Bank of Luxemburg promoted Jake Dittmann from commercial loan sales officer to assistant vice president of commercial lending. Dittmann has been with Bank of Luxemburg since April 2015.

In his new role, Dittmann will not only manage his portion of the bank’s growing loan portfolio, but will also continue to be active on numerous bank committees, including the process improvement team which works to ensure the bank is as efficient as possible. “I have really enjoyed building relationships with our business customers, working hard to understand their needs and helping them reach their goals through thoughtful planning and problem solving,” Dittman shared. “Our local decision making allows me to remain flexible and quickly take care of any request that they may have. At the end of the day, our mission is to have a positive impact on people’s lives and I see that happening every day at Bank of Luxemburg.”

Prior to joining Bank of Luxemburg, Dittmann worked as a mortgage consultant for six years at two area banks. He holds a bachelor’s degree in economics from the University of Wisconsin – Green Bay.

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By, Alex Paniagua

GreenLeaf Bank recently announced the addition of Ryan Kauth as senior vice-president of lending. Kauth replaces Terry Lardinois, the bank’s chief lending officer, who retired on December 31, 2020.

Since 2007 Kauth held a variety of roles in business banking and at the University of Wisconsin Green Bay focused on improving small businesses. He advised local leaders on growing successful companies and the critical role banking services play in achieving their goals. Kauth says, “My expertise in banking and entrepreneurship provide a unique perspective to assist bank business customers in becoming even more successful.”

Lardinois retires after 19-years of service to GreenLeaf Bank. His career began in 2001 when then bank CEO Dave Krutz retired from day-to-day bank operation. Over the next 19 years, while holding the positions of Chief Operating Officer, CEO and finally as chief lending officer, he helped the bank grow from $49 million to $110 million in assets while ensuring it remained financially sound. Lardinois says, “It feels good to step down from our community bank after many years of success.” Lardinois will remain on the bank’s Board of Directors.

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By, Alex Paniagua

Bitcoin is currently worth $56,261.30 per share. By the time this article is released, it is more than likely – if not practically guaranteed – to be different than the worth listed. This way of pseudo-anonymously transferring a decentralized digital currency is, for some, the way of the future. Others may find it appealing as a potential long-term investment or store of value. However, many policymakers, economists and regulators, have raised serious concerns about Bitcoin and other cryptocurrencies ranging from its legality to its sizable carbon footprint and energy use. Regardless of which side of this debate someone may be on, banks play a different role entirely.  

As people continue to ask what the future of cryptocurrency will actually be, WBA spoke with Brian Laverdure, vice president of payments and technology policy at the Independent Community Bankers of America (ICBA), on the regulatory policies, challenges, and how banking and payment systems should interact with bitcoin and other cryptocurrencies. 

Bitcoin is worth what the market believes it’s worth. This characteristic hinders its ability to function as an effective means of payment and is enough to make someone question why banks would want anything to do with this market. 

“With these wild swings in valuation and new peaks followed by precipitous declines, it’s reasonable to ask why a company that has its cost structure in U.S. dollars would want to accept payment in bitcoin that could just have a steep decline in value in a matter of hours if not minutes,” Laverdure said. 

As policymakers work to develop effective frameworks to manage risks to the financial system and protect consumers while still supporting innovation with blockchain or digital assets, it will be important for the agencies to harmonize any ensuing regulations to ensure strong, clear, and consistent oversight of cryptocurrency service providers.  

Nevertheless, as public interest in Bitcoin builds, some consumers may look to their financial institutions to help safeguard their digital assets.” 

In July of 2020, the Office of the Comptroller of the Currency (OCC) released an interpretive letter that established banks can offer custody wallet services for cryptocurrency. With this guidance, OCC-regulated banks might decide to pursue new banking services such as secure storage of a digital wallet’s cryptographic keys – a string of data that allows a holder to transfer cryptocurrency. If a holder loses one of its keys or it’s stolen, it’s not recoverable. The three bitcoins worth nearly $200,000 that your friend discovered on a flash drive in the Denny’s parking lot – they’re gone. Forever. 

“It’s still too early to determine the full effect on the banking industry,” Laverdure said. “To date, only a small number of banks are directly engaging in cryptocurrency activities.” 

ICBA has noticed a small uptick following the release of the OCC’s interpretive letter. These have been a handful of national banks announcing services to customers that have expressed an interest in these services. Smaller community banks getting involved in cryptocurrency tell a different story. 

“Some community banks have positioned themselves as early adopters,” said Laverdure. “We’re seeing some new, pioneering cryptocurrency products and services like bitcoin reward programs.” Most community banks are still in the early stages of learning about the technology: How does it work? What are the mechanics? And what are the risks and potential opportunities with cryptocurrencies? “Ultimately, I think it’s just going to take more time before we start to see community banks pursue cryptocurrency products and services.” 

Although the need for banks to invest resources in cryptocurrency is uncertain and dependent on what each bank is witnessing in their communities, it is inarguably a growing trend. A recent survey found that about 1 in 10 Americans own some form of cryptocurrency. 

“It’s very individualistic,” said Laverdure. “Still, it’s important for all community banks to be aware  of technological innovation and the best way to stay on top of it is to learn about it.”  

There are several ways that community banks can be involved with cryptocurrency without actually accepting it. The first, Laverdure suggested, is to simply stay up to date. 

“Awareness is key. Community banks should make an effort to stay aware of new technologies that are impacting financial services, whether that’s cryptocurrency or artificial intelligence, or machine learning, or so many different things."  

He noted it is important to understand the risks, the rewards, and most importantly, the need for it in your community. ICBA’s informational guide on the risks, benefits, and developments of cryptocurrency reminds banks that they should “monitor accounts for cryptocurrency activity” and “engage [their] risk and compliance officers to establish a process to track and assess crypto asset activities and associated risks.” Whether or not your bank is actively participating in crypto exchanges, there’s a good chance your customers might be. Staying aware, and often having a plan, can ensure that banks continue to help their customers by remaining flexible and discussing potential strategies for the various directions the future of cryptocurrency may head.  

“As new payments technology becomes available and accepted, community banks will need to consider the impact of virtual currencies on their institutions and customers,” said Laverdure. “New technologies can present new risks, so it is essential for community banks to have processes and procedures in place to manage the risks associated with virtual currencies.”

By, Alex Paniagua

After an uncertain 2020 in which government assistance boosted farmers financially and many projects were put on hold, Wisconsin bankers saw an increase in borrowing by their agriculture customers this year. 

For some farmers, however, the focus may be more about reducing debt than borrowing to expand or modernize. Together, these factors have ag lenders balancing a mixture of optimism and caution as they head into spring. 

Plans for expansion and purchases stalled last year when the COVID-19 pandemic left farmers wondering how badly the economy would be impacted, said Chris Schneider, vice president – agricultural banking for  Investors Community Bank, Manitowoc, and vice chair of the WBA Agricultural Bankers Section. Then, when government aid became available, farmers were able to use that money for operations instead of tapping their banks for traditional lending.

Total farm loans – loans to finance agricultural production and other loans to farmers – by Wisconsin-based banks dropped almost 9% to $3.5 billion in 2020 from more than $3.8 billion in 2019, according to Federal Deposit Insurance Corp. data.

Part of the reduced lending in 2020 might also have reflected the overall reduction in dairy farms that has taken place over the last few years, said Jeff Gruetzmacher, senior vice president at Royal Bank, Lancaster, and current past chair of the WBA Agricultural Bankers Section. 

“Looking around Wisconsin, I think some of that had to do with still working out some of the people that were exiting from the dairy business,” Gruetzmacher said. 

Today, some farmers are starting to move forward on projects they planned for last year but held off because of the uneasiness caused by the pandemic. 

“There should be some improvement in lending this year,” Schneider said. 

Despite the pandemic, 2020 turned out to be a solid year for many Wisconsin farmers, bankers said. 

“We’re coming off probably one of the better years since 2014 in the dairy industry,” said Schneider, whose bank operates in about 60 counties. “Crop conditions were much better also. Most areas in Wisconsin had a very good yield in their crops, plus the fall harvest was a lot easier because it wasn’t wet.” 

Darla M. Sikora, senior vice president– agricultural banking for Citizens State Bank of Loyal and chair of the WBA Agricultural Bankers Section, said 2020 was a very good growing and harvesting year for crops, including forage crops and row crops like corn and soybeans, in her central and north central Wisconsin market. 

“Not only were the crops bountiful, but prices for these commodities improved later in the year as well and are continuing even stronger here into 2021,” Sikora said. 

Sikora said the year ended with a record low stock of soybeans and a near-record low of corn, which has helped drive up prices this year. 

Government support in 2020, especially Coronavirus Food Assistance Program payments, greatly alleviated the need to borrow operating funds from banks. But without that additional government assistance this year, more farmers “will once again have to rely on their lenders if they need money to operate,” Sikora said. 

“2021 may see a bigger need for operating money than was required from banks in 2020,” she said. “With milk prices at a ho-hum sort of level coupled with potential higher costs to operate, more farmers may need to access bank capital to help pay bills. I do not see any large demand for bank money to grow and expand operations.” 

Dairy farming expansion could be limited by product demand from processors, bankers said. 

“Probably the biggest factor to restricting any expansion moving forward is these processing plants don’t want any more milk,” Schneider said. “They want to stay with the status quo on what they’re getting from their producers.” 

Sikora said building material costs, such as lumber and steel, also may be a hindrance to some farmers who’d like to expand. 

“Building costs have ratcheted up considerably,” she said. 

Sikora added: “Right now, one of the biggest goals my customers have in the present economy is to reduce debt – not to take on more.” 

Gruetzmacher said he sees things lining up for a more prosperous year for farmers, such as product prices, land values, and a weaker dollar. That makes him optimistic about lending. 

“Last year a lot of farmers did better than what we expected. I would say coming into 2020 pre-COVID, we kind of had some worries about the year,” Gruetzmacher said. “But as the year went along, especially when we worked through a lot of the market disruptions and supply chain disruptions, things ended up looking rosier mid-year and at the end of the year. Now as we’re coming into 2021, milk prices don’t look all that bad. And of course, the grains look spectacular.” 

As prices languished prior to 2020, maintenance was deferred at some Wisconsin farms, Schneider said. 

“There’s a lot of catching up that’s going to have to happen in the good years,” he said.

Paul Gores is a journalist who covered business news for the Milwaukee Journal Sentinel for 20 years. Have a story idea? Contact him at paul.gores57@gmail.com. 

By, Alex Paniagua

While we will be meeting virtually, we are all likely used to this now that over a year has passed. The outlook for the 2021 WBA Agricultural Bankers Conference once again has a great line up of presenters. You can find the full agenda online.

Dr. David Kohl will kick things off with topics of Covid-19 impact, global trends, supply-demand, consumer behavior, and challenges of ag stimulus packages. Dr Kohl always has a heartbeat of what is going on in the United States and with worldwide trends.

Dennis Frame will discuss Wisconsin water quality and what local farmers are doing to improve the water quality, sediment loss and nutrient loss. I have worked closely with Dennis and he has a real passion of the environmental impact of farmers' practices. He has helped some of the farmer-led groups to find ideas to help themselves with better farming practices.

ABA's Ed Elfmann will give us updates from Washington on upcoming changes and challenges when it comes to Agricultural adjustments to policy and trade.

Dr. Mark Stephenson will discuss where they Ag economy is heading and where it has been, including analysis of the last few years and comparing to where we are headed.

Eric Snodgrass will share how weather technology can help predict the growing season and weather factors from drought to flood. The growing season is becoming longer in most cases, and of course there's impacts on trade from other countries potential growing seasons.

To wrap up the virtual conference, Dr. Kohl, Sam Miller, and Lynn Paulson will host an open “question and answer” session where attendees can turn on their web cameras and unmute to join the conversation! They all have many years of experience and will share their thoughts and assist with your concerns.

In addition to the sessions that will be presented live, and also recorded for later access, conference exhibitors and sponsors are providing additional on-demand sessions that can be viewed at any time between the start of the conference and April 30. 

We all hope for good things to happen in the Ag sector, including weather, health, commodity prices, and fair trade. Your Ag Section Membership and support is as important as ever during these times. When we start a few membership year on June 1, 2021, please remember to renew your membership for June 1, 2021 – May 31, 2022 and keep our Ag Bankers Section strong.

I wish you all well, and I'll look forward to "seeing you" on April 7.

Chris Schneider is vice president, senior agricultural banking officer with Investors Community Bank in Manitowoc. He also serves as the current Vice Chair of the WBA Agricultural Bankers Section and will become our next Chair on June 1, 2021.

 

By, Lori Kalscheuer

During the 2021 Ellsworth Area Chamber of Commerce annual awards banquet, CCF Bank won the large business of the year award due to the hometown feel that employees give customers. The chamber said the bank has continued to support small business ventures in the community and embody the bank’s motto “making more possible,” which the residents of Ellsworth appreciate. You can read the full list of nominees for the awards here.

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By, Alex Paniagua

Q: Is there a Legal Distinction Between Hemp and Marijuana?

A: Yes. With talks of marijuana legislation occurring once more, it’s important to remember that there is a legal distinction between hemp and marijuana. 

As of publication of this article, the growing and production of hemp is legal in Wisconsin (subject to certain requirements) while marijuana remains unlawful on both a state and federal level. A key component of this distinction is that the Agriculture Improvement Act of 2018 removed hemp from the definition of marijuana in the Controlled Substances Act. This paved the way for rulemaking which ultimately provided states the ability to implement their own programs. Wisconsin is one such State. 

Effective October 29, 2020, Wisconsin’s Hemp Pilot Research Program converted to the Hemp Program. The Hemp Program is consistent with the pilot program and allows Wisconsin’s hemp growers to plant, grow, and process hemp legally. Marijuana is not legal under this program. It’s also worth noting that hemp and marijuana are physically, and chemically different. While such a discussion is outside the scope of this article, it is important to understand that there is a difference. Just as a bank that works with farmers of various crops, or restaurants and bars, or steel mills and factories is likely to have some knowledge of the industry to better understand their relationship, it is important to become familiar with hemp, and, as its legality shifts in more states (such as the case recently in Illinois), marijuana. 

In short, a bank should have procedures in place to identify the extent to which a business is engaged in the growing or production of hemp or marijuana. If the business is engaged in the growing or production of hemp, bank should confirm whether it is done so legally, under Wisconsin’s Hemp Program. Because legal hemp is still a relatively new commodity, it can be difficult to know where to start, let alone in relation to marijuana. To the extent that you have any questions on the matter, do not hesitate to contact WBA Legal’s Scott Birrenkott at 608-441-1200 or wbalegal@wisbank.com

Birrenkott is WBA assistant director – legal. For legal questions, please email wbalegal@wisbank.com

Note: The above information is not intended to provide legal advice; rather, it is intended to provide general information about banking issues. Consult your institution’s attorney for special legal advice or assistance. 

By, Alex Paniagua

By Rose Oswald Poels

During the first quarter of this legislative session, tax reform and liability reform are seeing significant movement with the potential to impact the agricultural industry in Wisconsin and beyond, specifically as it relates to the Enhancing Credit Opportunities in Rural America (ECORA) Act.

The end of the 2019-20 congressional session saw a bill introduced on this topic, though it ultimately did not move forward. In February of 2021, Kansas Governor Laura Kelly signed the Kansas Bankers Association-supported SB 15 into law.  This state-level tax equity and economic recovery package contains language very similar to the federal ECORA Act and allows Kansas banks to soon benefit from the same tax-exempt status at the state level currently enjoyed by the Farm Credit System.

Continuing the necessary push toward this reform, Wisconsin Rep. Ron Kind and Iowa Rep. Randy Feenstra introduced ECORA legislation that would remove taxation on income from certain farm real estate loans made by community banks, allowing banks to lower loan rates and more efficiently serve these borrowers. WBA is working on similar legislation to benefit farmers and preserve local access to credit in Wisconsin.

WBA is proud to announce our support of this legislation as many members of the ag sector continue to deal with the evolving challenges of the pandemic. We have released the attached statement applauding Rep. Kind on the introduction of this bipartisan bill. This legislation has the opportunity to benefit our farmers through better rates and loan terms, and boost local economic activity by ensuring that the agricultural industry will receive increased access to low-cost credit from banks that farm credit institutions are already able to provide. We commend those who have also taken part in supporting this legislation and anticipate the introduction of its companion bill in the Senate very soon.

In Business Madison’s "40 Under 40" Class of 2021 has been announced. Four WBA member bankers are on the annual list that honors 40 of the most civic-minded and successful individuals in the Greater Madison area under the age of 40. Congratulations to the following bankers!

Wendy Jirsa, VP/Verona bank manager at Capitol Bank, Madison

Dawn Mullarney, trust officer/trust marketing specialist – Wealth Management Division, State Bank of Cross Plains

Amos Pearson, VP – executive banking at Monona Bank 

Jessica Sarbacker, VP – crop insurance manager at State Bank of Cross Plains 

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By, Alex Paniagua

Dawn Lawrence, human resource officer at Bank of Broadhead, has received a Lifetime Service Award and has now retired after 37 years of dedicated service.

Bank of Broadhead President & CEO Michael Olson and WBA President and CEO Rose Oswald Poels presented her with the award.  

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By, Alex Paniagua