Wisconsin community bankers optimistic about economy

Regulations and competition are main concerns

Jennifer Provancher has been promoted to president of Wauwatosa-based The Equitable Bank
Jennifer Provancher has been promoted to president of Wauwatosa-based The Equitable Bank

Last updated on July 2nd, 2019 at 09:07 am

Wisconsin’s community bankers have a positive outlook on the state and local economies, according to a survey released today by the Wisconsin Department of Financial Institutions.

They pointed to the state’s low 4.2 percent jobless rate and its high labor force participation rate as a source for optimism.

The survey, “Community Banking in the 21st Century: Opportunities, Challenges and Perspectives,” was released in partnership with the Conference of State Bank Supervisors and the Federal Reserve.

Competition from nonbank entities, credit unions and the Farm Credit System is increasing, the community bank respondents said. Credit unions are able to offer lower rates on longer-term loans, and the consolidation in the credit union industry could pose an even larger threat.

“We’re not afraid of competition, but a billion-dollar credit union operates just like a bank, but with a significant competitive advantage. … It’s not a level playing field,” one respondent said.

The banks’ business customers are leaning toward hiring more employees, but have expressed difficulty finding candidates with the right skills and the ability to pass pre-hiring screenings, the bankers said.

Wisconsin’s community bankers said residential real estate sales volumes are up and demand is outpacing supply in most cases. Four of the five Wisconsin banks responding said residential mortgage lending is an important part of their strategy, whether it’s for diversification or building customer loyalty.

They said manufacturing and hospitality are doing well, while agricultural clients are being impacted by low commodity prices.

Regulations continue to be a point of concern for bankers, with Wisconsin’s respondents describing the current regulations as slow to be implemented, too complex and confusing, and sometimes ambiguous.

“The concepts haven’t been wrong,” one banker said. “It’s the implementation—it’s too complex and arcane.”

Looking to the future of their organizations, the community bankers said they have planned well for succession.

The results of the national survey were revealed this week at the organizations’ Community Banking in the 21st Century Research and Policy Conference in St. Louis. The survey included 557 community bankers from 29 states.

“The message that resonated loud and clear at the conference is that strong community banks make for strong communities,” DFI Secretary Lon Roberts said. “Community banks in Wisconsin provide the products and services that are needed for their customers to be successful, thereby benefiting the local, state and national economies.”

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Molly Dill
Molly Dill, former BizTimes Milwaukee managing editor.