16
Wisconsin Community Banker
January/February 2014
What Is the Outlook for Community Banking in 2014?
CBW Board Members Respond
Early this year, Community Bank-
ers of Wisconsin polled its board
members about their thoughts for the
year ahead. Here, they discuss what
they see on the horizon in 2014.
Chairman: Stan Leedle,
Choice Bank, Oshkosh
I feel the eco-
nomic environment
for 2014 will be
much like it was in
2013. We have seen
a steady stream of
new loan requests.
Customer results
have been improving with profits
and overall performance improving
since 2010. This improvement is also
reflective in the level of customers
who are past due on loans, which
has diminished greatly over the past
three years. The current pace of eco-
nomic rebounding, while not great, is
positive.
Chairman Elect: Jerry
O’Connor, The First
National Bank of
Waupun
We anticipate
moderate economic
improvements to
continue in 2014.
While certain mar-
ket segments have
reported commend-
able growth, this
still remains a slow, yet steady, paced
recovery overall. In 2014 the economy
will need to once again absorb the
ongoing negative stories coming out
of Washington related to budgets, total
debt, debt ceilings, unfunded man-
dates, and oppressive new regulations.
These forces are now joined by the
increasing and still unknown costs of
Obamacare. We can anticipate a mar-
ket drag that will accompany a very
contentious election cycle in 2014 as
all these issues are brought into focus.
The banking industry will need
to absorb and implement numerous
new regulations coming out of Dodd-
Frank with little or no chance of get-
ting reimbursed for the hundreds of
thousands of man-hours and millions
of dollars in costs that will be commit-
ted to this effort by the industry. The
bottom-line impact to Community
Banking: Opportunity is still available
to every organization. Being prepared,
efficient, and competitive will still be
the drivers for our successes.
Vice Chairman, Fred
Siemers, River Cities
Bank, Wisconsin Rapids
I foresee a
mixed bag for
community banks
in 2014. Most
banks have weath-
ered the storm and
are now looking
for ways to lay the
groundwork for future sustainability
and profitability.
Dealing with regulatory compli-
ance issues and credit quality have
dominated in recent years. As new
compliance rules are implemented,
banks will experience increased costs
of compliance but will adapt to these
changes out of necessity. Apart from
credit quality and regulatory com-
pliance issues, I believe there will
be some new challenges for banks
in 2014: namely earnings pressures
related to margin compression and
loss of non-interest income.
No doubt 2014 will be a dynamic
and challenging environment for com-
munity banks. New challenges bring
new opportunities. I know community
bankers are creative and adaptive.
It will be interesting to see how our
industry performs this year!
Past Chairman: Paul
Hoffmann, Monona State
Bank
While the eco-
nomic recovery is
slower than we’d
like and the Fed
seems unlikely
to much increase
interest before
2015, the economy
will continue to head steadily in a
positive direction. There is some pent-
up loan demand in our communities
where consumers and small busi-
nesses have been waiting for a stron-
ger economy to expand and are slowly
beginning to seek out loans again.
While the vast majority of commu-
nity banks have worked through any
problem loans over the past few years
and most are profitable, increased
regulations still take a toll on our prof-
itability. Community banks are getting
better at responding to new regula-
tory demands and at implementing
best practices that will sustain our
industry over the long term. Despite
increased competition, most of our
institutions will be around for decades
to come. Thanks to the efforts of ICBA
and CBW, some leaders in Washing-
ton, D.C., are listening and getting
the message that Main Street banks
are different from Wall Street banks.
Going forward in 2014, I hope that we
will see more results of our advocacy
in the form of consistently different
regulatory requirements for different
types of banks.
