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NOVEMBER
24 - 30, 2008
LINCOLN
FINANCIAL, THE HARTFORD, GENWORTH FINANCIAL, AND TRANSAMERICA APPLY FOR
THRIFT STATUS
Philadelphia-based Lincoln Financial Group, Hartford, CT-based The
Hartford Financial Services Group, Richmond, VA-based Genworth
Financial, Inc., and San Francisco, CA-based Transamerica Corp., a
subsidiary of The Hague-based AEGON, have applied to the Office of
Thrift Supervision (OTS) to become thrift holding companies.
In order to qualify, Lincoln Financial agreed to acquire
Goodland, IN-based, $7 million-asset Newtown County Savings Bank.
The Hartford agreed to acquire and recapitalize Sanford,
FL-based, $637 million-asset Federal Trust Corporation, parent of
Federal Trust Bank. Genworth
Financial agreed to acquire Maple Grove, MN-based, $895 million-asset
InterBank fsb. And,
Transamerica agreed to acquire Crofton, MD-based $381 million-asset
Suburban Federal Savings and Loan.
With their
applications to become thrift holding companies pending, each of the
insurers has applied to the U.S. Treasury Department to participate in
the Troubled Asset Relief Program (TARP), which is available to thrift
holding companies, but not to insurers.
The Hartford Chairman and CEO Ramani Ayer estimated that his
company could be eligible for up to a $3.4 billion capital purchase if
its application is approved. “Securing
capital at terms available through the Capital Purchase Program could be
a prudent course in this market environment,” Ayer said.
AEGON CFO Jos Streppel said, “As a company with sizable
operations in the United States [Transamerica], it makes sense for us to
examine the terms and conditions which may be available under the U.S.
government’s TARP program.”
U.S.
BANK ACQUIRES DOWNEY SAVINGS & LOAN AND PFF BANK & TRUST
Minneapolis, MN-based, $247.1 billion-asset U.S. Bank has acquired
Newport Beach, CA-based $12.8 billion-asset Downey Savings and Loan
Association and Pomona, CA-based, $3.7 billion-asset PFF Bank and Trust
in a move facilitated by the Federal Deposit Insurance Corporation
(FDIC). U.S. Bank has assumed Downey’s $9.7 billion and PFF
Bank’s $2.4 billion in deposits and has agreed to purchase all their
assets and assume their first $1.6 billion in combined losses.
The FDIC will share in any further losses and estimates the
failures of the banks will cost the Deposit Insurance Fund $1.4 billion
and $700 million, respectively. The
acquisitions add 208 branches to U.S. Bank’s 353-branch network in CA
and another 5 in Arizona. Downey
and PFF will reopen as U.S. Bank on November 24, 2008.
They were the fourth and fifth banks to fail in California this
year and the twenty-first and twenty-second to fail this year in the
U.S.
PROTECTIVE LIFE TURNS TO TARP IN BID
TO BUY BONIFAY HOLDING COMPANY
Birmingham,
AL-based Protective Life Corp. has agreed to acquire Bonifay, FL-based
$241.6 million-asset Bonifay Holding Company, parent of Bank of Bonifay,
and has applied to the U.S. Federal Reserve Board to become a bank
holding company. In
addition, Protective Life has filed an application with the U.S.
Treasury Department to participate in the Capital Purchase Program under
the Troubled Asset Relief Program (TARP).
Protective said it will not purchase Bonifay Holding Company if
Treasury does not approve its participation in TARP.
MORTGAGE-HEAVY
THRIFTS REPORT FOURTH CONSECUTIVE QUARTERLY LOSS
U.S. thrifts together set aside $7.9 billion in loan loss provisions
and reported a $4 billion loss in the third quarter, its fourth
consecutive quarterly loss, down from a loss of $5.4 billion in the
second quarter and an $18.8 billion loss in fourth quarter 2007, but
greater than the $267 million loss in first quarter 2008.
Office of Thrift Supervision (OTS) Supervision Director John
Reich said, “The housing sector is at the eye of the nation’s
economic storm, and the thrift industry, which focuses on home mortgages
and other consumer retail lending, is feeling a strong impact.”
By the
end of the third quarter, the number of problem thrifts with composite
examination ratings of 4 or 5, had risen from 17 in the second quarter
and jumped from 12 a year ago to 23, according to the OTS.
Profitability over all dropped to –1.35%, down from –0.57% in
the second quarter and 0.2% in third quarter 2007, the OTS said.
INDEXED
ANNUITY SALES CLIMB 5.2% HIGHER IN 3Q
Indexed annuity sales in the third quarter grew 5.2% to $6.7
billion, up from $6.37 billion in third quarter 2007, according to the Advantage
Index Sales and Market Report prepared by Pleasant Hill, IA-based
Advantage Group Associates, Inc. Year-to-date
sales rose 3.9% over a year ago to $19.5 billion.
Des Moines, IA-based Aviva increased its dominant position in the
indexed annuity market to a 29% market share.
Third
quarter sales of indexed life insurance products inched up less than 1%
over third quarter 2007 to $129.5 million, but year-to-date sales grew
9% over a year ago to $381.2 million.
Advantage Group Associates CEO Sheryl Moore said, “Indexed life
sales are increasing due to consumer demands for guarantees and higher
upside potential.” Aviva
ranked first in this market, but Pacific Life more than doubled its
year-ago sales to rank second, according to the index sales report.
SURVEY
REVEALS INCOME GUARANTEES ARE TOP PRIORITY FOR MOST AMERICANS
Income guarantees became the top financial priority among 78% of
Americans in October, up from 52% in April, according to a recent AXA
Equitable survey of 400 randomly chosen consumers aged 35-70 with
$75,000 or more in household incomes.
AXA Equitable EVP Barbara Goodstein said, “The heightened
priority being placed so quickly on securing a stream of lifetime income
is striking.”
ASSURED
GUARANTY TO PURCHASE FINANCIAL SECURITY ASSURANCE
Brussels, Belgium-based Dexia has agreed to sell New York City-based
Financial Security Assurance (FSA), its U.S. bond insurance subsidiary,
to Bermuda-based Assured Guaranty for $361 million in cash and 44.6
million Assured Guaranty shares. Pierre
Mariani, CEO and Chairman of the Management Board of Dexia, said, “We
must now quickly focus on our core client franchises, reduce our risk
profile and remove unnecessary costs.”
Dexia reported a €1.5 billion ($1.89 billion) loss in the third
quarter, hit by €460 million ($579.16 million) in FSA losses and
€1.73 billion ($2.18 billion) in other losses.
SUCCESSFUL
INSURANCE
EARNINGS COMPRISE 61.5% OF NONINTEREST FEE INCOME AT VIST FINANCIAL
Wyomissing,
PA-based, $1.18 billion-asset VIST Financial reported that the third
quarter acquisition of Fisher Benefits Consulting bolstered group
insurance commissions and drove insurance brokerage fee income generated
by VIST Insurance up 3.0% to $3.05 million, compared to $2.97 million in
third quarter 2007. Insurance
earnings dwarfed all other sources of noninterest fee income, comprising
61.5% of the $4.96 million that made up that revenue.
Noninterest income, however, was hit by almost $7 million in net
securities losses tied to VIST’s investment in preferred Fannie Mae
and Freddie Mac shares and plunged to a loss of $2.04 million.
Net interest income increased 4.9% to $8.6 million, up from $8.2
million, but VIST reported a net loss of $4.61 million, impacted by the
Fannie Mae and Freddie Mac charges.
VIST Financial President and CEO Robert Davis said, “Our core
operating earnings continued to be strong through the third quarter.”
In 2007,
VIST Financial reported $11.4 million in insurance brokerage fee income,
which comprised 57.2% of its noninterest income and 21.3% of its net
operating income. The
company ranked 11th in insurance brokerage earnings among U.S. bank
holding companies (BHCs) with $1 billion to $10 billion in assets and
ranked 45th among all U.S. BHCs, according to the Michael
White-Symetra Bank Holding Company Fee Income Report.
INSURANCE BROKERAGE FEE
INCOME UP 2.7%, COMPRISES 20.8% OF NONINTEREST INCOME AT FIRST M&F
Kosciusko,
MS-based, $1.64 billion-asset First M&F Corp reported third quarter
insurance brokerage fee income was second only to service fees on
deposits and rose 2.7% to $1.15 million, up from $1.12 million in third
quarter 2007. Insurance
earnings comprised 20.8% of noninterest income, which increased 1.7% to
$5.52 million, up from $5.43 million.
Net interest income on a 3.7% net interest margin fell 18.2% to
$10.8 million, down from $13.2 million, as loan loss provisions jumped
to $2.2 million, up from $630,000 in third quarter 2007.
Net income dropped 42.1% to $2.2 million, down from $3.8 million
a year ago, but M&F Corp Chairman and CEO Hugh Potts said, “We
have taken losses, added to the Allowance, disposed of some other real
estate, paid our $0.13 quarterly dividend and added to our capital.”
In 2007,
First M&F reported $4.02 million in insurance brokerage fee income,
which comprised 21% of its noninterest income and 5.4% of its net
operating income. The
company ranked 39th in insurance earnings among U.S. bank holding
companies (BHCs) with $1 billion to $10 billion in assets and ranked
87th among all U.S. BHCs, according to the Michael
White-Symetra Bank Holding Company Fee Income Report.
INSURANCE
BROKERAGE FEE INCOME SLIDES 19.8% LOWER AT ALLIANCE FINANCIAL
Syracuse,
NY-based, $1.3 billion-asset Alliance Financial Corp. reported Ladd’s
Agency, Inc., its insurance agency subsidiary, generated $384,000 in
insurance brokerage fee income in the third quarter, down 19.8% from
$479,000 in third quarter 2007. Insurance
brokerage comprised 7.5% of noninterest income, which slid 5.5% to $5.13
million, down from $5.43 million, despite a jump in income from
bank-owned life insurance to $243,000, up from $160,000.
Net interest income, on a 3.43% net interest margin, grew 23.5%
to $8.73 million, up from $7.07 million, as loan loss provisions
decreased, and net income jumped 25% to $3 million, up from $2.4 million
a year ago. Alliance President and CEO Jack Webb said, “Our strong
capital position and solid earnings performance have positioned us to
carry out our ongoing commitments to serve the credit and related
banking needs in our markets.”
GROWING
INSURANCE BROKERAGE FEE INCOME IS NECK-AND-NECK WITH ATM FEES AT FIRST
MARINER BANCORP
Baltimore,
MD-based, $1.28 billion-asset First Mariner Bancorp reported third
quarter insurance brokerage fee income almost equaled ATM fees and
climbed 14.1% to $769,000, up from $674,000, to comprise 12.6% of
noninterest income, which increased 4.6% to $6.08 million, up from $5.81
million. Net interest
income rose 1.2% to $8.6 million, up from $8.5 million, but the company
reported a net loss of $2.28 million compared to a net loss of $3.58
million a year ago. First
Mariner Chairman and CEO Edwin Hale said, “We are seeing progress as
our expense levels continue to moderate.”
First Mariner said total revenue grew 11% to $1.89 million,
helped by “strong growth in fee-based revenue.”
In 2007, First Mariner reported $2.9 million in insurance
brokerage fee income, which comprised 15.6% of its noninterest income
and 4.5% of its net operating revenue.
The company ranked 53rd in insurance brokerage earnings among
BHCs with $1 billion to $10 billion in assets and 109th among all U.S.
BHCs, according to the Michael
White-Symetra Bank Holding Company Fee Income Report.
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