The Future of Banking Is Now

Keith Gottschalk, Chief Operating Officer

Keith Gottschalk, Chief Operating OfficerIt’s no secret: The pace of change in banking is speeding up. But where technology initially drove the changes leading to a better in-branch experience and more productive online activities, the application of that technology into easily downloadable apps for use on our phones and tablets has us crossing into a new frontier of convenience.

Faster, simpler, better, mobile.
As much as we look forward to seeing you in our branches during business hours, we know that isn’t necessarily where you’ll be when the need to bank occurs. This is why we continue to expand the ways you can conduct your banking activities—whenever, wherever and however you prefer.

For instance, unless you’ve been in the market for a loan recently, you may not know that O2 now accepts applications online for both mortgages and installment loans. Similarly, you can open new checking accounts without ever visiting a branch. We even offer you a person-to-person payment option that reduces the need to carry cash or your checkbook.

As we develop faster, simpler, better ways of serving you, we expect to add or enhance capabilities that will eventually include:

  • Kiosk banking, offering remote access to a teller located elsewhere (think Skype for banking)
  • The ability to use your cell phone as a debit card
  • A real-time transaction alert system to improve budgeting and security
  • Added functionality for ATMs for quicker crediting of deposits
  • The further streamlining of the lending process for even faster decisions

Ultimately, our goal is providing you with intuitive banking services, along with functions you can download through your preferred app store. The difference we intend to bring is providing these services and functions in one convenient, interconnected place—your community’s branch, both the physical version you visit and the mobile version you hold in your hand.

SPECIAL: Wealth Management Market Volatility Update August 24, 2015

world_finance_000023933922_320Equity markets worldwide have seen an extreme bout of volatility over the last week and several indices have entered into correction territory. The catalyst for the downside move appears to be two-fold: China’s recent decision to devalue its currency and anticipation for an interest rate hike by the Federal Reserve. China’s call to allow the value of its currency float more freely was a pretty marked shift from its previous position of being pegged to the value of the U.S. dollar. The result was a steep devaluation of the Chinese yuan in relation to other currencies. Many market participants view this as an indication of a rapid slowdown in growth in China. Back home, the minutes from the most recent Federal Reserve meeting indicated that while most voting members need to see more improvement in inflation data to support a rate hike, those conditions are becoming closer and closer to reality. Odds of a September rate hike had been falling in recent weeks with probabilities shifting toward December, however that came into question given the minutes from the meeting.

Those two reasons aside, it is our opinion that the longer term strategic outlook for the markets is largely unchanged despite recent market volatility. Moderate global economic growth and still accommodative monetary policies appear to remain intact, however volatility and downside moves may continue until more clarity is achieved on both fronts. Domestically, the economy appears to be on solid footing as recent employment and housing data remain strong. Additionally, consumers should continue to benefit from lower energy prices, providing a boost to retail activity.

If you have any questions or concerns, please do not hesitate to contact an Investment Officer or your Relationship Manager.

Rich Gartelmann CFP® – (630) 844-5730 rgartelmann@oldsecond.com
Jean Van Keppel CFA® – (630) 906-5489 jvankeppel@oldsecond.com
Brad Johnson CFA®, CFP® – (630) 906-5545 bjohnson@oldsecond.com
Joel Binder, SVP – (630) 844-6767 jbinder@oldsecond.com
Jacqueline Runnberg CFP® – (630) 966-2462 jrunnberg@oldsecond.com
Tamara Wiley, CFP® – (630) 844-3222 twiley@oldsecond.com
Ed Gorenz, VP – (630) 906-5467 ejgorenz@oldsecond.com

Visit Old Second Wealth Management

Non-deposit investment products are not insured by the FDIC; not a deposit of, or guaranteed by, the bank; may lose value.

Wealth Management Economic Update August 24, 2015

U.S. and World News

  • After the Chinese Yuan fell 3.6% last week, Chinese markets continued their decline this week. The Hang Seng officially entered the bear market territory as it has plummeted over 20% from its high in April. The IMF has given a sign that it will be at least another year until the Chinese currency will be added to its basket of reserve currencies. Concerns about China’s economy has rattled markets globally this week and has been blamed for the sharp decline of the S&P 500 which is down over 6% from its high in May.
  • Germany has voted in favor of the bailout package for Greece by a large margin, putting an end to negotiations lasting months. The first disbursement of €13B of funds from the bailout package was received by Greece just in time to make a €3.2B payment due to the ECB. €12B of this amount will be used to pay down debt. Greek Prime Minister Alexis Tsipras announced his resignation shortly after receiving the first disbursement of the €86B bailout deal.
  • oil_drill_320For the first time ever, the U.S. will allow limited sales of crude oil to Mexico. The oil that will be exported is expected to be high-quality shale which will help Mexico produce premium fuel. The U.S. will continue to receive the heavy oil coming from Mexico which is better for U.S refiners than the light oil they receive from Texas and North Dakota. WTI crude declined for the eighth straight week after the U.S revealed a large supply of 2.6M barrels.

Markets

  • Equity markets plunged this week amid global worries. The S&P 500 lost 5.77%, closing at 1,971. Similarly, the Dow Jones fell 5.82% and closed at 16,460. Year to date, the S&P is down 4.27% and the Dow is down 7.65%.
  • Yields in the Treasury markets fell this week. The 10 year Treasury bond now yields 2.05% while the 5 year Treasury bond now yields 1.43%.
  • The spot price of WTI Crude Oil continued its decline, and dropped by 6.73% closing at $40.21 per barrel. In 2015, WTI Oil prices are down 30.81%.
  • The spot price of Gold continued its weekly increase and gained 4.00% closing at $1,159.70 per ounce. Year to date, gold prices are down 2.09%.

Economic Data

  • Initial jobless claims came in at 277,000 which was an increase from the prior week’s figure of 273,000. The Labor Department noted that there were no special factors that affected the claims figure. The four week moving average for claims now stands at 271,500.
  • Existing home sales rose 2.0% in July vs. consensus of -1.1% to a high of 5.59 million. Single family homes sales are up 2.7% and condo and co-op sales fell -3.1%.
  • Housing starts were up 0.2% month-over-month in July, slightly higher than consensus forecasts.
  • The Consumer Price Index (CPI) increased 0.1% month-over-month in July, slightly lower than expected.

Fact of the Week

  • 64% of Millennials (ages 18-34 in 2015) believe they have a greater chance of winning the lottery than ever receiving a penny from Social Security once they retire. (T. Rowe Price)

Please contact a member of the Wealth Management Department if you have any questions about this information.

Rich Gartelmann CFP® – (630) 844-5730 rgartelmann@oldsecond.com
Jean Van Keppel CFA® – (630) 906-5489 jvankeppel@oldsecond.com
Brad Johnson CFA®, CFP® – (630) 906-5545 bjohnson@oldsecond.com
Joel Binder, SVP – (630) 844-6767 jbinder@oldsecond.com
Jacqueline Runnberg CFP® – (630) 966-2462 jrunnberg@oldsecond.com
Tamara Wiley, CFP® – (630) 844-3222 twiley@oldsecond.com
Ed Gorenz, VP – (630) 906-5467 ejgorenz@oldsecond.com

Visit Old Second Wealth Management

Non-deposit investment products are not insured by the FDIC; not a deposit of, or guaranteed by, the bank; may lose value.

Scoring Credit: Play It Smart

Jackie Allison, First Vice President, Retail Services 

Jackie Allison, First Vice President, Retail ServicesWhether you are requesting credit in the form of a credit card, car loan, or a home mortgage, it literally pays to have a winning credit score. The higher your score, the less you will pay over the life of the loan.

Who’s Keeping Score?
There are three main credit reporting bureaus:

  • Experian
  • Equifax
  • TransUnion

Each collects information in a report that summarizes your financial history. The bureaus use this information to calculate your credit score. Those scores are used by potential lenders to see if you are a “good credit risk,” someone who will likely pay back what they borrow, as agreed.

What Affects a Score?
While each bureau uses a different formula, they look at the same factors:

  • Whether you pay your bills on time. A late payment once in a while may not be damaging, but a pattern of late or missed payments is.
  • The amount you have outstanding each month as a percentage of your available credit. A high percent outstanding actually can lower your score.
  • The number of new credit applications you’ve submitted recently. This can signal a concern to the potential lender that you are acquiring too much new debt too quickly.
  • Payment history. If you have been late on a payment, get the account current and stay current. This will help improve your credit score.
  • The extent of your borrowing history. To have a credit score, you need to have had credit and demonstrated you can repay it. A good way to start building your history may be to have a parent co-sign on a loan application when you start working or, if you are able to do so, apply for a CD-secured loan at OSNB.

Before you apply for credit, take a look at your reports. You may request a free report once every 12 months from each bureau. To request your free reports, visit AnnualCreditReport.com.

Question any inaccurate information. And, if you are a joint borrower, exchange reports before applying. It may make more sense for the person with the higher score to apply for the loan on their own to lower its overall cost to you both.

If you do have a low score or a limited credit history, talk to us. Your banker can make suggestions that may help you raise it and lower your future borrowing costs. Because when it comes to your credit score, it’s never too late to improve it. For additional information, visit the FDIC’s consumer protection page.

Wealth Management Economic Update August 10, 2015

U.S. and World News

  • greece_000044812184_320The Athens Stock Exchange reopened on Monday after being closed for more than a month during the most recent Greek debt crisis. The benchmark index in Greece saw significant losses, falling by as much as 30% in its first day of resumed trading. Volatility has subsided somewhat after Greece and its lenders stated they were optimistic they could broker the final details of a bailout within days. A funding deal worth up to €86 billion must be settled by August 20th so that Greece can pay off €3.5 billion in debt it owes to the European Central Bank.
  • Puerto Rico announced that over the weekend it failed to make a debt payment, placing the U.S. commonwealth into default for the first time in its history. What happens next is unclear. Congress may assist the territory by passing a bankruptcy bill, allowing Puerto Rico to restructure its debts; however that effort has faced opposition. Another option may be for the Treasury Department to guarantee Puerto Rico’s debt when it seeks to borrow from the market again, significantly lowering the country’s future borrowing costs.
  • The Federal Reserve meeting this month produced little insight into when the Committee plans on raising the Federal Funds Rate. Policymakers continued to see an improving economy and labor situation but said that it requires additional improvement in labor market conditions before ‘liftoff’. The Committee also noted concerns about ‘international developments’, most likely referencing the summer’s Greek drama and the volatility in China’s stock markets.

Markets

  • Equity markets dwindled this week. The S&P 500 lost 1.25%, closing at 2,078. Similarly, the Dow Jones fell 1.79% and closed at 17,374. Year to date, the S&P is up 0.91% and the Dow is down 2.52%.
  • Yields in the Treasury markets went in opposite directions this week. The 10 year Treasury bond fell and now yields 2.16%. On the other hand, the 5 year Treasury bond rose and now yields 1.57%.
  • The spot price of WTI Crude Oil plummeted this week, dropping 6.98% and closed at $43.83 per barrel. In 2015, WTI Oil prices are down 23.77%.
  • The spot price of Gold continued its decline, dropping 0.13% and closing at $1,094.35 per ounce. Year to date, gold prices are down 7.60%.

Economic Data

  • Initial jobless claims came in at 270,000 which was an increase from the prior week’s figure of 267,000. The Labor Department noted that there were no special factors that affected the claims figure. The four week moving average for claims now stands at 268,250.
  • The July jobs report showed a gain of 215,000 nonfarm payrolls, lower than expectations of 225,000. The figures were revised up by 14,000 to prior months.
    • The headline unemployment rate remained unchanged at 5.30%. The labor force participation rate also remained unchanged at 62.60%.
    • Average hourly earnings rose by 0.20% vs. consensus estimates of 0.20%.

Fact of the Week

  • Approximately 21% of 401(k) plan participants who are eligible to borrow from their balances have outstanding loans. Additionally, participants in the U.S. left $24 billion in company matching funds unused because they didn’t save enough to claim the full match. (Source: ThinkAdvisor)

Please contact a member of the Wealth Management Department if you have any questions about this information.

Rich Gartelmann CFP® – (630) 844-5730 rgartelmann@oldsecond.com
Jean Van Keppel CFA® – (630) 906-5489 jvankeppel@oldsecond.com
Brad Johnson CFA®, CFP® – (630) 906-5545 bjohnson@oldsecond.com
Joel Binder, SVP – (630) 844-6767 jbinder@oldsecond.com
Jacqueline Runnberg CFP® – (630) 966-2462 jrunnberg@oldsecond.com
Tamara Wiley, CFP® – (630) 844-3222 twiley@oldsecond.com
Ed Gorenz, VP – (630) 906-5467 ejgorenz@oldsecond.com

Visit Old Second Wealth Management

Non-deposit investment products are not insured by the FDIC; not a deposit of, or guaranteed by, the bank; may lose value.

Wealth Management Economic Update August 3, 2015

U.S. and World News

  • SHANGHaiHeightened volatility continued in Chinese equity markets this week as government intervention was unable to prevent the Shanghai Composite from posting its worst month in six years as the index fell 14%. Chinese regulators said they were prepared to lend further support to markets, while the central bank injected cash into the money markets and hinted at further easing. In addition, China’s securities regulators said it has launched a probe into automated trading, restricting accounts suspected of “influencing securities trading prices.”
  • Greece’s financial markets are finally set to reopen on Monday August 3rd after being closed since June 28th. Already dealing with dissention in his own Syriza party, Prime Minister Alexis Tsipras was informed on Friday by the International Monetary Fund that Greece’s high debt levels and current record of implementing reforms disqualify it from a third bailout. The IMF will still take part in the bailout negotiations that are underway, but will not decide whether to agree to a new program for a few months.
  • The Federal Reserve meeting this month produced little insight into when the Committee plans on raising the Federal Funds Rate. Policymakers continued to see an improving economy and labor situation but said that it requires additional improvement in labor market conditions before ‘liftoff’. The Committee also noted concerns about ‘international developments’, most likely referencing the summer’s Greek drama and the volatility in China’s stock markets.

Markets

  • Equity markets rose moderately this week. The S&P 500 gained 1.18%, closing at 2,104. Likewise, the Dow Jones rose 0.69% and closed at 17,689. Year to date, the S&P is up 3.35% and the Dow is up 0.56%.
  • Yields in the Treasury markets dipped this week. The 10 year Treasury bond now yields 2.19% and the 5 year Treasury bond yields 1.54%.
  • The spot price of WTI Crude Oil fell again this week, dropping 2.72% and closed at a 52-week low of $46.83 per barrel. In 2015, WTI Oil prices are down 18.56%.
  • Once again, the spot price of Gold fell, decreasing by 0.30% and closing at $1,095.80 per ounce. Year to date, gold prices are down 7.48%. 

Economic Data

  • Initial jobless claims came in at 267,000 which was an increase from the prior week’s figure of 255,000. The Labor Department noted that there were no special factors that affected the claims figure. The four week moving average for claims now stands at 275,000.
  • Real Gross Domestic Product increased by 2.3% (quarter over quarter) in the 2nd quarter, boosted by a solid increase of 2.9% in consumer spending. The figure for the 1st quarter GDP was revised upwards from -0.2% to +0.6%.
  • The Case-Shiller home price index declined 0.2% in May, disappointing against consensus estimates of a gain of 0.3%. Half of the 20 cities in the index showed price gains. Over the last 12 months, home prices in the index have risen 4.9%.
  • The Employment Cost Index (measure of wage growth) rose just 0.2% in the 2nd quarter which was below consensus expectations. With the Federal Reserve signaling that more improvement in inflation data is necessary for a September increase in the Fed Funds Rate, many analysts believe that this data point bring down the odds of that occurring, pushing the most likely ‘liftoff’ date to December.

Fact of the Week

  • The United States’ total outstanding debt has increased 91% over the last 7 years, an increase of 9.7% per year. The national debt has risen from $9.49 trillion on June 30, 2008 to $18.15 trillion as of June 30, 2015. (Source: Treasury Department)

Please contact a member of the Wealth Management Department if you have any questions about this information.

Rich Gartelmann CFP® – (630) 844-5730 rgartelmann@oldsecond.com
Jean Van Keppel CFA® – (630) 906-5489 jvankeppel@oldsecond.com
Brad Johnson CFA®, CFP® – (630) 906-5545 bjohnson@oldsecond.com
Joel Binder, SVP – (630) 844-6767 jbinder@oldsecond.com
Jacqueline Runnberg CFP® – (630) 966-2462 jrunnberg@oldsecond.com
Tamara Wiley, CFP® – (630) 844-3222 twiley@oldsecond.com
Ed Gorenz, VP – (630) 906-5467 ejgorenz@oldsecond.com

Visit Old Second Wealth Management

Non-deposit investment products are not insured by the FDIC; not a deposit of, or guaranteed by, the bank; may lose value.