Most banks in southeastern Wisconsin have cut back on their loans for commercial and industrial and commercial real estate in the past year. However, several bankers say that increased competition and other factors are likely to reverse those contractions in the year ahead.
Click here to see a chart of banks doing business in southeastern Wisconsin to see which ones have increased commercial lending, and which banks have cut back.
Commercial and industrial lending in the United States fell from $1.45 trillion in July of 2009 to $1.23 trillion in July 2010. In that same time frame, commercial real estate lending fell from $1.69 trillion to almost $1.56 trillion.
The Federal Deposit Insurance Corp. says many banks in metropolitan Milwaukee have contracted their commercial and industrial and commercial real estate lending. Yet despite that contraction, competition is increasing in the commercial lending field in southeastern Wisconsin, and that competition may help reopen the spigot of dollars available to businesses in the region.
Large banks such as PNC Bank and Harris Bank have moved into the metro Milwaukee area through acquisitions made in 2008. Both banks have hired experienced lenders from the Milwaukee market and are beginning to make commercial loans.
Also, other Milwaukee-based banks that have not historically done much commercial lending have moved into the field. Meanwhile, other community-based banks have continued to expand their commercial lending operations.
Banks, both large and small, see an opportunity in commercial lending in the Milwaukee marketplace.
Read more in the latest BizTimes Milwaukee cover story.

FDIC’s list of ‘problem banks’ remains long
The number of problem banks reached 829 during the second quarter while the income of insured institutions reached $21.6 billion, the Federal Deposit Insurance Corp. (FDIC) reported.
The FDIC still expects bank failures in 2010 to exceed 2009 levels of 140, as 118 institutions have failed so far this year.
"Particularly given economic uncertainties we believe that all banks should continue to exercise caution and maintain strong reserves. The high level of troubled loans reflects the ongoing challenges that many banks face," said FDIC Chairman Sheila Bair.
U.S. lenders posted their biggest quarterly profit in almost three years, even as the number of banks at risk of failure rose to 11 percent of the insured institutions, the FDIC said.
Bank profits rose to $21.6 billion in the three-month period that ended June 30, an increase from $18 billion in the first quarter, the FDIC said in its quarterly report on industry performance.
“The economic recovery that began last year is beginning to be reflected in the rising earnings and improving credit quality,” Bair said.
The FDIC had 829 banks with $403 billion in assets on its list of so-called problem lenders at the end of the second quarter, a 7 percent increase from the 775 the on the list at the end of the first quarter. The agency does not disclose which banks are on that list>
“Earnings remain low by historical standards, and the numbers of unprofitable institutions, problem banks, and failures remain high,” Bair said.

California company acquires Abri Health Plan
Molina Healthcare Inc. of Long Beach, Calif. recently closed on its acquisition of West Alliis-based Abri Health Plan, a Medicaid managed care organization.
"We are pleased to welcome Abri Health Plan members into the Molina family," said J. Mario Molina, M.D., Molina Healthcare's president and chief executive officer. "The combination of Abri Health Plan and Molina Healthcare will strengthen the BadgerCare Plus service offering and provide Wisconsin families and individuals participating in the program with a compelling option for accessing quality health care services."
The purchase price for the acquisition is approximately $16 million, subject to adjustments. Abri Health Plan serves approximately 18,000 Medicaid members.
Molina provides Medicaid-related solutions to meet the health care needs of low-income families and individuals and to assist state agencies in their administration of the Medicaid program.
Abri Health Plan provides health care services for BadgerCare Plus and Medicaid SSI members in 23 counties in Wisconsin. Abri Health Plan was a 2009 Future 50 Master Mettle company
Molina Healthcare Inc.’s acquisition of Abri Health Plan is expected to result in an additional 40 to 50 jobs for the Milwaukee area community.
“Prior to the acquisition, (Abri) just signed a new ten year lease at our building on 102nd St., in West Allis,” said Ron Scasny, president of Abri Health Plan. “We plan to add an additional 40 to 50 employees at our location, bringing us close to 100 employees in West Allis.”
According to Scasny, Abri will add additional executive level and middle management positions in addition to customer service representatives and administrative assistants. Abri is actively recruiting and hiring for those positions now, Scasny said.
“We’re really busy recruiting now so they are on staff for the enrollment period,” Scasny said. “It’s a long and difficult process, there are a lot of good people out of work right now. We’re excited for the changes, some of these positions are new to Abri, and work that we usually outsourced out. The acquisition has allowed us to bring some of those jobs in house.”
None of the current Abri employees are at risk of losing their job due to the acquisition, Scasny said.

Corona sells Eddie Z’s in Brookfield
Anthony Corona, owner of Eddie Z’s Blinds and Drapery at 14640 W. Capitol Dr. in Brookfield, has sold the company back to Eddie Z’s Inc. of Chicago. 
“They were my business partners,” Corona said. “It was just time for me to move on.”
Corona has owned the Eddie Z’s Brookfield location for the past 15 years. Eddie Z’s has eight locations in Wisconsin and Illinois.
Eddie Z’s Inc. now owns and operates the Brookfield location as well as the location in Madison, Corona said.
Corona and his wife, Missi, own and operate Halloween Express stores in the Chicago area, but Corona said he has not yet decided about his next business venture.

J.B. Kenehan acquires Conley Printing
Waukesha-based J.B. Kenehan LLC has acquired Beaver Dam-based Conley Printing Company.
The name of the Conley Printing operations will be changed to J.B. Kenehan, but no other significant changes are planned, said John Schueller, chief financial officer for J.B. Kenehan.
No immediate employment changes are planned at Conley, Schueller.said. “We do plan to grow the business,” he said.
Existing Conley Printing customers will continue to have their materials printed, bound and mailed from the 172,000-square-foot Beaver Dam facility, J.B. Kenehan president Tom Majdoch said in a letter to Conley customers and in a news release.
BizTimes Milwaukee magazine is printed by Conley Printing.
“For the past six years, Conley Printing and J.B. Kenehan have been working together utilizing each others’ manufacturing capabilities and technical expertise,” Majdoch said. “That close working relationship allowed us to identify several benefits of bringing the two companies together. This acquisition enhances core competencies of both facilities. The combination of the two companies allows for further growth in the industry and provides an impressive variety of services as well as a vast pool of talent and expertise in printing.”
J.B. Kenehan has an 80,000-square-foot facility in Waukesha.
Schueller declined to disclose financial terms of the acquisition.

La Macchia acquires interest in Florida firm
La Macchia Enterprises, the Milwaukee-based parent company of The Mark Travel Corp., has become a strategic investor in Fort Lauderdale, Fla.-based Next One Interactive Inc.
Under the terms of the agreement, William La Macchia, chairman and founder of La Macchia Enterprises, will join the NXOI board of directors and assume a leadership role in the company's direction within the travel arena. The partnership also includes access to La Macchia Enterprises' significant industry reach, travel booking solutions and advertising opportunities with key suppliers.
La Macchia has invested in NXOI by way of a private placement. Additionally, The Mark Travel Corp. has made a line of credit available to NXOI, which will be convertible into common stock at $1 per share over the next three years.
"The strategic investment and partnership with La Macchia Enterprises is a perfect fit for Next One Interactive, because Mark Travel offerings will be integrated across NXOI media and drive incremental revenues. Our flagship property, R&R TV, is a full-time television network supported by 'video on demand' and enhanced TV applications including broadband and web, focused on vacation travel, real estate and resort ownership with a reach of over 40 million households," said Bill Kerby, CEO and vice chairman of Next One Interactive Inc.

Regal Beloit acquires Dutch company
Beloit-based Regal Beloit Corp. has acquired Rotor B.V., which is headquartered in Eibergen, the Netherlands.
Rotor sells standard and special electric motors to a variety of industries including the marine industry, ship building and offshore oil and gas. In addition to the Netherlands, Rotor also sells throughout Europe and Japan. The management of Rotor will continue to lead the company following the acquisition.
For the remainder of 2010, the business is expected to add approximately $10 million to sales for Regal Beloit.
Henry Knueppel, chairman and chief executive officer of Regal Beloit, said, "We are very excited to announce the acquisition of Rotor. The company has an outstanding management team that has grown the business in Europe and beyond. The addition of Rotor strengthens our European commercial position and adds vertical market segment strengths. The Rotor addition represents continued progress on our strategy of geographic and market segment diversification."
Herbert Weekhout and Mario Pistone, managing directors and owners of Rotor stated, "We are excited to join Regal Beloit and are confident that, following this acquisition, we will become an even stronger company, benefiting our customers and stakeholders."

North Shore Bank promotes Hoepfer
Brookfield-based North Shore Bank announced that it has promoted Bob Hoepfner to vice president – commercial banking manager. He previously served as a regional vice president. “Bob has been with the North Shore Bank family for a long time, and he’s done an excellent job serving our clients,” said David Potter, chief lending officer for North Shore Bank. “We know he’ll thrive in his new role with the bank, and we wish him continued success.” Hoepfner’s duties will include managing the Commercial Lending Group, which includes eight full-time commercial bankers who serve Northeast and Southeast Wisconsin, and Northern Illinois.

The Milwaukee private equity firm Blackthorne Partners has named Steve Balistreri managing director. Balistreri’s experience includes president and CEO of Sun Cleaning Systems and founding director of Brookfield-based Spring Bank.
He has also spent time with privately held security consulting and business turnaround firms.
“Steve’s blend of solid investment strategy and proven operational experience, particularly in the service sector, uniquely equip him not only to uncover exceptional opportunities but to help companies to reach their full growth potential,” said John Syburg, president and co-founder of Blackthorne Partners. “His expertise and dedication bring extraordinary value to our investors and our portfolio companies alike.”
Blackthorne Partners invests in private niche businesses with less than $1 million EBITDA and $2 million to $10 million in annual revenues. The firm believes that although that sector has not attracted much private equity investment before, there is significant opportunity for value creation.
“Now more than ever, small businesses need new sources of capital and guidance for growth,” Balistreri said. “I’m excited to join Blackthorne Partners and leverage my experience to help bring these types of companies together with clients who might not otherwise have access to such great investment opportunities.”

Gary White, community development coordinator at PyraMax Bank, has been appointed vice-chairman of the WHEDA Lender Advisory Board.  White will serve as an advisor assisting WHEDA in product and program development and implementation.  The goal is to further WHEDA’s mission to provide affordable lending and first-time homeownership.
WHEDA is an independent lending authority created by the Wisconsin legislature. The WHEDA Lender Advisory Board consists of 13 leaders within the mortgage lending field statewide.

The Financial Planning Association of southern Wisconsin will present the seminar “The Financial Reform Bill & Tax Planning: What every advisor needs to know heading into next year” on Tuesday, Sept. 14 from 7:30 a.m. to noon at the Country Springs Hotel, 2810 Golf Road, Waukesha. Speakers will highlight recent federal regulation changes and how they affect how financial planners will interact with clients. For more information, click here.

The Wisconsin Chapter of the Midwest Business Brokers & Intermediaries (MBBI) will present the seminar “2010 M&A: New Rules of the Game” on Tuesday, Sept. 21 from noon to 6 p.m. at Lambeau Field in Green Bay.
The event will include keynote speaker, Russ Ball, VP of Football Administration and Player Finance for the Green Bay Packers, who will discuss the business of sports negotiations. It will also feature the panel discussion “Behind the Curtain: What Really Happens at Bank Credit Committees” which will feature bankers from Green Bay-based Associated Bank. A separate panel discussion “Reform is in the Air: What Does It All Mean?” will include panelists from Davis & Kuelthau, Kolb+Co. and Godfrey & Kahn.
"No matter what part of the M&A world you're involved with, this is the perfect opportunity to learn what's new when it comes to getting deals done," said Scott Bushkie, president of the Wisconsin MBBI chapter.
For registration information, click here.

Clifton Gunderson will present the free webinar “Structuring International Operations: Tax and Accounting Considerations” on Wednesday, Sept. 22 at 10 a.m. The webinar will look at topics including legal structure, reporting standards, compliance, transfer pricing and repatriation.
Registration is required, click here to register. One continuing professional education credit is available.

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