Southeastern Wisconsin financial service industry news
Tuesday, October 21, 2014
BankMyBiz launches seed round
Milwaukee and Madison-based startup BankMyBiz.com has launched a $500,000 seed round to fund its growth.
The website, which connects businesses with lenders, was launched in September 2013 and has helped complete more than $8 million in loans. The site, which functions similarly to social networks like Match.com, asks lenders and business owners to create profiles and then suggests matches using an algorithm. Users can post on their newsfeeds and explore other profiles.
BankMyBiz has been growing organically over the past year at a steady pace, said Michael Adam, founder. The website now has close to 1,000 users, and the business has three full-time and one part-time employee. He hopes to increase employment to 10 to 13 employees in the 18 months following the close of the seed round.
The seed round funds will mainly be used to get additional customers on the site, Adam said.
“There’s a cost of customer acquisition, and I think we’ve been very efficient gaining new customers, kind of in bootstrap mode, but now it’s really time to turn it up and multiply the number of user we have on the site,” he said.
BankMyBiz hopes to find one investment group to fund the whole seed round, Adam said. The plan is to close the seed round in the next three months, and use the funds over the following 18 months.
“We’ve spoken with several institutional angel groups throughout the Midwest,” he said. “We’re hoping to find one group to come in for the entire piece, so that’s why we’re being very selective of the process.”
The company also recently became a member of the Wisconsin Bankers Association and has been forming partnerships with small business advocacy groups to mentor business owners. Many of its loans have an SBA aspect, Adam said.
Connecture files for IPO
Brookfield-based Connecture Inc. has filed with the Securities and Exchange Commission for a proposed initial public offering of its common stock.
The company, which develops web-based information systems used to create health insurance marketplaces, has not yet determined the number of shares to be offered or the price range for the offering, which may include stockholder shares.
Connecture previously confidentially filed for an IPO under the Jumpstart Our Business Startups Act of 2012.
According to Connecture, the use of private exchanges is expected to increase dramatically as the online distribution of health insurance and other benefits increase.
Associated Bank grows on loans
Green Bay-based Associated Banc-Corp reported third quarter net income of $50.2 million, or 31 cents per share, up from $45.7 million, or 27 cents per common share, in the third quarter of 2013.
The company, which operates Associated Bank branches across Wisconsin and in Minnesota and Illinois, reported $25.7 billion in total assets, up from $23.7 billion in the same period a year ago.
Average loans increase to $17.1 billion, up 9 percent from a year ago. Average deposits increased 2 percent, to $17.9 billion. Net interest income was up 8 percent, to $173 million, and noninterest income was up 6 percent from last year.
"We are pleased with our strong results this quarter. Growth in loan interest income drove top line revenue higher. We remain focused on investing in technology which is essential to sustain and improve operational efficiency," said Philip Flynn, president and chief executive officer. "We will continue our ongoing commitment to build long-term shareholder value at Associated with a focus on strengthening our franchise and deploying capital in a disciplined manner."
Bank Mutual earnings up 51 percent
Brown Deer-based Bank Mutual Corp. reported third quarter net income of $4.4 million, or 9 cents per share, up 51.6 percent from $2.9 million, or 6 cents per share, in the third quarter of 2013.
The bank attributed the increase to higher net interest income, lower provision for loan losses, lower net losses and expenses on foreclosed real estate and lower compensation-related expenses. The gains were partially offset by lower net mortgage banking revenue and higher occupancy and equipment expense.
Net interest income was $17.4 million, up from $16.8 million during the same period last year. Total non-interest income was flat from the third quarter of 2013, at $6.1 million.
Total assets were $2.3 billion, flat from last year.
"Our operating results in the third quarter were strong even excluding a couple of revenue items related to our bank-owned life insurance and a sale of securities," said David Baumgarten, president and chief executive officer of Bank Mutual. “Our net interest margin contracted slightly this quarter compared to the second quarter, which was a bit sooner than we had expected. However, continued growth in our loan portfolio offset much of the impact of that contraction."
ACG honors companies for outstanding growth
The Wisconsin Chapter of the Association for Corporate Growth recognized A.O. Smith Corp. of Milwaukee and J.F. Brennan Company of La Crosse with Outstanding Growth Awards during the chapter's member meeting this month.
Accepting the awards on behalf of their respective companies at the Milwaukee Athletic Club were Ajita Rajendra, chairman, president and chief executive officer of A.O. Smith, and Anthony Binsfeld, president of J.F. Brennan Company.
Each year, ACG Wisconsin members are called upon to nominate businesses that they believe exhibit sustained financial performance, a strong corporate culture and strategic excellence. The 2014 pool of nominees included 23 public and private Wisconsin-based businesses.
“The awards committee was challenged with a large pool of candidates,” said Karin Gale, shareholder, Schenck S.C., and ACG Wisconsin president-elect and awards committee chair. “However, our two award winners consistently rose to the top of the list in each criteria category. A.O Smith is an iconic name with a 140-year history in Milwaukee, but it was the company’s compounded growth over the last five years and its position as the leading water heater brand in the Chinese market that was most impressive. J.F. Brennan also has a long corporate history in Wisconsin. Now in its fourth generation of family leadership, the marine construction and environmental remediation company is well positioned for sustainable growth with its continued expansion throughout the Midwest, long-term succession planning, and proven commitment to environmental concerns and innovation.”
The ACG Wisconsin is comprised of 225 business leaders in corporations, private equity, finance and professional service firms.
MGIC reports dramatic earnings increase
Milwaukee-based mortgage insurance firm MGIC Investment Corp. reported third quarter net income of $72 million, or 18 cents per share, up from $12.1 million, or four cents per share, in the third quarter of 2013.
Total revenues were $235.1 million, down from $254.4 million in the same period a year ago.
The decrease can be attributed in part to lower net premium figures. Net premiums written were $222.9 million, down from $234.3 million in the third quarter of 2013. And net premiums earned were $209 million, down from $231.9 million.
MGIC wrote $10.4 billion in new insurance during the third quarter, up from $8.6 billion in the same period last year. And the percentage of delinquent loans decreased to 6.9 percent, from 8.9 percent a year ago.
"I am pleased to report we had another profitable quarter and that the amount of new insurance written increased 21 percent, while the delinquency inventory declined more than 25 percent from the same period last year," said Curt Culver, chairman and chief executive officer of Mortgage Guaranty Insurance Corp. and MTG. Relative to the recently proposed GSE mortgage insurance eligibility requirements he said, "I fully expect that we will comply with the requirements, whether they are modified or not, and that MGIC will remain a vital part of the evolving U.S. housing finance system."
Bucks add more members to ownership group
The Milwaukee Bucks announced that the team has added seven additional local investors to its ownership group, and for the first time acknowledged that New York hedge fund manager Jamie Dinan is a “substantial” owner of the team.
The new members of the ownership group include Gale Klappa, CEO of Milwaukee-based Wisconsin Energy Corp. and Jon Hammes, managing partner of Brookfield-based Hammes Company.
The Bucks also announced that its ownership group now also includes the Partners for Community Impact LLC, a group of Milwaukee area African-American business leaders, which includes: Michael Barber chief operating officer of GE Healthcare; Valerie Daniels-Carter co-founder, president and CEO of V&J Holding Companies; former Miller Brewing Company executive vice president Virgis Colbert; Charles Harvey, chief diversity officer and president of the Johnson Controls Foundation, and Generation Growth Capital founder and managing director Cory Nettles.
“PCI represents a historic collective of African-American community and investment-minded business leaders,” Daniels-Carter said. “We see a unique opportunity to bring together a storied local sports franchise with a group of minority business leaders who are committed to ensuring that the benefits of this economic activity reach the full community. We think the PCI partnership model will be replicated throughout the NBA, particularly as a means of diversifying the ownership of NBA franchises.”
The new owners join other local owners that the team announced in July including: Ted Kellner, founder and executive chairman of Milwaukee-based Fiduciary Management; Jim Kacmarcik, president of Grafton-based Kapco Inc.; Craig Karmazin, founder and CEO of Beaver Dam-based Good Karma Brands; Michael Kocourek, president of Buffalo Grove, Ill.-based Mid Oaks Investments; Keith Mardak, chairman and CEO of Milwaukee-based Hal Leonard Corp.; and Teddy Werner, senior director of business operations for the Milwaukee Brewers.
The announcement by the Bucks also acknowledges for the first time that Dinan, a hedge fund manager and founder of York Capital Management, is also part of the ownership group with Marc Edens and Wes Lasry, who bought the team earlier this year from Herb Kohl. Dinan is a “substantial” owner of the team, said a Bucks spokesperson.
“Since I joined as an owner in July, I have already seen the huge strides we have taken on making the Bucks an integral part of the Milwaukee community,” Dinan said in a news release. “With these leaders joining the Bucks organization, the momentum on our side is undeniable. We look forward to utilizing their knowledge and expertise to build the future of Milwaukee.”
Klappa, Hammes and the Partners for Community Impact have all been approved by the NBA to be part of the Bucks ownership group, the team said.
“I couldn’t pass up the opportunity to join with such distinguished fellow owners of the Bucks franchise,” Klappa said. “The talent in the front office, on the court and throughout the ownership is second to none. All of us are united in our goal of building the Bucks organization into an economic engine for Milwaukee and Wisconsin, providing quality jobs in the community, supporting economic growth and making substantive progress on building our statewide workforce.”
“I am thrilled for the future of basketball in Milwaukee,” said Hammes. “Being home to a strong franchise will pay off in the long-term for all of our local institutions and their athletic activities. I believe we have the ownership team to do great work and am eager to take our next steps toward making the Bucks a model for other basketball teams across the country.”
This exclusive news bulletin is compiled by BizTimes Milwaukee reporter Molly Dill. This bulletin is published every Tuesday morning. Send financial services industry news and tips to firstname.lastname@example.org or call her at (414) 336-7144.
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