|
AUGUST
30 - SEPTEMBER 5, 2010
U.S. COMMUNITY BANK
INVESTMENT PROGRAM INCOME UP 12.6% IN FIRST QUARTER
Investment program income (combined securities brokerage and annuity fee
income) at U.S. community banks with under $4 billion in assets grew
12.6% in the first quarter to $110.1 million, up from $97.8 million in
first quarter 2009, and rose 4.6% over $105.3 million earned the quarter
before, according to the Michael
White Community Bank Investment Program Report.
Just over 20% (1,412) of community banks offered investment
programs, and among those that did, 45.8% offered securities brokerage
alone, 11.1% offered only annuities, and 43.1% offered both, making
securities brokerage available at 89% of community banks with investment
programs, and annuities available at 54%.
Securities
brokerage showed the greatest strength in the quarter, with earnings
jumping 25.9% to $82.56 million, up from $65.59 million in first quarter
2009, enough to comprise 75% of investment program income.
In contrast, annuity fee income fell 14.5% to $27.54 million,
down from $32.21 million in first quarter 2009, but up 10.3% over $24.97
million in fourth quarter 2009. CenterState
Bank of Florida ranked first in securities brokerage earnings among
community banks, benefiting from a 139% jump in this revenue to $6.37
million. North Shore
Community Bank (IL) followed with 58% growth to $3.56 million.
BAC Florida Bank (up 355% to $2.28 million), Texas-based TIB The
Independent Bankersbank (down 37% to $2.06 million), and Florida-based
Espirito Santo Bank (up from zero to $1.88 million), respectively,
rounded out the top five.
Virginia-based
Bank of Hampton Roads ranked first in annuity earnings among community
banks, recording a jump from zero in first quarter 2009 to $1.15 million
in first quarter 2010. New
Jersey-based, Sumitomo Trust and Banking Co.’s annuity earnings also
jumped from zero, enough to place that bank second with $821,000 in
annuity income. Texas-based
Victoria National Bank (up 10.3% to $515,000) ranked third, followed by
West Virginia-based Lake City Bank (up 41.2% to $442,000) and West
Virginia-based United Bank (down 36% to $428,000).
Among
all community banks with investment programs, average income from these
programs per bank reached $77,969, up 19.7% from $65,115 in first
quarter 2009, enough to comprise a mean 8.36% of noninterest income,
according to the Michael
White Community Bank Investment Programs Report.
SECOND QUARTER
VARIABLE ANNUITY SALES CONTINUE UP; FIXED ANNUITY SALES CHOPPY
U.S. fixed annuity sales in the second quarter dropped 30.2% to $19.4
billion, down from $27.8 billion in second quarter 2009, while variable
annuity sales rose 8.2% to $34.4 billion, up from $31.8 billion the year
before, according to the Insured Retirement Institute based on data
supplied by Evanston, IL-based Beacon Research and Chicago, IL-based
Morningstar. Compared to first quarter 2010, fixed annuity sales climbed
17.7%, up from $16.5 billion, and variable annuity sales increased 9%,
up from $31.6 billion.
Commenting
on quarter-to-prior-quarter results, Beach Research President and CEO
Jeremy Alexander said, “The spread between Treasury and corporate bond
yields widened. This
enabled fixed annuities to offer competitive credit rates.”
Regarding variable annuity sales, Morningstar Variable Annuity
Data Operations Manager Mario Chmura said, “While variable annuity
products may be offering less lucrative benefits than in the past,
investors are still attracted to the idea of creating a floor against
losses.” He added,
“Variable annuity sales reached their highest quarterly level since
the third quarter of 2008.”
U.S. THRIFT
EARNINGS UP YEAR OVER YEAR, DOWN QUARTER TO QUARTER
The U.S. Office of Thrift Supervision (OTS) reported U.S. thrifts earned
$1.49 billion in net income in the second quarter compared to a net loss
of $94 million in second quarter 2009.
Second quarter earnings reflected the industry’s fourth
consecutive quarterly profit, but were down 22.4% from $1.92 billion
earned in first quarter 2010, as thrift’s set aside $2.3 billion in
loan loss provisions, and the number of problem thrifts grew to 54, up
from 50 in the previous quarter and 40 in first quarter 2009, the OTS
said.
FIRST NIAGARA LOOKS
TO NEW ENGLAND WITH NEWALLIANCE
Buffalo, NY-based, $21 billion-asset First Niagara Financial Group has
agreed to acquire New Haven, CT-based, $8.7 billion-asset NewAlliance
Bancshares in a stock and cash deal valued at $1.5 billion.
When the deal closes in second quarter 2011, pending shareholder
and regulatory approvals, First Niagara will add 75 NewAlliance Bank
branches in Connecticut and 13 in Massachusetts to its 255 branches
across New York and Western and Eastern Pennsylvania.
First
Niagara President and CEO John Koelman said the acquisition fits First
Niagara’s strategy of “entering new markets that complement our
geographic footprint with companies that enhance our strong business
model.” He described
NewAlliance as a “well-positioned franchise with tremendous upside
potential in a region with strong demographics.” NewAlliance’s current headquarters in New Haven will become
First Niagara’s New England Regional Market Center when this 10th
Niagara acquisition in 10 years is completed.
NY AG CUOMO
SUBPOENAS MORE LIFE INSURERS’ RETAINED ASSET ACCOUNTS
New York Attorney General Andrew Cuomo is expanding his investigation
into retained-asset accounts set up by life insurers to hold and manage
insurance policy funds after a policyholder dies.
Cuomo alleges that not only do some beneficiaries mistakenly
believe that these funds are FDIC-insured (they are protected by
industry guaranty funds), but that the accounts earn as much as a 4.8%
return but pay out as little as 0.5% in interest.
In July
Cuomo’s office subpoenaed Newark, NJ-based Prudential Financial and
New York City-based MetLife in order to examine how they handle policies
for federal employees, including the military.
The office has since subpoenaed Hartford, CT-based Aetna, New
York City-based American International Group (AIG), Carmel, IN-based CNO
Financial Group and Des Moines, IA-based Principal Financial Group.
Aetna
said it will cooperate with Cuomo and added that over the past six years
it has paid more than $17 million in interest to beneficiaries using
retained asset accounts. “That’s
above and beyond the life insurance.”
Principal Financial Group said its life insurance beneficiaries
“have complete and immediate access to the money they receive as a
death benefit at any time when a retained asset account is used.”
Recipients
of life insurance policy benefits can keep their money in
interest-bearing retained asset accounts and use them like checking
accounts, or they can remove their money from their individual accounts
in a lump sum by writing one single check, BestWire reports.
CRITICAL ILLNESS
INSURANCE APPEALS
Almost 60% (58%) of fulltime employees who had critical illness
insurance explained to them said they would be interested in buying the
product through their employer even if they had to pay 100% of the
premium, according to the MetLife Study of the Financial Impact of
Critical Illness. The
study found that a critical illness can reduce a family’s income by
more than $12,000 in the first year even when the family has
comprehensive health insurance. The
study also found that 46% of fulltime workers have less than $5,000 in
savings, and 28% have less than $500 in savings to cover the $12,000
income loss. In addition,
only 7% of those experiencing a critical illness had critical illness
insurance, and only 28% were aware that such insurance was available.
AMERICAN COLLEGE TO
HOLD FINANCIAL SERVICES DIVERSITY SUMMIT
The American College based in Bryn Mawr, PA plans to hold the first
national Summit on Diversity in Financial Services in November to
address the fact that white males hold 64% of the financial services
industry’s senior management positions, Asian Americans hold 3.5%,
Hispanics hold 3%, and African Americans hold 2.8%.
Among the seminars to be offered at the Fairmont Mayakoba Hotel
on Riviera Maya, Cancun, Mexico are the following:
The African American Advisor: Recruitment, Retention, Recharge!
Beyond the Glass Ceiling: New Insight on Building a Strong Women’s
Network
Understanding the Gay and Lesbian Market: Helping Advisors Understand
Cultural and Language Differences
HSBC HOLDINGS WANTS
70% OF OLD MUTUAL’S NEDBANK GROUP
London, England-based Old Mutual plc has granted London-based HSBC
Holdings plc “exclusivity” in the latter’s proposal to acquire up
to 70% of Johannesburg, South Africa-based Nedbank Group, an Old Mutual
subsidiary. The proposal to
acquire the Nedbank shares requires Old Mutual and Nedbank board
approvals and South Africa regulatory approval.
Old Mutual said that if the deal goes through, it will use the
proceeds to reduce its debt and reinvest in South Africa and other
emerging markets. Nedbank
said the HSBC investment “should enhance Nedbank Group’s ability to
strengthen its position in the South African banking sector.”
INDIA’S IDBI,
FORTIS AND FEDERAL BANK PARTNERSHIP RENAMED
Mumbai, India-based IDBI Fortis Life Insurance Company in association
with Federal Bank has changed its name to IDBI Federal Life Insurance
Co. in association with Ageas. The
name change reflects Fortis’ global rebranding to Ageas and emphasizes
Federal Bank’s bancassurance association.
The bancassurance partnership is 48% owned by IDBI Bank, 26%
owned by Federal Bank, and 26% owned by Ageas (Fortis Insurance
International).
IDBI
Bank Chairman R.M. Malla said, “This name change will help IDBI
Federal tap into markets that are known to be Federal Bank
strongholds.” Federal
Bank Executive Director P.C. John said, “This change allows us to
project our deep commitment to the life insurance business and provide a
full product range to our customers.”
IDBI Bank has 725 branches throughout India, and Federal Bank has
708 branches, with a dominant presence in the state of Kerala.
EMPLOYEE BENEFITS
AND TRUST-ASSOCIATED EARNINGS GROW AT COMMUNITY BANK SYSTEM
DeWitt, NY-based, $5.4 billion-asset Community Bank System reported
“new client and services generation and increased asset-based
revenues” drove employee benefits administration, consulting and
actuarial fee income up 10% in the second quarter to $7.26 million from
$6.6 million in second quarter 2009.
At the same time, “favorable market valuation comparisons and
generally improving demand” helped boost trust, investment and asset
management fees 17.6% to $2.67 million, up from $2.27 million.
Employee benefit earnings and trust-associated fees comprised,
respectively, 32.4% and 11.9% of noninterest income, which grew 8.4% to
$22.38 million, up from $20.65 million, despite a major drop in mortgage
banking fees.
Net
interest income on a 4.10% net interest margin climbed 14% to $43.9
million, up from $38.5 million, as interest expenses declined and loan
loss provisions remained basically steady at just over $2 million.
Net income jumped 76.5% to a quarterly record of $16.2 million,
up from $9.2 million in second quarter 2009.
Community Bank System President and CEO Mark Tryniski said, “We
believe that these strong quarterly results reflect our commitment to a
disciplined and balanced approach to our business regardless of market
conditions.”
BENEFICIAL MUTUAL
GROUP REPORTS RISING INSURANCE AND ADVISORY EARNINGS
Philadelphia, PA-based, $4.9 billion-asset Beneficial Mutual Bancorp
reported insurance and advisory fee income rose 2.3% in the second
quarter to $1.76 million, up from $1.72 million in second quarter 2009,
and comprised 28.1% of noninterest income, which increased 2.1% to $6.27
million, up from $6.14 million in second quarter 2009, when the company
recorded a $1.32 million gain on the sale of securities.
Net
interest income on a 3.57% net interest margin jumped 41.3% to $32.95
million, up from $23.32 million, as loan loss provisions decreased by
almost $1 million and expenses decreased over $4 million.
The company reported net income of $5.6 million compared to a net
loss of $50,000 in second quarter 2009, and Beneficial President and CEO
Gerard Cuddy said, “We were able to grow our earnings, assets and core
deposits by aligning the products and services we offer with the needs
of our customers.”
GROWING INVESTMENT
SERVICES AND TRUST REVENUES CONTRAST WITH NET LOSS AT PINNACLE
Nashville, TN-based, $4.9 billion-asset Pinnacle Financial Partners
reported second quarter investment services fee income grew 22.2% to
$1.32 million, up from $1.08 million in second quarter 2009, and trust
income climbed 17.6% to $754,515 from $641,646, while insurance
brokerage income slid 1.6% to $904,359, down from $919,342.
Investment services, trust and insurance brokerage fee income
comprised, respectively, 12.5%, 7.1% and 6.1% of noninterest income,
which slipped 0.3% to $10.57 million, down from $10.60 million, as gains
on loan sales dropped.
Net
interest income on a 3.23% net interest margin reached $5.19 million
compared to a net interest loss of $34.81 million in second quarter
2009, as loan loss provisions were reduced by almost $35 million to
$30.51 million. But with
charge offs of $33.5 million largely tied to the company’s
construction and development loan portfolio, Pinnacle reported a net
loss of $27.87 million for the quarter compared to a net loss of $33.25
million in second quarter 2009. Pinnacle
President and CEO Terry Turner said, “We believe the Nashville market
is well-positioned to begin the process of recovery and that our capital
and liquidity position will enable us to take advantage of local market
opportunities.”
WEALTH MANAGEMENT
AND BOLI INCOME UP AT INDEPENDENT BANK CORP.
Rockland, MA-based, $4.7 billion-asset Independent Bank Corp. reported
wealth management earnings in the second quarter grew 18.1% to $3.19
million, up from $2.7 million in second quarter 2009, and bank-owned
life insurance (BOLI) income increased 7.0% to $731,000, up from
$683,000. Wealth management
and BOLI earnings comprised, respectively, 29.2% and 6.7% of noninterest
income, which fell 17.3% to $10.94 million, down from $13.22 million in
second quarter 2009, when the company recorded a $3.78 million gain tied
to terminating a hedging relationship.
Net
interest income on a 3.96% net interest margin slipped 1.14% to $34.24
million, down from $34.63 million, as loan loss provisions increased
$2.5 million to $6.9 million, and the company recorded net income of
$8.03 million compared to a net loss of $3.87 million in second quarter
2009. Independent Bank
Corp. President and CEO Christopher Oddleifson said, “Our second
quarter performance was solid, fueled in large part by growth in
priority loan portfolios and very strong core deposit growth.” He added, “We significantly reduced our nonperforming
assets this quarter.”
WEALTH MANAGEMENT
AND INSURANCE BROKERAGE EARNINGS COMPRISE 34% OF NONINTEREST REVENUE AT
S&T
Indiana, PA-based, $4.1 billion-asset S&T Bancorp reported that
wealth management fee income in the second quarter inched ahead 0.5% to
$1.92 million, up from $1.91 million in second quarter 2009, while
insurance brokerage earnings slipped 1.5% to $1.96 million, down from
$1.99 million. Wealth
management and insurance brokerage fee income comprised, respectively,
16.8% and 17.1% of noninterest income, which dipped 2.7% to $11.43
million, down from $11.75 million.
Net
interest income on a 4.05% net interest margin surged five-fold to
$28.69 million, up from $5.68 million, as loan loss provisions were
slashed by over $22 million to $9.13 million.
Net income of $7.9 million compared favorably with a net loss of
$10.2 million in second quarter 2009, but was down 19.4% from first
quarter 2010 net income of $9.8 million.
S&T Bancorp President and CEO Todd Brice said, “We are
cognizant of the fact that the economic recovery has not fully taken
shape. We continue to
believe that S&T Bank’s strong capital position will enable us to
meet the challenges presented by the current economic times.”
HEARTLAND FINANCIAL
REPORTS GROWING TRUST, SECURITIES/INSURANCE BROKERAGE AND BOLI INCOME
Dubuque, IA-based, $4 billion-asset Heartland Financial USA reported
second quarter trust fees grew 18.3% to $2.33 million, up from $1.97
million in second quarter 2009; combined securities brokerage and
insurance commissions increased 9.8% to $785,000, up from $715,000; and
income from bank-owned life insurance (BOLI) climbed 37.6% to $293,000,
up from $213,000. Trust, combined securities and insurance earnings and BOLI
income comprised, respectively, 21.5%, 7.2% and 2.7% of noninterest
income, which dropped 26.1% to $10.83 million, down from $14.66 million,
impacted by a $1.7 million fall in loan servicing income, a $1.15
million decline in gains on loan sales and a $1.2 million drop in
securities gains.
Net
interest income on a 4.09% net interest margin grew 15.7% to $25.85
million, up from $22.34 million, as expenses declined just short of $4
million. Net income rose
10.2% to $3.77 million, up from $3.42 million, and Heartland Financial
Chairman, President and CEO Lynn Fuller said, “We are focused on
reducing problem credits. This
will only enhance our ability to grow profitably in an economic
recovery.” Nonperforming
assets increased in the second quarter, Fuller said.
Click
Here to request your FREE
BankInsurance.com Monthly News
by Email
|
