Milwaukee banker Roger Dirksen is leading a buyout of he only Wisconsin financial intitution that has ever flunked a community reinvestment exam. and he intends to transform it into a respectable community lender.

Mr. Dirsen's investor group is buying $86 million-asset Milwaukee Western Bank, which was slapped with a "substantial noncompliance" rating after a CRA review last year.

The group signed a definitive purchase agreement in March and applied in April for approval from the Federal Reserve.

In an interview, ML Dirksen said he has been working with community groups to try to ease the path to a successful acquisition of Milwaukee Western.

Mr. Dirksen, who will be president and chief executive if the deal goes through, doesn't view the bank's poor lending past as a hindrance.

"I've been lending money in this marketplace for 20 years."

Long Career

After spending 1963 through 1974 in Chicago at Northern Trust Co., Mr. Dirksen spent 11 years as president of Heritage Bank Milwaukee, followed by nine years as president of Associated Bank Milwaukee. His job was eliminated in January when the company consolidated his bank with an acquisition in Menomonee Falls.

Jon Bruss, chairman of $86 million-asset Fortress Bancshares, Hartland, Wis., who is familiar with Milwaukee's banking scene, said that if anyone can improve Milwaukee Western's lending habits, Mr. Dirksen can.

"Roger is a very seasoned and savvy banker," he said. "I think he has a very good sense of the challenges and the opportunities in the city of Milwaukee."

Portfolio-Based Profits

The bank received its "substantial noncompliance" for failing to serve its northwest side community. The rating is the worst of four that banks are assigned under the act.

Calls to Richard A. Sachs, current chairman, president, and CEO of Milwaukee Western, were referred to Mr. Dirksen, who said that current management is very conservative and has relied on its investment portfolio for earnings instead of doing much lending.

Mr. Bruss added: "It was strictly a bond house."

Now, Mr. Dirksen's plans call for pushing the bank's loan-todeposit ratio up to between 70% and 75% within three years.

Milwaukee also has plenty of opportunities for commercial lending - despite both big- and small-bank competition, Mr. Bruss said.

Selling to the Community

Mr. Dirksen already is working with various community groups on new lending strategies.

"Rather than the an application with the Fed and wait for the groups to object... I decided the smart thing would be to meet with them first," he said.

Subject to regulatory approval, the sale could be completed by summer or fall, said Mr. Dirksen, who would not disclose the terms of the cash deal. His holding company, Capital Commerce Bancorp Inc., will buy the bank from Mr. Sachs' holding company.

Other investors and future officers include two of Mr. Dirksen's former Associated Bank Milwaukee colleagues, David Davis, who was senior vice president in commercial lending, and Michael Peters, who was vice president and cashier.

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