Company’s operations consist of three primary segments: community banking,
specialty finance and wealth management.
Community Banking
Through our banks, we provide community-oriented, personal and commercial banking
services to customers located in our market area. Our customers include individuals,
small to mid-sized businesses, local governmental units and institutional clients
residing primarily in the banks' local service areas. The banks have a strategy
to provide comprehensive community-focused banking services. In keeping with
this strategy, the banks provide highly personalized and responsive service,
a characteristic of locally-owned and managed institutions. As such, the banks
compete for deposits principally by offering depositors a variety of deposit
programs, convenient office locations, hours and other services, and for loan
originations primarily through the interest rates and loan fees they charge,
the efficiency and quality of services they provide to borrowers and the variety
of their loan and cash management products. Using our decentralized corporate
structure to our advantage, we offer our MaxSafe® deposit accounts, which
provide customers with expanded Federal Deposit Insurance Corporation (“FDIC”)
insurance coverage by spreading a customer's deposit across our fifteen banks.
This product differentiates our banks from many of our competitors that have
consolidated their bank charters into branches. We also have a downtown Chicago
office that works with each of our banks to capture commercial and industrial
business. Our commercial and industrial lenders in our downtown office operate
in close partnership with lenders at our community banks. By combining our expertise
in the commercial and industrial sector with our high level of personal service
and full suite of banking products, we believe we create another point of differentiation
from both our larger and smaller competitors. Our banks also offer home equity,
consumer, and real estate loans, safe deposit facilities, ATMs, internet banking
and other innovative and traditional services specially tailored to meet the
needs of customers in their market areas.
Specialty Finance
We conduct our specialty finance businesses through non-bank subsidiaries. Our
wholly owned subsidiary, FIFC, engages in the premium finance receivables business,
our most significant specialized lending niche, including commercial insurance
premium finance and life insurance premium finance. We also engage in commercial
insurance premium finance in Canada through our wholly owned subsidiary FIFC
Canada.
In their commercial insurance premium finance operations, FIFC and FIFC Canada
make loans to businesses to finance the insurance premiums they pay on their
commercial insurance policies. Approved medium and large insurance agents and
brokers located throughout the United States and Canada assist FIFC and FIFC
Canada, respectively, in arranging each commercial premium finance loan between
the borrower and FIFC or FIFC Canada, as the case may be. FIFC or FIFC Canada
evaluates each loan request according to its own underwriting criteria including
the amount of the down payment on the insurance policy, the term of the loan,
the credit quality of the insurance company providing the financed insurance
policy, the interest rate, the borrower's previous payment history, if any,
and other factors deemed appropriate. Upon approval of the loan by FIFC or FIFC
Canada, as the case may be, the borrower makes a down payment on the financed
insurance policy, which is generally done by providing payment to the agent
or broker, who then forwards it to the insurance company. FIFC or FIFC Canada
may either forward the financed amount of the remaining policy premiums directly
to the insurance carrier or to the agent or broker for remittance to the insurance
carrier on FIFC's or FIFC Canada's behalf. In some cases the agent or broker
may hold our collateral, in the form of the proceeds of the unearned insurance
premium from the insurance company, and forward it to FIFC or FIFC Canada in
the event of a default by the borrower. This lending involves relatively rapid
turnover of the loan portfolio and high volume of loan originations. Because
the agent or broker is the primary contact to the ultimate borrowers who are
located nationwide and because proceeds and our collateral may be handled by
the agent or brokers during the term of the loan, FIFC and FIFC Canada may be
more susceptible to third party (i.e., agent or broker) fraud. The Company performs
various controls and procedures including ongoing credit and other reviews of
the agents and brokers as well as performs various internal audit steps to mitigate
against the risk of any fraud.
Wealth Management Activities
We offer a full range of wealth management services through three separate subsidiaries,
trust and investment services, asset management and securities brokerage services.
These subsidiaries are subject to regulation by the Securities and Exchange
Commission (the "SEC") and the Financial Industry Regulatory Authority
("FINRA").