A displaced Wisconsin banker with little knowledge of the dairy industry, his hometown's mainstay, is counting on it for his new bank's future.
William Censky, who was laid off by Milwaukee-based Firstar Corp. nearly two years ago, opened Investors Community Bank in March in Manitowoc, the heart of the state's dairy industry.
The bank is a subsidiary of $6 billion-asset County Bancorp, a holding company Mr. Censky formed last year to run a mortgage company he was setting up. Profits and capital generated from the mortgage company gave him the money to start the agricultural bank.
To obtain dairy expertise Mr. Censky plucked several key dairy lenders from $19.9 billion-asset Firstar. He hired Mark Binversie, a former Firstar vice president and lifelong dairy farmer, as Investors' president.
Mr. Censky, chairman and chief executive officer of County Bancorp, said he wanted to tap the local dairy market because many big producers are expanding and he expects them to borrow a lot.
"I've always operated under the theory that if you have good-quality loans you can make a bank work," he said.
Investors Community Bank has written $26 million of loans, about 90% of them to dairy farmers, mostly with operations near Manitowoc. Most of the dairy loans range between $100,000 and $250,000, but the bank has also written its share of $1 million to $2.5 million loans to the county's biggest producers.
But Investors Community could be taking a risk with its strong focus on dairy lending. The U.S. Department of Agriculture's has Economic Research Service projected that dairy revenues would be down in 1997 after a record 1996. The department attributed the expected decline to increased milk production and lower prices, but sales are still expected to surpass the average of $19 billion a year in 1990-95.
Mr. Censky said the bank is trying to diversify its portfolio to include residential and small-business loans, while emphasizing financial planning and brokerage services. "It's part of a long-term risk management strategy," Mr. Censky said.
The fledgling bank turned a profit for the first time last month, he said, despite having to commit $26,000 to loan loss provisions.
After only five months in business, "we're already shooting for our third-year goal," Mr. Censky said.