Southeastern Wisconsin financial service industry news
Tuesday, April 22, 2014
Laning to lead Baker Tilly Investment Advisors
Bruce Laning has been named president of Madison-based investment advisory firm Baker Tilly Investment Advisors LP. He will work out of the Milwaukee office.
BTIA also has offices in Appleton, Minneapolis and Janesville. There are 42 employees.
Steve Parish, who had served as chief executive officer, has left the company. Laning will now lead executive team members Kelly Baumbach, principal, and Brian Powers, chief operating officer, in an "executive office" team format along with outside investors.
Baker Tilly Investment Advisors branched off from accounting firm Baker Tilly and became an independent company in 2013. The company has undergone significant growth over the past decade, and today has $1.9 billion in assets under management.
"I am excited to step into the leadership role as we begin the next chapter of our firm," Laning said. "We are grateful for the role Steve Parish played in the creation of our client-focused culture and in securing partners that helped us become an independent investment firm."
Laning joined BTIA in 2012. He previously served for 11 years as a partner and portfolio manager at Marietta Investment Advisors. Before that, Laning was a portfolio manager at US Bank for 12 years.
He holds a bachelor's in business administration from Valparaiso University and an MBA from Northwestern University. Laning sits on the Valparaiso and Milwaukee Symphony Orchestra boards of directors.
Analysts upgrade Badger Meter stock rating
Brown Deer-based Badger Meter Inc.’s stock has been upgraded by investment analysts at Robert W. Baird & Co. Inc. from a “neutral” rating to an “outperform” rating.
Baird has a new $57 per share price objective for Badger Meter’s stock, up from a previous price objective of $54.
Badger Meter’s stock is traded on the New York Stock Exchange with the ticker symbol of BMI.
On average, analysts predict that Badger Meter will post $2.19 earnings per share for the current fiscal year.
Badger Meter recently reported record first quarter sales of $83.5 million and increased earnings of $4.6 million.
Several other analysts have also recently commented on the stock. Analysts at Zacks reiterated a “neutral” rating on Badger Meter shares with a $54 price target on the stock. Analysts at Canaccord Genuity raised their price target on shares of Badger Meter from $50 to $52 in a research note on Feb. 7.
Modine upgraded to outperform
Racine-based Modine Manufacturing Inc. has been upgraded from “neutral” to “outperform” rating by analysts at Milwaukee-based Robert W. Baird & Co. Inc.
Baird has a new $19 per share price objective for Modine's stock, up from a previous price objective of $13.
The thermal management system and component manufacturer, which serves the automotive, commercial truck, industrial and building markets, has reached the end of an extensive four to five year transformation process, Baird said.
The transformation has comprised repositioning its product portfolio, right-sizing its manufacturing operations and securing new orders for higher return systems and modules.
"Early evidence of these actions and end-market tailwinds kicking in should allow Modine to sustain high rate of growth over next several years," the report said. "Furthermore, valuation appears very attractive with shares at 30-40 percent discount to group, stable balance sheet, improving free cash profile."
NBA will reserve right to buy Bucks back
The NBA will reserve the right to buy back the Milwaukee Bucks from incoming owners Wesley Edens and Mark Lasry if a deal to a build a new arena in the city is not in place by November 2017.
ESPN.com reported that sources said the sale agreement announced last week to transfer the Bucks from longtime owner Herb Kohl to Edens and Lasry for $550 million includes a provision that allows the league to buy back the team for $575 million if construction on a new building in Milwaukee is not underway by the deadline.
A source close to the negotiations, who asked not to be named for this report, told BizTimes Monday, "Nothing like this gets done without a carrot and a stick all around. I believe the league will try to honor Herb's desire -- most of the owners and the commissioners really like Herb and are concerned about the image of the game. So the league will likely have some future influence with the new owners -- possibly a covenant that allows the league to take over the franchise if the deal for a new arena falls through. So the new owners better work hard, or all they get is their money back. Also, the local and state government leaders need to feel the pressure to help get things done, but there are lots of options other than a regional sales tax. It doesn't make sense to just build a new arena and leave the rest of the downtown area, including the convention center, languishing. Maybe there's a way to empower the city and/or county to pull on their own bootstraps with a larger, more ambitious plan together with some sharing of incremental taxes of all kinds generated by the new development."
One source said the league would likely only intervene and take ownership of the Bucks step if it did not see "significant progress" toward a new arena in Milwaukee.
New NBA commissioner Adam Silver said the league was prepared to insist that Milwaukee have a plan for a modern arena by 2017 to keep the franchise where it has been since its inception in 1971.
"Sen. Kohl put in place provisions to ensure that the team stays in Milwaukee," Silver said last week after the league's annual board of governors meetings.
The board has not yet signed off on the deal to sell the team.
Bank earnings solid in 1Q
Earnings released last week for banks with a presence in the Milwaukee market have been generally positive.
Chicago-based Northern Trust Corp. Tuesday reported first quarter net income of $181.4 million, or 75 cents per share, up from $169.7 million, or 67 cents per share, in the first quarter of 2013.
Revenue was $1.04 billion, up 7 percent from $976.4 million in the same period a year ago.
"Our first quarter 2013 results improved compared to a year ago with trust, investment and other servicing fees increasing 8 percent, total revenue increasing 7 percent and net income and earnings per share increasing 11 and 12 percent, respectively," said Frederick Waddell, chairman and chief executive officer of Northern Trust. "We also experienced strong growth in client assets under custody and under management of 15 percent and 13 percent, respectively."
Minneapolis-based U.S. Bancorp reported first quarter net income of $1.39 million, or 73 cents per share, up slightly from $1.42 million, or 73 cents per share, in the first quarter of 2013.
Total net revenue was $4.8 million, flat from $4.8 million in the same period a year ago.
"Our first quarter earnings … demonstrated our company's ability to generate strong results in the face of a slow-growing and uncertain economy," said Richard Davis, president and CEO of U.S. Bancorp. "Our industry-leading returns on average assets of 1.56 percent and average common equity of 14.6 percent, combined with our strong efficiency ratio of 52.9 percent, remain among the top performance ratios in our peer group. Our performance clearly reflects the advantage of our diversified business mix and disciplined expense management which has enabled us to withstand the revenue challenges facing our industry in this slow-growth economy."
Pittsburgh-based PNC Financial Services Group Inc. reported first quarter net income of $1.1 billion, or $1.82 per share, up from $995 million, or $1.74 per share, in the first quarter of 2013.
But total revenue was just $3.7 million, down 5 percent from $3.9 million in the same period a year ago. The company attributed the drop to lower net interest income, because there were fewer days in the quarter and the bank has achieved lower returns on loans and securities while holding higher borrowed funds balances.
"PNC had a successful first quarter – our fourth straight quarter with net income of $1 billion or more," said William S. Demchak, president and chief executive officer. "We grew loans and deposits, and we lowered expenses even as we continue to make investments across our businesses to enhance the customer experience and become more efficient. Based on the strength of our performance and balance sheet, we were pleased to announce plans to return more capital to our shareholders through a 9 percent increase in our quarterly dividend and reinstituted share repurchase programs."
All of the banks mentioned increasing productivity and efficiency while investing in the people and technology needed to advance in today's banking and regulatory environment.
Johnson Controls makes $1.6 billion acquisition
Glendale-based Johnson Controls Inc. has agreed to acquire air distribution and ventilation product manufacturer Air Distribution Technologies Inc. for about $1.6 billion.
The Richardson, Texas-based Air Distribution Technologies is owned by the Canada Pension Plan Investment Board. It is a leading North American independent air distribution and ventilation product provider.
ADT's products include grilles; registers and diffusers; terminal units; and fire and smoke dampers and fans sold under brands like Ruskin, Titus, Hart & Cooley, Krueger, PennBarry and Tuttle & Bailey.
Johnson Controls is a global industrial firm that provides products and services aimed at improving operational efficiency and energy savings for buildings, as well as cars and their batteries, electronics and interiors.
"This investment expands Johnson Controls' position in the buildings space with additional products that are complementary to our existing heating, ventilation and air conditioning offerings," said Alex Molinaroli, Johnson Controls chairman and chief executive officer. "It reflects our stated commitment to invest in the buildings business as a growth platform and further enhances our offerings and channels. Air Distribution Technologies customers will have undisrupted access to the products and brands that they have come to expect. This new channel will provide an important growth platform for Johnson Controls as we continue to pursue additional investments in new products and increase our market coverage worldwide."
ADT will be integrated into Johnson Controls' Building Efficiency division and will continue to use its own brands, distribution channels and employees. Both leadership teams will guide the integration.
"Johnson Controls is a leader in the building technology industry that will complement our strong brands and valued relationships," said Terry O'Halloran, CEO of Air Distribution Technologies. "Our customers will now have access to an unmatched portfolio of products and offerings as well as backing and continued innovation from the best experts in the industry."
The acquisition is subject to limited conditions and is expected to close in July.
Waukesha State Bank plans branch at Hartland bowling alley site
Waukesha State Bank is working on plans to build a bank branch in Hartland at the current site of the Hartbrook Lanes bowling alley at 550 Hartbrook Drive.
The Hartland Plan Commission reviewed the proposal at its meeting on Monday.
Waukesha State Bank has branch locations in Waukesha, Brookfield, Delafield, Mukwonago, Muskego, New Berlin, Oconomowoc, Pewaukee and Sussex, but the bank has no branches in Hartland currently.
Bank executives could not be reached for comment.
An employee reached at Hartbrook Lanes said that Waukesha State Bank has an option to buy the property, but "nothing has been finalized" and the bowling alley will remain open for "another year at least."
"They have an option to buy the property," said the Hartbrook Lanes employee, who declined to provide his name. "We get so many offers (to buy the property) every year. (The bank) is just trying to see if they can do what they want to do."
The bowling alley building was built in 1975 and the property has an assessed value of $1.23 million, according to Waukesha County records.
Westbury Bank to renovate Brookfield branch
West Bend-based Westbury Bank will spend about $1.5 million to renovate its branch at North Avenue and Calhoun Road in Brookfield.
The first and second floors will be updated with modern finishes, an ATM and a business lending hub for more efficient service. Th exterior ATM location will be reconfigured and the entryway to the building will be upgraded.
"We understand that customers want their service completed in a timely manner," said Greg Remus, chief operating officer. "We will provide an environment where we can provide them with excellent service."
Five to six new employees will be added as a result of the renovation.
Security and technology will be emphasized in the project, to meet customers' interaction preferences. The completed branch will serve as a main hub for the Bank's Commercial Lending & Wealth Management areas
"We are investing in the reconstruction to improve the customer experience for Brookfield and surrounding communities. We are a dynamic bank with which an individual or business customer can build a relationship," Remus said.
The bank also plans to remodel its Germantown and Jackson branches in the next 12 to 18 months.
"This project has given us a template for what we need to do to help serve our neighborhoods," Remus said. "Our Germantown and Jackson neighbors will see an improvement in their branches soon. Overall, we will continue to transform our business to help serve our customers."
Westbury Bank has 12 branches in Milwaukee, Washington and Waukesha counties.
Quarterly earnings dip at Associated Banc-Corp
Green Bay-based Associated Banc-Corp reported first quarter net income of $45.1 million, or 27 cents per share, down from $47.3 million, or 28 cents per share, in the first quarter of 2013.
Associated Bank's quarterly revenue was $243.1 million, down from $244.7 million in the same period a year ago.
The company's net interest income was $164.9 million, up from $157.6 million in the first quarter of 2013. Noninterest income was $74 million, down 10 percent from $82 million in the first quarter of 2013. The bank attributed the steep drop to the drastic reduction in refinancing activity.
The firm's total assets were at $24.8 billion, up from $23.2 billion in the first quarter of 2013.
"We are pleased with our solid results this quarter and remain optimistic about our long-term prospects. This quarter's strong performance was driven by robust loan growth, particularly in our Commercial lines of business." said Associated president and chief executive officer Philip Flynn. "In this environment, we remain focused on our strategies to enhance efficiency and manage expenses. We will continue to look for opportunities to deploy capital which are consistent with our commitment of building long-term shareholder value at Associated."
Bank Mutual reports earnings increase
Brown Deer-based Bank Mutual Corp. reported first quarter net income of $2.8 million, or 6 cents per share, up 11.7 percent from $2.5 million, or 5 cents per share, in the first quarter of 2013.
The bank attributed the higher earnings to increased net interest income and lower compensation-related expenses, provision for loan losses, federal insurance premiums and net losses and expenses on foreclosed real estate.
Net interest income was $17.1 million, up 5.9 percent from $16.1 million in the same period last year.
Offsetting the earnings bump were lower net mortgage banking revenue, lower income from bank-owned life insurance and a non-recurring charge related to state income taxes.
"Our net interest margin improved for the seventh straight quarter due to continued improvements in our earning asset and funding mixes," said David Baumgarten, president and chief executive officer. "Also impressive was a nearly 12 percent decline in our total non-interest expense to a level that we believe we can sustain through the remaining quarters of 2014. Our performance in the first quarter was also impacted by continued improvements in asset quality, which reduced the amount of loss provisions we recognized. Assuming that recent trends continue, as well as our assessment of economic conditions in our local markets, we are reasonably confident that the loss provision during the remainder of the year will continue to be lower than it was in 2013, although we cannot provide assurances."
MGS acquires plant in New York
MGS Mfg. Group Inc., headquartered in Germantown, announced it has purchased Hospira's injection molding plant in Buffalo, N.Y.
The transaction is scheduled to close at the end of June this year. Financial terms were not disclosed.
The plant employs 120 people and runs 40 injection molding machines, ranging from 100-ton to 400-ton, producing parts for Hospira's pharmaceutical and device businesses. As part of the agreement, the Hospira employees who work at the Buffalo facility will join MGS. No layoffs are planned as part of the purchase.
"This represents a strategic move for both companies," says Paul Manley, MGS chief operating officer and chief financial officer. "MGS has made, and will continue to make, substantial investments in manufacturing technologies and capabilities to increase service to our healthcare industry customers. This opportunity with Hospira will benefit both of our organizations."
"MGS's expertise in cost-efficient custom manufacturing and molding of components and sub–assemblies better positions Hospira to meet customers' evolving needs for molded parts," says Matthew Stober, senior vice president of operations for Hospira. "MGS meets or exceeds the ISO and FDA guidelines for single-use disposable plastics manufacturing and will ensure supply continuity is maintained at all Hospira facilities."
MGS Mfg. Group is a leading supplier to the global plastics industry of tight-tolerance injection-molded components, injection molds, specialty multi-shot equipment and automation systems.
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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