Triangle Background

Bank of Wisconsin Dells is pleased to announce the promotion of Matthew Schaefer to chief credit officer following the recent retirement of Kevin Bernander. Schaefer joined the Bank of Wisconsin Dells in 2003 and continues to be a fundamental part of our team. He began his career with BWD as a consumer lender and has worked his way up through the organization over the past 20 years in various roles. Congratulations on your well-deserved promotion Matthew!

Triangle Background

On July 9, Cheryl Miller celebrated 35 years of service at National Exchange Bank & Trust.

Miller joined the bank in 1987 and has been in customer service since. As a personal banker at our Campbellsport office, Miller helps customers with their accounts, assists with safe deposit boxes, and answers questions customers may have.

Miller grew up in Fond du Lac, attended St. Mary’s Springs, and studied accounting at UW-Fond du Lac. Today, she resides in Campbellsport with her family, where she volunteers at the Campbellsport Public Library.

Commentary by PNC Chief Economist Gus Faucher

Real gross domestic product (GDP) fell 0.9% at an annual rate in the second quarter of 2022, according to the advance estimate from the Bureau of Economic Analysis (BEA); this followed a 1.6% decline in the first quarter. This is the first time GDP has contracted in two consecutive quarters since the first half of 2020, when the pandemic came to the U.S.

The big drag came from inventories, which subtracted 2 percentage points from growth. Trade was a major positive adding 1.4 percentage points to growth in the quarter as the trade deficit declined. Exports rose a very strong 18% while imports rose just 3%; higher imports subtract from GDP. Consumer spending rose 1.0% adjusted for inflation, adding 0.7 percentage point to growth. Goods spending fell 4.4% in the quarter, with declines for both durable and nondurable goods, but services spending rose 4.1%.

Business fixed investment was essentially flat in the second quarter, with a big increase in investment in intellectual property products almost offsetting declines in investment in structures and equipment. Housing investment was a major drag, subtracting 0.7 percentage point from growth, as higher interest rates weighed on homebuilding and repairs and renovations. Government subtracted 0.3 percentage point from growth, with small declines in federal and state and local government spending.

On a year-ago basis real GDP was up 1.6% in the second quarter, down from 3.5% growth in the first quarter.

Final sales of domestic product — GDP minus the change in inventories, which measures demand for goods and services produced in the U.S. — increased 1.1% in the second quarter, following a 1.2% decline in the first quarter.

The National Bureau of Economic Research (NBER) is the widely accepted arbiter of recessions in the U.S. according to the NBER, a recession is “a significant decline in economic activity that is spread across the economy and that lasts more than a few months.” The NBER explicitly states that two consecutive quarters of contraction in GDP does not necessarily equate to recession. Instead, the NBER considers many economic series, including personal income (excluding government transfer payments) and consumer spending, both adjusted for inflation; employment; wholesale and retail sales, also adjusted for inflation; and output in manufacturing, mining, and utilities.

Using these indicators, the economy was expanding through the second quarter. The second quarter GDP results reaffirm this view, with consumer spending and final sales of domestic product both up moderately, and with inventories the major drag on growth. Demand remains solid.

Strong job growth is another indication that the economy is expanding in mid-2022; the economy added 375,000 jobs per month on average in the second quarter. Additionally, the decline in real GDP (unannualized) in the first half of 2022 was 0.7%; it is unclear if this would meet the NBER’s definition of a “significant” decline. And an alternative measure of the size of the economy, real gross domestic income (the income going to households and firms from economic activity) rose in the first quarter; the BEA will release the first read on real GDI for the second quarter next month. Real personal income excluding transfer payments rose slightly in the second quarter.

The GDP price index rose 8.7% annualized in the second quarter, up from 8.2% in the first quarter. The personal consumption expenditures price index increased 7.1% in the second quarter, the same pace as in the first quarter. The core PCE price index, excluding food and energy prices, rose 4.4% in the second quarter, down from 5.2% in the first quarter. The PCE price indices are the Federal Reserve’s preferred inflation measures and are running much higher than the central bank’s 2% objective. The central bank is raising interest rates in an effort to slow growth and bring down inflation.

Economic growth slowed in the first half of 2022, but the U.S. economy is not in recession. Demand, especially from consumers, remains solid, thanks to the very good labor market and about $2 trillion in extra saving relative to before the pandemic, and despite the drags from inflation and higher interest rates. Consumer spending is shifting from goods to services; consumers bought a lot of goods in the initial recovery from the pandemic and don’t need as many now and are feeling more comfortable going out and spending on services.

Despite a very small decline in the second quarter, business investment demand remains solid. A narrowing trade deficit will also contribute to solid economic growth in the second half of 2022. Housing will remain a drag, however, as higher mortgage rates continue to weigh on the housing market. PNC expects annualized growth in the second half of 2022 of around 2%, with growth slowing to around 1% in 2023 and 2024 as higher interest rates continue to weigh on the economy.

Although the U.S. economy continues to expand, recession risks are elevated, with a probability of around 45% over the next couple of years; this is more than double the probability before the Russian invasion of Ukraine. The risk is that Fed interest rate increases to reduce inflation could lead to an outright contraction in economic activity, either in late 2022 or sometime in 2023.

Lisa HigginsWritten by Lisa Higgins, State Bank of Cross Plains

Last month we heard from Craig Rogan of Nicolet National Bank on celebrating June dairy month. This month, we are knee deep into fair season. Most of us have a connection to our county fairs, whether we were involved in 4-H or take our families to enjoy the animals, projects, entertainment, rides, games and let’s not forget the fair food!

This time of year, we are lucky to have the opportunity to get out from behind our desks to support our Ag Community at our county fairs. I’m not sure about you, but it seems like I spend more time on fair grounds during the summer than at the office or on farm calls. One of my favorite things to do is to walk through the barns and see the kids resting with their animals, cleaning up, or sitting in a circle on lawn chairs or coolers and shooting the breeze or playing cards with each other. Showing up and making a day of it is an easy way to support the hard work that the kids put into their animals and projects (and the parents behind them) to make sure they succeed.

Another way to enjoy the fair is by bidding and buying at the meat animal sales. Even though it is highly competitive, when it comes to being there for one another, there is nothing like it. Neighbors bid on neighbor’s animals and local businesses come to see what they can buy. At State Bank, we do the best to spread the wealth, so we are represented at each fair-bidding on customers and prospects and the friendly competition between banks-it is for a great cause! It is an electric atmosphere and sometimes highly emotional.

Once the fair is over, we go through and share the thank you cards that we receive from the kids that we bought from with the full bank staff. They are a sweet reminder of how much we impact our youth.

I am thankful that we can support and enjoy our community in such a fun way. I hope each of you has a chance to visit your county fair this year!


Lisa Higgins is vice president, ag and commercial lender with State Bank of Cross Plains in Janesville, and also serves on the WBA Agricultural Bankers Section Board.

One Community Bank is honored to be recognized as a top bank for commercial lending by the Independent Community Bankers of America (ICBA). This is the second consecutive year that One Community Bank has received this award.

“ICBA commends One Community Bank and its staff on this outstanding achievement during this important time for our industry,” ICBA Executive Vice President and Chief Marketing Officer Rob Birgfeld said. “The success of this year’s standout performers is testament to their ingenuity, resourcefulness, and steadfast devotion to their customers. ICBA is pleased to recognize these institutions for their mastery of the community bank business model and impressive lending results that help create and sustain communities of prosperity.”

Independent Banker, the award-winning magazine of the ICBA, recognized One Community Bank in its July issue. OCB’s recognition is based on the strength of its competitive banking services and operational efficiencies throughout 2021.

One Community Bank is the only bank in the state of Wisconsin to receive the recognition of being a top commercial lender for banks over $1 billion in asset size.

“One Community Bank is honored to be included in this prestigious list of industry top performers,” said Steve Peotter, president, and chief executive officer of One Community Bank. “We are proud of the success we have achieved through the service and support of clients, colleagues, and communities.”

One Community Bank has had some notable commercial lending financing projects that have been integral in OCB receiving this award:

The Legacy Hotel is a boutique all-suites luxury hotel located two blocks from Lambeau Field in the Legends District, Green Bay. The Legacy Hotel was an approximate $24 million dollar loan with $4.5 million of those dollars being a PACE financing project. PACE Wisconsin is a statewide Commercial Property Assessed Clean Energy (C-PACE) program.

OCB also recently financed an expansion project for Octopi Brewing Company in Waunakee. Octopi specializes in contract brewing for craft breweries along with contract packaging/brewing for other specialty beverage companies nationwide. This loan was approximately $39 million.

OCB also was proud to have recently financed the UC Nexus LLC project. This project brought in approximately $23 million dollars in financing which will go towards the new construction of a 105-unit apartment complex located at 2524 Winnebago St. in Madison.

OCB is a proud partner to all our commercial loans and look forward to growing our footprint in the communities that we serve.

The “ICBA’s Top Lenders 2022” demonstrates the strength of personal connections to create a pathway for success as agricultural, commercial, and consumer and mortgage lenders. It showcases the importance of sound and efficient banking practices and their local knowledge and expertise in adapting to shifting market dynamics and evolving client needs.

The annual list is based on the strength of competitive banking services and operational efficiencies using FDIC data for 2021. Scores were determined by combining the average of the bank’s percentile rank for lending concentration and loan growth over the past year in each lending category and asset size and adjusted for loan charge-offs at certain percentile thresholds.

On July 20, WBA’s Daryll Lund visited Denmark State Bank to award several employees with WBA’s Lifetime Service Awards for their extended service to Wisconsin’s banking industry and celebrate 10 upcoming retirements in the bank.

Congratulations to Mark Hoefs and Lori Sisel, 30 years; Stephen Arps, 31 years; Chris Mueller, 32 years; Jeff Wilke, 33 years; James Meyer, Tami O’Brien, and Scot Thompson, 35 years; Jacqui Engebos, 36 years; Tammy Phibyl and John Rehn, 37 years; Annette Commons, 40 years; Linda Kuik, 41 years; Jeannie Swagel, 42 years; and Carl Laveck, 50 years, for receiving WBA’s Lifetime Service Awards.

The reception also honored the bank’s 10 retirees, several of which also were honored with WBA’s Lifetime Service Award. Congratulations to Deborah Carlson, credit analyst III (37 years); Joan DeGrand, business banking portfolio manager (47 years); Teri Deprey, credit analyst III (39 years); Jan Hall, vice president – deposit operations manager (37 years); Dave Kappelman, senior vice president – agribusiness banker III (40 years); Mark Kropp, assistant vice president – branch manager III (38 years); Deanna Tilot, financial assistant (35 years); Jeff Vandenplas, vice president – business banker III (39 years); Bonnie Vogel, lead teller (34 years); and Cindy Winiecki, agribusiness portfolio manager, on their retirements and extended years of service.

Rose Oswald PoelsBy Rose Oswald Poels

Since the enactment of the Dodd-Frank Act in 2010, WBA has assisted members in understanding and implementing countless layers of new federal regulations — some as straight forward as creating and delivering a new one-page notice, others much more complex, including TRID, mortgage servicing rules, and QM/ATR underwriting standards (and those are only the most recent of new laws).

An area of the Dodd-Frank Act that much of the industry has been anxiously awaiting is that of Section 1071. As a reminder, Section 1071 of the Dodd Frank Act amended the Equal Credit Opportunity Act (ECOA) to require that financial institutions collect and report to the Consumer Financial Protection Bureau (CFPB) certain data regarding applications for credit for women-owned businesses, minority-owned businesses, and small businesses.

Having been in this industry for over thirty years, I will say that the forthcoming business data collection and reporting regulation is of the magnitude — both in cost and in operational impact — of what bankers experienced with the implementation of other industry-changing regulations such as the Bank Secrecy Act, Reg CC, or the SAFE Act. I can recall pre-BSA procedures, and now we operate in an implemented BSA world; a time of in-branch check encoding and processing to today’s electronic presentment, centralized clearing, and near live-time processing; and of course, a time when TILA and RESPA were separate disclosures versus today’s mortgage loan application and closing procedures due to TRID rules.

The same will be true after full implementation of a final Section 1071 rule. This law, once finalized, will change how business credit applications are processed. Data will need to be collected and reported as never before. Some members experience similar types of data collection and reporting under the Home Mortgage Disclosure Act (HMDA), but even non-HMDA reporting banks may be required to comply with Section 1071 data collection and reporting.

Based upon recent agency regulatory agenda filings and court filings earlier this month, it is expected that CFPB will finalize its Section 1071 Small Business Lending Data Collection and Reporting Rule by March 2023. Rest assured, I understand the impact this rule will have on the membership. In my comment letter to CFPB regarding its Section 1071 proposal, I advocated for the collection of only those data points required under the Dodd-Frank Act, a higher exemption threshold, and for a longer implementation period to help lessen the impact of the new regulation.

Late last year, WBA prepared a toolkit to help senior management, commercial lenders, loan processors, compliance officers, and others involved with small business lending to better understand the impact of CFPB’s proposal on the bank. Those resources are still available, and I would recommend those in the areas mentioned become familiar with the general concepts of the proposal, understand what could become law, and begin considering the impact on the bank. Planning will be crucial with a regulation as impactful as what Section 1071 will be.

In addition to being vocal during the regulatory process on Section 1071, WBA has advocated for repeal of Section 1071 with our congressional delegation for the last 10 years. Although it is late in the session, I am pleased to share that Rep. Scott Fitzgerald (WI-05) introduced on July 20 the Making the CFPB Accountable to Small Business Act which would repeal Section 1071 of the Dodd-Frank Act. Rest assured, WBA will continue its strong advocacy at all levels to try and reduce this regulatory burden. In the meantime, WBA plans to create further resources once the final rule is released and will help answer questions related to the new regulation.

Current WBA Section 1071 resources may be found on the WBA Compliance Resources webpage.

Triangle Background

Pictured (left to right) are: Tami Eid, recently retired branch manager of First National Bank and Trust and Dawn Peterson, president of Whitehall Area Chamber of Commerce.

The historic Whitehall Bandstand outdoor venue for live artistic performances recently received a $5,000 community grant from First National Bank and Trust Company to assist with the project restoration.

The iconic Whitehall Bandstand was built in 1915 with funds provided by the Chautauqua Committee, comprised of six women for $700 and has been home of many community events. With the current capital campaign, it is the hope for this ornamental outdoor space to be the hub of even more community activities.

On April 1, 1915 the Whitehall Times newspaper article described the structure as “a fine, concrete pebbledash bandstand. F.B. Seymour, superintendent of the Green Bay & Western Railroad donated the site between the city hall and railroad track and A.E. Wood was contracted to erect it.” It was further described as a “massive octagonal structure 20’ in diameter of solid concrete, stuccoed and pebbled on the outside, with eight large, cement pillars, and pagoda roof with extended eaves. This handsome structure will add materially to the beauty of the village as well as furnish an incentive to our fine bands for a continuance of their worthy efforts.”

According to the newspaper reports, the structure stood as originally built until 1953 when the City Council discussed repairing the original roof and even the possibility of taking down the entire structure. In 1955 the Council approved removal of the roof and replacement with a flat roof. In 1982 the flat roof was replaced with the current roof today.

“We would like to thank First National Bank & Trust Company for this most generous contribution to the restoration of Whitehall’s 1915 bandstand! Contributions like yours will assure the completion of the work to bring the structure back to its original beauty,” said Whitehall Area Chamber of Commerce Coordinator Ellen Koxlien.

Since celebrating its 100th birthday in 2015, the Whitehall Chamber of Commerce has been working with the Wisconsin Historical Society and other donors to see this project to fruition and save pieces of history. The official construction will begin fall 2022.

“We are very excited to see the restoration of this historic community feature is finally going to happen,” added Koxlien.

George E. Gary (right) receives WBA’s 50 year club recognition from WBA’s Daryll Lund (left).

On Thursday, July 21, WBA’s Executive Vice President and Chief of Staff Daryll Lund attended the retirement reception of George E. Gary, president and CEO of Columbia Savings and Loan Association in Milwaukee. During the reception Gary was awarded with WBA’s 50 Year Club recognition for his tenure within the banking industry.

Gary began at Columbia Savings and Loan Association, Wisconsin’s oldest Black financial institution, as a loan officer. Throughout his time at the bank, Gary has assisted in serve the needs of citizens and organizations in the Black community.

Bank First Corporation (Nasdaq: BFC) (“Bank First” or “the Company”), the holding company of Bank First, N.A., announced on July 26, 2022 the signing of an Agreement and Plan of Merger with Hometown Bancorp, Ltd. (“Hometown”), parent company of Hometown Bank, a Wisconsin state-chartered bank, under which Bank First has agreed to acquire 100% of the common stock of Hometown in a combined stock-and-cash transaction.

Under the terms of the Agreement and Plan of Merger, each Hometown shareholder will have the option to receive either $29.16 in cash or 0.3962 of a share of Bank First’s common stock in exchange for each share of Hometown common stock, subject to customary proration and allocation procedures, such that no less than 70% of Hometown shares will receive stock consideration and no greater than 30% will receive cash consideration. The aggregate consideration is valued at approximately $124 million, based on the closing price of Bank First common stock as of July 22, 2022 of $75.23 per share.

Bank First’s focus on providing innovative products and services will allow the customers of Hometown to benefit from a wide array of retail banking products and loan programs tailored to the unique needs of each individual or family.

Hometown shareholders and customers will also benefit from Bank First’s 49.8% ownership of UFS, LLC, a bank technology outfitter, which provides digital, core, cybersecurity, managed IT, and cloud services to banks in the Midwest. Bank First’s relationship with UFS creates opportunities to access the latest advancements in banking technology at a faster rate than its peers.

Mike Molepske, president and chief executive officer of Bank First stated, “We are excited to welcome Tim McFarlane and the relationship focused team of bankers at Hometown to Bank First. I’ve had the pleasure of knowing Tim throughout my banking career and working with him as well. I am looking forward to collaborating with Tim and his team as we combine our organizations. Together, we will provide exceptional value to our employees, customers, and shareholders.”

“Our organizations’ shared values make this partnership a natural fit,” stated Tim McFarlane, president and chief executive officer of Hometown. “By joining with Bank First, we found an opportunity to align with a partner that shares our passion for providing personalized customer service and shows a genuine concern for the well-being of our employees, customers, and communities. We see a great opportunity to complement Bank First’s strengths while leveraging their capabilities to add value to our customers in the form of leading-edge technology and a large breadth of retail and business offerings.”

Upon completion of the merger, Tim McFarlane will assume the role of President and will join the Board of Directors of Bank First, N.A. He will also be nominated to the Bank First Corporation Board of Directors. Mike Molepske will continue serving as Chief Executive Officer and Chairman of the Boards of Directors of Bank First Corporation and Bank First, N.A.

The Boards of Directors of Bank First and Hometown have approved the Agreement and Plan of Merger. The closing of the transaction is expected to be in the fourth quarter of 2022, subject to customary closing conditions, including regulatory approval, approval by Hometown’s shareholders, and obtaining a conversion date from UFS and Fiserv.

As of June 30, 2022, Hometown had approximately $627.6 million in consolidated assets, $421.2 million in gross loans, $538.7 million in deposits, and $65.5 million in consolidated stockholders’ equity. Based on the financial results as of June 30, 2022, the combined company, inclusive of projected balances to be acquired from the proposed acquisition of Denmark Bancshares, Inc., will have total assets of approximately $4.3 billion, loans of approximately $3.3 billion and deposits of approximately $3.7 billion.

Piper Sandler & Co. served as financial advisor to Bank First and Alston & Bird LLP served as legal counsel. Reinhart Boerner Van Deuren, s.c. served as legal counsel to Hometown.