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Wisconsin Banker January | February 2024

Founded 1892

Addressing Housing Affordability in Wisconsin

Initiatives in eastern Wisconsin help to provide workforce housing By Hannah Flanders In July 2023, Governor Tony Evers signed into law Wisconsin’s largest ever investment into affordable housing. The historic $525 million investment helps to bolster the state’s affordable housing initiatives and establish loan programs that aid builders and developers to expand infrastructure, spur new construction, and prompt existing home improvements. Already, bankers across the state are committed to fostering strong communities. With Wisconsin’s recent legislation, opportunities to support unique initiatives and help ensure equitable access to housing have only expanded. Housing supply and affordability have long been a concern across the state. While rental prices and the median cost of homes steadily rise, inventory continues to be a major issue. Throughout Q3 2023, Wisconsin hovered around only 7,600 active listings. As individuals and families in Wisconsin struggle to afford what limited property is available, many — including bankers — are concerned about the impact the housing market will have on Wisconsin’s workforce. Supporting Housing Initiatives In a report published by Forward Analytics in September 2022, it is estimated that 130,000 individuals representing the state’s working population will leave Wisconsin by 2030. Aiding in expanding affordable housing programs across Wisconsin is not only a significant way for banks to demonstrate their commitment to their communities; banks play a critical role in stabilizing communities, attracting and retaining talent, fostering economic growth, and helping local families to begin building their generational wealth. Workforce housing, as defined by the Wisconsin Legislative Council, is housing that requires households to spend no more than 30% of 140% of the local area’s median income. These homes are intended for individuals or families whose household earnings do not surpass 140% of the area’s median income.

Already, several banks — including Cleveland State Bank, Collins State Bank, Oostburg State Bank, and Waldo State Bank — have partnered with the Sheboygan County Economic Development Corporation (SCEDC) to aid in actualizing the Forward Fund, a three-phase workforce housing project aiming to establish 600 entry-level homes in the county. The Forward Fund was initially a $10 million investment in workforce housing spearheaded by Johnsonville LLC, Kohler Co., Masters Gallery Foods Inc., Sargento Foods Inc., and Sheboygan County. Working alongside the partnering Wisconsin-chartered banks in the area, developers are ensuring its future residents are able to access mortgages and loans that allow families to take the first step toward owning a home in Sheboygan County. “It was in the best interest of our communities that we worked together,” notes Ben Becker, president of Collins State Bank, on the collaboration with Cleveland State Bank, Oostburg State Bank, and Waldo State Bank. “When people spend less on housing, they have more disposable income to spend on other goods and services, which can stimulate the local economies. When our community benefits, we benefit.” With construction underway, the first project — Founders’ Pointe in Sheboygan Falls — is expected to be completed by the end of 2024 and feature 54 single-family units available for under $250,000. “Upon completion of the project, there will be opportunities for permanent financing, and other financial institutions could get involved,” says Becker. “Several other communities are currently exploring similar projects for affordable housing, which will create additional opportunities for involvement throughout Wisconsin.” Continued on pg. 10

Inside this issue. . . Bank Executives Conference. . . . . . . pg. 2 Holiday Survey Results. . . . . . . . . . . pg. 8 Wisconsin Bankers Foundation News. . pg. 9 Power of Community Week. . . . . . . . . . . . pg. 13 Wisconsin Economic Forecast Report. . . pg. 17 Bank CEO Survey Results. . . . . . . . . . pg. 25

UMS

Wisconsin Bankers Association 4721 South Biltmore Lane Madison, WI 53718

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Chair’s Column

Be the Inspiration in 2024

By Donna Hoppenjan

In addition to kicking off the new year, January is just past the halfway point of my time as chair of the Wisconsin Bankers Association (WBA). Though bankers have long demonstrated their commitment to the wellbeing of our industry and the communities we serve, now is the perfect time to consider the ways in which each of us is able to cultivate success throughout our industry for years to come. Inspiration — a key priority for the Association this fiscal year — is demonstrated by the WBA membership in a number of ways. Whether your team takes advantage of WBA’s programs to connect and uplift peers or advocates for the ability of banks to thrive, adapt, and make meaningful contributions to communities across the state, each action contributes to the collective momentum towards a more successful future. Talent recruitment and retention remain at the top of mind for many industries in Wisconsin, and as a shrinking talent pool threatens the long-term viability and competitiveness of our industry, it is vital that bankers are

Wisconsin Banker

January | February 2024

proactive in working to attract young talent to the banking industry and ensuring that our young professionals are well-equipped to navigate the banking sector as it continues to evolve. By engaging with students through mentorship programs, internships, or career fairs, bankers can offer firsthand insights into the dynamic landscape of our industry. Furthermore, emphasizing the industry’s innovation, impact on the community, and diverse career opportunities helps to broaden students’ perspectives and encourage young people to consider banking as a promising and fulfilling career path. Now’s our time to inspire and drive positive change throughout our industry; to invest in the ongoing success of Wisconsin. Together, we each pave the way for a stronger, more vibrant future for Wisconsin’s banking industry and the communities we serve. Hoppenjan is president and CEO of Mound City Bank, Platteville and chair of 2022–2023 WBA Board of Directors.

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January | February 2024

Advocacy Update

New Year, New Opportunities to Advocate By Lorenzo Cruz of the year, will take place on February meeting certain aggregate contribution With the start of the new year, many 22 in Madison at the Monona Terrace. amounts to the PAC and ABW. These of us have taken time to reflect upon the accomplishments of the last year. The one-day event is a great opportunity contribution levels are based on the asset size of the bank. For the Wisconsin Bankers Association for all bankers, regardless of advocacy After the big win in the budget, experience, to gain insight on policy (WBA) and our members, 2023 was issues impacting the Wisconsin banking the WBA government relations team full of success. Of note, our team of continues to lobby at the State Capitol dedicated banking advocates helped industry and make direct connections in support of our top three priorities: with their elected legislators. These to secure a historic victory in the state budget, which will save the industry meetings, which occur in small groups elder fraud, financial institution modernization, and trust code updates. based on Assembly or Senate district, tens of millions of dollars annually Our team is also playing defense on through a state tax exemption on certian are an effective way for WBA and the issues regarding privacy, Merchant membership to share our legislative commerical and ag purpose loans. priorities with policymakers. Category Codes (MCC), Environmental Without the grassroots and financial advocacy support of the membership, On the financial front, it is no secret Social Governance (ESG), and credit card swipe fees. that election years bring with them this monumental achievement would As the Legislature turns its focus on not have been possible. So, as you begin political campaigns that are skyrocketing passing legislation over the next three to consider your resolutions for the year in cost. Being “B” for “Banker,” it is months, WBA calls upon our members ahead, I hope that you consider actively more important than ever that we to remain engaged in the process both are prepared to support pro-banking engaging in WBA’s political advocacy financially and on a grassroots level. candidates on both sides of the aisle. efforts in 2024. Political activism allows our collective At the individual level, bankers As always, there are a plethora of ways voice to stand out and be heard. should consider becoming a member for bankers to be involved with WBA’s of the Silver Triangle Club or advocacy efforts to aid in shaping the future of our industry. Being an election Leadership Circle by making a personal Cruz is WBA vice president – government relations. year, it is ever so important that bankers contribution to Wisbankpac or the Alliance of Bankers Conduit (ABW). are present to make their voices heard. Visit wisbank.com/Advocacy to Capitol Day, the Association’s most At the bank level, an organization can learn more about getting involved! important and largest advocacy event achieve Gold Triangle recognition by

Advocacy in Action Mound City Bank, Platteville hosted Sen. Howard Marklein (R–17) and Rep. Travis Tranel (R-Cuba City) for a “Take Your Legislator to Work” meeting.

Standing are: members of the Mound City Bank Board of Directors and senior management bank staff. Seated (left to right) are: Daryll Lund, WBA EVP – chief of staff; Sen. Howard Marklein; Rep. Travis Tranel; Donna Hoppenjan, Mound City Bank president and CEO; and Lorenzo Cruz, WBA VP – government relations. wisbank.com

Legal Update

transactions that exceed a certain dollar amount. The Committee recommends By Scott Birrenkott encouraging staff members to follow their bank’s procedures Data released by the Federal Trade fraudulent transactions. on suspicious transaction activity Commission (FTC) in 2023 shows that Typically, bad actors use rented, late to minimize losses. Additionally, consumers reported losing nearly $8.8 model vehicles with stolen Wisconsin bankers should work closely with their billion to fraud in 2022; an increase license plates and only visit branch customers to report the loss of access of more than 30% over the year prior. locations away from the customer’s devices, account information, or other Those are sobering numbers, but WBA’s address to avoid being spotted. These identifying information. Then, a system Financial Crimes Committee would individuals dress the part by wearing notification or warning to a relationship be quick to point out that figure only wigs and costumes to resemble the profile can be added to flag any potential includes fraud that was reported. individual whose identity they have felony lane gang activity. The WBA Financial Crimes stolen. The actor may also wear covering As technology, methods of business, Committee is comprised of fraud garments, such as sunglasses, hats, cowls, and commerce evolve, fraudsters officers, risk managers, and security and coats to make identification more are continually developing their specialists. The Committee serves to difficult. Staff should be encouraged methods to become increasingly more inform and educate the Wisconsin to closely compare the likeness of the convincing. In this way, the group banking industry, law enforcement, person conducting the transaction to the stresses the importance to monitoring and the general public on the changing identification presented. fraudulent tactics through alerts by security and criminal threats to While WBA’s Financial Crimes the Financial Crimes Enforcement Wisconsin’s financial sector while also Committee has reported that it is most Network (FinCEN), news sources, and helping to develop solutions. Of the common to see bad actors use drive information sharing. common fraud trends seen in Wisconsin up lanes to commit fraud, members of — including phone or online scams and felony lane gangs have been known to WBA would like to thank the Financial ATM skimmers — felony lane gangs enter a branch lobby as well. Crimes Committee for their assistance in remain difficult for law enforcement and Being aware of typical security informing this article. bankers alike to identify. questions, bad actors will have two A “felony lane gang” refers to a group forms of identification available. These Birrenkott is WBA director – legal and of organized criminals that target banks individuals may often appear anxious or liaison to the 2023–2024 WBA Financial through use of the far drive-up lane. rushed if confronted, or if they cannot Crimes Committee. While these groups are not new, they accurately answer security questions. have recently been active in Wisconsin. Paying careful attention to the second For legal questions, please email The group travels across the country to form of identification presented, bankers wbalegal@wisbank.com. recruit individuals for smash-and-grab should ensure that it has not previously Note: The above information is not petty thefts. These individuals will steal been closed or hot-carded. intended to provide legal advice; rather, it is intended to provide general cash, checks, and personal identifying Depending on branch locations and information about banking issues. cards such as driver’s licenses, credit overall risk tolerance, a bank might Consult your bank’s attorney for cards, and debit cards that are later used also consider establishing additional specific legal advice or assistance. to impersonate the victim and conduct identification procedures, perhaps for

Remaining Vigilant Against Felony Lane Gangs

WBA Comments on Recent FinCEN and DOL Proposals Comment letters are an excellent The letter supported the extension regulations issued under the Fair Labor opportunity for the banking industry and recommended that it be made Standards Act. The proposal would significantly increase the exemption to inform the federal agencies about permanent. WBA also recommended that FinCEN conduct additional thresholds under the FLSA. WBA the impact of rulemaking and provide examples. Recently, the Wisconsin outreach to affected businesses in order requested that DOL not undertake such Bankers Association filed comments with to promote overall awareness of the rule an increase at this time of economic Financial Crimes Enforcement Network and to better inform reporting entities recovery, as it would cause unnecessary disruptions for Wisconsin banks. (FinCEN) regarding its proposal to of their requirements. extend the filing deadline for beneficial Additionally, WBA filed comments View this and previous comment letters ownership information from 30 days to on U.S. Department of Labor’s (DOL) filed by WBA at 90 days for certain entities. proposal to update and revise the wisbank.com/CommentLetters. 6

Wisconsin Banker

January | February 2024

Invest in the Success of Your Bank’s Future Leaders Registration open for WBA’s highest-level school

Beginning on April 22, 2024, the Wisconsin Bankers Association’s (WBA) School of Bank Management will assist your team in becoming more well-rounded bankers. The week-long school provides bankers with an enhanced understanding of the bank as a business which, in today’s ever-changing banking environment, is critical for those who have the potential to rise within the institution. This year’s school will cover a number of topics including economics, money, and market; understanding the bank’s UBPR; lending functions in a bank; bank human resources; compliance management and bank operations; bank marketing; digital banking; asset/liability management; and more. As the highest-level school offered by the Association, the School of Bank Management is the ideal opportunity Register now for the WBA School of Bank Management, April 22–26, 2024, at wisbank.com/BankManagement.

for management trainees, managers new to the banking industry, and bankers pursuing a career in bank management and leadership to prepare for future enrollment at the Graduate School of Banking at UW– Madison. Additionally, GSB instructors and alumni make up a portion of the school’s faculty, providing attendees with the chance to establish and build connections early. Upon completion of the WBA School of Bank Management, graduates will be eligible for future Prochnow Educational Foundation/Wisconsin Bankers Association scholarships to be used for the Graduate School of Banking 25-month program. To register your team for WBA’s School of Bank Management, please visit wisbank.com/BankManagement. To learn more about additional educational opportunities available through WBA this spring, please see pg. 16 of this issue or visit wisbank.com/Education.

BankWork$ Builds Meaningful Careers in Banking Congratulations, graduates!

BankWork$ is a free, eight-week training program to prepare participants — primarily individuals from underresourced communities — for retail banking careers. The nationwide program was brought to Wisconsin in 2019 through a partnership between the Wisconsin Bankers Association (WBA) and Employ Milwaukee. So far, BankWork$ has provided over 130 individuals in the Milwaukee area with the opportunity to begin a career in banking. In December, a class of 12 students — including Emilia Blackwell- Brewer, Joseph Bump, Jarell Bustos,

Courtlyn Ellis, Tytiana Harris, Sravanthi Kakarla, Dennis Lara, Edwin Martinez Dolores, Elizabeth Miller, Umika Miller, LeAnn Shields, and Lily Smith — graduated from the program. WBA’s Rose Oswald Poels attended the ceremony and congratulated the graduates on their achievement. Over the course of the eight-week program, students learned the hard and soft skills necessary for entry-level retail and operations positions. Upon graduation, each graduate had the opportunity to take part in on-the-spot interviews with BankWork$ employer partners.

BankWork$® is a public-private partnership that primarily trains adults from underserved neighborhoods for careers in retail banking. To learn more about the program, or how your bank can get involved, please visit employmilwaukee.org/BankWorks.htm.

Standing, back row (left to right) are: Oscar Delgado, Employ Milwaukee career navigator; Jarell Bustos; Emilia Blackwell-Brewer; and Dennis Lara. Standing, middle row (left to right) are: Adriene Wright, BankWork$ instructor; Sravanthi Kakarla; Umika Miller; Elizabeth Miller; Edwin Martinez Dolores; Rose Oswald Poels, WBA president and CEO; and Jovo Potkonjak, BankWork$ program manager. Seated, front row (left to right) are: Courtlyn Ellis; Lily Smith; Joseph Bump; Tytiana Harris; and LeAnn Shields. wisbank.com

When Will Wisconsin Banks Be Closed in 2024? Results of WBA Holiday Closure Survey

Fifty-eight banks completed the Wisconsin Bankers Association’s 2024 Holiday Closure Survey. *Asterisks denote holidays observed by the Federal Reserve System. Percentage sums may not equal 100 due to rounding. Open

Closed – Day Off

Closed – Day of Service

Closed – Staff Training

Closed Early

58 (100%)

Martin Luther King, Jr. Day (January 15)*

19 (33%)

35 (60%)

4 (7%)

Washington’s Birthday (Presidents Day) (February 19)*

26 (45%)

11 (19%)

21 (36%)

Good Friday (March 29)

46 (81%)

2 (4%)

9 (16%)

Memorial Day (May 27)*

58 (100%)

27 (47%)

29 (50%)

1 (2%)

Independence Day (July 4)*

58 (100%)

Labor Day (September 2)*

58 (100%)

Columbus Day/Indigenous Peoples Day (October 14)*

24 (41%)

7 (12%)

27 (47%)

Veterans Day (November 11)*

19 (33%)

37 (64%)

1 (2%)

Thanksgiving Day (November 28)*

58 (100%)

Christmas Eve Day (December 24)

2 (3%)

3 (5%)

53 (91%)

57 (98%)

1 (2%)

33 (57%)

5 (9%)

20 (34%)

New Year’s Day (January 1)*

Juneteenth National Independence Day (June 19)*

Christmas Day (December 25)* New Year’s Eve Day (December 31)

Wishing you abundant joy and health this New Year! Thank you for your loyalty and goodwill throughout the year.

Wisconsin Banker

January | February 2024

News From the Wisconsin Bankers Foundation The Non-Profit Arm of WBA, Dedicated to Financial Literacy

St. Marcus School Awarded $5,000 WBF Grant The Wisconsin Bankers Foundation (WBF) is pleased to announce a $5,000 grant to St. Marcus School in Milwaukee. The grant will support the St. Marcus community engagement team’s financial education efforts during the 2023–2024 school year, including: • • •

Virtual financial literacy classes hosted by St. Marcus and their community partner organizations. In-person “Rising Star” meetings. These dinner meetings spotlight a parent who shares a testimonial about their recent successes with a group of other parents. The group also troubleshoots obstacles that other parents are facing. A recognition and celebration event called “RISE” (Resilient Individuals Seeking Excellence) that brings together school parents, staff, and community members who celebrate the successes of a group of 4–5 parents who are on their way to becoming homeowners, have become homeowners, or are accomplishing their financial goals in other ways.

“The work St. Marcus School’s community engagement team is doing to empower the families of their students aligns wonderfully with our Foundation’s mission to promote financial literacy and capability,” said Rose Oswald Poels, WBF chair and treasurer. “We are proud to support these initiatives and congratulate the St. Marcus staff and participants on the positive impact they are creating.” St. Marcus School is one of two recipients of a 2023–2024 Wisconsin Bankers Foundation grant. The Foundation also awarded a $5,000 grant as part of a three-year commitment to Asset Builders to support its statewide Finance and Investment Challenge Bowl for high school students.

Announcing the 2024 Reading Raises Interest Kits

Are you planning financial literacy presentations for Teach Children to Save Day on April 25, 2024 or other elementary school visits? WBF will provide one free Reading Raises Interest Kit per WBA-member bank, which includes: • • •

Nine copies of “A Boy, a Budget, and a Dream” by Jasmine Paul and one copy of the Spanish edition “Un Niño, Un Presupuesto Y Un Sueño,” Sample lesson plans for teaching children the basics of saving money, and Additional resources for your classroom visit.

Additional books are available for purchase at a discounted rate of $6.00/book while supplies last. Learn more and order your Reading Raises Interest Kit at: wisbankfoundation.org/reading-raises-interest-kits. Questions? Contact WBF Coordinator Hannah Flanders at hflanders@wisbank.com.

Wisconsin Bankers Foundation Spring Scholarships Apply between January 29 and March 13, 2024 to be considered for one of four $2,000 scholarships! Criteria: • Wisconsin high school senior, an employee of a WBA-member bank, or the dependent of a WBA-member bank employee. • Currently enrolled or enrolling in fall at an accredited Wisconsin public or private, nonprofit college, university, or technical college. • Demonstrate academic, community, and pre-professional (job or internship) achievement and be able to articulate the importance of financial literacy. wisbankfoundation.org/scholarships

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Addressing Housing Affordability in Wisconsin Initiatives in eastern Wisconsin help to provide workforce housing In Washington County, leaders, employers, and workers have also expressed concern over the state of the county’s quality and stock of houses. As such, the Washington County Community Development Department established the Next Generation Housing Initiative in 2021.

“Several other communities are currently exploring similar projects for affordable housing, which will create additional opportunities for involvement throughout Wisconsin.” – Ben Becker, president of Collins State Bank

With a mission to bring 1,000 new owner-occupied housing units under $420,000 by 2032, the initiative has already broken ground on two pilot developments — The Oaks of Jackson subdivision and lots 67–73 in the Skyway Park subdivision (Hartford). Between the two developments, the initiative will make 108 single- and mixed-family homes available to area residents. Brian Heckendorf, senior vice president – director of community banking at Westbury Bank and village president of Jackson, Wisconsin, has a hand in the project not just from a banking standpoint, but as a community leader as well. “I see this development helping various demographics from first-time homebuyers all the way to empty nesters that are looking to downsize,” Heckendorf notes. “This housing initiative will also help our local businesses fill their staffing needs better by keeping more people working and living in Washington County.” Through Westbury Bank’s involvement in the program, several 10

Wisconsin Banker

bankers helped to provide expertise as the County worked to establish guidelines for the initiative. “Working alongside a team of realtors, lenders, title companies, attorneys, and Washington County employees, our goal is to ensure that new homeowners looking to buy are able to obtain conventional loans,” adds Heckendorf. In addition to the Forward Fund and Next Generation Housing Initiative, the Northeastern Wisconsin Housing Community Development Block Grant (CDBG) Loan Program helps to address the affordable housing as well as community and economic development needs of non-urban areas of Brown, Calumet, Door, Fond du Lac, Kewaunee, Manitowoc, Marinette, Outagamie, Sheboygan, and Winnebago counties. Since 2014, the state CDBGfunded program has been administered by Brown County in order to provide 0% deferred loan payment housing rehabilitation loans to low- and moderate- income (LMI) owneroccupied households and smallscale neighborhood-oriented public facilities improvements, among other activities, to residents. Larger cities, including Appleton, Fond du Lac, and Sheboygan, receive CDBG funds directly from the U.S. Department of Housing and Urban Development (HUD). “Our goal is to ensure that new

homeowners looking to buy the homes are able to obtain conventional loans.”

– Brian Heckendorf, senior vice president – director of community banking at Westbury Bank and village president of Jackson, Wis. Housing Provisions While several preexisting initiatives continue to make investments in

January | February 2024

affordable housing across the state, Wisconsin’s 2023–2025 state budget also included several supplemental items in support of local workers, families, and communities that are predicted to make a historic impact across the state. In the spring of 2023, the Workforce Housing Package was first introduced by Assembly Housing Chair Robert Brooks (R–Saukville) and Senate Housing Chair Romaine Quinn (R–Cameron) after a year of discussions between a coalition made up of the League of Wisconsin Municipalities, Wisconsin Builders Association, Wisconsin Counties Association, Wisconsin Housing and Economic Development Authority (WHEDA), Wisconsin REALTORS® Association, and Wisconsin Towns Association. The package garnered bipartisan support in both the State Assembly and Senate before being signed into law. The programs then received funding as part of the 2023– 2025 state budget. “With this package, the coalition was most concerned with spurring the development of workforce housing,” notes Brad Boycks, executive director of the Wisconsin Builders Association. “The first step in making housing in Wisconsin more accessible is providing developers with the resources to both build and remodel single- and multifamily homes.” The 2023 Wisconsin Housing Package encompasses the following five laws: • Act 14: Residential Housing Infrastructure Loan Fund Creates a residential housing infrastructure revolving loan fund and loan fund program. Both programs are administered by WHEDA and awarded to developers for the purpose of workforce or senior housing. Loans

may also be awarded to the governmental unit having jurisdiction over the development. • Act 15: Main Street Housing Rehabilitation Loan Fund Creates a main street housing rehabilitation revolving loan fund and loan fund program. Both programs are administered by WHEDA and awarded to the owner of single-family or multifamily rental housing for the purpose of housing rehabilitation. • Act 16: Local Regulation of Property Development Addresses the judicial review of local residential development decisions; approval of permits for residential housing developments; the procedure for amending a zoning ordinance; appeal of county conditional use permit decisions; and planned development district zoning. • Act 17: Workforce Housing Rehabilitation Loan Program Modifies certain parameters of the workforce housing rehabilitation loan program to expand upon the specifics — including type of rehabilitation and type of home — that are eligible for a loan. Additionally, the Act allows WHEDA to establish an interest rate (at or below market rate) for a workforce housing rehabilitation loan. • Act 18: Commercial-to-Housing Conversion Loan Fund Creates a commercial-to-housing conversion revolving loan fund and loan fund program. Both programs are administered by WHEDA and awarded to the developer to cover construction costs for the conversion of a vacant commercial building to a new residential housing development that consists of workforce or senior housing. For bankers, the 2023 Wisconsin

Housing Package encourages banks to foster partnerships with WHEDA that significantly enhance the banks’ ability to assist customers in accessing these housing programs tailored to their specific needs. This collaboration not only helps banks to extend their traditional financial services by ensuring their customers are aware of the resources available to them, but bankers are also able to understand the nuances of each program and guide their customers effectively. “While the loans provided by WHEDA are not meant to be the primary source of funding, it is important for bankers to know and understand what is included in the 2023 Housing Package in order to share the affordable opportunities with their customers,” notes Tom Larson, president and CEO of the Wisconsin REALTORS® Association. “By bridging financial gaps and offering support beyond conventional services, banks reinforce their dedication to the well-being of their customers and the communities they serve.” Taking the Lead As initiatives and opportunities for affordable housing emerge across the state, bankers have the unique opportunity to invest in their existing and future neighbors. “In the last several years, many of us have experienced a very tight workforce environment while housing costs, whether renting or owning, continued to increase

significantly,” says Becker. “Affordable housing directly contributes to the overall well-being and prosperity of a community, and we, as community bankers, have the opportunity and responsibility to support strategies that align with our mission to serve the needs of our communities.” “By bridging financial

gaps and offering support beyond conventional services, banks reinforce their dedication to the well-being of their customers and the communities they serve.”

– Tom Larson, president and CEO of the Wisconsin REALTORS® Association. Flanders is WBA writer/editor.

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Strategic Connections

Making Financial Literacy Fun

By Alissa Weber

While attending the FLEX Retail and Marketing Summit this year, I was impressed with the number of bankers being recognized for their financial literacy efforts. While many of our peers go out into their communities and lead programs about important financial topics, it got me thinking about the importance of teaching financial education at home. As bankers are well aware, money management, budgeting, saving, and basic math skills are the foundation of financial literacy — especially for our youngest consumers. In starting financial education early, parents and bankers alike can help to instill life-long financial habits and prepare children to build a secure financial future.While many banks have already taken a great first step in offering programs tailored to children and teens, it is important that we do not stop there. Many parents will attest that gamification is a great strategy in piquing a child’s interest. When opening new children’s accounts, bankers could also include a recommended list of financial literacy-focused games — such as Monopoly Junior or The Game of Life — alongside account disclosures.

Additionally, the Wisconsin Bankers Foundation (WBF) offers a wide variety of reading recommendations tailored for young learners along with a diverse selection of financial literacy resources, games, and lessons suitable for individuals of all ages. These resources are free and available for bankers to incorporate into their own presentations or share with parents, instructors, and those passionate about enhancing financial literacy. The journey to improving financial literacy is ongoing, and adapting strategies based on feedback and evolving needs is crucial. By fostering a community approach and continually exploring innovative ways to make financial education relatable and engaging, bankers help make significant strides in ensuring financially capable communities. Weber is senior marketing representative – brand management at Bank Five Nine in Oconomowoc and a member of the 2023–2024 WBA Marketing Committee. Learn more about the efforts of WBA’s non-profit arm at wisbankfoundation.org or on pg. 9 of this issue.

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January | February 2024

Power of Community Week In 2023, over 326 individual bank branches (representing 54 member banks) reported their participation in the Wisconsin Bankers Association’s (WBA) Power of Community Week. The annual campaign — which brings together member banks, Associate Member Participation map from 2022 Power of companies, and the WBA Commmunity Week staff — encourages all participants to engage in one or more service activities to demonstrate to the public the ongoing commitment of Wisconsin’s banking industry to local communities. This year, WBA’s Power of Community Week will be held April 15–20 and will be followed by National Teach Children to Save Day on Thursday, April 25. However, throughout April — Community Banking Month — and May, activities including volunteering at nursing homes,

hosting shredding events at the bank, running a food drive, or giving financial literacy presentations in K–12 classrooms all count toward a bank’s participation in the WBA Power of Community Week. We invite all members to participate in this effort to show how much Wisconsin’s banking industry supports the communities in our state. To get started, make sure your team has their Power of Community shirts ready. These t-shirts feature the campaign logo and hashtag (#BanksPowerWI) and can be ordered at wisbank.com/BanksPowerWI. A company logo may also be added to the back. Next, organize your bank’s volunteer activities and share your plans with WBA. All bank initiatives will be added to the interactive map to highlight the impact and serve as inspiration for other banks for their community-focused activities. A media kit, including a press release template, sample social media posts, and best practices, are also available. Finally, share your photos on social media using the hashtag #BanksPowerWI. Throughout Power of Community Week, WBA will be sharing the ways in which the Wisconsin banking industry is committed to serving Wisconsin communities.

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Bulletin Board

News from Wisconsin Bankers Association Members

Stadler

Hinze

Beheiri

Myers

Rice

Pelot

Athorp

Scully

Lauersdorf

Travnick Oberfoell

Cashmore

Schalk

Kasinski

Tolokken

Hensley

Lindert

Jacobson

Strieff

Thompson

Molter

Manitowoc Promotions and New Hires Kristeen Pelot (pictured) has Fond du Lac joined Bank First as senior Glenn Stadler (pictured) has vice president – operations. joined National Exchange Bank Additionally, Trevor Athorp & Trust’s Waukesha office as a senior vice president – commercial (pictured) has joined the bank as vice president – agricultural and lending and market lead. business banking. Ixonia

president – market president. Additionally, David (Dave) Schalk (pictured) has joined the bank’s Burlington office as vice president – market president.

Meredith Strieff (pictured) was honored by the American Bankers Association (ABA) as a recipient of its 2023 ABA Emerging Leader Awards.

Waukesha Waukesha State Bank is proud to announce the promotion of Tammy Kasinski (pictured) to controller.

Madison Chief Executive Officer and Chairman of Capitol Bank, Ken Thompson (pictured), has been named to the Federal Home Loan Bank of Chicago Board for a four-year term as a Wisconsin Director.

Wausau Peoples State Bank has announced that Katie Tolokken (pictured) has joined Peoples Wauwatosa State Bank as vice president and WaterStone Bank is proud to chief operating officer. announce that Marlene Molter (pictured), senior vice president Wauwatosa Mauston Ixonia Bank has recently hired – human resources, has been Joshua Braun has joined Bank of Mauston is pleased Alex Hinze (pictured) as a vice WaterStone Bank as its newest named an Inclusive Influencer president – commercial lending. to announce the appointment by the Women’s Fund of Greater community president. of Molly Scully (pictured) to Milwaukee. Madison Retirements president and chief executive Capitol Bank is pleased to Associate Member News Fond du Lac officer. announce that Bader Beheiri National Exchange Bank & Trust Alex Brown has been promoted (pictured) has joined the team as Oregon wished to congratulate Richard to signing director, financial One Community Bank has vice president – retail banking. services at CliftonLarsonAllen LLP. (Dick) Hensley (pictured), welcomed Jonathan Lauersdorf Madison president – southeast Wisconsin (pictured) as vice president – Jim Myers (pictured) has been market, on his retirement. digital banking. promoted to vice president – Mauston Sun Prairie company retirement plans at Michael Lindert (pictured), First Business Bank. Additionally, Bank of Sun Prairie welcomes president and chief executive the bank is pleased to welcome Bridget Travnick Oberfoell officer at Bank of Mauston, (pictured), SPHR, SHRM-SCP, Matt Rice (pictured) back as retired in December 2023 as new senior vice president – chief investment officer. after 43 years of service to the director of human resources and Madison banking industry. training. Park Bank has named Ken Annoucements Lammersfeld as chief executive Union Grove First Citizens State Bank, Chippewa Falls Jay Cashmore (pictured) has officer and Josh Marron as Whitewater Celebrates Gerald (Jerry) Jacobson joined the Community State president and chief banking (pictured), president of 160 Years Bank Waterford location as vice officer. On October 27, 2023 WBA Northwestern Bank, has been re-elected to the Federal Reserve President and CEO Rose Oswald Poels presented First Citizens Bank of Minneapolis’ Board for State Bank, Whitewater with a a second term. He will serve a plaque celebrating the bank’s 160th full three-year term as Class A anniversary.Pictured (left to right) Director. are: Jim Caldwell, First Citizens State Horicon Horicon Bank’s Retail Sales Manager and Vice President

Wisconsin Banker

January | February 2024

Bank CEO; Rose Oswald Poels, WBA president and CEO; and Nate Parrish, First Citizens State Bank president.

Bulletin Board

News from Wisconsin Bankers Association Members Celebrating a Lifetime of Service WBA is proud to recognize the individual bankers who dedicate their service to our industry and their community. The 50- and 60-Year Clubs recognize bankers who have served in the banking industry for 50 and 60 years, respectively. Additionally, WBA’s Lifetime Service Awards recognize bankers who have served in the industry for between 30 and 49 years. To recognize a banker for the esteemed honor, please visit wisbank.com/ServiceAwards.

Bank of Brodhead Glenn Marass, vice president – ag lending, was recognized with WBA’s Lifetime Service Award for 45 years of service with WBA’s Lifetime Service Award. Pictured (left to right) are: Michael Olson, Bank of Brodhead president and CEO; Glenn Marass; and Pam Kelly, FIPCO president.

Dairy State Bank, Rice Lake In November 2023, Mike Bock retired from his position as chief executive officer after 35 years of service. Bock was presented with a WBA Lifetime Service Award to celebrate the achievement. Pictured (left to right) are: Mike Bock and Daryll Lund, WBA executive vice president – chief of staff.

Farmers & Merchants State

State Bank of Chilton After 46 years of service to the banking industry, Joyce Ditter, vice president – cashier, retired in December 2023. She was presented with a WBA Lifetime Service Award to celebrate the achievement. Pictured (left to right) are: Joyce Ditter and WBA President and CEO Rose Oswald Poels.

First State Bank, New London After 38 years of service to the banking industry, Wisconsin Rapids Branch Manager Rhonda Richardson retired in October 2023. She was presented with a WBA Lifetime Service Award to celebrate the achievement. Pictured (left to right) are: Matthew Lemke, First State Bank president and CEO; Rhonda Richardson; and Heather MacKinnon, WBA vice president – legal.

First National Bank of River Falls In December 2023, Sue Langer, tour coordinator, was recognized for 50 years of service to the banking industry. She was presented with WBA’s 50 Year Club Award in celebration of the milestone achievement Pictured, holding a plaque, is Sue Langer. Left to right are: Daryll Lund, WBA executive vice president – chief of staff; Jeff Johnson, First National Bank of River Falls president and CEO; and Sandra Smith Wurm, chair of the bank’s Board of Directors.

Royal Bank, Elroy Lynn Munz, vice president – security officer based in Cobb, retired from her position in November 2023. In celebration of her 48 years of service, she was presented with WBA’s Lifetime Service Award. Pictured (left to right) are: Rose Oswald Poels, WBA president and CEO; Glenda Faull, executive vice president/chief banking officer; Lynn Munz; Barb Enloe, vice president; and Dan Ravenscroft, Royal Bank president

Bank, Waterloo William (Bill) Campbell, president and CEO, was recognized with WBA’s Lifetime Service Award for 40 years of service to the banking industry with WBA’s Lifetime Service Award. Pictured (left to right) are: Pam Kelly, FIPCO president, and Bill Campbell.

See more good news about Wisconsin’s banking industry, including recent hires, staff achievements, and community involvement at wisbank.com/Bulletin.

Partners Bank, Marshfield Doreen Kuse, assistant cashier, was honored with WBA’s 50 Year Club Award for her tenure in the banking industry. Pictured (left to right) are: Partners Bank President and CEO Jeff Lappe, Doreen Kuse, and WBA President and CEO Rose Oswald Poels.

Northwestern Bank, Chippewa Falls

During a ceremony held in October 2023, 15 employees were recognized for their tenure and service to Wisconsin’s banking industry. Congratulations to Kathie Barth (46 years), Jody Becker (37 years), Roxanne Geurkink (32 years), Dawn Iverson (32 years), Jerry Jacobson (45 years), Judy Jensen (32 years), Jane Johnson (44 years), Michele Koch (39 years), Jerry Kuehl (37 years), Toni Luzinski (37 years), Sandy Martell (31 years), Julie Murphy (33 years), Fran Noller (33 years), Kent Pickerign (37 years), and Lori Schindler (44 years).Pictured, back row (left to right) are: Roxie Geurkink, Jane Johnson, Jerry Jacobson, Dawn Iverson, Kent Pickerign, Julie Murphy, and Jerry Kuehl. Pictured, front row (left to right) are: Michele Koch, Fran Noller, Lori Schindler, Sandy Martell, Toni Luzinski, Kathie Barth, and WBA

President and CEO Rose Oswald Poels.

wisbank.com

2024

Education Calendar April

January •

Understanding Bank Performance Virtual Series

•

Midwest Economic Forecast Forum

11–12

2024 Community Bankers for Compliance (CBC) – Session I

15–20

•

Virtual – membership/pricing op�ons vary

February 1

•

• •

16–18

•

Power of Community Week Fintech Showcase Wisconsin Dells

Introduc�on to Commercial Lending School Madison – $895/atendee

Branch Manager Boot Camp: Session I

Four-part series, virtual half days – $800/atendee 7–9

•

Compliance Forum: Session III

•

Capitol Day

•

Bank Execu�ves Conference Wisconsin Dells

•

22–26

•

Women in Banking Conference Wisconsin Dells or virtual – team pricing available School of Bank Management Madison – $1,395/atendee

•

Wisconsin Dells – annual membership/pricing varies

Community Bankers for Compliance (CBC) – Session II

Virtual – membership/pricing op�ons vary

Madison

Online Workshop; Fundamentals of Commercial Lending 101 Virtual full day

5 •

Advanced IRA Workshop

Health Savings Account Workshop Madison or virtual – $245/atendee

6–7 • 11–15 •

FIPCO So�ware & Compliance Forum: Deposits Virtual half days – $250/atendee

13–15 •

Real Estate Compliance School

14–15 •

Call Report Workshop

25–28 • 27 •

Madison or virtual – $795/atendee

Wisconsin Dells or virtual – $245/atendee

Residen�al Mortgage Lending School Madison – $1,045/atendee

Online Workshop: Fundamentals of Commercial Lending 201: Analyzing Repayment Sources Virtual full day

www.wisbank.com I 608-441-1252 I wbaeduca�on@wisbank.com

Wisconsin Banker

January | February 2024

FDIC Bank Directors College Madison – $225/atendee

14–15

•

BSA/AML Conference Wisconsin Dells

•

Trust Conference

Madison – $245/atendee TBD

•

Personal Banker School

Central Wisconsin area – $495/atendee

KEY: Color-Coded Event Descriptions •

Virtual half days – $245/atendee

Security Oﬃcer Workshop

Human Resources Conference Wisconsin Dells

Loan Compliance School

Madison or virtual – $1,295/atendee

20 •

•

9 •

Madison or virtual – $245/atendee 6 •

May 2

March

Agricultural Bankers Conference

Wisconsin Dells – $300/ag sec�on member or $350/non-sec�on member atendee

Virtual – individual & group pricing available 23

Wisconsin Economic Forecast Luncheon Madison

Eight-part series – $1,000/atendee

• • • •

Conferences/Summits – One or more days, based on hot

topics, industry news and best prac�ces, scheduled �me for peer networking.

Schools/Boot Camps – Focused on a par�cular area of banking, allowing for a deep dive into that focused area over the course of two to six days.

Workshops/Seminars – One-day programs, some�mes in mul�ple loca�ons, focused on a speciﬁc topic or area of banking. WBA-Hosted Webinars – Two-hour webinars instructed with a par�cular focus on Wisconsin state law and rules.

Other Events

WISCONSIN ECONOMIC REPORT

2023. While some businesses are still looking for labor, it is less of a widespread issue than it has been in the past. This resiliency is expected to remain well into the new year. A Cautionary Approach In addition, gas prices dropped Heading Into 2024 throughout last fall, which directly By Rose Oswald Poels helped consumers’ pocketbooks. With more money in their bank accounts to The year 2023 ended with Wisconsin’s spend on discretionary items instead economy in a strong position despite of gasoline, retail sales numbers are headwinds faced throughout the expected to end the year strong. year, and that resiliency is expected The banking industry itself to last throughout 2024. According continues to show solid financial to the WBA Bank CEO Economic strength through the third quarter of Conditions Survey conducted in 2023. Year-over-year lending increased November 2023, more than 68% in all categories — commercial, of bank leaders responding to the residential, and farm loans — survey believe the current health demonstrating the responsiveness of Wisconsin’s economy is good or of banks to meet their customers’ excellent. Looking ahead six months, needs. Individuals and businesses 47% of respondents believe the continue to trust banks as a safe place economy will remain the same while to keep their money, as evidenced by 44% believe it will weaken. These a slight increase in deposits, both year responses are an improvement from over year (0.59%) and quarter over last year when 72% of respondents quarter (0.95%). Net interest margin believed the economy would weaken for Wisconsin’s banks held steady in the next six months. Moreover, most at 3.19% year over year, and capital respondents (95%) do not foresee levels are healthy. inflation worsening in the future, Certainly, one headwind facing further supporting the notion that the the economy is the unknown length economy will remain essentially the of time that interest rates will remain same over the next six months. elevated. While it is a positive sign In the second half of 2023, we for the economy that the Fed did saw lower-than-expected inflation not raise rates after July 2023, the along with core inflation moving Fed is also not expected to begin closer toward 2% than expected, cutting interest rates until much both of which helped the Fed decide later in 2024. This sustained period to keep rates steady and not impose of higher interest rates particularly any increases after July 26. We also harms individuals with high credit continue to see strong employment card balances, and highly leveraged numbers, with the unemployment businesses and farmers that may rate dropping to 3.7% in November also be experiencing limited revenue

growth. In addition, businesses that borrowed money at a fixed rate for a two- or three-year period will see their loans reprice in 2024, which will put pressure on their overall earnings. Demand for loans is expected to remain steady throughout 2024, although overall demand is not extremely strong. Demand for business, commercial, and agricultural loans are all expected to remain consistent into 2024; however, residential real estate lending is lagging and expected to continue to remain at lower levels. As discussed above, elevated interest rates are one factor contributing to a weaker demand for credit. In addition, other headwinds for the new year include inflation, the uncertainty surrounding a presidential election, and geopolitical issues. While there is some caution heading into 2024, bankers believe that the economy will not materially change from its current conditions and are not expecting a recession. Bankers are in the risk business and have reserves set aside to handle any potential defaults they may experience in 2024. Overall, the industry itself is very healthy and in a strong position to work with their borrowers and customers through any potential economic issue this year. Oswald Poels is president and CEO of the Wisconsin Bankers Association Founded in 1892, the Wisconsin Bankers Association is the state’s largest financial industry trade association, representing more than 200 commercial banks and savings institutions and over 30,000 employees. wisbank.com

WISCONSIN ECONOMIC REPORT

The Theme for 2024 is ‘Wait and See’ By Robb Kahl Secretary of the Treasury Janet Yellen captured the spirit of economic forecasts when she said, “The outlook for the economy, as always, is highly uncertain.” Over the last year, material prices and availability leveled, minimizing bid price increases and project delays. But many of the ‘asks’ on last year’s economic wish list remain unfulfilled: an increase in owner confidence to invest in construction projects, lower interest rates to make project financing possible, and an ample supply of employees, willing and able to work building Wisconsin. ‘Wait and see’ is an appropriate theme for the 2024 construction industry outlook because economic news continues to inspire neither confidence nor dread. The Fed continues to wage its tightrope balancing battle against inflation, while trying to avoid undue deterioration in the capital markets environment. This uncertainty is the engine behind an economy that is showing signs of deceleration, with several contributing factors, including high interest rates impacting consumer discretionary incomes that stresses business profitability. In 2023, U.S. total construction starts through October rose only 7% (much lower than the increases we saw in 2022), with moderate increases in most segments of the nonresidential and public sectors, including transportation. Multi-family is the only segment of residential that has shown increases, with single-family down 6% and not likely to resume activity until interest rates improve. The Architectural Billing Index for October reflects a continued downward trend in architectural billings, forecasting a slowdown in the construction industry, and the Dodge Momentum Index is down almost 10% from Oct 2022.

Wisconsin Banker

Manufacturing held the spotlight for growth in 2023, attributed to a robust computer and electronic manufacturing market that includes data centers. Education, power, healthcare, and transportation are expected to finish the year with strong double-digit growth. As historical trends demonstrate, growth in the different construction segments can vary widely each year. Wisconsin’s 2023– 2025 biennial budget and WisDOT’s Transportation Funding are strong and include substantial investments in both transportation and infrastructure. Manufacturing projects are forecasted to remain at peak levels in 2024, as Buy America requirements force owners to invest in U.S. facilities, and U.S. computer/electronics manufacturing. For example, data centers, are in strong demand. Transportation, highway and street, sewage and waste disposal, and water supply are forecasted to deliver doubledigit increases in 2024 due to increased federal spending. The Infrastructure Investment and Jobs Act (IIJA), Chips+ Act, and Inflation Reduction Act of 2022 will continue to support investment in projects that increase energy efficiency and reduce carbon emissions. Despite the ongoing concerns about a housing shortage, particularly for workforce housing, it is forecast that singlefamily housing will not recover until the stabilization of interest rates. This presents a major challenge in most parts of the state. In Dane County for example, it is projected that the population will increase by 100,000 over the next decade, and multi-family vacancies today are less than 2%. There is no end in sight for multi-family housing construction in Dane County. There are many units being built right now, both at affordable and high-end market rate, despite the rising interest rate environment.

January | February 2024

“Workforce housing,” rather than lowincome housing, needs to be a focus. The availability and cost of building materials in 2023 were less of a challenge than in recent years with most inputs, except for electrical gear and some electronics, leveling off. Contractors are not experiencing relief relative to labor availability. Wisconsin, like the rest of the midwestern states, has close to no population growth, leaving worker shortages once again the #1 challenge for construction. The ongoing shortage of workers will be challenging for a much longer period than material costs or supply. Wisconsin’s construction industry contributes to the quality of life we enjoy and is an important stimulator for the economy. Every $1 spent within the construction industry, produces an economic impact of $1.84. Every $1 million spent within the construction industry generates twelve jobs on average (seven within construction and five in other sectors) and over $742,000 in wages. Construction Business Group looks forward to supporting the modest growth forecasted for 2024 and is prepared to work with our industry partners and elected officials, as we Build Wisconsin Together. Kahl is the executive director of Construction Business Group. The Construction Business Group works to promote and protect the construction industry by ensuring fair contracting laws are followed on public construction projects. CBG works cooperatively with contractors, employees, and public entities by educating them on fair contracting laws; monitors projects for fair contracting compliance; and aids to resolve compliance issues.

WISCONSIN ECONOMIC REPORT

Wisconsin Farmers Push Through More Challenges in 2023 By Kevin Krentz 2023 was an anxious year for farmers. The year started with many geopolitical issues, such as elevating fertilizer prices, continued supply chain disruptions, and trade tensions. While global challenges did not completely subside, domestic issues became more dominant. Inflation, interest rates, and labor costs have become some of the most prevalent concerns of farmers across Wisconsin. Although inflation has slowed recently, prices are still high for farmers. Some prices are driven by a strong dollar increasing import costs, such as the costs of chemicals and fertilizers. Though fertilizers were cheaper than in 2022, they were still relatively high historically speaking. Much of the increase in domestic costs was driven by labor costs. From parts to supplies, equipment to services, labor costs have increased throughout the supply chain and pushed costs higher for farmers. Farming is a high-asset, lowmargin industry. In 2023, Wisconsin agriculture not only saw higher replacement costs for assets, but interest rates we haven’t experienced in a generation. This has slowed and will continue to slow asset updates and growth as everyone tries to determine how transitory the rate increases are. As unemployment rates remain historically low, on-farm labor costs have risen in recent years. According to USDA National Agricultural Statistics Services, farm labor rates were up 4–10% in May of 2023 from the year prior. The range is dependent on the area of farmwork.

May rolled around, and farmers across the state were busy planting. By mid-May, the rain turned off and some parts of Wisconsin experienced some of the worst drought conditions in more than a generation. Planting in these conditions led to inconsistent germination in fields as seeds waited for water. Parts of Wisconsin went for up to three months with less than an inch of rainfall. This even affected deep-rooted crops, stressing alfalfa and pastures. Yield concerns increased as the growing season continued. But crop genetics have improved dramatically during the last 20 to 30 years, helping make crops much more drought-tolerant than years before. As harvest began, most farmers were surprised by the above-average yields they experienced. The higherthan-expected yields also caught the markets off guard, and commodity prices quickly took a hit. In most regards, farmers are price takers, not price makers. Margins have tightened for agriculture but not without opportunities. Commodity prices ebb and flow dramatically over the pace of 12 months. It is important for farmers to follow their business plan, use the tools available to them, and protect a profit when they can. Even when 2023 was another hard year in dairy, farmers who utilized tools such as Dairy Revenue Protection and Dairy Margin Coverage had a successful year. Farm Bureau has helped develop and bolster Dairy Margin Coverage (DMC) and Dairy Revenue Protection (DRP) as well as crop insurance. We also continue to work

on Federal Milk Marketing Order reforms. We are here to support farmers across Wisconsin. This past spring, the Farm Bureau lobbied for a very agriculture-friendly Wisconsin state budget including the Agriculture Road Improvement Program. Wisconsin agriculture is a $104 billion industry, and those dollars are spent over and over in local communities around the state. Helping agriculture succeed helps our small communities. But know that Farm Bureau is much more than a lobbying organization. We are a farmer network of support on everything from leadership development to promoting the value of conservation practices to engaging consumers. This year we were excited to announce a consumer-friendly website to learn more about and engage with farmers in Wisconsin. Visit GatherWisconsin. com for yourself. As we conclude 2023, Wisconsin farmers have many justifiable concerns. Farm Bureau and our agricultural partners will continue to advocate for all of agriculture. In general, farmers are optimists. They are good at finding solutions and are looking forward to another productive year in 2024. Krentz is a director on the board of the Wisconsin Farm Bureau Federation. The Wisconsin Farm Bureau Federation is the largest general farm organization in the state and serves as a voice for farmers. WFBF’s mission is to lead the farm and rural community through legislative representation, education, public relations, and leadership. wisbank.com

WISCONSIN ECONOMIC REPORT

The New Three-Legged Stool By Brandon Scholz

It used Once the supply chain is able to back out of products based on price to be to recover and get back to normal (whether they are high end products) that the grocery industry’s three-legged (whatever that may be), the expectation and put fewer ‘indulgent’ items in stool stood for competitive prices, is that prices will go down. The change their cart. They may begin to switch to quality products, and customer service. is hinged on wages and workforce as more of a ‘bulk shopping’ trip with a That’s still true today, but there is well as energy and fuel costs. But that’s bigger basket (purchase) but reduce the another stool in the room. going to take time. There’s not really a number of trips to the store. Inflation/higher prices, supply chain, magic formula that says prices will go While consumers may be spending and workforce are the issues that are down accordingly as inflation decreases. fewer dollars at their favorite restaurant driving the retail food sector — grocery In fact, the USDA projects grocery and shifting those times to meals at stores, convenience stores, and other prices could increase by 1% in 2024. home, it is still an exercise in shopping merchants that try to incorporate some One of the most difficult poston based on price. Excluding specialty food products in their aisles. Welcome to pandemic challenges has been how events and holidays, the expectation is the other three-legged stool in the room. to recover the workforce that the that consumers will stay on this path Grocers are entering the fourth retail food industry relied on to stay throughout 2024. year of COVID/post COVID and in business. In February 2020, the Consumers and others will notice the devastating impact the pandemic unemployment rate shot up from 3.2% subtle changes throughout the store. had on the retail food sector and to 14.1% in April and then eventually The most obvious is self-checkouts and consumers. crept down to approximately 3.1%. robotics. Without a full workforce, There’s no question that the But that’s not the whole story because empty checkout lanes will be converted pandemic-driven inflation rate of 8.9% as every employer knows, Wisconsin’s to self-checkout stations and shoppers is still crushing food and grocery prices base workforce changed. There simply may start to see robots in the aisles even though inflation has started to weren’t enough people who wanted to working on stocking and inventory. settle back to familiar rates (around work or who were still in the workforce. Partstown notes, automation has 3%+). Virtually every product that This is a major compounding recently become a growing trend in ends up in the grocery basket reflects issue as wages and benefits soared to the foodservice world in general; in at least a 3.2% price increase over the new levels and drove expenses (and the grocery space though, it has the period, according to the U.S. Bureau of inflation) even higher. While every potential to become a new normal. Labor Statistics. industry has had to face this situation, In 2024, the hope is that prices Here’s the kicker: consumers expect the retail food sector has not seen the begin to come down as costs in the prices on the shelves to decrease return of the workforce to the levels supply chain find ways back to preaccordingly when they hear reports needed to operate efficiently. And there pandemic times. With that, and that inflation has subsided back down has been no reduction in wages and continued Fed-impacted controls on to ‘normal’ levels. That’s not going to benefits that were elevated during the inflation, shoppers may see some relief happen real soon. pandemic. and return to stable pricing. Traditional retail grocery businesses The other 800-lb gorilla in the store is Just don’t expect to see this soon. have between 15,000–75,000 of course, the consumer whose attitudes, products throughout the store. Every opinions, tastes, and demands change. Scholz is president and CEO of the manufacturer, grower, producer, and The pandemic accelerated those changes Wisconsin Grocers Association. other has struggled to maintain their to occur more frequently giving grocers costs during this period. But with the less time to react and plan. The Wisconsin Grocers Association impact of the third leg, the “workforce” On their own, however, consumers represents over 500 independent grocers, crisis, raw materials, fuel costs, and move to ‘pocketbook’ survival and retail chain stores, warehouses and more, costs went up beyond their change their shopping patterns and distributors, convenience stores, food ability to control it. As a result, prices what’s on their shopping list. Until brokers, and suppliers in Wisconsin. on the shelves increased drastically. there is relief, consumers will continue 20

Wisconsin Banker

January | February 2024

WISCONSIN ECONOMIC REPORT

Hospitals’ Biggest Hurdles for 2024: Workforce and Inflation By Eric Borgerding

individuals under the age of 35 comprise required to submit data, 139 (86%) more than 40% of the population, yet experienced decreasing margins, with their health care demand constitutes less 65 hospitals (40%) operating in the Like many other businesses over the past few years, Wisconsin hospitals have than 20%. By 2032, the final members red, including 10 of our rural hospitals of the Baby Boom generation will reach running at a loss. These are the worst encountered substantial challenges, 65 years old, and by 2040 Wisconsin’s numbers we have seen in decades, including a shifting and shrinking population 65 and older is projected to including the incredibly difficult first workforce and inflation unseen in swell to 24%, almost one-quarter of the year of the pandemic in 2020. years. These two factors — along state’s population. While retirements Thankfully, Wisconsin has not had a with essentially flat reimbursement may decline in other sectors, we hospital close in over a decade, but we for services — are combining to place predict the enduring influence of are seeing troubling signs, as potentially historic pressure on operations for the “Silver Tsunami” on health care foreshadowed in the data above. Over 24/7/365 hospitals. Despite these demand and the health care workforce the past 18 months several labor and challenges, our hospitals and health delivery programs have closed leaving systems — 94% of which are non-profit will span decades. Wisconsin hospitals and health communities and families with longer — deliver essential services throughout systems anticipate additional fiscal drives to deliver babies. Other critical the state, while maintaining their status service lines such as inpatient behavioral as some of the best quality health care in challenges for the foreseeable future, primarily caused by operational costs, health and substance abuse care — the nation. reimbursement, and patients resuming which typically operate in the red and Wisconsin hospitals are striving to their pre-pandemic care. Higher costs would not be available at all if not for expand, recruit, retain, and support for labor, medical supplies, and overhead the local hospital — have downsized, the health care workforce required to have a larger impact on businesses relied closed, or shelved plans for expansion. uphold the high-quality health care upon to deliver on-demand, aroundWe expect more to come in 2024. that Wisconsin citizens both expect the-clock access to care. Since 2019, the Even in the face of these new and deserve. However, despite these concerted efforts, it is improbable that cost of supplies and services skyrocketed challenges, Wisconsin’s hospitals by almost 27%. Meanwhile, labor costs continue their unwavering dedication the health care workforce can expand surged by nearly 14% and capital costs to providing exceptional care for all rapidly enough to meet the escalating increased by 6%. As a result, profit individuals. They persist in supporting health care demands of Wisconsin’s margins have suffered significantly (even critical services such as hospice, home inordinately aging population. By 2030, one in five Americans will non-profits must operate in the black). health, behavioral health, long-term These pressures are exacerbated by care and more, which are vital in many be at retirement age. In Wisconsin, shrinking reimbursement for services communities where if not for the it is closer to one in four. Wisconsin from commercial and government hospital, the services simply would not is currently among the nation’s 15 oldest states, with a population 65 and insurance while competition grows from exist. Despite these and other political older near or at 20%, as compared to for-profit, often venture capital-backed challenges, responsible stewardship surgery centers that refuse to care for the has and will remain at the forefront of younger states with only 12 to 15% of their population over the age of 65. uninsured or Medicaid patients and only their mission. the least complex (thus more profitable) The rise in retirements is a powerful demographic trend impacting various Medicare patients. In December 2023, Borgerding is president and CEO of the the U.S. Senate Budget committee, Wisconsin Hospital Association. industries. However, the health having “become increasingly concerned care sector faces a unique challenge about the associated negative outcomes Advocate. Advance. Lead. It’s what the because of the increasing demand as Wisconsin Hospital Association (WHA) individuals grow older, coupled with a for patients,” announced a bipartisan investigation into the private equity does for its member hospitals and health shrinking workforce. ownership of hospitals. systems so they can provide high-quality, Although those aged 65 and above Recently released, state-mandated affordable, accessible health care for represent only 20% of the population, hospital fiscal data illustrates these they contribute to more than 40% Wisconsin families and communities. dynamics. In 2022, of the hospitals of health care utilization. In contrast,

wisbank.com

WISCONSIN ECONOMIC REPORT

Expect More of the Same By Kurt Bauer

When it comes to assessing the strength of our economy, I am not sure what to believe; government economic data or what I am hearing from WMC members, particularly our manufacturers. Economic numbers are overall pretty solid. The unemployment rates for both the U.S. and Wisconsin (3.9% and 3.2%, respectively), are low, and GDP growth is strong (initially reported as 5.2% in Q3). But during a recent WMC Board meeting, one member, who happens to be a banker, said that while we are not in a recession, “we are in something.” Other Board members smiled and nodded in agreement. To that point, the concern that “something” not so positive is happening has been reinforced by multiple business leaders during scores of member visits and CEO roundtables WMC has hosted around the state since last summer. One warning sign, which actually has a short-term silver lining to it, is that WMC members are telling us that for the first time in years, more people are applying for jobs, coming to interviews and, if hired, showing up on the first day of work. That is anecdotal evidence that the economy is slowing. To be sure, this is a temporary respite from the labor shortage, which is without question Wisconsin’s biggest long-term economic challenge. To show just how acute the labor shortage is, many businesses tell us they are reluctant to lay off employees even as business slows because they know they will need them on the back end when the economy gets stronger. Businesses also continue to be optimistic about their company’s outlook

Wisconsin Banker

in 2024 versus the economy as a whole. For example, most businesses believe they will remain profitable in the New Year even as they suspect the national economy will be somewhat anemic. The bi-polar view of the economy may just be a sign of troubled times. There are wars in Ukraine and Israel, as well as a cold war with China. The world seems far more unstable and dangerous entering 2024 than it did just a few years ago. Interest rates are high to combat stubborn inflation. And we are on the eve of national presidential and congressional elections, which will showcase the deep political and social divisions in our country. 2023 was a chaotic year. I would expect more of the same in 2024. There will continue to be contradictory economic information, geo-political conflict, domestic political polarization, and unrest. The aforementioned 2024 elections will be huge. Most people tend to focus on the White House, but don’t forget the razor thin margins in both the U.S. Senate (51 Democrats, 50 Republicans) and the House of Representatives (221 Republicans, 213 Democrats and one vacancy, as of press time). Typically, uncertainty as to which party will control both the White House and Congress compels businesses to delay major decisions. That makes sense considering the stakes for the national business climate, including tax, labor and energy policy. At the state level, keep an eye on the Wisconsin Supreme Court in 2024. There is an activist progressive majority on the high court for the first time since 2008 by virtue of Janet

January | February 2024

Protasiewicz’s victory last spring, and the consequences to the Wisconsin business climate could be profound. There are already challenges to school choice funding and Act 10, which ended compulsory union membership and collective bargaining for public employees, saving Wisconsin taxpayers an estimated $16 billion over 12 years. We also expect additional legal challenges to Wisconsin’s Right to Work law and scores of other pro-business reforms impacting taxes, regulations and the litigation environment.

“2023 was a chaotic year. I would expect more of the same in 2024.” Sweeping regulatory and liability changes by fiat from our state Supreme Court could freeze business investment the same way as national political uncertainty does, and cause Wisconsin employers to look elsewhere when making investments. Bauer is president and CEO of the Wisconsin Manufacturers & Commerce. Wisconsin Manufacturers & Commerce (WMC) is the largest and most influential business association in the state, working to make Wisconsin the best place in the nation to do business. WMC is proud to have been serving as Wisconsin’s business voice since 1911, representing over 3,800 member companies, spanning all sectors of the economy.

WISCONSIN ECONOMIC REPORT

Tight Inventory and Unmet Millennial Demand Pushes Prices Higher in Tom Larson 2023 By With insights from David Clark For a second straight year, Wisconsin’s assuming a 20% downpayment and There are some preliminary signs existing home sales slowed compared the remaining balance financed with a that supply constraints are moderating. to the previous year, and this was 30-year fixed-rate mortgage at current New listings of existing homes in the primarily because of very low inventory rates. The index showed that qualified state improved 2% in October 2023 levels. While there was some modest buyers could purchase 127% of the compared to a year earlier. Furthermore, softening of demand pressure in median priced home in October 2023. while months of supply continued to 2023 as housing affordability slipped, The index was 139% in October 2022, signal a seller’s market, they did improve housing demand remained solid and it was 203% in October 2021. from October 2022 when there was just especially for first-time millennial Although many economists 2.7 months of supply. buyers. Millennials have now surpassed expected the national economy to The Fed remains committed to the Baby Boom generation in size, and weaken in 2023 because of the Fed’s taming inflation, and hopefully they while they delayed moving into owner- aggressive increase in short-term will be able to achieve a so-called “soft occupied housing in the immediate interest rates, real (inflation-adjusted) landing.” Congress and the president aftermath of the Great Recession, GDP has shown remarkable resilience need to do their part by controlling they are now forming households and throughout the year. Real GDP grew spending to avoid creating more buying single-family homes. at just over 2% in each of the first inflationary pressures. Finally, we The problem they now face is a two quarters of 2023, but it grew at want to thank Governor Tony Evers shortage of homes available on the 5.2% in Q3, which is the strongest and the Wisconsin Legislature for the market. A rule-of-thumb in housing showing since Q4 of 2021. Moreover, historic $525 million investment in is that a market is balanced if there there has been consistent improvement new housing supply. This is a great is six months of supply. Less than six in inflation, with the Fed’s preferred start, and we encourage state and local months signals a seller’s advantage and measure of core inflation falling officials to continue to pursue policies using that benchmark, Wisconsin has to 3.5% in October 2023. While that will help improve the supply of been in a persistent seller’s market since this remains above the Fed’s target housing. This includes lowering the August 2017. In October 2023, there of 2%, it is at its lowest level since regulatory burden for new construction were just 3.3 months of available supply. April 2021. In addition, measures of and finding creative strategies to create This tight supply combined with solid consumer confidence published by affordable workforce housing. demand resulted in a 20% reduction the Conference Board indicate that Larson is president and CEO of the in year-to-date home sales through consumers are relatively pessimistic Wisconsin REALTORS® Association. October 2023, compared to the first ten about the future economy, with months of 2022, and it drove home sale about two-thirds of those surveyed in Clark is professor emeritus of Economics prices up 8.3% over that same period. November 2023 perceiving the risk of at Marquette University. Unfortunately, the combination a recession in the next 12 months to be Founded in 1909, the Wisconsin of strong price pressure, relatively “somewhat likely” or “very likely.” REALTORS® Association (WRA) is high mortgage rates, and slowing Since consumer spending accounts one of the largest trade associations in income growth has pushed statewide for about 70% of real GDP, any Wisconsin. It represents and provides affordability down substantially. The change in spending patterns can lead to services to more than 15,000 members Wisconsin REALTORS® Association recession. Both the progress on inflation statewide. WRA’s goal is to promote the (WRA) Housing Affordability Index and the weak consumer confidence advancement of real estate in Wisconsin shows that portion of the median measures will likely preclude more and provide cutting-edge tools to help priced home that a buyer with median short-term interest rate hikes by the Fed REALTORS® enjoy a successful career and family income qualifies to purchase, to further slow the economy. be competitive in their market.

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WISCONSIN ECONOMIC REPORT

Wisconsin is Headed for a Stronger 2024 By Tom Still

Mike Knetter, the nationally known economist who runs the UW Foundation, aptly describes it as “the economic expansion we love to hate.” It’s the notion that the U.S. economy has thus far dodged recession and is growing in tangible ways — but is still viewed with apprehension by many people. A former economic advisor to two presidents, Wisconsin-native Knetter recently described the uncertain public attitude as shaped by a mix of encouraging factors — such as low unemployment, high payroll employment, and prime-age workers returning to the labor force — and some cautionary trends. Those trends include inflation, high interest rates, lack of housing mobility, the growth of the national debt, and fragile consumer confidence. Layer in worries about conflict abroad, political polarization at home, reverse globalization, and the stubborn reality that transitioning away from “carbon energy” won’t come easy, the picture of a “lovehate” relationship comes into focus in Wisconsin and nationally. All in all, however, expect a stronger 2024 for Wisconsin’s economy. “What!” you might exclaim. “Optimists like you think the Green Bay Packers will win the next Super Bowl, too.” I’ll leave football forecasts to others, but Wisconsin is wellpositioned for growth. Here are some reasons why:

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•

Technology, innovation, and entrepreneurship are changing the state economy in ways that touch every sector, from agriculture to manufacturing, and from financial services to tourism. Artificial intelligence is a part of what will become the “fourth industrial revolution.” The Wisconsin economy is increasingly intertwined with what’s happening in tech markets. Companies such as Microsoft, Amazon, Google, and Tesla all have a stake in the state in one form or another. As the need for data centers grows with AI, Wisconsin is a natural candidate to host them — assuming energy costs are controlled. Home-based tech companies continue to out-perform competitors. Epic Systems’ market share for electronic health records resembles Henry Ford’s dominance in the 1920s. Exact Sciences, Promega, Faith Technologies, SHINE Technologies, NorthStar Medical Radioisotopes, and Rockwell Automation are among other examples. Wisconsin is well-positioned to take advantage of changes in agriculture, energy, water, and manufacturing tech to make the world more resilient in the face of climate change. Two planning grants from the National Science Foundation

January | February 2024

•

(only 44 were awarded nationwide) speak to Wisconsin expertise in those sectors. The right-sizing of higher education in Wisconsin is underway. It will be painful to many but ultimately beneficial to an economy that needs all the talent it can get. Memo to Wisconsin Legislature: Part of right-sizing is approving UW buildings for the future. Early stage investing across the country declined in 2023, but indicators suggest young Wisconsin companies continued to attract money from venture and angel capitalists close to home and well beyond.

One factor to watch: In-migration. Will Wisconsin be among those states that benefit from the California exodus, which approached 343,000 people in 2022 alone? Lower regulatory hurdles, competitive taxes and quality of life can separate the state from natural competitors. Told often and well, the Wisconsin economic story can generate more love than hate. Still is president of the Wisconsin Technology Council. The Wisconsin Technology Council is the independent, non-partisan science and technology advisor to the Governor and the Legislature.

Wis. Bank CEO Survey Results Signal Caution Heading Into 2024 Results of WBA Bank CEO Economic Conditions Survey

Poor (5%)

Excellent (6%)

Rise (5%)

Lay Off Employees (12%)

Hire Employees (11%)

Stay the Same (47%)

Fair (27%)

Good (62%)

Fall (48%)

Maintain Current Staffing Levels (77%)

By Cassandra Krause In the Wisconsin Bankers Association’s latest Economic Conditions Survey of Wisconsin bank CEOs, 68% of respondents rated Wisconsin’s current economic health as “excellent” or “good.” While most respondents (95%) do not foresee inflation worsening, 44% predict that the economy will weaken over the next six months and 47% predict it will stay about the same over the next six months. At the close of 2022, 72% of respondents predicted the economy would weaken over the next six months and 28% predicted it would stay about the same, showing some easing of economic concerns at 2023 year-end.

Survey results may be viewed at wisbank.com/2023survey.

“Bankers have unique insights into their customers’ financial health as well as understand issues facing businesses in their markets,” said WBA President and CEO Rose Oswald Poels. “With continued headwinds in sight for the beginning of 2024, banks in Wisconsin stand prepared to support their communities.” Among the economic bright spots cited by bank CEOs in the survey were low unemployment, profitability of area businesses — particularly in construction and manufacturing — and relatively good commodity prices for the agricultural industry. On the other hand, bank CEOs reported staffing and interest rates as top concerns of their business customers heading into the new year. The survey also showed inflation, a high cost of living, and availability and affordability of housing as top concerns for individuals and families for 2024. To view the survey results, visit wisbank.com/2023survey. Krause is WBA director – communications.

wisbank.com

Making the Right Choice

By Jeff Schmid

Although not a new concept, outsourcing has emerged in management circles as a strategic approach when planning for the future. For many, the upside to outsourcing various functions far outweighs the disadvantages. In outsourcing certain functions, your bank has the opportunity to take advantage of skilled professionals, remain flexible in changing environments, and ensure regulatory compliance all the while management teams can refocus their energy on spearheading overall growth. Finding the right vendor to help manage critical and non-critical functions can be troublesome and requires banks to consider many aspects of a vendor. Determining the vendor’s reputation, delivery,

knowledge, creativity, responsiveness, and customer support will help your team determine the partner that is most aligned with the mission and goals of your institution. In all cases, it is critical that banks trust their vendor enough to be considered as part of the overall succession strategy and longterm growth. If not, you found the wrong vendor. The “right” vendor should be dedicated to tailoring programs that align with your specific product offerings, business structure, and risk management requirements. There should be no question as to whether your vendor will aid in alleviating stress, reducing errors, and transferring compliance and IT risks away from the bank at a manageable cost. Rather than simply outsourcing aspects of

2024 American Financial Directory – Wisconsin Edition –

your organization, the relationship should be a mutually understood partnership; one in which each party needs the other one to be successful in the industry. At FIPCO, we view our members as banking partners, not just customers. Our team is genuinely invested in helping your bank to streamline operations though ShareFI compliance and management services. If this sounds like the right fit for your bank, please contact me at 608-4411220 or jschmid@fipco.com. Schmid is director – compliance and management services at FIPCO, a WBA subsidiary.

We may have a new look in 2024 - but we are still your Investment experts! We are trusted professionals in the business of investing Financial Institution portfolios:

Information for every Wisconsin depository institution and branch by city. This annual bank directory has the most current Wisconsin financial institution information, including every depository institution and branch by city. The handy (4.5” x 9”) size includes more than 200 directory pages.

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January | February 2024

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Acuity Knowledge Partners is a strategic outsourcing partner, and the leading provider of research & analytics to the financial services industry.

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Partnering with ICEBERG FS means saving time and money on core, debit, digital, and IT contract negotiations, helping community bankers stay focused on what truly matters: building communities.

Visit wisbank.com/Associates or contact WBA’s Nick Loppnow at nloppnow@wisbank.com to learn more about the WBA Associate Membership Program.

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Vitex specializes in providing professional consulting services empowering financial institutions to embrace technology, seize opportunities, and navigate change with confidence. WBA Associate Membership should not be construed as an endorsement by the WBA of the company’s products or services.

LEADERS IN BANKING EXCELLENCE Nominate a banker at wisbank.com/excellence by Friday, May 10, 2024 for excellence in: • Banking • Civic Involvement • Community Service Bankers will be recognized with a plaque in the WBA headquarters and at a ceremony in fall 2024.

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Back to School Take the next step in your career with WBA Throughout the year, the Wisconsin Bankers Association (WBA) offers a number of comprehensive programs to equip banking professionals with the latest industry insights, regulatory knowledge, and strategic expertise. For more information about these upcoming programs, or to register your team, please visit wisbank.com/Education.

Introduction to Commercial Lending: April 16–18, 2024 Designed for bankers who are relatively new to commercial lending and want to develop strong lending and credit decisioning skills, branch managers, retail lenders, credit analysts, and loan support staff.

Loan Compliance School: March 11–15, 2024 | Real Estate Compliance School: March 13–15, 2024 Designed for compliance officers, loan officers, document preparation staff, loan operations staff, audit personnel, and bank legal counsel.

Personal Banker School: Spring TBD Designed for new and experienced personal bankers, new accounts personnel, and others who manage retail account relationships.

Residential Mortgage Lending School: March 25–28, 2024 Designed for personal bankers, consumer lenders, loan processors, closers, and new residential mortgage lenders.

School of Bank Management: April 22–26, 2024 Designed for the bank’s emerging leaders, management trainees, experienced managers who are new to the banking industry, and bankers interested in pursuing a career in bank management and leadership. As WBA’s highest-level program, the School of Bank Management was designed to assist your team in becoming more well-rounded bankers. To learn more about the upcoming school, please see pg. 7.

INTRODUCING WBA, Inc. Announces New Hire WBA is pleased to welcome Christian Heo as graphic designer. In May 2023, Christian graduated from the University of Wisconsin–Stout in Menomonie with a BFA in Graphic Design and Interactive Media. Originally from Portage, Christian previously interned at the Wilderness Resort in Wisconsin Dells and has experience in digital and print marketing and design. He is excited to get to know Wisconsin’s banking industry and contribute his talents to various projects, including the Wisconsin Banker magazine and WBA’s educational programs.

Wisconsin Banker

January | February 2024

Share Your Expertise with WBA Apply now to join a committee, section, or advisory board By Daryll Lund

As a member-driven association, one critical component to the success of the Wisconsin Bankers Association (WBA) is the participation of our members. The Association thrives on the active engagement and collaboration of bankers across the state, as they provide invaluable insights and perspectives that shape the direction of our initiatives. Now through Monday, March 11, WBA is accepting applications for volunteers interested in joining one of WBA’s various committees, sections, or advisory boards. These groups, which are comprised of banker volunteers from a variety of areas in the bank, play a significant role in the future of Wisconsin’s banking industry and the Association as a whole. From financial crimes to mortgage

lending, WBA is pleased to offer the opportunity for all bankers to make their voices heard. In volunteering, bankers will work alongside their peers and WBA staff to tailor the Association’s programs, advocacy efforts, and educational resources to be the most relevant, impactful, and reflective of the evolving landscape of the banking industry. In addition, bankers involved on a committee, section, or advisory board greatly benefit from the opportunity to establish connections and share ideas with other bankers from across Wisconsin. To learn more about the opportunities to get involved, please visit wisbank.com/Committees.

• Diversity, Equity, and Inclusion Advisory Group • Financial Crimes Committee • Wisconsin Bankers Foundation Financial Literacy Advisory Board • FIPCO Software Users’ Committee • Agricultural Bankers Section • Building Our Leaders of Tomorrow (BOLT) Section

• Government Relations Committee • Human Resources Committee • Marketing Committee • Mortgage Lending Committee • Retail Banking Committee • Trust Banking Section

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Community Advocate Spotlight Wisconsin bankers are the definition of “community advocates” in all that they do every day to improve their local economy through bank products and services, as well as through generous philanthropy of time and money. The Community Advocate Spotlight shares and celebrates the diverse backgrounds, experiences, perspectives, and innovation of some of the extraordinary bankers in the state.

Q& A The following is a brief interview between WBA President and CEO Rose Oswald Poels and Northwestern Bank President Jerry Jacobson. Rose: How did you first get into the banking industry? Jerry: By the time I completed my MBA in the spring of 1978 in Chicago, I knew that large cities were not for me, so I moved back to my hometown of Chippewa Falls to look for a job. At that time, I was not sure what field I wanted to work in but was familiar with the banking industry as my mom had worked in the safe deposit area at a bank in town for many years. When I returned to Chippewa Falls, I learned that another bank in town was hiring for a position that I was qualified for. That is when my career at Northwestern Bank started. What is your favorite aspect of your role at your bank? My favorite part of my job is listening to our commercial lenders who are so excited and motivated while they are working with entrepreneurs in getting their ideas into practice. I see their enthusiasm and satisfaction in helping the customers achieve their dreams. I love being able to provide them my insight to contribute to their successes. What do you wish the general public understood about the banking industry? I wish the public understood that banks are not like other businesses. We have a charter that calls on us to help our communities succeed. Of course, we need to make money, but we are also here to serve the community’s needs. I wish they knew that the banking industry — community bankers in particular — are at the heart of small business lending; that we assist in driving the nation’s growth. Where do you believe the industry’s greatest challenges are in the next three to five years? The only way the banking industry will continue to succeed is with good employees and I feel that over the next few years, many long-time bankers will be retiring. Communication from the WBA reports almost daily of the retirement of another long-time employee and recently, 30

Wisconsin Banker

January | February 2024

Northwestern Bank celebrated fifteen employees with over 30 years of banking. Unfortunately, I think it will be difficult to find employees who have the desire and passion to be bankers at all levels of banking. So, now more than ever, it is important that banks find ways to transfer that community-minded culture to new employees and nurture the same passion for banking that has been the norm in the past several decades. Every day, bankers serve their local communities by helping their customers achieve their financial dreams as well as provide significant charitable support. Please describe your current role at your bank and share with us one of your more rewarding experiences (e.g., a time you had to go above and beyond to help a customer, a memorable customer interaction, stepping in to help the local community after a disaster, or something more personal, etc.). Throughout my career at Northwester Bank, I have had many rewarding experiences. One, however, happened when I was a young lender in 1982 and has stuck with me for over 40 years. A young man in his 30’s — just a few years older than me — came in and said he was taking a two- month leave from work to travel and experience everything that Europe had to offer. He asked me for the largest loan I could possibly give against his life insurance policy. After a few months, he stopped back at the bank a to thank me and said he had the most enjoyable trip that anyone could have. Six months after I made the loan, it was paid off by his life insurance. He had passed away. I tell everyone that I have the greatest job in the world to be a part of helping others achieve and enjoy their dreams and have a better life. Do you know a banker who should be recognized as a Community Advocate for the work they do? Nominate them by emailing Rose at ropoels@wisbank.com!

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WBA Gives Back

President and Chief Executive Officer Community involvement is at the heart of the banking Location: Belmont, Cuba City, Mineral Point, Mount Horeb, industry, and — as is the case for our members across the and Platteville state — our Association staff enjoys working together to support worthy causes in our area. In our final fundraisers Mound City Bank, an independent community-owned bank of 2023, WBA staff supported the United Way of Dane with $460 million in assets, 80+ employees in 5 communities County — or other local United Way chapters — as well in southwest Wisconsin is seeking a new president and CEO as a local family through the Family Support and Resource to succeed the bank’s retiring president and CEO. Center (FSRC). This year, Association staff raised over This position is responsible for the strategic direction of the $6,500 for the United Way and $1,000 to supply items on bank reporting to the Board of Directors; providing leadership the family’s holiday wish list. for bank activities to assure safety, soundness, and compliance; and demonstrating leadership skills in planned growth and managing for short and long-term profitability. Duties include: • Excellent communication skills supporting our Culture of Excellence • Oversee all holding company activity • Team player supporting the career development of coworkers • Oversee and monitor financial reports • Responsible for the strategic planning and budget process • Oversee the asset liability management process • Oversee the bank’s investment portfolio • Active leadership in community development and serve on market area boards • Proactively build relationships with customers and businesses The ideal candidate should have 15+ years banking experience, with an extensive leadership skillset, and be a graduate of the Graduate School of Banking. The bank, voted Best of the Best Workplace by the readers of the ‘Shopping News,’ offers a competitive benefit package and is an Equal Opportunity Employer. Qualified candidates should send letter of interest, resume, and references prior to the February 15, 2024 deadline to Kari Geyer at kari.geyer@moundcitybank.com. Member FDIC

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Wisconsin Banker WBA Mission We actively advocate for, educate, and support our members to help Statement them positively impact the Wisconsin communities they serve. Association Officers: Donna J. Hoppenjan (Chair), President/CEO, Mound City Bank, Platteville Alvaro (Al) Araque (Chair-Elect), Senior Vice President, Director of Consumer, Private, and Small Business Banking, Johnson Financial Group, Racine Paul J. Northway (Vice Chair), President/CEO, American National Bank – Fox Cities, Appleton Daniel J. Peterson (Past Chair), President/CEO, The Stephenson National Bank & Trust, Marinette Rose Oswald Poels, President/CEO, Wisconsin Bankers Association, Madison

Association Board of Directors: Kelly Heroux, President/CEO Anthony (Tony) Nguyen Peshtigo National Bank Eastern Minnesota/Wisconsin/Chicago Paul A. Hoffmann, President Regional Bank Director, Senior Vice Lake Ridge Bank, Middleton President Wells Fargo Bank, N.A., Milwaukee Shay Horton, President & CEO Cumberland Federal Bank Greg A. Ogren, President/CEO Ryan T. Kamphuis, President/CEO Security Bank Shares, Inc., Iron River Bristol Morgan Bank, Oakfield Joe Peikert, President/CEO Greg Lundberg, President/CEO Wolf River Community Bank, Hortonville Fortifi Bank, Berlin Jay C. Mack, President/CEO Daniel J. Ravenscroft, President/CEO Town Bank, N.A., Hartland Royal Bank, Elroy Thomas Mews, President William (Bill) Sennholz, CEO Forward Bank, Marshfield First National Community Bank, New Richmond The Wisconsin Banker is published by the Wisconsin Bankers Association, 4721 South Biltmore Lane, Madison, WI 53718; Telephone: 608-441-1200; wisbank.com. Cassandra Krause, Editor 608-441-1216; ckrause@wisbank.com

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The publication of advertisements does not necessarily represent endorsement of those products or services by the Wisconsin Bankers Association. The editor reserves the right ot reject any advertising or editorial copy deemed unsuitable for publication for any reason. Copy deadline is eight business days before publication date. Disclaimer: With the exception of official announcements, the Wisconsin Bankers Association disclaims all responsibility for opinions expressed and statements made in printed articles and advertisements in the Wisconsin Banker. This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is distributed with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional services. If legal or accounting advice or expert assistance is required, the services of a qualified professional should be sought.

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Wisconsin Banker

January | February 2024

January/February 2024 Wisconsin Banker