Category Archives: Uncategorized

Spring Planting Season

Jeremy Doetch

Jeremy Doetch, VP, Ag & Commercial Services

As spring starts to erase the remnants of winter, I can’t help but get anxious and excited for this season.  It’s the time of year that I make a checklist for the next 90 days. The reasons I do this is because I’m part of an elite group that consists of 2% of the United States population. This group is working feverishly to get everything ready.  We check and double check equipment, technology items, seed, and fertilizer, and then we count down the days until it all begins. Every member of this group has their own way of preparing for the spring.

For me, this checklist revolves around smells. It may sound funny, but it’s something that has been sown deep into my roots. I can’t wait to smell the exhaust from a tractor just starting up. I can’t wait to smell fresh tilled dirt. The mixture of seed and graphite, along with the occasional smell of grease.  The way the smell of the dirt changes from May to April to June – And then, the satisfaction of a carefully executed plan coming to fruition when I see the first sign of corn and soybeans sprouting above the ground. The smell of freshly cut hay and yes, even the smell of fertilizer.  These smells keep me grounded, keep me focused, and keep me on track.

These checkpoints help me understand and appreciate a farmer’s perspective. When I’m sitting across the desk from a farmer wanting to do business with me, I never forget my roots and I know that this farmer understands my appreciation of these smells in a way that the other 98% of the population does not. We’re farmers. We’re part of an elite group.

Our agriculture lending team has very deep roots in this industry.  When we take the banker hat off at the end of the day, we are putting the farmer hat on.  We strive to help farmers grow their business, protect their legacy, and transition to the next generation.  If your banking relationship is broken and needs repairs, we have the tools to fix it and get you back to enjoying the smells that you love, worry free.

So to my fellow elitists, I wish you all a prosperous and safe spring planting season.  I hope at some point this season, as you are filling your planter at sunset, you take in a deep breath and think to yourself, “It doesn’t get any better than this.”

Jeremy Doetch, Vice President, Ag & Commercial Services, has more than 14 years of experience in commercial and agricultural lending. From the Poplar Grove area, Doetch plays an active role in his family’s grain, hog and trucking operation. 

Three Keys to Remember for IRAs

Stephen Hofmann, J.D., CPS, Assistant Vice President, Wealth Advisor & Investment Officer

Stephen Hofmann, J.D., CPA, Assistant Vice President, Wealth Advisor & Investment Officer

It’s that time of the year – we all have taxes on the brain. Whether you’ve yet to file, or if you’ve already filed and are looking to get this next year started off on the right foot, we’ve got some key reminders regarding taxes and IRAs.

    1. It’s time to save with a Traditional IRA. Depending on your age, you may still have time to contribute to an Individual Retirement Account (IRA). The Internal Revenue Service (IRS) imposes deadlines on when contributions can be made to traditional IRAs. If you have not filed your tax return, and would still like to make a 2015 contribution, you still have time. For 2015 contributions, you have up until the filing of your 2015 income tax return or April 18, 2016.
    2. There are current tax benefits with a Traditional IRA. At $5,500 ($6,500 age 50 and older), the annual limits to an IRA may seem small, but combined with tax breaks and compounding, your savings can add up significantly over time. Depending on your income, you may receive a current tax deduction for the amount of your annual contribution. The size of that tax deduction depends on the tax bracket you are in for 2015. In other words, the traditional IRA can have a double benefit, by saving for retirement and providing a current income tax deduction.
    3. Don’t forget about the Roth. The annual contribution limits to a Roth IRA are the same as a Traditional IRA. However there is no current income tax benefit for contributing. Under current IRS rules, the assets in a Roth IRA will grow income tax free. When you make qualified distributions from a Roth, those distributions are not taxable (traditional IRA distributions are treated as taxable ordinary income). With patience, the tax free benefit of a Roth IRA can be a strong planning tool for your retirement. The Roth does have income contribution limitations, but if a taxpayer is eligible to contribute, the taxpayer can reap large future benefits.

Alpine Trust & Investment Group offers several different calculators to help you begin your planning. These tools are an excellent place to start, providing an opportunity to identify your desired course of action. Meeting with a wealth advisor or retirement planning specialist will help you put that plan in place. Please feel free to reach out to one of our many talented advisors here at Alpine Trust & Investment Group.

Stephen Hofmann, J.D., CPA, is an Assistant Vice President, Wealth Advisor & Investment Officer at Alpine Trust & Investment Group. He has more than 7 years of experience in managing assets, tax planning and financial planning. 

*This does not constitute tax planning services. The above statements do not include all IRS rules that may impact the contributions and tax benefits. To confirm what options are available to you, please contact one of our wealth advisors or retirement planning specialists.

Investment and insurance products are: not FDIC insured; not guaranteed; and, may be subject to investment risk, including possible loss of principal.

Alpine Mortgage Banking – A Year in Review

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Cass Wolfenberger, Senior Vice President, Mortgage Banking

At Alpine Bank, we live and breathe the ins and outs of the mortgage world every day.  The average consumer cannot say the same. Unless you are in the business of real estate, you can probably count on one hand the number of mortgages you’ve been up close and personal with.

We understand the importance of educating and informing our customers, providing peace of mind for those making life-altering decisions. As we kick off 2016 in high gear, I thought I’d take a moment to provide a recap of the last year, and talk about what’s on the horizon.

At a national level, 5,256,000 existing-homes and 499,000 new homes were sold in 2015. Although there was a drop in the number of new home sales, there was an increase of 6.5 percent in existing-home sales, indicating a continued recovery of the real estate market nationally.

From a local perspective, the Rockford area Real Estate sales for 2015 increased 3.77% over 2014, while the three month rolling average sale price increased 4.0% to $107,462.00.  Inventory of homes listed for sale is at a 12 year low, hindering a more robust recovery in the number of home sales. Despite the low inventory, we saw the highest number of Rockford homes sold since 2007.

Alpine Bank saw an increase of 58% over 2014’s total dollar amount of mortgages closed, as well as a 43.6% increase in the number of loans closed.  This increased our market share and maintained our position of being the area’s top mortgage lender.

Additionally, we’ve expanded our capabilities to include the servicing of Federal Housing Administration (FHA), making Alpine Bank the only locally owned bank in Rockford to service their own FHA loans.  This has been dominated by large, national banks. Yet, this has been tremendously successful here at Alpine Bank.

We helped 243 families buy a home using the Illinois Housing Development Authority (IHDA) grants for down payment and closing costs in 2015. Additionally, Alpine Bank was recognized as IHDA’s top lender in loan quality.

Our team of Alpine Bank Mortgage Bankers continues to grow, setting us up for another successful year full of growth and new opportunity. The future is bright, let’s go together!

Cass Wolfenberger, NMLS#133909, is Alpine Bank’s Senior Vice President, Mortgage Banking and has more than 20 years of experience in providing mortgage expertise to home-buyers. 

Three Rules for Retirement Savings

Michael St. John, CPA, CRPS®, Vice President & Retirement Plan Services Manager

Michael St. John, CPA, CRPS®, Vice President & Retirement Plan Services Manager

For most of us, saving for retirement is a necessary step in ensuring a comfortable lifestyle as we grow older. Despite competing demands for our money, ultimately we must commit ourselves to saving for retirement.

You likely have an employer sponsored retirement plan at your place of work where you can save a portion of your paycheck directly into an account set aside for your retirement (401k, 403b, SIMPLE). And don’t forget about Individual Retirement Accounts (IRAs). If you do not have a retirement plan at work you might consider regular contributions to an IRA.

Follow three basic rules to boost your retirement savings.

  1. Start Early

Save as much as you can, as soon as you can. The sooner you start, the longer compounding can work in your favor. Don’t assume that you can put off saving for retirement and make up the difference later with larger contributions. Waiting too long to start saving can make it very difficult to catch up. Only a few years could cost you tens of thousands in accumulated savings at retirement age. Start saving today!

  1. Increase Contributions

Sometimes we cannot save as much as we should early in our working years. If you are not saving as much right now, make a plan to increase your contributions each year or every time you receive a raise or promotion. Always be aware of employer matching contributions. Your first goal should be to contribute the amount that will ensure you receive the maximum employer match.

If possible, you should increase your contributions enough over time that you reach the maximum allowable contribution in your plan. Increasing just one or two percent of your pay each year can quickly get you on your way to a savings rate that can make a big difference in reaching your retirement goals.

  1. Don’t Stop

It can be tempting to reduce, or even stop contributing when we change jobs or experience other life changes such as getting married or having children.  It’s easy to stop, but much, much harder to get started again.

We may also feel inclined to stop saving when investment markets take a downturn. Downward trending markets can actually signal a great time to even increase your contributions. By investing consistently through down market cycles, you purchase investments at a lower cost, buying more shares with each dollar, and allowing for greater potential growth of your account in the future.

Reducing or stopping retirement savings in your employer sponsored plan can also reduce employer matching contributions. Make sure you contribute at least enough to receive the maximum match allowed under your plan.

Make saving a priority! By saving what you can now, increasing your contributions over time , and remaining consistent with your current plan, your savings can really add up over time.

The information contained in this article does not constitute tax or investment advice.  The above statements do not include all rules that may impact your contributions and tax benefits. To confirm what options are available to you, please consult your tax advisor or one of our wealth advisors or retirement planning specialists.

Michael St. John, CPA, CRPS® is a Vice President & Retirement Plan Services Manager at Alpine Trust & Investment Group. He has more than 25 years of experience in accounting, income tax and retirement planning.

Investment and insurance products are: not FDIC insured; not guaranteed; and, may be subject to investment risk, including possible loss of principal.

 

Helpful tips on paying off Student Loans

Repaying Student LoansIf you’re saddled with both a degree and thousands of dollars of student debt, you’re not alone. More than 70% of Millennial college graduates leave college facing prospects of repaying more than $35,000 in student loans, a feat that can take well over a decade to eliminate. Though it may seem daunting, the financial experts at Alpine Bank recommend the following to repay student loans with minimal stress and maximum efficiency:

  • Choose your loans wisely: Calculate the cost of the necessities – tuition, room and board, textbooks, and transportation – and sign loans that cover only what you need, even if you qualify for more. A part-time job or summer position can provide funds for added nonessential expenses. Your loan might allow you to defer interest payments while you’re still in school. However, unless it’s subsidized, it will accrue interest immediately. Unpaid interest then compounds and adds to the principal, creating an even larger amount to repay. When possible, apply income from a part-time job to pay back a loan’s interest while you’re still in school to save hundreds on repayment when you graduate.
  • Increase your payments: If you’re on a 10-year installment plan, you’re paying a decade of interest on top of your original loan, adding more debt to your plate. When possible, pay back more than the minimum agreement each month and chop off extra time and interest. If you have multiple loans, direct your additional payments towards the loan with the highest interest rate. The faster you can pare down the principal, the less you accrue in exorbitant interest.
  • Make installments as often as you are able: With less time between payments for interest to accumulate, an accelerated payment plan can decrease your repayment term. By doubling your schedule of installments and making more payments over the same time period, you’re able to lessen the interest and pay your loan off sooner.
  • Track your interest: Motivate yourself with a continually updated track record of your current interest. The longer you have the loan, the more money you spend towards interest. Incentivize yourself by creating a cap for how much you want to pay in interest. Let that help guide you to make extra payments per year.

Our loan officers at Alpine Bank are here to help you not only secure the funds you need, but manage them as effectively as possible. Let us know how we can help you navigate your student loans today!

This is Not a Lehman Moment!

Certainly stock market declines of the nature that we have experienced in the past couple ofStockMarket days are unnerving.  Recollection of the 2007-2009 market decline is very fresh in investors’ minds. It is important to keep these events in perspective. The previous decline was a reaction to a financial system on the brink, a real crisis in confidence in the entire financial system. This is not the case today. In other words, this is not a Lehman moment!

So, what is going on?
>      This is merely a reset of global growth expectations. It’s becoming clear that the global economy, likely in part due to demographics, is going to be in a much slower growth pattern than has historically been the case.
>      If global economic growth is lower, then future earnings growth must be lower too. Earnings are what moves stock prices and that’s why stocks are going lower, to reset to new lower growth expectations.
>      Good news is that U.S. earnings expectations are not very high anyway, however, everyone has been suspicious of China’s reported economic data and given all the actions the government has been taking to stabilize growth, the suspicions are confirmed and China is likely growing slower than previously thought.
>      Market valuation is not at the same high level that it was in 2007, it is much more reasonable.
>      Our economy is still growing steadily. Our largest trading partners are Canada, China, and Mexico. China’s citizens are not heavily involved in their stock market so our exports to China may not even be impacted too much.
>      U.S. new home sales in July were at their highest level since July 2007; auto sales are at best pace in a decade; labor market improved.
>     Europe has become more stable despite Greece’s Prime Minister, Alexis Tsipras’ recent resignation.  European growth is firming, but certainly not robust. Recent Eurozone PMI came in at 54.1, signaling the best expansion in some time for the manufacturing sector.
>     U.S. has gone 1,418 calendar days without a 10% correction, the 3rd longest in the past 50 years. The DOW and S&P 500 have now corrected 10% from their May 2015 highs. 10% corrections are normal and healthy, even though they do not feel very good, especially when they happen as quickly as this one.
>     The Fed has not been clear on its direction and that has spooked markets as well. Market volatility may push off a rate hike until at least December.
>     Most portfolios are diversified and are not fully invested in stocks. Bonds have rallied so that side of your portfolio should have gained in value to help offset equity declines.

Investors in the equity markets know that long term value is achieved only when a long term perspective can be maintained. Volatility like this is difficult to tolerate over the short term but might be easier if the media was as vocal about the gains in your bond portfolio that were serving to mitigate some of the short term equity declines.

Investment and insurance products are: not Alpine Bank products, not FDIC insured; not guaranteed; and, may be subject to investment risk, including possible loss of principal.

 

How to Save Money While You Move

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Moving to a new home is an exciting time! Whether you are going through a career change, personal life change or just want to try something new, there are big changes ahead. Moving can also be expensive. We aren’t just talking about the mortgage or insurance, but the expenses of physically moving can really add up, especially when you have a lot of possession accumulated. Alpine Bank has some strategies that you can use to cut back on costs:

De-clutter: The time before a big move is the perfect time to go through your stuff and figure out what you need to keep and what can be sold. When selling items, Craigslist is a good place to sell larger items. eBay is more powerful for small or collector’s items. Yard sales and consignment shops are also great ways to get rid of larger bulk items like clothes and furniture.

Avoid hiring movers: Moving services can be expensive. Instead of dropping cash on movers, look into what you would need to move on your own. Do you have friends who would be willing to help for a day? Treating some friends to dinner after loading up a rental truck is a much cheaper option than paying someone to load the truck for you.

Strategize utility and service shutoffs: Many utilities require you to pay for a full month’s services at a time. If one of the services isn’t essential, cut it off before you leave rather than after so you aren’t pay for something that you aren’t using. This means you need to plan ahead and contact your service companies more than a month before your move-out date.

Be smart about finding moving boxes: As soon as you decide to move, start saving any cardboard boxes and packing materials that you can get your hands on. There are several places in your community, such as liquor stores, bookstores and grocery stores that will usually have free boxes laying around.

Moving is a stressful time and you may not have the time to use all of these strategies. But getting organized and planning ahead could help you save a bundle of money and your sanity. For more tips about the housing market, saving money and more, talk to a friendly staff member at Alpine Bank.

Money Advice for High School Graduates

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A large number of American students graduate from high school without knowing the basics of managing their money wisely. Their first step is often to take on a student loan to pay for college without understanding the scope of that debt. Whether your graduate plans to attend college, enter the working world, travel or join the military, all young people should know these basic personal finance rules.

Track your spending – Too often, people will spend mindlessly as long as there is money in their account. However, these are usually the people that can’t pay their bills at the end of the month. Keeping track of where you spend your money allows you to understand where you money has gone and where you can cut back.

Create a budget – Once you know where your money is going, creating a budget will help you designate where you want it to go. If you make a reasonable budget and stick to it, you won’t have to worry about not having enough money at the end of the month.

Earn compound interest – When you start to save or invest money, it earns interest. That interest can earn interest as well over time. This is why it is a good idea to start saving as soon as you can. Even if you can only save $5 or $10 a week, that money will add up over time.

Use cash – Research has shown that we are more careful with our money when we are handing over card than when we swipe a credit or debit card. If you do choose to use credit, never spend more on that card than what you can pay off at the end of the month. That will get you into even more problems with debt in the future.

If your child just graduated from high school, teach them what you can about what it means to manage money wisely. For help starting up a checking account, savings account, Online Banking or another financial tool, talk to Alpine Bank.

Thinking of Purchasing an Older Home? Read This First!

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Have you ever heard someone say “They don’t build them like they used to” when it comes to talking about old cars, appliances and homes? Whether it’s the style they were built in, the identifying features or other characteristics, there’s just something about living in an older home that has a unique history behind it.

 

However, old homes can also cause difficulties if you aren’t careful. If you are looking into purchasing an older home this spring, here are some pros and cons to consider from your friends at Alpine Bank.

 

Pros:

 

Location – Older homes were built first so they are often situated close to the action.

Cost – This is usually assumed, but you will typically pay less for an older home than a newer one of the same size.

Long-term investments – Check with other home owners in the area to see how much their home values have changed in the past decade. Old homes are often limited in supply, yet high in demand so the value may rise.

Availability – An older home is ready to be lived in. You don’t need to wait for a builder to put finishing touches or delays in the building schedule.

 

Cons:

 

Roots – Old homes often have older trees in the yard. These trees have long and deep roots that can cause problems with your foundation or plumbing systems.

Out-of-date building codes – Checkold heating, plumbing and wiring systems to make sure they are up to modern codes, along with the chimneys and windows.

Places to put your stuff – People didn’t own as much stuff when older homes were built as we do now. This means that closets and storage spaces may be smaller than what you are used to.

 

When you are looking at houses, don’t be afraid to ask a lot of questions! Purchasing a new home is a big decision, so don’t leave any stone unturned.

 

The mortgage bankers at Alpine Bank can help you find the mortgage solutions you need to get your ideal home, old or new. Give them a call to get started with a free loan consultation today!

 

Foundations of Financial Literacy

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Do you remember when you were learning how to read? When you were just starting, you probably didn’t like to practice very much. However, when you had an understanding of the words and became literate, reading probably became more fun! Just like when you learned to read, learning to be financially literate takes some practice. However, you will be thankful when you have an understanding of how to wisely manage your money.  In order to become financial literate, you must understand some principles of financial literacy. We will talk about four foundational principles in today’s blog.

The Difference between an Asset and a Liability

An asset is anything that puts money in your pocket. A liability is anything that takes money out of your pocket. To illustrate the difference, we will use your home as an example. Many people think of their house as an asset. This isn’t really true because your home takes money out of your pocket each month in the form of taxes, maintenance, etc. But if you own rental properties, tenants pay rent, maintenance costs, taxes, and more. This is money going into your pocket each month, making these properties an asset.

Cash Flow versus Capital Gains

When investing for capital gains, you invest your money and hope that the price will go up. The problem with this is that you don’t have any control over whether or not the price goes up. Investing for cash flow gives you more control over your income. For instance, you could buy investment real estate, have tenants to pay the expenses, and collect rent each month. This makes it an asset. If there are capital gains in the end, that is a bonus.

Using Debt to get Richer

Debt isn’t typically viewed as a money maker. However, it can be used to create wealth. There are two kinds of debt – good and bad. Bad debt comes from borrowing money for liabilities such as using credit cards to buy big TVs or borrowing a line of credit on your home. This is the debt you want to stay away from. Good debt is used to purchase assets. Think of our previous example of purchasing rental property. When you purchase that property using the bank’s money, you can collect money from your tenant to pay off debt and then pocket the profit.

Learn How to Make Your Own Financial Decisions

If you aren’t confident in your financial knowledge, ask experts for help. They will help you learn how to make financially intelligent decisions that can give you the confidence to think for yourself. The wisdom needed to be financially literate only comes from the desire to learn about what courses of action are best.

April is Financial Literacy Month and Alpine Bank wants to help all of our customers gain a fuller understanding of wise financial decisions. If you have any questions, please feel free to contact us.