1895 Bancorp of Wisconsin, Inc. (BCOW): Business Model Canvas [11-2024 Updated]
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1895 Bancorp of Wisconsin, Inc. (BCOW) Bundle
In the competitive world of banking, understanding the business model is crucial for success. This is where the Business Model Canvas comes into play, offering a visual framework to analyze key components. For 1895 Bancorp of Wisconsin, Inc. (BCOW), their model centers around strategic partnerships, innovative services, and a strong local presence. Discover how BCOW effectively integrates these elements to create value for their customers and stakeholders.
1895 Bancorp of Wisconsin, Inc. (BCOW) - Business Model: Key Partnerships
Federal Home Loan Bank (FHLB)
The 1895 Bancorp of Wisconsin, Inc. collaborates closely with the Federal Home Loan Bank (FHLB) to obtain funding for its lending operations. As of September 30, 2024, the total outstanding FHLB advances amounted to $75.8 million, reflecting an increase of $4.8 million or 6.8% from $71.0 million at December 31, 2023. The FHLB also requires the bank to hold stock which increased to $4.6 million, a rise of 9.5% compared to $4.2 million at the end of 2023.
Local Real Estate Agents and Brokers
Local real estate agents and brokers are integral partners for 1895 Bancorp, facilitating mortgage loan origination. The bank reported an increase in mortgage loan origination, with the total amount of mortgage loans held for sale rising to $17.1 million for the first nine months of 2024, compared to $8.9 million in the same period of 2023. This partnership enhances the bank's reach in the local housing market and contributes significantly to its loan portfolio growth.
Financial Advisors and Wealth Management Firms
Strategic partnerships with financial advisors and wealth management firms allow 1895 Bancorp to offer comprehensive financial services to its clients. This collaboration is essential for cross-selling products and expanding the bank's service offerings. The bank's noninterest income for the nine months ended September 30, 2024, stood at $2.6 million, a notable increase from $306,000 in the same period of 2023. This growth can be attributed in part to enhanced advisory services stemming from these partnerships.
Technology Providers for Banking Solutions
1895 Bancorp has partnered with technology providers to enhance its banking solutions, focusing on improving customer experience and operational efficiency. The bank incurred professional fees of $358,000 related to the renegotiation and renewal of its core data processing contract, which is expected to yield a $1.5 million reduction in data processing expenses over the contract's term. This strategic move not only reduces costs but also positions the bank to leverage advanced technologies for better service delivery.
| Partnership Type | Key Metrics | Impact on Business |
|---|---|---|
| Federal Home Loan Bank | $75.8 million in advances; $4.6 million in stock | Increased funding for loans |
| Local Real Estate Agents | $17.1 million in mortgage loans originated | Enhanced market reach and loan portfolio |
| Financial Advisors | $2.6 million in noninterest income | Increased cross-selling opportunities |
| Technology Providers | $358,000 in professional fees | Reduced operational costs |
1895 Bancorp of Wisconsin, Inc. (BCOW) - Business Model: Key Activities
Origination of mortgage loans
The origination of mortgage loans is a critical activity for 1895 Bancorp of Wisconsin, Inc. (BCOW). In the first nine months of 2024, the company originated $17.1 million in mortgage loans, an increase from $8.9 million during the same period in 2023. The proceeds from the sale of mortgage loans held for sale were $17.6 million, compared to $8.8 million in 2023.
Asset/liability management
BCOW employs a robust asset/liability management strategy to mitigate interest rate risk, which is vital given that most of its assets and liabilities are sensitive to changes in interest rates. As of September 30, 2024, the company had $75.8 million outstanding in Federal Home Loan Bank (FHLB) advances, reflecting increased funding needs. The average amount of loans outstanding increased from $375.8 million in the first nine months of 2023 to $400.2 million in 2024, demonstrating effective management of its loan portfolio.
Risk management and compliance
Effective risk management and compliance measures are crucial for BCOW. The allowance for credit losses was $4.0 million, or 0.99% of loans, as of September 30, 2024, up from $3.7 million, or 0.94%, at the end of 2023. The company recorded a provision for credit losses of $225,000 for both the nine months ended September 30, 2024, and 2023. Nonaccrual loans represented 0.23% of total loans.
Marketing financial products and services
Marketing of financial products and services is essential for expanding BCOW's customer base. The company reported a significant increase in noninterest income, which rose by $2.3 million to $2.6 million for the nine months ended September 30, 2024. This growth was driven by a $184,000 increase in net gain on the sale of loans, attributed to enhanced marketing efforts.
| Key Activity | 2024 Amount | 2023 Amount | Change |
|---|---|---|---|
| Mortgage Loans Originated | $17.1 million | $8.9 million | +92.2% |
| Proceeds from Sale of Loans | $17.6 million | $8.8 million | +100% |
| FHLB Advances Outstanding | $75.8 million | N/A | N/A |
| Allowance for Credit Losses | $4.0 million (0.99%) | $3.7 million (0.94%) | +8.1% |
| Noninterest Income | $2.6 million | $306,000 | +751.6% |
1895 Bancorp of Wisconsin, Inc. (BCOW) - Business Model: Key Resources
Capital from deposits and FHLB advances
The total amount of deposits at 1895 Bancorp of Wisconsin, Inc. as of September 30, 2024, was $395.3 million, a decrease of $8.4 million or 2.1% from $403.7 million at December 31, 2023 . The composition of these deposits included:
| Type of Deposit | Amount (in thousands) |
|---|---|
| Non-interest bearing checking | $71,374 |
| Interest bearing checking | $27,116 |
| Money market | $95,783 |
| Statement savings | $39,958 |
| Certificates of deposit | $161,079 |
Additionally, the company had $75.8 million in Federal Home Loan Bank (FHLB) advances outstanding as of September 30, 2024 .
Skilled workforce in banking and finance
As of September 30, 2024, the company employed 88 full-time equivalent employees, a reduction from 106 employees in the previous year . This reduction was part of cost-saving initiatives aimed at improving operational efficiency. The workforce is skilled in various banking and finance functions, critical for maintaining the company's competitive edge in the financial services industry.
Proprietary loan processing technology
1895 Bancorp utilizes proprietary loan processing technology that enhances its operational efficiency. This technology supports the origination and sale of mortgage loans, which saw significant increases in activity. For the first nine months of 2024, the origination of mortgage loans held for sale was $17.1 million, compared to $8.9 million in the same period of 2023 . This increase demonstrates the effectiveness of their loan processing systems in managing higher volumes of transactions.
Established customer relationships
The company has established strong relationships with its customers, which is evident from the increase in mortgage loan sales. The net gain on the sale of loans was $184,000 for the nine months ended September 30, 2024, compared to a net loss on the sale of securities of $1.9 million during the previous year . This indicates a robust customer base and effective relationship management strategies.
1895 Bancorp of Wisconsin, Inc. (BCOW) - Business Model: Value Propositions
Competitive mortgage rates and terms
As of September 30, 2024, 1895 Bancorp of Wisconsin, Inc. offered competitive mortgage rates with an average yield on loans of 4.85%, up from 4.44% in the same period of the previous year. The company has focused on adjusting its loan offerings in response to market conditions, which has led to a 21.2% increase in interest and dividend income to $18.3 million for the nine months ended September 30, 2024. This strategic pricing approach aims to attract a broader customer base looking for favorable mortgage options.
Personalized financial services
1895 Bancorp emphasizes personalized financial services tailored to the unique needs of its customers. The bank's customer-centric approach includes dedicated financial advisors who help clients navigate their financial decisions. This is reflected in the significant increase in the origination and sale of mortgage loans, which reached $17.6 million in the first nine months of 2024, compared to $8.8 million in the same period of 2023. The focus on personalized service enhances customer loyalty and retention.
Local market expertise in Wisconsin
The company leverages its deep understanding of the Wisconsin market to offer products that meet local needs. With a total loan amount of $401.6 million as of September 30, 2024, 1895 Bancorp has maintained a strong presence in the community, focusing on areas such as commercial and residential real estate. This local expertise allows the bank to provide relevant financial solutions and build strong relationships with its clients.
Strong focus on customer satisfaction
Customer satisfaction is a core value at 1895 Bancorp, which is evident from its operational metrics. The bank recorded a decrease in net loss to $981,000 for the nine months ended September 30, 2024, compared to $4.5 million in the same period of the previous year. This improvement reflects the bank's commitment to enhancing the customer experience and addressing client feedback effectively. Additionally, the bank's total stockholders’ equity increased to $73.2 million at the end of September 2024, indicating a solid financial foundation supportive of customer service initiatives.
| Metric | 2024 | 2023 | Change (%) |
|---|---|---|---|
| Average Yield on Loans | 4.85% | 4.44% | 9.25% |
| Interest and Dividend Income | $18.3 million | $15.1 million | 21.2% |
| Loan Origination & Sale | $17.6 million | $8.8 million | 100% |
| Net Loss | $981,000 | $4.5 million | -78% |
| Total Stockholders’ Equity | $73.2 million | $72.8 million | 0.55% |
1895 Bancorp of Wisconsin, Inc. (BCOW) - Business Model: Customer Relationships
Dedicated customer service teams
1895 Bancorp of Wisconsin, Inc. (BCOW) emphasizes a strong customer service approach through dedicated teams. The bank has reduced its full-time equivalent employees from 106 in 2022 to 88 by September 2024, aiming for a more efficient service model while maintaining quality customer interactions.
Community engagement initiatives
BCOW actively participates in community engagement initiatives, which are crucial for building relationships. The bank’s community involvement includes educational programs and financial literacy workshops aimed at enhancing local financial knowledge. For instance, the bank recorded a significant increase in noninterest income, which rose to $2.6 million for the nine months ended September 30, 2024, compared to $306,000 in the same period of 2023, reflecting successful community-focused activities.
Educational resources for financial literacy
BCOW prioritizes financial literacy as a key aspect of its customer relationship strategy. The bank provides educational resources that help customers understand financial products and services, thereby fostering trust and loyalty. This initiative is reflected in the increase of loan origination to $17.1 million and sales to $17.6 million during the first nine months of 2024, compared to $8.9 million and $8.8 million respectively in 2023.
Loyalty programs for repeat customers
The bank has implemented loyalty programs aimed at retaining repeat customers. These programs are designed to incentivize customers, resulting in a more stable deposit base. As of September 30, 2024, total deposits decreased by $8.4 million, or 2.1%, reflecting shifts in customer preferences towards higher interest-bearing accounts.
| Metric | 2024 | 2023 | Change |
|---|---|---|---|
| Net Interest Income | $9.2 million | $9.2 million | - |
| Noninterest Income | $2.6 million | $306,000 | +£2.3 million |
| Loan Originations | $17.1 million | $8.9 million | +£8.2 million |
| Total Deposits | $395.3 million | $403.7 million | -£8.4 million |
1895 Bancorp of Wisconsin, Inc. (BCOW) - Business Model: Channels
Direct banking services through branches
1895 Bancorp operates several branches providing direct banking services to its customers. As of September 30, 2024, the total deposits held by the bank were approximately $395.3 million, reflecting a decrease of $8.4 million or 2.1% from $403.7 million at December 31, 2023.
Online banking platform and mobile app
The online banking platform and mobile app are critical channels for customer engagement. The bank has reported significant growth in digital banking usage. As of September 30, 2024, the average balance of interest-bearing accounts decreased, indicating a shift toward more digital transactions. The average balance in non-interest-bearing checking accounts decreased by $7.2 million, or 9.3%. The mobile app features functionalities such as fund transfers, loan applications, and account management, aiming to enhance customer convenience and reduce branch visits.
Partnerships with real estate agents
1895 Bancorp has established strategic partnerships with local real estate agents to facilitate mortgage lending. In the first nine months of 2024, the volume of mortgage loans originated was $17.1 million, while the volume of loans sold reached $17.6 million, compared to $8.9 million and $8.8 million respectively during the same period in 2023. These partnerships are aimed at leveraging the agents' local market knowledge and customer networks to drive mortgage applications and sales.
Community events and local sponsorships
1895 Bancorp actively engages with the community through events and sponsorships. The bank has allocated approximately $124,000 for advertising and promotions for the nine months ended September 30, 2024, which includes community outreach programs. This investment aims to enhance brand visibility and foster relationships with local residents, ultimately driving customer acquisition and retention.
| Channel Type | Details | Financial Impact |
|---|---|---|
| Direct Banking Services | Branch operations for customer transactions | Total deposits: $395.3 million |
| Online Banking | Digital platform for transactions | Decrease in non-interest-bearing checking accounts by $7.2 million |
| Partnerships with Real Estate Agents | Mortgage loans sourced through agents | Mortgage loans originated: $17.1 million |
| Community Events | Local sponsorships and engagement | Advertising expenses: $124,000 |
1895 Bancorp of Wisconsin, Inc. (BCOW) - Business Model: Customer Segments
Homebuyers Seeking Mortgages
1895 Bancorp of Wisconsin, Inc. provides mortgage loans primarily to homebuyers. In the first nine months of 2024, the company originated $17.1 million in mortgage loans, compared to $8.9 million during the same period in 2023, reflecting a significant increase in demand.
Small Businesses Needing Loans
The company also targets small businesses that require financing. As of September 30, 2024, commercial loans have increased by $2.4 million, contributing to a total of $401.6 million in net loans. The focus on small business loans is further supported by the tax exemptions introduced by Wisconsin for loans under $5 million.
Investors in Real Estate
Real estate investors form another critical customer segment for BCOW. The company's commercial real estate loans saw a $2.0 million increase, indicating the growing interest from real estate investors. The bank's strategic positioning allows it to cater to this segment effectively by offering tailored loan products.
Local Residents Looking for Banking Services
Local residents also represent a significant customer segment for the bank. As of September 30, 2024, total deposits decreased to $395.3 million from $403.7 million at the end of 2023, indicating fluctuations in local banking service demand. The breakdown of deposits includes $71.4 million in non-interest-bearing checking accounts and $161.1 million in certificates of deposit.
| Customer Segment | Details | Financial Data |
|---|---|---|
| Homebuyers | Seeking mortgages | Mortgage loans originated: $17.1 million (2024), $8.9 million (2023) |
| Small Businesses | Needing loans | Increase in commercial loans: $2.4 million; Total loans: $401.6 million |
| Real Estate Investors | Investing in properties | Increase in commercial real estate loans: $2.0 million |
| Local Residents | Looking for banking services | Total deposits: $395.3 million (2024), $403.7 million (2023) |
1895 Bancorp of Wisconsin, Inc. (BCOW) - Business Model: Cost Structure
Interest on deposits and loans
The interest expense on deposits for the nine months ended September 30, 2024, increased by $3.3 million, or 55.2%, to $9.0 million compared to $5.8 million for the same period in 2023. This rise was primarily due to a 118 basis point increase in the average rate paid on deposits and a $31.8 million increase in average interest-bearing deposits outstanding.
For the same period, interest and dividend income rose by $3.2 million, or 21.2%, totaling $18.3 million, up from $15.1 million. This increase was largely driven by a $2.0 million increase in interest and fees on loans.
Operational costs (salaries, technology)
For the nine months ended September 30, 2024, noninterest expense increased by $319,000, or 2.5%, totaling $13.1 million. The increase was partly due to a $439,000 rise in unrealized gains on marketable equity securities and a $374,000 increase in other noninterest expenses.
Salaries and employee benefits for the same period were reported at $7.460 million, increasing from $7.792 million in the previous year. The company has seen a reduction in full-time equivalent employees from 106 to 88 between September 30, 2022, and September 30, 2024.
Marketing and advertising expenses
In the third quarter of 2024, advertising and promotions expenses amounted to $25,000, which reflects a decrease from $124,000 reported for the same period in 2023.
Regulatory compliance costs
Regulatory compliance costs are reflected within the operational costs, with a significant portion allocated to FDIC assessments, which were $247,000 for the nine months ended September 30, 2024, compared to $182,000 for the same period in 2023. The company has also faced changes in income tax expenses due to new Wisconsin tax laws, which have impacted overall compliance costs.
| Cost Category | Q3 2024 ($) | Q3 2023 ($) | 9M 2024 ($) | 9M 2023 ($) |
|---|---|---|---|---|
| Interest on deposits | 3,000,000 | 2,400,000 | 9,000,000 | 5,800,000 |
| Operational costs (salaries, technology) | 4,287,000 | 3,710,000 | 13,162,000 | 12,843,000 |
| Marketing and advertising | 25,000 | 124,000 | 25,000 | 124,000 |
| Regulatory compliance costs (FDIC assessment) | 89,000 | 61,000 | 247,000 | 182,000 |
1895 Bancorp of Wisconsin, Inc. (BCOW) - Business Model: Revenue Streams
Interest income from loans
For the nine months ended September 30, 2024, 1895 Bancorp reported interest and dividend income of $18.3 million, which reflects a $3.2 million increase or 21.2% compared to $15.1 million for the same period in 2023. This increase was primarily driven by a $2.0 million increase in interest and fees on loans, attributed to a $24.4 million increase in the average amount of loans outstanding, rising from $375.8 million in 2023 to $400.2 million in 2024. The yield earned on loans increased by 41 basis points, from 4.44% to 4.85% during this period.
Fees from mortgage origination and servicing
During the first nine months of 2024, the net gain on the sale of loans increased to $184,000, compared to a lesser amount in the previous year. The origination of mortgage loans rose significantly, with mortgage loans held for sale reaching $17.1 million, up from $8.9 million in 2023. Similarly, the sales of these loans increased to $17.6 million from $8.8 million during the same comparative period.
Investment income from securities
Investment income from securities increased by $1.1 million for the nine months ended September 30, 2024, attributed to a 157 basis point increase in yield from 2.24% in the first nine months of 2023 to 3.81% in 2024. The average amount of securities held also showed fluctuations, decreasing from $110.2 million to $105.1 million during the same period.
Service fees for financial products and services
Noninterest income for the nine months ended September 30, 2024, reached $2.6 million, a significant increase of $2.3 million from $306,000 in the prior year. This surge was primarily due to a $439,000 increase in unrealized gain on marketable equity securities and a rise in other service fees associated with financial products.
| Revenue Stream | 2024 (Nine Months Ended Sept 30) | 2023 (Nine Months Ended Sept 30) | Change ($) | Change (%) |
|---|---|---|---|---|
| Interest income from loans | $18.3 million | $15.1 million | $3.2 million | 21.2% |
| Fees from mortgage origination and servicing | $184,000 (net gain on sale of loans) | Lower than prior year | Not specified | Not specified |
| Investment income from securities | $2.993 million | $1.847 million | $1.1 million | 59.7% |
| Service fees for financial products and services | $2.6 million | $306,000 | $2.3 million | 751.6% |
Updated on 16 Nov 2024
Resources:
- 1895 Bancorp of Wisconsin, Inc. (BCOW) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of 1895 Bancorp of Wisconsin, Inc. (BCOW)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View 1895 Bancorp of Wisconsin, Inc. (BCOW)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.