When we languish as ‘victims,’ it’s easy to believe there is nothing we can do to control rising medical plan costs.  This year in our discussions with employees, we are drawing distinctions between areas that influence medical costs and focusing our energy on the things we CAN control.  When you look at the list, it’s easy to understand there is much we can do to impact medical costs.

 CONTRIBUTORS TO MEDICAL COSTS

The Economy – As more and more Americans rely on government programs or provider write-offs to “pay” for needed medical care, the cost to the rest of us is rising to offset the gap between what is paid and the true cost.  Can we control it? – NO

 Our Genetics – A very real contributor to our long term propensity for certain diseases, this deal was sealed through mom and dad.  Can we control it? – NO

 The Health Care Delivery System – Article after article will tell you that our health care delivery system is ‘broken’ and there are few that would disagree.  Can we personally control it? – NO

 Environmental Factors – The sun, free radicals, carcinogens in the soil/water/air, pollution, pesticides and more all take their toll on our bodies over time.  Can we control them? – MAYBE, some easier than others. 

Getting Annual Screenings – Age-appropriate, preventive screenings are designed to keep us ‘in-the-know’ regarding our risk for and development of specific disease states.  They help us to identify medical concerns when they are small as opposed to when they are full-blown and more costly.   Can we control? – YES

Our Knowledge About A Healthy Lifestyle – There’s lots of information about making good lifestyle choices available.  While some may be confusing, we can probably all agree that moving more, eating fresh fruits and vegetables and limiting what we eat out of a box or drive-thru is solid advice.  Can we control? – YES

Compliance with Physician Orders – Doing what our doctor tells us to do is TOTALLY in our control!

Physician Engagement – For far too long we’ve known far too little about our own health.  We are in charge of the questions we ask our Physicians and our depth of knowledge regarding our medical issues.

CONCLUSION

We’re in the driver’s seat much more than we want to accept when it comes to medical care and medical costs.  Commit to what YOU can control and help your employees do the same to help tame the rising cost trend.

Terri Burdick, Senior Vice President

In short, we meet with our bankers because we KNOW our needs have changed.

But what about the times we don’t KNOW our needs have changed? What do I mean by that? Banks modify their product line up and available services on a regular basis.  In the event your personal world hasn’t changed in the past few years, you may be unaware of new products that may make your money work harder and new services that may make your banking even easier.

 A banker is trained to review your banking activity to determine if you are in the right account.  They can demonstrate powerful on-line tools for account management, get direction from you about how you want us to handle an overdraft situation in your account, show you how you can bank from your smart phone, get you registered for online bill payment, account alerts and more.  A banker can also review your loan commitments to evaluate if there is a loan product that would be more economical. 

 The banking world has changed dramatically over the past few years.  So while your needs may not have changed, the industry has and there may be options for consideration that have never been there before.  So, just like you schedule preventive check-ups with your dentist to guard against the onset of tooth-related problems, schedule time with your banker to review your banking needs and guard against missing out on the best products/services for you!

Terri Burdick, Senior Vice President

 Our clients, and maybe even a few of us, are panicking.  The Dow Jones Industrial Index closed down over 600 points today.  That is on top of the stunning 700 drop last week.  It is in response, in part, to the downgrade of US debt along with that of Fannie Mae, Freddie Mac and a number of old line insurance companies.  The US economic recovery has been weak and very spotty, our fiscal situation is an unadulterated mess, and we have shown none of the political will to make the hard decisions to get away from borrowing forty-one cents of every dollar we spend and heading toward tripling the national debt in the ten years following Obama taking office. Add to the mix a European Union struggling with a debt contagion and weak economic numbers from a number of its nation states and you don’t get a pretty picture.  Market confidence evaporates with broad-based uncertainty and we have an ocean of uncertainty.  Here is my unvarnished take on things:

1. There are no quick fixes or magic bullets.  Governments have run out of money and are running low on options.  The first stimulus was a bust.  Easy money and low interest rates have failed.  The market will continue to be volatile and the economy will move sideways, on a good day.  We could be in this for a long time.
2. There is a real risk of a double dip recession.  The kind of hit to wealth that has occurred for the second time in three years is going to make investors, consumers and businesses very, very cautious.  Many of our clients will see the progress made toward rebuilding their finances come to a screeching halt.  None of this bodes well for an economy that depends on consumer spending for its engine of growth.
3. Our political leadership, both the executive and legislative branches, have failed to demonstrate that they can solve problems and our confidence that they can ever do so spirals lower with each week.  They continue to want to play politics and the blame game with what is really a simple math problem.

 What then do we tell our clients?  The same thing we told them last time there was a meltdown.  Don’t panic.  Be cautious but deliberate.  Last time, a number of clients did panic and exited the market to maximize their losses and stayed on the sidelines to see the market recover without them.  At the same time, they should be cautious about committing liquidity to major purchases or undertaking borrowing for anything that isn’t critical.

An old rule of thumb is that consumers should have six months of expenses in the bank.  Not bad advice.  The job market may become more uncertain.  Companies learned the lesson of responding too slowly to the last recession.  It is a lesson they won’t repeat.

 I am not painting a rosy picture and I hope I am wrong.  But when you give the “advice you need, for the life you want” it requires honesty, as unpleasant as it may be.  We will continue to support deserving clients through this recession, if there is another one, just like we supported them through the last one.

 What then does this mean for the bank?  We remain profitable and strong and I don’t expect that to change, but the weak economy and higher unemployment will continue to present loan challenges to us.  As I told the board of directors, “The good news is that we are running full speed ahead.  The bad news is that it is in mud up to our knees.”

 I would welcome your comments or questions.

 Rick Bastian
President

First, let’s all agree that most people spend more money than they have in their bank account at some point.  Sometimes it’s a choice and other times it’s related to bad math, but the end result is the same – you are officially overdrawn.  The next question becomes: what do you want to happen?

There are only a few things that can happen:

• Your check or debit card will be denied at check-out. (Ugh!)
• The bank will return the check to the merchant and BOTH the bank and the merchant will charge you a returned check fee (Ugh!)
• The bank will honor the check and charge you a fee dependent upon what directions you have given them for situations such as this. (Aah!)

Second, let’s all agree that the hassle, embarrassment and high cost of NOT completing the transaction are not what you want to happen. 

You have choices about the direction you give the bank for honoring overdraft transactions with varying related costs:

• You can direct the bank to ‘sweep’ money from another account you have at the bank into the overdrawn account to cover the overdraft.  This works great if you have another account with a balance in it – like a savings account or other checking account.  It’s also the lowest cost solution.  A small ‘sweep’ fee is charged for moving the needed dollars from one account to another. If you never use it, you never pay a fee.
• You can apply for an Overdraft Protection Line of Credit.  This loan product is linked to your checking account and will automatically be advanced in increments of $100 to cover the amount of your overdraft.  The loan is repaid through automatic monthly deductions.  There is an annual fee and small fee for each advance.  If you never use it, all you pay is the annual fee.
• You can ask the bank to extend the courtesy of covering your overdraft instead of returning it.  At Blackhawk Bank our “Courtesy Pay” feature provides a safety net up to a pre-determined overdraft limit and is extended to accounts in good standing.  The bank charges a Non-Sufficient Funds Paid Item Charge in exchange for honoring the transaction. A newer federal rule requires you to give us direction about how to process ATM and one-time debit card transactions using “Courtesy Pay.” Simply put, if you want the bank to honor your ATM and one-time debit card transactions that could cause your account to become overdrawn, you must ‘Opt-In’. 

A Personal Banker is best equipped to talk with you about which of these options is the best choice for you.  While most of us would like to think we will NEVER spend more than we have in our account, experience tells us otherwise.  It’s best to think about it BEFORE it happens and have the process set up that insures the outcome you desire.

Terri Burdick, Senior Vice President 

Blackhawk Bank is a Member of the Federal Deposit Insurance Corporation

These days, criminals as unsophisticated as those digging in your trash or watching over your shoulder as you type your password, to complex multi-national ‘companies’ of online thieves are working to gain access to your personal information and financial resources.   I know I’ve written on this topic before, but recent wide-spread breaches of personal financial information for customers of certain Sony online game services and Michael’s craft stores serve as reminders of the things we need to do to stay safe in our electronic world.

• Monitor your banking account and credit card account activity frequently and report any suspicious transactions immediately.
• Create strong passwords that are complex including upper case letters, lower case letters, numbers, and punctuation characters.  The password should be at least eight characters in length.
• Create different passwords for different accounts and applications.  If criminals figure out one of your passwords, it shouldn’t give them access to ALL your information.
• Don’t share your password with anyone else – including family members. Once it’s out of your control, so is your security.
• Never enable the ‘Save Password’ option, even if prompted to do so.  Pre-saved passwords make it easy for anyone else using your computer to access your accounts.
• Don’t leave your password anywhere on or near your computer (e.g. on post-it notes, under mouse pads, etc.)
• Do not open or respond to emails from ANYONE you do not know.  This is the most common method of launching malicious software.
• THINK! – Many people use their smart phones or respond to an email without a thought of what they are doing.  Take a moment to ‘think’ before you click.  Would Aunt Sally really send that link to the most hilarious video on Facebook?  Would my mom really send a zip file attachment?  Why does my bank need to verify my account numbers? (They don’t!!)  Pausing to reflect is a terrific security feature!

We love technology and it gives us tremendous tools.  It’s up to us, however, to protect ourselves from those with an incentive to do us harm.  Stay safe!

Terri Burdick, Senior Vice President

 Things that get better with age:

Wine …denim…cheese…leather jackets…balsamic vinegar…comfy sneakers…fossils…one’s palette…Scotch…Sean Connery…one’s sense of humor…Friendships…wisdom…taking on challenges…Blackhawk Bank. 

 Blackhawk Bank has been serving the Rock River Valley for 130 years!  And while that’s a long time, our mission over the years has remained the same:  To Add Value.  Three little words that mean something different to every client….and that’s the point!  Each of us comes to our banking relationship differently.  We have different amounts of money to manage, different ways we earn that money, different uses for our money, differences in our financial knowledge, and different dreams.  But at the end of the day, we all want ONE THING – for whatever money we have to work as hard as it can for us.  And that’s where we come in.  Our goal is to insure you have the information you need to make the best decisions for making your money work as hard as possible given your unique situation.  It’s all about you and that’s where our value shines! 

 We’ve always been a community bank and we’re proud that in these difficult economic times we’ve been recognized for standing by our clients and supporting their challenges.  There is a temptation to believe that ‘bigger is better,’ but in banking, we couldn’t disagree more. 

• Community banks focus attention on the needs of local families and businesses.  Conversely, many megabanks are structured to place a priority on serving large corporations.
• Unlike many large banks that may take deposits in one state and lend in others, community banks channel most of their loans to the neighborhoods where their depositors live and work, helping to keep local communities vibrant and growing.
• Community bank officers are accessible to their customers on-site unlike large banks where CEOs are often headquartered far away from daily customer dealings.
• Community bank officers are deeply involved in local community affairs unlike megabanks where officers are distant from their branch communities.
• Community banks offer nimble, local decision-making as opposed to megabank centralized loan decisions made far from the community they impact.

 We’ll be celebrating the strength of community banking and our birthday the week of April 25, 2011.  Check out our website or pick up an entry to play Blackhawk trivia and be sure to visit a branch for the Open House complete with birthday cake on Friday, April 29. 

 Thank you for trusting us as your financial advisor for part of this 130 year journey.  We plan to continue to earn that trust and hope you’re with us for the next 130 years!

 What do you think? …  What else gets better with age?

Terri Burdick, Senior Vice President

Who is Bauer Financial?

Bauer Financial is the nation’s leading independent bank and credit union rating and research firm.  They have been reporting on and analyzing the performance of U.S. banks and credit unions since 1983.  No institution pays Bauer Financial to rate it,  nor can any choose to be excluded.  Much like ‘Consumer Reports’ provides us with independent rating information on everything from cars to toasters to cell phone networks, the folks at Bauer Financial give consumers a way to compare the strength of financial institutions.

What does it mean to have a 5-Star, Superior rating?

5-Star is as high as it goes in the Bauer rating system.  The rating was earned by continuing to excel in such areas as capital adequacy, delinquent loan levels, and profitability.  This rating identifies Blackhawk Bank as one of the strongest banks in the country.

As a consumer, why do I care about the rating?

In this difficult environment, the 5-Star rating confirms that we have been able to not just withstand economic pressures, but to excel despite the challenges.  It means that management is doing things right.  It’s someone else, besides us, telling consumers that Blackhawk Bank is a great place to do business. It’s a way for a consumer to know that Blackhawk is here today and will be here tomorrow.

 It takes hard work to be a 5-Star bank.  It’s our privilege to do the work to be the best for our clients.  You may learn about the star-ratings of other banks by visiting www.bauerfinancial.com.

CONGRATULATIONS BLACKHAWK BANK!

Terri Burdick, Sr. Vice President

‘Alerts’ is a feature that you control that is part of most on-line banking accounts, including all on-line accounts you can access at Blackhawk Bank.  You control what type of ‘Alert’ you would like for each account:

• You can set an alert that lets you know if your account balance falls below a threshold that you set.  For example, you may ask to be notified if your account falls below $100 or $50 or $5 or $500 – whatever makes sense to you!
• You can set an alert that lets you know when a specific check number is processed.
• You can set an alert that lets you know it’s time to pay a specific bill.
• You can set an alert that is meaningful to you for any future date:  a birthday, an anniversary, a property tax payment, ANYTHING! 

You also determine how you would like to be alerted – either by a text message to your phone or by an email to the address you provide. 

In addition to ‘Alerts’ your smart phone can become the bank as you use it to review balances, transfer funds between accounts and even make same-day electronic payments. 

If you are a Blackhawk Bank on-line banking client, sign into your account and check out the ‘ALERTS’ and ‘MOBILE BANKING’ tabs to take advantage of these smart tools!  (THEY’RE FREE)  You can also check on line with your other banking partners to see what smart tools may be available. 

Tools such as mobile banking and alerts can be powerful financial partners!

Terri Burdick, Senior Vice President

• HSBC North America told customers that it is converting their free checking accounts to ones carrying a monthly maintenance fee of up to $15.
• Bank of America has restructured its checking accounts and has implemented monthly fees ranging from $8.95 to $25.
• Effective February 8th, Chase Checking will require certain behaviors to avoid a $6 monthly maintenance fee.

Why the focus on fee increases?

Regulators in the past year have pushed through changes designed to limit the fees banks can charge for certain services, without regard for the costs paid by banks related to the same services. For example, banks bear the cost of debit and credit card fraud and the cost to produce the cards. Under the new regulations, banks will be limited in participating in the income derived from vendors who accept debit and credit card payments. For banks, the costs neither go away nor are they reduced but the income stream to allow them to continue is dramatically reduced. Sadly, that means new fees will be needed to enjoy the same services and protections we have come to expect as consumers. 

How can you minimize the impact of fee changes?

1. Understand how you use your checking account and select the right account for you. Monthly maintenance fees can usually be reduced if you keep a minimum balance, accept bank statements and notifications electronically, use direct deposit, use your debit card for making purchases and use electronic bill pay. Account fees may change based on your use of specific account features. Be sure your account has the features you want and use.

2. Be careful not to overdraft your checking account. No one wants to overdraw their account, but sometimes ‘bad math’ happens to good people and you end up in a negative position. Protect yourself from overdraft fees by establishing a savings account or a line of credit that is your ‘back up’ in the event of an overdraft. Money can be ‘swept’ from one of these sources to bring your regular account back to a positive position without the cost of an overdraft fee. (Note: there may be a minimal fee for monitoring your account and completing the ‘sweep’ as needed, but it will be far less than the overdraft fee).

3. Conduct as much of your banking business as possible with a single institution. Many banks reward your full relationship with them by reducing account fees, improving interest on your deposit accounts and more if you have all your banking services with them.

4. Read your mail! Notification of account changes will be sent to you via mail and often duplicated online. Be sure to open and read information from your bank so that you can avoid and/or understand fee changes coming your way. Sadly, we find that less than 50% of clients actually read the materials that have been developed to communicate changes in a meaningful way.

What is the best thing you can do to avoid fees?

Set up time to meet with a personal banker. Bank associates know how to put their line of financial products and services to work for YOU. They can look at your account history to help you evaluate how to maximize your banking relationship. With their insights, you should be able to select the right accounts for your specific needs, avoid needless fees, and pay only for services that are meaningful to you. Now more than ever, it makes sense to understand how to utilize the features and benefits of bank accounts and related services, and select those that truly fit your needs.

Terri Burdick, Senior Vice President

WHAT DID WE LEARN?

• For the most part, things are going great!  You like our facilities, our staff, our products and services, our website and the way you are treated as a client. (oh…and you like our popcorn!)
• You find Blackhawk to be friendly, courteous, and accurate in the way they transact your business.
• We could do a better job of using your name and recommending banking services based on your unique needs.
• 96% of you would recommend us to a friend or family member and use us for your next banking need.  (We are honored!)
• Many of you use social media and would not be opposed to your bank having a social media presence (like Facebook or Twitter)
• If we are going to be on Facebook or Twitter, you would like us to share specials with you, provide financial education, share how the Bank is supporting the community and learn more through the eyes of our President.
• You don’t like fees of any kind and wish interest rates on deposits could be higher
• You wish our ATMs would accept deposits and wish our website had a more modern look and feel

 WHAT ARE WE DOING WITH THE FEEDBACK?

• We’re making sure we don’t change the things you like!  Feedback helps us continue doing the things you like and stop doing the things you don’t.
• We are working to make fees more transparent to insure you understand ways to avoid fees and how our costs are determined based on providing the feature the fee is related to
• Our website will get a new look and new functionality in 2011.  Among other things, you will be able to personalize your on-line start page specific to how you use on-line banking.
• We will be increasing our financial education to include more robust fraud education.  We want you to be safe!
• We will continue implementing our 5-Star Client Service initiatives to insure we provide the experience you want every time at every banking center.

 We ask….you tell….we listen!  Thank you for both your kind words and the specific descriptions of where we are falling short.  It’s only through your gift of feedback that we can continue to improve.

 Terri L. Burdick

Senior Vice President, Administration & Operations