The first half of 2019 saw a healthy level of M&A activity among community banks in Wisconsin with 14 deals announced, equal to the number of deals announced during the previous two years combined.
Since then, M&A activity has slowed significantly. In the third quarter through Sept. 23, only one deal with a Wisconsin-based bank target had been announced, although it was a large one. On Aug. 28, Chicago-based First Midwest Bancorp Inc. announced it would acquire Milwaukee's Bankmanagers Corp., the holding company for Park Bank, for $193.8 million, marking the third-largest deal in the state since 2015.

On an operating basis, Wisconsin's community banks and thrifts under $10 billion in assets posted relatively mediocre results in the second quarter, as profitability lagged Midwestern peers and the U.S. as a whole.
The state's median return on average equity fell 24 basis points year over year to 9.24% in the second quarter, lower than the Midwest's 9.72% and the U.S.'s 9.59%. Wisconsin's community banks reported a 3.74% median net interest margin during the quarter, 3 basis points lower than the Midwest median and 9 basis points lower than the national median.
Asset quality improved year over year, but the state's 0.85% median nonperforming assets ratio was 23 and 22 basis points higher than at peers in the Midwest and U.S., respectively.

Racine-based Johnson Bank, Wisconsin's largest community bank under $10 billion in assets, was more profitable than its in-state peers during the second quarter and managed to grow both its loans and deposits at faster rates than the state medians.
Green Bay-based Nicolet National Bank, Wisconsin's second-largest community bank, posted better results than the state medians in five of the six metrics examined in the second quarter. Parent company Nicolet Bankshares Inc. has been an active acquirer in recent years, announcing four transactions since 2015, including a $72.1 million deal for Oshkosh-based Choice Bancorp Inc. in June.
Earlier in 2019, Nicolet Bankshares took the No. 19 spot in S&P Global Market Intelligence's annual ranking of the top-performing large community banks.

Wisconsin, like much of the U.S., is seeing more branch closures than openings as more banking goes digital. During the second quarter, 24 branches were closed and only four were opened in the state, and over the last 12 months to June 30, 57 branches were closed and 16 opened.

Click here for a refreshable spreadsheet containing financial information for Wisconsin community banks and thrifts.
