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JANUARY
30 -
FEBRUARY 5, 2012
TOMPKINS FINANCIAL TO EXPAND INTO SOUTHEAST
PENNSYLVANIA WITH VIST ACQUISITION
Ithaca, NY-based, $3.4 billion-asset Tompkins Financial Corp. has agreed
to acquire Wyomissing, PA-based, $1.4 billion-asset VIST Financial in a
stock deal valued at $86 million. Tompkins
Financial President and CEO Stephen Romaine described the purchase as
consistent with Tompkins’ long-term growth strategy and said, “The
[Southeastern Pennsylvania] communities serviced by VIST have similar
demographics to markets we serve in New York State, where Tompkins
Financial’s integrated financial services model has been
well-received.”
VIST
Bank will retain its name, separate banking charter, board of directors,
management team led by President and CEO Robert Davis and 27 banking
locations and operate as a unit of Tompkins Financial.
Davis said the deal will enable VIST to maintain its local
identity, when it closes in the third quarter, pending shareholder and
regulatory approvals and VIST’s repurchase of its preferred stock and
warrants acquired by the U.S. Treasury under the Troubled Asset Relief
Program (TARP).
U.S. INDIVIDUAL LIFE
INSURANCE APPLICATIONS CONTINUE UP
U.S. individual applications for life insurance grew 5.8% in December
2011 compared to December 2010, led by a 13.8% climb in applications
among individuals aged 60 and older and bolstered by 4.5% and 4.3%
increases in applications among individuals aged, respectively, 0-44 and
45-59, according to the MIB Life Index.
For the
year 2011, individual life insurance applications ticked up 0.2% over
year 2010. Growth in applications among individuals 60 and older (+8.7%)
drove the increase, capping 5 consecutive years of climbing applications
among this group, up 42.2% since 2007.
In contrast, applications among individuals aged 0-44 slipped
2.2% in 2011 compared to 2010, while applications among individuals aged
45-59 remained basically steady (+0.1%), Braintree, MA-based MIB Group
found.
Commenting
on the overall results and looking ahead, MIB Group CEO Lee Oliphant
said, “2011 is slightly positive and a strong fourth quarter [+2.5%]
is cause for optimism as we look towards 2012.
Market stability in challenging economic conditions may signal a
new floor from which the industry can grow.”
BANCORPSOUTH
INSURANCE SERVICES LAUNCHES MOBILE APP
BancorpSouth Insurance Services (BIS), the insurance brokerage unit of
Tupelo, MS-based, $13 billion-asset BancorpSouth, has launched its
brand-specific mobile app, which BIS customers can download for free on
their iPhones™, iPads™, iPods™ and Androids.
Clients can access the BancorpSouth Insurance Services Mobile app
online at the iPhone App Store or Android Market, then use it to locate
a BIS office, contact an agent, report a claim, upload the location and
photo of an incident and report the time, date and details of the
incident.
BIS
President Markham McKnight said, “Our goal is to continue to offer our
clients what they need in a format that is right for them.”
The BIS Mobile app, he said, “provides clients with a simple
way to access information and report a claim anytime of the day or
night, seven days a week.”
AGENTS
REPORT 4TH QUARTER RISE IN COMMERCIAL PROPERTY/CASUALTY RATES
Composite commercial property/casualty rates rose 2.8% in fourth quarter
2011 over fourth quarter 2010, when rates fell 5.4% compared to fourth
quarter 2009, according to the Council of Insurance Agents &
Brokers’ (CIAB) Commercial P/C Market Index Survey.
A 7.5% increase in workers’ compensation rates drove the rise,
followed by a 5.7% increase in commercial property rates.
Rates for medium and small accounts rose, respectively, 3.5% and
3.1%, while rates for large accounts ticked up 1.8% compared to fourth
quarter 2010, Washington, DC-based CIAB found in its survey of members.
CIAB
President and CEO Ken Crerar attributed the rate increases to the
“declining underwriting profitability, dwindling reserves and large
catastrophic losses.” He noted, however, that insurers’ capacity remains strong.
To
read the entire CIAB study on fourth quarter property/casualty rates,
click here.
FINRA
FINES MERRILL $1 MILLION FOR FAILURE TO ARBITRATE
The Financial Industry Regulatory Authority (FINRA) has fined Charlotte,
NC-based, $2.22 trillion-asset Bank of America (B of A) unit New York
City-based Merrill Lynch (Merrill) $1 million for failing to use
arbitration to resolve disputes over employee retention bonuses.
FINRA
found that after B of A acquired Merrill in 2009, Merrill structured a
$2.8 billion bonus program designed to retain 5,000 high-producing
registered representatives (RRs). In
order to receive the bonuses, which were structured as loans to be
repaid if an RR left Merrill before a designated period of time, RRs
were required to sign promissory notes agreeing to repayment and to
resolve any disputes over the notes only in New York State Courts.
FINRA
said Merrill made it appear that the funds covered by the notes were
provided by MLIF, a non-registered Merrill affiliate, in order to
circumvent the regulatory requirement that such disputes within
registered companies be resolved through arbitration.
FINRA
said Merrill filed over 90 actions in New York State Courts to collect
amounts it asserted were due from RRs who left Merrill before the
designated time agreed to in each promissory note.
FINRA
Chief of Enforcement Brad Bennett said, “Merrill Lynch specifically
designed this bonus program to bypass FINRA’s rule requiring forms to
arbitrate disputes with employees and purposefully filed expedited
collection actions in New York State Courts and denied those registered
representatives a forum to asset counterclaims.”
ANNUITIES GUSH INTO IRAS IN
2011
Individual retirement accounts (IRAs) accounted for 77% of positive
annuity net flows in 2011, while 401(k) plans took in 13%, and
nonqualified plans absorbed less than 6%, according to data from
transactions processed by New York City-based Depository Trust &
Clearing Corporation (DTCC).
CROP INSURANCE
CLAIMS HIT RECORD $9.1 BILLION IN 2011
U.S. crop insurers paid out a record $9.1 billion in claims in 2011,
largely related to drought in the Plains, flooding along the Mississippi
and freezes in the South, according to Overland, KS-based National Crop
Insurance Services (NCIS). NCIS
President Tom Zacharias said, “These billions in damages would have
landed on the plates of input suppliers, lenders, marketers and farm
families if crop insurance weren’t in place.”
GENXERS RIPE FOR FINANCIAL
ADVISORS
Most U.S. adults (65%) in their 30’s and 40’s (GenXers) are not
confident that they will have enough money to pay for their children’s
college educations and live comfortably in retirement with funds to pay
their medical expenses, according to a November 2011 survey conducted on
behalf of the Insured Retirement Institute (IRI).
Far less than half (41%) of this group has attempted to determine
how much they need to save to meet these goals, and among those who
have, 50% have saved less than $100,000.
During
the current recession, 23% of GenXers have stopped contributing to their
retirement accounts; 22% have stopped contributing to their college
savings plans, and 15% have made early withdrawals from their 401(k)
plans.
Over
half (54%) of GenX females and 37% of GenX males say they have little or
no investment knowledge. To
educate themselves, 37% of married and 20% of single GenXers have
consulted a financial advisor.
IRI
President and CEO Cathy Weatherford said that the nation’s 70 million
GenXers “can get back on track, build their nest egg and gain
confidence in their ability to achieve their retirement goals … with
the proper preparation and with guidance from an advisor.”
To
access the IRI’s Retirement Readiness of Generation X, click here.
VANTISLIFE
INSURANCE SALES CONTINUE RECORD GROWTH
Windsor, CT-based VantisLife Insurance Co. reported record growth in
recurring life insurance sales for the third consecutive year in 2011.
After 17% growth in 2009 over 2008 and 21% growth in 2010 over
2009, sales in 2011 climbed 26% over 2010, as the company continued to
offer its products from a web-based platform, exclusively through banks
and credit unions.
VantisLife
Senior Vice President Craig Simms said, “Our business model is unique
and hard to replicate. We
are able to provide comprehensive support for protection-oriented life
insurance … offering superior wholesaling, marketing and training
support to more than 120 partners nationwide.”
MORGAN
KEEGAN SALE IMPACTS REGIONS’ BOTTOM LINE
Birmingham, AL-based, $127
billion-asset Regions Financial Corp. reported fourth quarter insurance
brokerage income rose 4% to $26 million, up from $25 million in fourth
quarter 2010, while trust department fee income slipped 2.0% to $49
million, down from $50 million, and combined brokerage, investment
banking and capital markets (BIC) income dropped 42.4% to $19 million,
down from $33 million. Insurance,
trust and BIC fee income comprised, respectively, 5.1%, 9.7% and 3.7% of
noninterest earnings, which fell 44.9% to $507 million, down from $920
million in fourth quarter 2010, when service charges on deposit accounts
and mortgage banking income were, respectively, $27 million and $6
million higher.
Net
interest income on a 3.08% net interest margin in the fourth quarter
more than tripled to $554 million, up from $181 million in fourth
quarter 2010, reflecting a $357 million drop in loan loss provisions to
$295 million and a $75 million cut in interest expense.
The company reported a fourth quarter $602 million net loss,
however, hit by a $467 million charge for discontinued operations and a
$253 million goodwill impairment tied to the January 2012 sale of Morgan
Keegan & Co. and related affiliates.
In fourth quarter 2010, Regions reported $36 million in net
income.
For the
year 2011, insurance brokerage fee income slipped 1.8% to $106 million,
down from $107.9 million in 2010, and trust earnings rose 1.5% to $199
million, up from $196 million, but BIC income slid 7.2% to $64 million,
down from $69 million. Insurance,
trust and BIC fee income comprised, respectively, 5.0%, 9.3% and 3.0% of
noninterest income, which fell 14.1% to $2.14 billion, down from $2.49
billion in 2010.
Net interest income in 2011 more than tripled to $1.88 billion,
driven by a $1.33 billion drop in loan loss provisions to $1.53 billion
and a $406 million cut in interest expense, which more than compensated
for a $385 million decline in interest income.
With the aforementioned fourth quarter $253 million goodwill
impairment and $404 million charge for Morgan Keegan’s upcoming
discontinued operations, Regions reported a year 2011 net loss of $429
million compared to a year 2010 net loss of $763 million.
In 2010, Regions Financial’s insurance
brokerage and fiduciary income comprised, respectively, 3.7% and 6.7% of
its noninterest income and 1.7% and 3.1% of its net operating revenue.
The company ranked 10th in insurance brokerage earnings among U.S. bank
holding companies with assets over $10 billion, according to the Michael
White-Prudential Bank Insurance Fee Income Report, and it ranked 15th in earnings from fiduciary
activities among U.S. bank holding companies with assets over $10
billion,
according to the Michael
White Wealth Management Fee Income Report.
GROWING
INSURANCE EARNINGS COMPRISE OVER 25% OF FIRST NIAGARA’S NONINTEREST
INCOME
Buffalo, NY-based, $32.8
billion-asset First Niagara Financial Group reported insurance brokerage
fee income in fourth quarter 2011 grew 17.6% to $15.44 million, up from
$13.13 million in fourth quarter 2008; wealth management income jumped
65.6% to $8.18 million, up from $4.94 million, and income from
bank-owned life insurance (BOLI) climbed 65.8% to $3.30 million, up from
$1.99 million. Insurance
earnings, wealth management and BOLI income comprised, respectively,
24.2%, 12.8% and 5.2% of noninterest income, which grew 17.7% to $63.69
million, up from $54.11 million in fourth quarter 2010.
Net
interest income on a 3.48% net interest margin in the fourth quarter
climbed 48.7% to $229.11 million, up from $154.05 million in fourth
quarter 2010, despite a $116.21 million increase in interest expense, as
loan loss provisions remained almost steady at $13.4 million and
interest income grew by $86.59 million to $291.91 million.
Net income, despite $62.84 million in increased noninterest
expenses largely tied to mergers, grew 27.5% to $58.46 million, up from
$45.86 million in fourth quarter 2011.
For the
year 2011, insurance brokerage income remained the largest contributor
to noninterest earnings, growing 26.1% to $65.13 million, up from $51.63
million in 2010. Wealth
management earnings climbed 54.9% to $30.73 million, up from $19.84
million, and BOLI income grew 53.3% to $11.13 million, up from $7.26
million. Insurance, wealth
management and BOLI income comprised, respectively, 26.6%, 12.5% and
4.5% of noninterest income, which climbed 31.4% to $245.31 million, up
from $186.62 million in 2010, reflecting across the board fee income
growth.
First
Niagara’s net interest income in 2011 surged 49.9% to $823.14 million,
up from $549.12 million in 2010, reflecting a $319.72 million increase
in interest income to $1.07 billion, which dwarfed a $36.23 million
increase in interest expense to $184.06 million, and $9.48 million
increase in loan loss provisions to $58.11 million.
Net income, after $283 million in increased expenses tied to
mergers and restructuring, grew 23.9% to $173.91 million, up from
$140.35 million in 2010. Commenting
on the year’s results, First Niagara President and CEO John Koelmel
said, “We’ve delivered solid fundamental results while advancing our
strategy to be among the best in the business and a market leader in the
communities we serve.”
In 2010, First Niagara Financial Group’s insurance brokerage
fee income comprised 28.2% of its noninterest income and 6.4% of its net
operating revenue. The
company ranked 17th in insurance brokerage
earnings among all U.S. bank holding companies (BHCs),
according to the Michael
White-Prudential Bank Insurance Fee Income Report.
INSURANCE,
INVESTMENT MANAGEMENT & BOLI INCOME UP AT PEOPLE’S UNITED
Bridgeport, CT-based, $28
billion-asset People’s United Financial reported fourth quarter 2011
insurance revenue rose 4.3% to $7.2 million, up from $6.9 million in
fourth quarter 2010. Investment
management fees increased 5.1% to $8.3 million, up from $7.9 million,
and bank-owned life insurance (BOLI) income grew 70.0% to $1.7 million,
up from $1.0 million. However,
securities brokerage income declined 10.3% to $2.6 million, down from
$2.9 million, “reflecting lower commissions on mutual funds and fixed
income products due to the uncertainty in the equity markets and the low
interest rate environment,” the company said.
Insurance revenue, investment management fees, BOLI income, and
securities brokerage commissions comprised, respectively, 10.0%, 11.6%,
2.4% and 3.6% of noninterest income, which rose 5.3% to $71.7 million,
up from $68.1 million in fourth quarter 2010.
Net
interest income on a 4.07% net interest margin in fourth quarter 2011
climbed 23.8% to $221.4 million, up from $178.9 million in fourth
quarter 2010, reflecting a $51.7 million decrease in interest expense to
$30.4 million, while loan loss provisions about doubled to $20.7
million. Net income grew
34.4% to $43 million, up from $32 million in fourth quarter 2010,
despite a $31.1 million increase in noninterest expense tied to
acquisitions.
For the
year 2011, insurance revenue increased 6.6% to $30.7 million, up from
$28.8 million in 2010; investment management fees rose 3.8% to $33.2
million, up from $32.0 million; securities brokerage commissions rose
5.3% to $11.9 million, up from $11.3 million, but BOLI income slid 6.0%
to $6.3 million, down from $6.7 million.
Insurance revenue, investment management fees, securities
brokerage commissions and BOLI income comprised, respectively, 10.0%,
10.8%, 3.9% and 2.0% of noninterest earnings, which grew 13.9% to $307.6
million, up from $270.0 million in 2010.
Net
interest income in 2011 climbed 34.6% to $859.9 million, up from $639.0
million in 2010, reflecting a 22.1% jump in interest income to $1.05
billion, up from $828.8 million, a $1.3 million decrease in interest
expense to $128.5 million and a relatively slight $3.7 million increase
in loan loss provisions to $63.7 million.
Net income after $84.9 million in increased noninterest expense
tied to mergers and acquisitions, more than doubled to $198.8 million,
up from $85.7 million in 2010.
Commenting
on the company’s fourth quarter and year 2011 results, People’s
United Bank President and CEO Jack Barnes said, “Integration of
acquisitions has become a core competency for this organization.”
He added, “Offering the full breadth of products and services
that our customers need, providing relationship-based solutions, and
effectively cross-selling our products across all lines of business are
key contributors to our continued growth and strong operating
performance.”
RETAIL BROKERAGE, TRUST
& BOLI COMPRISE 41% OF NONINTEREST INCOME AT ASSOCIATED BANC-CORP
Green Bay, WI-based, $22 billion-asset Associated Banc-Corp reported
retail commissions in fourth quarter 2011 rose 3% to $14.88 million, up
from $14.44 million in fourth quarter 2010, while trust fees remained
basically flat at $9.51 million, and income from bank-owned life
insurance (BOLI) fell 15% to $3.82 million, down from $4.51 million.
Retail commissions, trust fees and BOLI comprised, respectively,
20.1%, 12.9% and 5.2% of noninterest income, which fell 12.8% to $73.86
million, down from $84.70 million in fourth quarter 2010, reflecting
declines in nine of the eleven sources of noninterest earnings.
Net interest income on a 3.21% net interest margin
in the fourth quarter jumped 71.7% to $150.83 million, up from $87.86
million in fourth quarter 2010, driven by a $62 million drop in loan
loss provisions to $1 million and an $8.8 million cut in interest
expense to $29.46 million, which made up for a $7.81 million decrease in
interest income to $181.28 million.
Net income surged 600% to $39.83 million, up from $6.61 million
in fourth quarter 2010.
For the
year 2011, retail commissions rose 2.5% to $62.78 million, up from
$61.26 million in 2010, and trust fees rose 3.4% to $39.15 million, up
from $37.85 million, but BOLI income slipped 5.5% to $14.90 million,
down from $15.76 million. Retail
commissions, trust fees and BOLI income comprised, respectively, 22.2%,
13.9% and 5.3% of noninterest earnings, which fell 18.2% to $282.47
million, down from $354.52 million in 2010, hit by a
$20.8 million decrease in service charges on deposit accounts and
a $20.4 million drop in mortgage banking income.
Net interest income in 2011 surged 130.1% to $560.83 million,
up from $243.77 million in 2010, despite a $64.5 million decline in
interest income to $741.6 million, and driven by a $338.01 million drop
in loan loss provisions to $52 million and a $43.56 million cut in
interest expense to $128.79 million.
Net income of $114.87 million contrasted with a net loss of
$30.39 million in 2010. Associated
Banc-Corp President and CEO Philip Flynn said, “We are pleased with
the results and accomplishments achieved over the past year.”
In 2010,
Associated Banc-Corp’s insurance brokerage fee income comprised 13.8%
of its noninterest income and 4.5% of its net operating revenue. The
company ranked 17th in insurance brokerage earnings among U.S. bank
holding companies (BHCs) with over $10 billion in assets and 18th among
all U.S. BHCs, according to the Michael
White-Prudential Bank Insurance Fee Income Report.
GROWING
INSURANCE & TRUST FEES CONTRIBUTE TO RECORD EARNINGS AT CULLEN/FROST
San Antonio, TX-based, $20.3
billion-asset Cullen/Frost Bankers reported the December 2011
acquisition of human resources consulting firm Stone Partners helped
drive benefit commissions up $459,000 in the fourth quarter,
contributing to a $673,000 increase in insurance brokerage earnings,
which grew 10.3% to $7.5 million, up from $6.8 million in fourth quarter
2010. Trust fees, buoyed by
a $427,000 increase in investment fees, rose 1.3% to $17.63 million, up
from $17.40 million. Insurance
brokerage and trust fees comprised 11.1% and 26.1% of noninterest
income, which slipped 3.7% to $67.66 million, down from $70.28 million
in fourth quarter 2010, when service charges on deposit accounts were
higher.
Net
interest income on a 3.76% net interest margin in fourth quarter 2011
climbed 14.9% to $165.34 million, up from $143.93 million in fourth
quarter 2010, helped by the zeroing out of loan loss provisions.
Driven by higher net interest income and no provisions, net
income rose 4.4% to $55.41 million, up from $53.05 million in fourth
quarter 2010.
For the
year 2011, insurance commissions and fees rose 4.0% to $35.42 million,
up from $34.05 million in 2010, and trust fees increased 7.0% to $73.23
million, up from $68.43 million. Insurance
brokerage and trust fees comprised 12.2% and 25.3% of noninterest
income, which rose 2.8% to $290.0 million, up from $282.0 million in
2010, helped by $6.41 million in net gains on securities transactions.
Net
interest income in 2011 increased 7.3% to $614.62 million, up from
$572.71 million in 2010, when loan loss provisions were $16.17 million
higher at $43.61 million. Net
income rose 4.2% to a record $217.5 million, up from $208.8 million in
2010.
Commenting
on the results and looking ahead, Cullen/Frost Chairman and CEO Dick
Evans said, “I am pleased to report that in 2011 Cullen/Frost achieved
record annual earnings, demonstrating steady performance amid continued
economic challenges and regulatory headwinds.”
Evans added, “As we have since the recession began, we are
working to build new relationships and believe these new relationships
form the foundation for future growth when confidence returns.
In 2010,
Cullen/Frost Bankers’ insurance brokerage fee income comprised 12.6%
of its noninterest income and 4.1% of its net operating revenue. The
company ranked 22nd in insurance brokerage earnings among U.S. bank
holding companies (BHCs) with over $10 billion in assets and 25th among
all U.S. BHCs,
according to the Michael
White-Prudential Bank Insurance Fee Income Report.
In 2010,
fiduciary-related fee income comprised 25.2% of its noninterest income
and 8.2% of its net operating revenue. The company ranked 29th in
trust-related earnings among U.S. bank holding companies (BHCs) with
over $10 billion in assets and 30th among all U.S. BHCs, according to the Michael
White Wealth Management Fee Income Report.
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