Southeastern Wisconsin financial service industry news
Tuesday, April 21, 2015
Associated Bank opens Third Ward branch
Associated Bank on Monday opened its new branch at 102 N. Water St. in Milwaukee's Historic Third Ward.
The branch, at the corner of Erie and Water Streets, has a smaller footprint than the Green Bay-based bank’s other locations. The 2,691-square-foot space also includes a digital demonstration zone. Both changes are a response to customers’ shift toward using online banking most frequently.
The full-service branch, one of just two bank branches in the Third Ward, has a teller lobby as well as two 24-hour ATM units. In the digital demonstration zone, a bank concierge helps customers with the bank’s online and mobile tools.
Associated is also including the new branch in its rollout of virtual teller technology, in which a customer interacts with a remote teller via video. The bank plans to install the machine by the end of the year.
“Our commitment to downtown Milwaukee remains strong and visible,” said John Halechko, director of branch banking. “We look forward to being a part of the continued growth of downtown Milwaukee and all of Southeast Wisconsin.”
The branch will be managed by Kelly Ostricki, who has 17 years of banking experience.
“It’s exciting to be part of the future of branch banking – where great bankers integrate with new technology to provide the best experience for our customers,” Ostricki said. “Everyone is invited to visit our new branch and learn how we can provide a better banking experience.”
Baird Capital invests in Alpha Source
Milwaukee-based Alpha Source, a leading medical equipment solutions provider, has received a direct private investment from Milwaukee-based Baird Capital, a division of Robert W. Baird & Co. Inc.
Baird Capital described the investment as “significant,” but did not reveal the figure.
Baird has named Rick Lytle as the new chief executive officer of Alpha Source. He has more than 20 years of experience in global health care products and services. Norine Calson-Weber, who founded and co-owns Alpha Source, will continue to manage operations as chief operating officer.
“Our strategic partnership with Baird Capital will support the continued growth of Alpha Source’s core medical parts and battery business, while focusing on the continued rapid growth of our services business,” Carlson-Weber said.
As part of the agreement, Baird Capital partner Michael Bernstein and operating partner Fred Robertson have been appointed to the Alpha Source board of directors.
Alpha Source makes medical devices, particularly batteries and electronic components used in medical equipment maintenance and service, medical device battery manufacturing and medical equipment parts distribution.
“Alpha Source is one of the fastest growing companies in the U.S. because they are constantly forging new directions in the delivery of innovative, efficient and quality health care equipment solutions,” Bernstein said. “We are excited to partner with the Alpha Source team and support the business as it continues its expansion in the market.”
MGIC earnings soar
Milwaukee-based MGIC Investment Corp. today reported first quarter net income of $133.1 million, or 32 cents per share, up significantly from $60 million, or 15 cents per share, in the first quarter of 2014.
Total revenue was $270.2 million in the first quarter, up from $235.1 million in the same period a year ago. MGIC wrote $234.5 million in net premiums, up from $218 million in the first quarter of 2014.
MGIC had $166.1 billion in primary insurance in force as of March 31, up from $157.9 billion as of March 31, 2014.
“I am pleased to report that in the first quarter of 2015 the company continued to generate high quality new insurance which contributed to an increase in insurance in force,” said Patrick Sinks, chief executive officer of Mortgage Guaranty Insurance Corp. “I am encouraged by the positive trends we continue to experience relative to new delinquent notices, paid claims, and the delinquent inventory.”
Northern Trust reports 27% higher profits
Northern Trust Corp. today reported first quarter net income of $230.7 million, or 94 cents per share, up 27 percent from $181.4 million, or 75 cents per share, in the first quarter of 2014.
The Chicago-based bank, which has an office on Wisconsin Avenue in downtown Milwaukee, reported total revenue of $1.1 billion, up 9 percent from $1 billion in the same period a year ago. Noninterest income was up 10 percent year-over-year, while interest income was up 1 percent.
The company brought in $727.5 million in trust, investment and servicing fees, up 7 percent from the first quarter of 2014, but also experienced an unfavorable impact from foreign exchange rates during the quarter.
“We are pleased with our financial performance in the first quarter of 2015, which reflects continued growth in our business serving personal and institutional clients, said Frederick Waddell, chairman and chief executive officer. “Trust, investment and other servicing fees, which represent two-thirds of our revenue, increased 7 percent compared to last year. New business and higher equity markets contributed to growth in assets under custody and under management of 6 percent and 5 percent, respectively. Total revenue grew 9 percent (compared to the previous quarter) and we maintained a disciplined focus on expenses, which increased 3 percent, producing meaningful operating leverage. As a result, our pre-tax profit margin improved to 31.2 percent in the first quarter and our return on equity was within our target range of 10 to 15 percent. We also look forward to returning capital to our stockholders in the year ahead as the Federal Reserve did not object to the proposed capital actions in our 2015 capital plan. Our capital plan and proposed capital distributions demonstrate the strength of Northern Trust’s focused business model, financial position and commitment to stockholders.”
Associated Bank buys mortgages from Habitat for Humanity
Associated Bank has purchased about $2 million in residential mortgages from Milwaukee Habitat for Humanity in one of the largest one-time mortgage sales in the chapter's history.
Through the purchase of the mortgages, Green Bay-based Associated Bank has provided funding for Habitat’s five-year renovation of about 25 homes in Milwaukee’s Washington Park neighborhood.
Habitat will target the neighborhood’s vacant, city-owned foreclosures, and through renovation or complete rebuild, transform them into livable single family homes.
“The success of our neighborhood revitalization efforts relies on partnerships with businesses and organizations that have a strong commitment to building our community,” said Brian Sonderman, executive director of Milwaukee Habitat. “We are deeply grateful to Associated Bank for this opportunity to further our mission to build homes and hope in Milwaukee and to truly transform Washington Park into a safe, sustainable community of choice.”
Using funding from charitable donations, profits from its Habitat ReStores and mortgage payments from partner family homeowners, Milwaukee Habitat is able to fund its revitalization projects. Partner families must go through a screening process, participate in financial education and contribute up to 500 hours of sweat equity to their homes and neighbors’ homes before they become Habitat homeowners.
“It’s a common misconception that we give houses away,” Sonderman said. “That’s not how Habitat works. We provide an affordable, interest-free mortgage and the payments we receive from these mortgages help us to fund more homes.”
Habitat eventually sells the mortgages, like in this Associated Bank deal, and uses those funds to start new projects.
Associated will also offer its employees as volunteers on the Habitat worksites over the next five years. And the bank’s director of finance, Craig Hahn, will join the Habitat Milwaukee board of directors in December.
“Associated has a strong commitment to the communities we serve through both financial support and volunteerism,” said Dave Bauer, director of mortgage sales, Associated Bank. “We are happy the funds will be put to great use, helping to make our communities a better place to live and work.”
Bank Mutual profit up 25%
Brown Deer-based Bank Mutual Corp. reported first quarter net income of $3.6 million, or 8 cents per share, up 25 percent from net income of $2.8 million, or 6 cents per share, in the first quarter of 2014.
The company attributed the increase to a recovery of loan losses in the quarter, higher brokerage and insurance commissions compared to the first quarter of 2014, higher mortgage banking revenue and lower income tax expense. Bank Mutual did, however, report higher compensation-related costs, higher occupancy, equipment and data processing costs, and a loss on investment real estate.
Bank Mutual reported $2.4 billion in total assets in the first quarter, up from $2.3 billion in total assets in the same period a year ago.
Net interest income was $17.2 million in the quarter, up slightly from $17.1 million in the first quarter of 2014. Non-interest income totaled $5.5 million, up from $4.9 million in the same period a year ago, driven by higher brokerage and insurance commissions.
“As we expected, continued improvement in the credit quality of our loan portfolio resulted in a recovery of loan loss allowance in the first quarter of 2015,” said David Baumgarten, president and chief executive officer of Bank Mutual. “Also in line with our expectations was lower year-over-year growth in our net interest income, due to an anticipated contraction in our net interest margin. The impact of this development was offset by year-over-year growth in our loan portfolio, which we believe will continue in the near future and which should enable us to show improvement in our net interest income in future quarters regardless of a possible contraction in margin.”
Baird reports record 2014 revenue
Milwaukee-based Robert W. Baird & Co. Inc. reported record net revenue of $1.2 billion in 2014, up 12 percent over 2013. It is the fifth consecutive record year the employee-owned financial firm has reported.
Baird provides wealth management, capital markets, private equity and asset management services to a global client base. It has 3,100 employees and more than $145 billion in client assets. In addition, Baird is ranked No. 5 on the Fortune 100 Best Companies to Work For list.
Baird has increased its employee count by 29 percent over the past five years, during a time when the financial services industry as a whole grew by less than 4 percent. Over the past 10 years, the company’s stock value increased 195 percent.
Among its 2014 division highlights were: Private Wealth Management acquired McAdams Wright Ragen, adding more than 100 employees and $10 billion in client assets; Asset Management grew total fixed income and equity assets under management by more than 40 percent, to $31.9 billion; Global Investment Banking completed a record 222 advisory and financing transactions worldwide; Fixed Income Capital Markets continued to lead the country in the underwriting of municipal bonds; and Baird Capital raise a new capital fund totaling $185 million while bringing in $341 million in the year by exiting investments.
“Each of our businesses continued to excel in providing service and solutions to our clients, and several achieved records in key metrics and revenue,” said Paul Purcell, Baird chairman and chief executive officer. “Our results once again prove the value of our employee-owned model and our five complementary businesses that help diversify revenue and contribution.”
“Over the past 95 years, Baird has built a very durable business with a remarkable group of associate-owners who are motivated daily to serve our clients,” said Steve Booth, Baird president and chief operating officer. “With that strong foundation, we are exceptionally well positioned to capture opportunities that will allow Baird to continue to grow in a thoughtful way for our clients.”
PNC reports lackluster first quarter
The PNC Financial Services Group Inc. reported first quarter net income of $1 billion, or $1.75 per share, down from $1.1 billion, or $1.82 per share, in the first quarter of 2014.
Revenue was $3.7 billion, down from $3.8 billion a year ago, driven mostly by a 6 percent decrease in net interest income, year-over-year. The company attributed the net interest income decrease to lower loan yields, an increased liquidity position for the company and a change in classification of noninterest income of certain commercial facility fees.
The company had total assets of $351 billion at the end of the first quarter, up from $323.4 billion at the end of 2014’s first quarter.
“PNC delivered solid results in the first quarter, continuing the consistent performance that has been characteristic of our strategic execution,” said William Demchak, chairman, president and chief executive officer. “We grew average loans and deposits, controlled expenses and benefited from modestly improved credit quality this quarter. We completed our existing share repurchase program and announced new actions to return more capital to shareholders. Looking ahead, we like how we are positioned to help our customers achieve their financial goals and to perform for our shareholders.”
Pittsburgh-based PNC Financial Services Group is the parent of PNC Bank, which has a significant presence in the Milwaukee market.
This exclusive news bulletin is compiled by BizTimes Milwaukee reporter Molly Dill. This bulletin is published every Tuesday morning. Send financial services industry news and tips to email@example.com or call her at (414) 336-7144.
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