Collaboration, Consistency, Commitment ANNUAL REPORT

Transcription

1 Collaboration, Consistency, Commitment ANNUAL REPORT

2 Friends, We are pleased to report that 2011 was a successful year for Park Bank. Our profitability rebounded significantly from the prior two years. Net income increased to $5.4 million, while assets increased slightly to $776.3 million. This success is the result of hard work and commitment through some challenging years. We re proud of the way our employees, directors, shareholders and customers all rallied together talking openly and honestly, working through complex issues and pursuing common goals. It s deeply satisfying to begin seeing the long-term benefits to both our own business and that of our customers. Looking forward, we see opportunity for Park Bank in several areas. First, we look to our customer base for growth. Many have rebounded and are investing in their businesses or expanding through acquisitions, product development or new markets. We are committed to supporting their needs first and foremost. Secondly, we plan to increase market share among businesses in southeastern Wisconsin who are not pleased with the commitment level they re receiving from their current bank. In market research we conducted recently, business leaders cited a bank s individualized knowledge and attention as the most important factor in a good banking relationship. These responses reinforce our longstanding commitment to truly understanding our business customers so that we can provide a consistent, predictable and supportive experience. New customers are always pleasantly surprised at our genuine interest in getting to know their businesses. Just as importantly, they appreciate how easy we make the transition to our bank. Our third area of opportunity is meeting the broader financial needs of midmarket businesses and individuals in a global, technologically-driven economy. We know that businesses are looking for ways to control costs, increase efficiencies, develop new revenue streams and retain employees. From the research we conducted, we also learned that business owners and CFOs don t want to have multiple banks for their commercial banking needs. To that end, we re actively growing our suite of financial services, which include mobile access for individuals and businesses and a more robust line of international services to support import/export activities, international payments and financing. Meanwhile, to stay ahead of our customers evolving needs, we continue to simply sit down, dialogue with them and understand their ideas and plans for success. Our commercial bankers, treasury management experts and financial advisors have the experience, resources and personal dedication it takes to translate our customers needs into the best support possible. After all, that s the kind of partnership that s been at the heart of Park Bank s success for nearly 100 years. It s the same spirit of teamwork and commitment that produced a successful And it s why we re excited about 2012 and beyond. P. Michael Mahoney Chief Executive David P. Werner

3 Balance Sheet (Dollars in thousands) ASSETS Cash and Due from Banks $28,707 $23,038 $50,737 U.S. Government Securities 100,195 63,029 40,715 Asset-Based Securities 3,424 4,298 6,850 Mortgage-Based Securities 7,853 17,921 24,925 Other Investments Federal Funds Sold 29,428 40,232 22,487 Loans 606, , ,870 Less Loan Loss Reserve (14,000) (13,500) (12,500) Land, Building and Equipment 1,962 2,155 2,201 Interest Earned (Not Collected) 2,005 1,541 1,695 Other Assets 9,692 8,182 4,925 TOTAL ASSETS $776,263 $771,963 $798,320 LIABILITIES & STOCKHOLDERS EQUITY Noninterest-Bearing Demand Deposits $180,485 $138,031 $120,793 Adjustable Interest-Bearing Deposits 309, , ,239 Certificates of Deposit 181, , ,082 Total Deposits 671, , ,114 Repurchase Agreements 20,583 31,781 18,519 Other Liabilities 4,022 3,402 3,912 Total Liabilities 696, , ,545 Capital Stock 2,500 2,500 2,500 Capital Surplus 20,000 20,000 20,000 Unrealized Investment Depreciation (902) (963) (4,114) Undivided Profits 58,658 56,026 57,389 Total Stockholders' Equity $80,256 $77,563 $75,775 TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $776,263 $771,963 $798,320 $85 $80 $75 $70 $65 $60 Tier 1 Leverage Capital (Dollars in millions) Our capital level is extremely strong and composed almost entirely of retained earnings

4 Income Statement (Dollars in thousands) Interest Income 33,270 35,916 38,701 Interest Expense (4,125) (5,711) (8,797) Net Interest Income $29,145 $30,205 $29,904 Provision for Loan Losses (5,714) (14,154) (11,621) Net Interest Income after Provision for Loan Losses $23,431 $16,051 $18,283 Other Income 3,119 3,795 3,835 Other Expense (21,640) (19,315) (20,242) Income Before Income Taxes and Security Gains (Losses) $4,910 $531 $1,876 Provision for Income Taxes (107) (106) (109) Income before Security Gains (Losses) $4,803 $425 $1,767 Security Gains (Losses) TOTAL NET INCOME $5,381 $887 $2,525 Asset Composition 76.3% of Park Bank s total assets are composed of loans net of reserves, primarily commercial and industrial loans, lines of credit facilities and commercial real estate loans. 76.3% 14.4% 3.8% 3.7% 1.8% Net Loans Investments Federal Funds Sold Cash Other Assets Net Income (Dollars in thousands) $6,000 $5,381 $5,000 $4,000 $3,000 $2,525 $2,000 $887 $1, Net income rebounded significantly from the prior two years, a sign of our stable and growing customer base, a focus on revenue growth from other customer services, and a generally improving economy.

5 A Closer Look at the Numbers 2011 FINANCIAL HIGHLIGHTS: 2011 was a successful year for Park Bank. Net income was $5.4 million in 2011, a significant increase from the prior two years. Our capital base increased by 3.47% to $80.3 million. The tier 1 leverage ratio was 10.18% as of December 31, Assets increased slightly to $776.3 million as of December 31, 2011 from $772.0 million one year earlier. Total loans decreased in 2011 by 2.88%, which was offset by an increase in our investment portfolio. Despite our success of attracting new customer relationships to Park Bank, we experienced a decline in our loan portfolio due to restrained borrowing as a result of customer uncertainty regarding the economic and political climate and continued deleveraging. Our return to greater profitability is in large part a reflection of our customers improving financial positions and overall general market conditions. Many sectors, particularly those related to manufacturing, wholesaling and technology, performed strongly in 2011, and we were happy to support their growth and acquisition plans. We also experienced record revenue from other product lines related to investments, qualified business plans, corporate credit cards and treasury management services OPPORTUNITIES: We are absolutely committed to growing our loan portfolio in 2012 by supporting the needs of our current customers and by gaining new business relationships. We have the capacity to grow based on capital and liquidity levels. Nearly 90 cents of every deposit dollar is lent out to businesses in our region, and we will aggressively look for new customers who appreciate our relationship style of banking. Beyond lending, we see opportunity by helping companies find efficiencies in their cash management and payment processes. Businesses are running leanly and looking for ways to reduce expenses and gain control over their financial transactions and information. We are continuing to invest in online and mobile banking tools that make it easier to manage corporate and personal finances anywhere at any time. We also have expanded our capabilities in international services because we know local companies are becoming global. We will continue to enhance our suite of products and services based on the evolving needs of our business market. As the economy slowly improves, we believe that business owners and CFOs will start to investigate their banking options and will prefer to choose a banking partner that invests time and energy over the long run to help them succeed. Park Bank s business model has always been focused on supporting the needs of business. We have continued to back the credit and financial needs of our customers, and our ownership structure supports our number-one focus building long-lasting relationships with businesses and individuals in southeastern Wisconsin. We are optimistic about our financial performance and that of our customers. KEY DETAILS: 97-year-old, midmarket commercial bank committed to remaining independent and focused on business and the surrounding community. Stable business model built on consistent focus, philosophy and longevity of shareholders, directors, leadership and employees. Average tenure of our Board of Directors is 16 years Ranked first in the state and third in the country for largest commercial and industrial loan portfolios among community banks.* Flat business structure where all decisions and decision-makers are located in the Milwaukee region. * As of , as published by American Banker on More than 40% of Park Bank employees have been with bank for 10 or more years, representing a total of 927 years of service Robert J. Makowski, Jr. Executive Vice Chief Financial

6 Park Bank Board of Directors William J. Abraham, Jr. Partner Foley & Lardner LLP Helmut M. Adam Olympus Group Thomas L. Ducrest Sports Specialists of Milwaukee, Inc. Kevin P. Egan Managing Partner Jet Center Partners, LLC Ted D. Kellner Executive Chairman Fiduciary Management, Inc. Michael J. Kelly Investor P. Michael Mahoney Chairman and Chief Executive Park Bank James H. Schloemer Chairman and Chief Executive Continental Properties Company, Inc. David P. Werner Park Bank Michael H. White Rite-Hite Holding Corporation Park Bank s P. Michael Mahoney Chief Executive Daniel P. Hansen Vice Amy L. Schneider Vice Private Banking Linda D. Stiyer Assistant Vice Deposit Support David P. Werner Phillip E. Hickman Executive Vice Robert J. Makowski, Jr. Executive Vice CFO and Cashier Dale F. Guenther Senior Vice Chief Credit Kim D. Schaffer Senior Vice Market Manager Jerome J. Schlitz Senior Vice Craig A. Schmutzer Senior Vice Troy D. Bartoshevich First Vice Retail Sales Manager Cheryl L. Sorgi First Vice Human Resources Heather Baylor Vice Gregory J. Block Vice Elizabeth S. Borst Vice Marketing Patrick J. Foran Vice Information Systems Bill Harrigan Vice David M. Hoffmann Vice Park Bank Equipment Finance John R. Hutchinson Vice Financial Advisor Paul W. Jelacic Vice Bunny Jordan Vice Private Banking Jennifer A. Kasun Vice Private Banking Susan C. Ksicinski Vice Facilities Management Lee J. Laur Vice Audit Robert A. Mihm Vice Controller Donald A. Morell Vice Credit Risk Management Ruth Patterson Vice Consumer Mortgage Lending Adam Raychel Vice Credit Jon Robinson Vice Financial Advisor Kim M. Seidel Vice Treasury Management Bryan L. Swanson Vice Jack Walden Vice Scott C. Winkel Vice Director of Credit Review Jeanne M. Allen Assistant Vice Treasury Management C. J. Dykstra Assistant Vice Human Resources Mary Keppen Assistant Vice Credit Risk Management Bruce Matzek Assistant Vice Treasury Management Juliana Neu Assistant Vice Loan Operations David Oldenburg Assistant Vice Security Holly Pape Assistant Vice Personal Banking Joyce A. Pindel Assistant Vice Personal Banking Anne L. Staff Assistant Vice Compliance and CRA Adrienne D. Voyles Assistant Vice Audit Leigh Fricke Consumer Mortgage Jeffrey G. Gebhardt, Jr. Lisa M. Herman Business Information Systems Ronald W. Johnson Mechelle A. King Senior Marketing Karen Lanser Business Information Systems Jeffrey M. Mair Accounting Douglas J. Persich Accounting Bea Punke Accounting Paul Sackmann Small Business Banking Rosmarie Shimeta Customer Service Supervisor Suzette Smith Pam Vinzani Bank Secrecy Nina Sanfilippo-Wolf Tamie Wallschlaeger Business Information Systems Member FDIC