our newest Bemis employees and look forward to integrating these new facilities into our business," said Henry Theisen, Bemis president and chief executive officer. "During the next two years, we expect to generate strong cash flow which we will use to invest in growth opportunities, pay down debt, and deliver attractive total returns to our shareholders. This acquisition complements our manufacturing capabilities and technological expertise around the world. We are looking forward to an exciting and successful 2010."

Madison-based First Business Capital Corp. promoted Ryan Jahns to field examiner and Bridget Persch to senior collateral analyst. First Business Capital Corp. is a part of First Business Financial Services, Inc. (NASDAQ: FBIZ). Jahns joined First Business Capital Corp. in December 2007 after an internship at First Business Bank-Northeast. Persch joined First Business Capital Corp. in 2007 after working for First Business Bank.

CC&N named best ESOP in Wisconsin

CC&N, a Pewaukee-based provider of technology, communications and connectivity solutions, has been named ESOP Company of the Year by the Wisconsin Chapter of The ESOP Association. The company will be honored at the state ESOP conference on March 3 in Madison and will continue on to compete at the national level for ESOP Company of the Year.

CC&N was selected based on its communication with employees; commitment to employee participation, wealth creation and individual dignity and worth; and its financial stability.

CC&N recently celebrated its 15th anniversary as an ESOP. During that time, its stock has consistently outperformed the stock market, compared to the S&P 500 and Russell 2000 index. Despite the tough economic climate, CC&N posted a profit in 2009.

“We’re extremely proud of this award because each of our 160 employee-owners can take credit for it,” says Lisa Reardon, president of CC&N. “Our employees embrace the advantages of being company owners, and they understand that providing a high level of expertise and exceptional customer service to our clients directly benefits them. It’s one of our competitive advantages. No other company structure delivers such motivation to every employee.”

Nasdaq says Koss Corp. is noncompliant for stock listing

Koss Corp. has received notice from The Nasdaq Stock Market that because the company’s most recent annual report contained no financial statements, it is incomplete and does not comply with Listing Rule 5250(c)(1), which requires the timely filing of periodic financial statements.

Koss has 60 calendar days, or until April 20, to submit a plan to regain compliance on the exchange. If the compliance plan is accepted, Nasdaq can grant an exception of up to 180 calendar days from the filing's due date, or until August 16, to regain compliance. If the compliance plan is not accepted, Koss will have the opportunity to appeal that decision to a Nasdaq hearings panel.

As previously disclosed, because of unauthorized financial transactions, Koss is restating its previously issued financial statements for the fiscal years ended 2008 and 2009, for all quarterly periods during those fiscal years, and for the period ended Sept. 30, 2009.

Koss anticipates that the restated consolidated financial statements will be available as early as April but no later than June. The quarterly report on Form 10-Q for the period ended Dec. 31, 2009, will be amended to include the unaudited consolidated quarterly financial statements promptly after the restated consolidated financial statements are available.

On Feb. 16 and 18, separate shareholder derivative suits were filed in Milwaukee County Circuit Court in connection with the previously disclosed unauthorized transactions. The first suit names as defendants Michael Koss, John Koss Sr., the other Koss directors, Sujata Sachdeva, Grant Thornton LLP, and Koss Corp.

The second suit names the same parties, with the exception of Grant Thornton LLP. Among other things, both suits allege various breaches of fiduciary and other duties, and seek recovery of unspecified damages and other relief.

Sachdeva is accused of embezzling more than $30 million from the company.

Legislature approves bills for Roth conversions and BadgerCare Basic

The Wisconsin Assembly passed a bill late last week that would bring the state’s regulations of Roth Individual Retirement Account (IRA) conversions into line with federal regulations, while the State Senate narrowly approved a bill to create a new stopgap health insurance program for the working poor.

The same Roth IRA bill was approved by the state Senate recently, and the measure now awaits Gov. Jim Doyle’s signature.

Tim Steffen, financial and estate planning manager for Milwaukee-based Robert W. Baird & Co. Inc.’s Private Wealth Management Group, hailed the passage of the bill.

 “Without enactment of this bill, Wisconsin will be the only state in the country with restrictions on Roth conversions, allowing only taxpayers with income below $100,000 to do the conversion. In a time when all states are facing budget shortfalls, Wisconsin legislators were concerned about a Legislative Fiscal Bureau study showing that the conversion legislation would have a net negative impact on tax revenue. However, a second study has since shown that expanding Roth conversions would create a short-term revenue increase. This fact, combined with public pressure, led to the state Legislature approving these changes,” Steffen said.

The bill includes a provision that maintains the amount Wisconsin taxpayers may contribute to retirement plans beyond 2010, thereby matching the federal limitations in place for next year. Without this bill, Wisconsin residents would face lower maximum contribution amounts for 2011.

“Finally, the bill also adopts a variety of retirement plan provisions benefiting members of the armed services that are part of the federal Heroes Earnings Assistance and Relief Act of 2008. Included in those items are exceptions to IRA contribution and withdrawal limitations,” Steffen said.

With a 17-16 vote, the Senate approved a bill meant to serve 25,000 state residents who are on the waiting list for the BadgerCAre Core Plus program.

For ongoing coverage, visit WisPolitics.com, a media partner of BizTimes Milwaukee.

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