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April 2016 Customer Letter

 

April 4, 2016

Spring has arrived in Wisconsin.  As in most every other year, some days appear more spring like than others.  I enjoy this time of year because temperatures rise, we enjoy more sunlight, we see more green around us and the baseball season begins today.  

Spring Bank Update

Spring Bank posted very good results for 2015.  Our results continue to stack up favorably against our peer group of banks.  One of the many statistics that I am proud of is that our efficiency ratio ranks in the top 4%.  Our efficiency ratio measures how much we spend to generate each dollar of revenue.   By being more efficient than most competitors we are able to invest in products and services that you, our valued clients, need and want. 

Thanks to the confidence our valued clients have in us, Spring Bank exceeded our growth expectations for 2015.  Our commercial loan portfolio increased by 16% during the year.  Our goals for 2016 include continued growth in both commercial loans and income.  I believe that our success is based upon our continued dedication to provide you, our clients, with the personalized attention you deserve.

To meet the needs of our existing and new clients we plan to hire key additions to our banking team during 2016.  We have already filled two newly created positions with experienced bankers and are in process of bringing on board two more professionals before year end.

We recently completed an update to our online banking section which included several new features.  Mobile banking will be rolled out and available for your use beginning later this year.  Our mobile banking product will provide another way for you to access your accounts at Spring Bank and conduct your financial transactions remotely.  We will start to communicate information on mobile banking to you in the upcoming weeks.

While we predominantly lend to businesses and commercial real estate professionals, we offer a variety of personal banking products including Money Market and Certificate of Deposit accounts with interest rates that are among the highest in our market.  Please consider Spring Bank for your personal banking needs as well as your business needs. 

To confirm we’re meeting your current needs, as well as anticipate and support your future needs, we plan to conduct a brief online customer survey during the next month.  This builds on our 2013 customer research project with key clients and referring professionals. We want to continue to ensure that we’re providing you with the right products, services and information and in the format you want.  We hope that when you receive a link to the survey that you will take a few minutes to provide your candid feedback.

Economic Outlook

In late 2015 the Federal Reserve raised its key interest rate by 25 basis points.  The move had been anticipated for some time.  The Fed has been reluctant to increase its base rate due to concerns over the strength of our economy.  The impact to long term rates was temporary as we now see five and ten year rates at levels similar to those before the rate hike.  My expectation or prediction regarding further Fed action in 2016 is that we will see no more than one additional 25 basis point increase before year end. 

I base my prediction primarily on two points.  One, the fundamentals driving the US economy provide us with mixed signals.  Two, historically the Fed has been reluctant to raise or lower rates in the months leading to a presidential election.  Thus, businesses that borrow based upon short term or floating rates shouldn’t experience severe increases in interest expense.  Regarding long term rates, I foresee only slight increases during the year.  Long term rates can be impacted by many events, which make it difficult for me to be confident in my ability to predict the movement of longer term rates. 

Honor Flights

Late last year Spring Bank was proud to once again support WTMJ AM's efforts to fill a Stars and Stripes Honor Flight, this time with Korean War veterans.  The campaign, Operation Parallel, raised more than $250,000 to send 200 veterans to Washington, D.C. on two Honor Flights May 14th. This was our second time partnering with the station on an Honor Flight campaign and is part of our ongoing support to send veterans on Honor Flights to Washington DC to see the memorials built to honor their courage and sacrifice.

Nominate a Fastest Growing Firm

For the third consecutive year, Spring Bank will be the official bank sponsor of The Business Journal of Milwaukee’s Fastest Growing Firms awards program.  The awards honor the fastest growing mid-market companies in greater Milwaukee.  Help us honor successful growing businesses by submitting a nomination at www.bizjournals.com/milwaukee/nomination/79292 by May 6th. 

Thank you for choosing Spring Bank to be your financial services partner.  Our commitment to maintaining a fortress balance sheet allows us to better meet the growing needs of our clients.  Further, it allows us to invest in technology, people and in new services to meet the financial needs of privately owned business located throughout Southeast Wisconsin.