INSIGHT ON: Banking – Raising capital

Posted on May 1, 2015 :: Banking , Insight On
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Posted by , Insight on Business Staff Writer

Banking

When businesses launch initial public offerings (IPOs) or sell shares, it’s usually to spark growth. Two Northeast Wisconsin banks will take that one step further by expanding their own assets to help other businesses grow.

Earlier this year, Investors Community Bank in Manitowoc, a wholly owned subsidy of County Bancorp, closed on its IPO of 1.357 million shares of common stock at $15.57 per share, raising about $21.4 million. Shares also began trading on the NASDAQ under the symbol ICBK in mid-January.

Another regional bank — First National Bank-Fox Valley — sold shares recently through a private placement stock offering to raise capital. First Menasha Bancshares Inc. — FNB’s Neenah-based holding company — raised approximately $17.2 million.

Investors Community Bank CEO Tim Schneider says launching the IPO was done to help the 19-year-old bank grow.

“We had grown a lot organically, but the IPO will allow us to make some acquisitions that will help us grow even more,” he says. “We’ve
done a lot of good business in the ag sector, but we want to do more commercial business and this will help with that, too.”

FNB Chief Financial Officer-Senior Vice President Michael Boettcher says his bank is hoping for similar results.

“We were able to increase our base — not only in dollars, but also in bringing in more shareholders,” he says. “One of the encouraging things we saw was that investors were interested in investing in us. They like the Fox Valley and our position in it as the biggest locally-owned bank.”

Both Investors Community Bank and FNB plan to use the additional capital raised to increase their lending to other businesses.

“We have a lot more opportunities and options when it comes to lending” after the IPO, Schneider says.

Boettcher says the stock sale will help the bank expand its lending base. “We have been on a solid growth pattern, but to do more, we needed more capital. As we grow, we can then help other businesses and the economy in the Fox Valley grow,” he says.

Schneider hopes more businesses will think of Investors Community Bank as a possible lender when seeking funds for expansion.

“Our public profile has definitely been raised by the IPO and I’ve gotten a lot more calls from people who are looking to expand their businesses,” he says.

With full-service branches in Manitowoc and Stevens Point and loan processing offices in Fond du Lac, Darlington and Eau Claire, Investors Community Bank is known primarily as an agricultural lender — it’s ranked as the No. 39 farm lender in the country, according to the American Bankers Association — but Schneider says it wants to serve more industries and sectors.

The bank has been profitable every year since it was founded in 1997 and posted net income of about $7 million in 2013, according to its filing with the U.S. Securities and Exchange Commission. Investors Community Bank employs 95 and has assets of about $743 million.

As a publicly traded company, Investors Community Bank faces increased scrutiny and regulations, but Schneider says that won’t affect consumers at all. “We just have more going on behind the scenes, more paperwork,” he says.

As for FNB, Boettcher says it’s fully rooted in the Fox Valley with its five branches, but it won’t ever rule out expanding into other parts of Wisconsin.
“Our goal, however, is to be the premier bank in the Fox Cities,” he says. “We aren’t looking outside of the market right now. All the money we take in through deposits is lent back into the market.”

FNB employs about 80 and is a $410 million single-bank holding company.  Last year, the bank opened its fifth branch on Appleton’s north side and completed an 8,000-square-foot addition to its Neenah headquarters.

Besides growing in commercial markets, Boettcher says FNB is looking to also expand its mortgage business. He says the bank is participating in the Federal Home Loan Bank of Chicago’s Downpayment Plus Program, which provides down payment and closing-cost assistance to low- and moderate-income households for the purchase of a home.

“The mortgage market is definitely ripe with potential,” Boettcher says.

The recent private share offering was the first one for FNB since it was chartered in 1887 as the First Bank of Menasha.

“It was a fun and successful process,” Boettcher says. “It was a great business decision.”

ON THE WEB

» FNB-Fox Valley
fnbfoxvalley.com

» Investors Community Bank
investorscommunitybank.com