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Bank Insurance and Brokerage News BANKS THAT SOLD INSURANCE WERE AGAIN MORE PROFITABLE IN 2008 Banks that sell insurance make more money than banks that don’t. That was borne out again in 2008—even amidst the Great Recession. This conclusion follows analysis of 2008 bank data by the Bank Insurance Market Research Group. Examining FDIC call report data, BIMRG found that banks with some insurance activity had 69 percent higher (median) net income in 2008. In 2007, net income was 44 percent higher. This trend toward higher (median) net income persisted in all asset-size groups with the exception of the largest banks where there was no difference. Among 470 banks with $1 billion to $10 billion in assets, for instance, those with some insurance activity in 2008—about half the total—scored 23 percent higher in (median) net income (see table below). The trend was more pronounced in smaller banks.
“Overall median net income was off 36 percent in 2008 compared with 2007. Nonetheless, the data suggests that pursuing a diversification strategy—of which insurance brokerage is often a key part—may have again paid off for banks in 2008,” said Andrew Singer, Managing Director of the Bank Insurance Market Research Group, “particularly at a time when banks’ traditional income sources are under pressure. An insurance agency business can help smooth out earnings and act as a hedge against interest-rate volatility.” Overall, the median net income at 7,563 operating banks and savings banks was $686,000 in 2008, down from $1 ,071,000 in 2007. The median at 3,338 banks and savings banks that reported some insurance activity—less than half (44%) of the total number of banks—was $1,160,000. The largest discrepancy again was in the smallest banks. Median net income at 5,243 banks with assets less than $250 million was $469,000 in 2008. (That is, the middle ranking bank in this asset-size group reported $469,000 in profits.) Among the 2,136 with some insurance activity, however, the median was $825,000—76 percent higher. The median ratio of noninterest income to total bank revenues among all 7,563 banks was 14 percent. At banks with some insurance activity, this closely watched ratio was 17 percent. Both ratios were unchanged from 2007. (May 13, 2009) *** Bank Holding Company Annuity Index Stable in 4th Quarter The BISA-Singer’s Bank Holding Company (BHC) Annuity Index declined 3 percent in the 4th quarter of 2008. “Compared with what happened in the rest of the economy in the 4th quarter, this can be viewed as a victory for bank-sold annuities,” said Andrew Singer, editor of the Index. GDP fell at a 6.2 percent annual rate, its worst quarter since 1982, and the S&P 500 Index plunged 22 percent in the 4th quarter.
The Index is an average based on quarterly annuity (both fixed and variable) revenues at 10 large bank holding companies (see table above) as reported to the Federal Reserve Board. The index declined from 118 in the 3rd quarter of 2008 to 115 in the fourth quarter (see chart below). Aggregate brokerage revenue of the 10 bank companies covered fell 4 percent—from $208.59 million to $201.23 million. Although the Index edged downward in the 4th quarter, it is still substantially ahead of the first quarter of 2007 when the Index stood at 89. That was the first quarter that BHCs reported annuity revenues to the Federal Reserve Board. (‘100’ represents the quarterly annuity average of BHCs in 2007.) (April 10, 2009) *** Associated Bank’s Bohn Named to ABIA Board William Bohn, President and CEO of Associated Financial Group, LLC (Kimberly, Wis.) has been elected to the board of directors of the American Bankers Insurance Association (ABIA). Associated Financial is the insurance unit of Associated Banc-Corp. Associated was the nation’s 19th largest bank insurance operation, according to the 2008 Edition of Who’ Who in Bank Insurance. Also elected for the ABIA Board was Val Teagarden, president and chief executive officer of First United Insurance Group. (April 2, 2009) *** American Savings Bank sells insurance agency American Savings Bank (Honolulu, HI) sold its Bishop Insurance Agency unit to Monarch Insurance Services Inc. The thrift said it wanted to focus on its banking products and services. The bank bought Bishop Insurance in 2001. The agency, nearly 150 years old, sells personal lines and business insurance. It is the oldest of the 10 top insurance agencies in Hawaii. American Savings said it was entering a strategic alliance with Monarch to make sure its customers continue to receive insurance services and products. Monarch is a 26-year-old property and casualty insurance broker with offices in Honolulu, San Francisco, Denver and Bend, Ore. (January 12, 2008) *** First Community Bancshares Purchases Virginia Agency First Community Bancshares, Inc. (Bluefield, VA) announced in December that its wholly-owned insurance subsidiary, GreenPoint Insurance Group (High Point, NC), has acquired Carr & Hyde Insurance, an agency based in Warrenton,Virginia. Carr & Hyde is a full-service insurance agency providing a wide range of both commercial and personal insurance products. It has two offices and a staff of 18. First Community Bancshares, Inc. (assets: $2.13 billion) entered the insurance agency business in September 2007 with the acquisition of GreenPoint. With the addition of Carr & Hyde, the insurance subsidiary will generate approximately $54 million in annual insurance premium billings and have approximately $7 million in commission revenue. In the first half of 2008, First Community reported $2.61 million in insurance brokerage revenues, 74th among bank holding companies, according to Who’s Who in Bank Insurance. The acquired agency will continue to operate under the name of Carr & Hyde although it will be part of Greenpoint Insurance. Shawn Cummings, President of GreenPoint Insurance Group, said, “The addition of Carr & Hyde provides us with an excellent entrance to the Virginia insurance market. Carr & Hyde’s location is excellent and provides us access to not only the Warrenton area but also the metropolitan northern Virginia market as well as central Virginia.” First Community Bancshares, Inc is the parent company of First Community Bank, N. A., which operates through fifty-nine locations in Virginia,West Virginia, North Carolina, South Carolina, and Tennessee. (January 5, 2008) *** Fifth Third Sells P/C Insurance Agency; Legacy From First Charter Deal Commercial property and casualty insurance isn’t part of Fifth Third Bancorp’s strategic plans, so it is no surprise that it recently unloaded First Charter Insurance Services, the agency it inherited in its June 2008 acquisition of First Charter Corporation, the North Carolina bank holding company. What’s of some interest, however, is that it sold the agency to Ascension Insurance, Inc (Kansas City, MO), a full service insurance agency offering property and casualty, employee benefits services and personal lines. Ascension is headed by Leonard P. Kline, Jr., who used to run Compass Bank’s extensive insurance operations. (Kline is also a former director of the Bank Insurance & Securities Association.) Kline apparently sees value in a bank insurance agency, even in a ‘soft’ insurance market. “We are delighted that Clarkson B. McLean and his team at First Charter are joining Ascension,” he said in a recent statement. First Charter Insurance will be renamed Ascension Insurance Agency, Inc. It is North Carolina’s third largest domiciled insurance agency with 90 employees and four offices. This is the second time that Fifth Third has jettisoned a commercial P/C agency. The earlier one was also a legacy agency, inherited from Old Kent Financial, which it purchased in 2001. A $25 million (annual revenues) agency, it was sold in 2002 to Hub International. Fifth Third ranked 36th in the 2008 edition of Who’s Who in Bank Insurance (published this week), with $17.8 million in insurance revenues reported in 2007, the last full year where data is available. Fifth Third’s top insurance product line is individual life insurance, according to WWBI, where it is considered a bank leader. Ascension Insurance Inc., together with its private equity partners, Parthenon Capital and Century Capital Management, expects to grow to $200 million in revenue over the next four years. It has more than 320 employees and over 20 locations nationwide. (December 11, 2008). *** Wells Fargo to Acquire Wachovia--Upstaging Citigroup Wells Fargo & Co. has apparently won the battle for Wachovia. Citigroup Inc. late Thursday dropped its effort to split up Wachovia Corp. with Wells Fargo, ceding control of the troubled bank. Wachovia’s extensive brokerage and insurance operations are expected to become part of Wells Fargo. In the Citigroup-proposed deal, those operations would have been spun off. (October 10, 2008) *** Wachovia Insurance Services Is Not Part of Citigroup Deal In late September, Citigroup Inc. announced it would acquire the banking operations of Wachovia Corporation in a deal facilitated by the Federal Deposit Insurance Corp. Subsequently, it was learned that Wachovia Insurance Services, Wachovia’s insurance division, is not part of the deal. Wachovia Corp. will remain a public company and retain its asset management and retail brokerage operations, along with “select parts” of its wealth management businesses, including the Evergreen Investments and St. Louis-based Wachovia Securities businesses, which includes A.G. Edwards Inc., a firm Wachovia acquired for $6.9 billion. The insurance unit is part of Wachovia’s wealth management operations. Wachovia’s insurance unit has “premium placements exceeding $4 billion,” according to the company, with 1,300 employees in 35 offices in 16 states and Washington, D.C. In 2007, Wachovia ranked 6th among bank holding companies in insurance brokerage with $156 million in revenues, according to Who’s Who in Bank Insurance (2008 Edition). Its reported insurance brokerage revenues dropped 60 percent in 2007 because they did not include annuity revenues--unlike 2006 when annuities were included, noted the publication. (The company itself claims more than $400 million in annual insurance revenues, but obviously this includes annuities. Wachovia was the largest bank seller of annuities in 2007.) In June 2008, Anne Doss was named managing executive of Wachovia Insurance Services, replacing Stewart McDowell. (October 2, 2008). *** Trustco Bank Forms Insurance Agency for Life Sales Realizing that its customers, particularly those of its trust department, sometimes have more complex needs than the bank’s product offerings cover, TrustCo Bank will begin offering life insurance products. The bank has formed a new subsidiary, Trustco Insurance Agency Inc., that will work with the Optimus Group LLC. of Clifton Park to offer long-term care insurance, life insurance, disability income insurance and critical illness insurance to its customers. Trustco Bank, a thrift institution and a subsidiary of TrustCo Bank Corp NY, has 115 branches in New York, New Jersey, Florida, Vermont and Massachusetts. (October 1, 2008). *** New Insurance Chief at Huntington Huntington Bancshares Inc. has named Pete Dunlap president of its Huntington Insurance division. A MetLife veteran, Dunlap was most recently senior vice president and national sales manager for the Huntington Investment Co. division. He replaces Michael Moore as head of the insurance unit, which sells consumer and commercial insurance coverages in Ohio, Pennsylvania, Michigan, Indiana and West Virginia. In 2007, Huntington reported $37.75 million in insurance brokerage revenues, 20th among bank holding companies, according to Who’s Who in Bank Insurance (2008 Edition). Its ranking—only 46th in 2006—was buoyed by Huntington’s July 2007 acquisition of Sky Financial, which owned a large insurance agency, Sky Insurance. The insurance business reports to Daniel Benhase, senior executive vice president of Huntington’s Private Financial and Capital Markets group, who is also responsible for other specialized services offered by Huntington, including trust and brokerage. Huntington has sold insurance since 1996. The $55 billion-asset bank holding company is based in Columbus, Ohio. (September 16, 2008). *** SOY CAPITAL BANK ACQUIRES INSURANCE Agency Soy Capital Bank & Trust announced Monday the acquisition of SBSi Semonis Insurance Group in Peoria, an insurance agency that specializes in employee benefits programs. SBSi Semonis becomes a division of J.L. Hubbard Insurance, a subsidiary of Soy Capital Bank & Trust. Soy Capital is the bank subsidiary of SCB Bancorp, Inc. (Decatur, IL). It is one of the top insurance producing small banks in the U.S. In 2007, it reported $6.31 million in insurance brokerage revenues, 71st among banking companies according to Who’s Who in Bank Insurance (2008 Edition). It has only $327 million in balance sheet assets. Bill Shade, Soy Capital Bank & Trust board chairman, said, “Soy Capital is very fortunate to have partnered with SBSi Semonis, as they bring a high level of expertise in the employee benefits area. They will further strengthen the ability of Soy Capital Bank and J.L. Hubbard Insurance and Bonds to provide top quality financial services in Central Illinois.” SBSi Semonis Insurance Group, based in Peoria, will be located at 4530 N. University, Peoria, at the Soy Capital Bank & Trust location. (September 10, 2008) *** Five Banks That Stemmed The Insurance Tide Despite a difficult year for bank insurers—and other insurance brokers—a number of banks experienced strong insurance growth in 2007. Indeed, the 2008 Edition of Who’s Who in Bank Insurance reports that nine banks entered the ranks of the ‘top 100’ bank insurers in the U.S. for the first time. Most of the new entrants owe their inclusion due to an insurance agency acquisition—as opposed to internal growth. (A soft insurance market has made organic growth a continuing challenge.) Notable among the newcomers were: Central Community Corporation (TX), which operates First State Bank Central Texas. Its ranking rose the most dramatically of any bank company—from 157th to 31st—mainly on the strength of its investment in a title insurance agency. Inclusion in the top 100 ‘banks in insurance’ this year required $3.7 million in annual insurance brokerage revenues, down from $4.1 million in the previous edition and $3.8 million in the 2006 edition. Who’s Who in Bank Insurance is published annually in November by the Bank Insurance Market Research Group (www.singerpubs.com). It presents detailed narrative and data for each of the 100 entrants. The 168-page 2007 Edition was sponsored by BISA, Omni Builders Risk, EAI Information Systems, Invest Financial, and Symetra Financial. It is distributed at no cost to members of the Bank Insurance & Securities Association. For non-members, the charge is $275 . (September 4, 2008) ***. Eastern Insurance Acquires Kittredge Insurance Agency Natick, Massachusetts-based Eastern Insurance Group has acquired Northborough, Mass.-based Kittredge Insurance Agency Inc. Eastern Insurance, part of Eastern Bank, a subsidiary of Eastern Bank Corporation (Boston), said the acquisition increases its customer base west of Boston, where it already has eight locations. In all, Eastern Insurance has 26 locations in eastern and central Massachusetts, parts of Connecticut and in New Hampshire. “We are excited to welcome the talented staff of Kittredge Insurance,” said Hope Aldrich, president and CEO of Eastern Insurance. Eastern Insurance said it will retain the Kittredge's employees, and Francis J. Kittredge, president of Kittredge Insurance, will remain with Eastern Insurance in a senior executive position. Eastern Insurance claims to be the largest personal lines agency headquartered in Massachusetts by number of locations. With $40.7 million in insurance brokerage revenues in 2007, Eastern Bank Corporation ranked 19th among U.S. bank holding companies, according to Who’s Who in Bank Insurance (WWBI). A fuller profile of Eastern Insurance will appear in the 2008 Edition of WWBI when it is published in November. (August 11, 2008) *** New Leader for Wachovia Insurance Services Wachovia Wealth Management has named Anne Doss managing executive of Wachovia Insurance Services (WIS). She succeeds Stewart McDowell, who earlier this year announced his plan to retire as head of WIS. Doss has been with Wachovia for 23 years, serving most recently as head of bank integration for WIS, managing a team responsible for cross-selling insurance to clients across the bank. Under her leadership, insurance cross-sell revenue has increased more than 60 percent over the past year, said the company. Prior to joining WIS, she served in a variety of leadership roles at Wachovia in businesses such as Wealth Management, Treasury Services Electronic Cash Management and Securities brokerage. (August 7, 2008) *** NBT Bancorp Purchases Insurance Agency NBT Bancorp (Norwich, NY), parent of NBT Bank, is acquiring one of upstate New York’s largest independent insurance agencies. The bank company announced Wednesday it has entered a definitive agreement to acquire the Mang Insurance Agency (Binghamton,NY), a 104-year-old firm with 18 offices. The deal is expected to close in the third quarter. $5.2-billion (assets) NBT has 20 branches in Albany,Schenectady, Saratoga, Fulton, Montgomery and Hamilton counties. (July 10, 2008). *** PINNACLE ACQUIRES BEACH & GENTRY INSURANCE Pinnacle Financial Partners Inc. (Nashville), parent of Pinnacle National Bank, announced July 2nd its acquisition of Murfreesboro, Tennessee-based Beach & Gentry Insurance LLC. Beach & Gentry will merge with Miller & Loughry Insurance & Services Inc., a wholly-owned subsidiary of Pinnacle Financial Partners, also located in Murfreesboro, immediately. The combined company will take the name MillerLoughryBeach Beach & Gentry, founded in 1972, has 18 associates and 4,000 clients. Miller & Loughry, the oldest independent insurance agency inMurfreesboro, was founded in 1949 and has 22 associates and 6,300 clients. "Insurance services are a critical component of our clients' financial services needs," said Pinnacle Chairman Rob McCabe. "At a time when many financial services companies are shedding business lines and are focused on internal issues, we are continuing our strategy of acquiring likeminded financial services firms in high growth Tennessee areas." The firm began operations in a single downtown Nashville location in October 2000 and has since grown to $3.9 billion in assets (July 2, 2008). *** Citibank NA Tops Banks in Insurance Revenues in 1st Quarter Commercial banks and savings banks reported $1.207 billion in insurance revenues in the first quarter of 2008, up from $1.181 billion in the fourth quarter and $1.093 billion in the same quarter (1st) of the previous year (2007). 1st quarter revenues represent the sum of insurance brokerage and insurance underwriting revenues (the last two columns in the table below.) Annuities are not included. Citibank NA was again the leading bank, followed by BB&T and Bank of America. 2,808 operating banks and savings banks reported some insurance activity in the first quarter. They are not to be confused with bank holding companies, which report separately. Here are the Top 15: Source: Singer’s Annuity & Funds Report *** Banks that sold insurance were more profitable in 2007 That’s one conclusion from an examination of 2007 bank data by the Bank Insurance Market Research Group (BIMRG) Examining FDIC call report data, the Mamaroneck, New York-based research group found that banks with some insurance activity had 44 percent higher (median) net income than the typical bank in 2007. Moreover, this trend toward higher (median) net income persisted in all asset-size groups. Among banks with $10 billion or more in assets, for instance, banks with some insurance activity in 2007 scored 15 percent higher in (median) net income (see table below).
Overall, the median net income at 7,787 operating banks and savings banks was $1,071,000 in 2007. The median at 3,596 banks and savings banks that reported some insurance activity—less than half (44%) of the total number of banks—was $1,543,000. The largest discrepancy was in the smallest banks. Median net income at 5,533 banks with assets less than $250 million was $655,000 in 2007. (That is, the middle ranking bank in this asset-size group reported $655,000 in profits.) Among the 2,377 with some insurance activity, however, the median was $919,000—40 percent higher. The ratio of noninterest income to total bank revenues among all 7,787 banks was 14 percent. At banks with insurance activity, this closely watched ratio was 17 percent. A fuller analysis will be presented in BIMRG’s upcoming Who’s Who in Bank Insurance. (May 8, 2008) *** BB&T TO ACQUIRE UNION BANK OF CALIFORNIA’S INSURANCE UNIT BB&T Insurance Services, a subsidiary of BB&T Corporation (Charlotte, NC), said yesterday (April 23) that it
has reached an agreement with Union Bank of California, N.A. to purchase its San Diego-based insurance subsidiary, UnionBanc Insurance Services Inc. *** First Financial Buys Somers-Pardue Agency Banker and insurance broker First Financial Holdings Inc. (Charleston, SC) announced in April that its subsidiary, First Southeast Insurance Services Inc ., bought The Somers-Pardue Agency Inc. for $18.8 million Under the deal’s terms, the total price will also include some possible performance incentives over the next three years. Somers-Pardue, an independent insurance agency based in Burlington, N.C., will retain its name and current management and staff, First Financial said. First Financial Holdings, a thrift holding company, runs one of largest insurance operations in South Carolina. It ranked 38th among banks in insurance in the 2007 edition of Who’s Who in Bank Insurance. (April 10, 2008) *** Citigroup, Wells Fargo, and BB&T Were Top Banks in Insurance in 2007
ABP is asset-base penetration (ins. revenues/assets). Source: Who’s Who in Bank Insurance Citigroup, Wells Fargo, and BB&T were the top U.S. bank holding companies (BHCs) in 2007 as measured by (non-annuity) insurance brokerage revenues. These three bank companies also headed the list in 2006 (see table above). Wells Fargo increased its insurance brokerage revenues 19 percent in 2007, mainly through acquisition—most notably its purchase of Greater Bay Bancorp, itself a top 10 ‘bank in insurance’ in 2006. (Greater Bay had owned ABD Insurance, a large retail brokerage firm.) Bank of America’s revenues fell 7 percent after selling its commercial insurance agency to Hilb Rogal & Hobbs Co. in the second half of 2007. JPMorgan Chase’s revenues plummeted 66 percent, largely the result of the sale of its Zurich Insurance legacy insurance business to Protective Life Insurance in July 2006. Wachovia’s revenues dropped 60 percent mainly because the bank included annuities among its 2006 revenues. In 2007, the government specifically directed BHCs to “exclude income from annuity sales and referrals” when reporting insurance brokerage revenues (which most had been doing before anyway). BancorpSouth, Inc. (MS) and Unionbancal Corp. (CA) joined the top ten list for the first time. Both have substantial commercial insurance operations. BancorpSouth, with only $13.2 billion in balance-sheet assets, was the smallest bank on the top ten list--by a wide margin. The rankings here are based on an examination of recent Federal Reserve Board Y-9 filings. A more comprehensive bank insurance list will appear in an upcoming issue of Singer’s Annuity & Funds Report, with more in-depth analysis, including narrative, to appear in Who’s Who in Bank Insurance, BIMRG’s study of the top 100 banks in insurance, published annually in the fall. (March 10, 2008) *** Adirondack Trust buys Another Upstate NY Insurance Agency Adirondack Trust Co. (Saratoga Springs, NY) has acquired Amsure Associates Inc. an independent insurance agency based in Albany, N.Y. The 63-year-old Amsure provides risk management, commercial and personal insurance, surety, life insurance and employee benefit services throughout the eastern United States. It works with 20 different insurance companies and does about $90 million a year in premiums. This is Adirondack Trust's fourth insurance agency acquisition in seven years. It previously acquired Wise Financial Group of Saratoga Springs, Round Lake Insurance of Malta and Client's First of Ballston Lake, all in upstate New YorkState. Adirondack Trust is owned by 473 Broadway Holding Corporation, a bank company with $713 million in assets that ranked 83rd among bank holding companies in insurance brokerage revenues ($3.41 million) in the first nine months of 2007, according to Who’s Who in Bank Insurance. Insurance brokerage accounted for nearly half (49%) of the company’s noninterest income. In 2006, 473 Broadway ranked 113th among bank holding companies, with $2.96 million in brokerage revenues. Terms of the deal between the Saratoga Springs bank and Amsure owner Guy Alonge III were not disclosed, but Alonge will serve as president of the Amsure Division of Adirondack Trust's insurance operations. All Amsure employees with join the bank. In addition to its Albany base, the firm has a satellite office in Wilton. Industries served include construction, research & development, life sciences/technology, nonprofits, manufacturing, health care, education, and real estate. (February 14, 2008) *** Webster Financial Sells Its Insurance Agency to USI Holdings USI Holdings Corporation announced on Friday (February 1) the closing of its acquisition of Webster Insurance, Inc., from Webster Financial Corporation, the Connecticut-based holding company for Webster Bank, N.A. Webster Insurance is one of the largest middle-market insurance brokerage firms in New England with offices in Connecticut, Massachusetts and Rhode Island. It was a leader among bank-owned insurance businesses, ranking 29th in the most recent edition of Who’s Who in Bank Insurance (2007 Edition), but its ranking had been dropping in recent years. Two years earlier, for instance, it claimed the 23rd position. Friday’s sale comes as little surprise. In July 2007, Webster Financial announced that it would sell the insurance unit after a 10-month strategic review of its operations concluded that Webster should concentrate on the businesses it knows best and those that are most profitable: commercial and consumer banking. Webster Financial will retain Webster Risk Services, a third-party workers’ compensation administrator. The companies also announced a joint marketing arrangement between USI and Webster Bank to provide expanded products and services to their respective clients. Webster Insurance specializes in commercial property & casualty and employee benefits insurance for middle-market companies and personal lines insurance for individuals throughout the New England region. USI Holdings (Briarcliff Manor, NY), a distributor of insurance and financial products, is a portfolio company of Goldman Sachs Capital Partners, a private equity affiliate of Goldman Sachs & Co. In recent years, private equity firms have acquired many insurance brokerage firms, but some have seen a fall off in activity recently. “Despite the credit crunch which chased away many private equity buyers, there will be more deals to come in 2008 from this buyer segment,” predicted Patrick Linnert, executive vice president of MarshBerry, which advised Webster in the transaction. “Private equity is not dead as many consultants predicted. On the contrary, like banks, there are just fewer committed parties.” (February 2, 2008) *** BancorpSouth Insurance to Buy Texas Agency BancorpSouth Insurance Services, Inc., a subsidiary of BancorpSouth Bank, headquartered in Tupelo, Miss., has agreed to acquire the JMG/IC Insurance Agency, Inc., based in Nacogdoches, Texas. Founded in 1962, the agency now generates written premiums in excess of $100 million. Its major lines of business include commercial, group, personal, surety, life and health insurance products. It operates affiliated branches and divisions in Itasca, Illinois, a Chicago suburb, and in Houston, Livingston, Tyler, Henderson and Athens, Texas. The effective date of the transaction will be Jan. 1, 2008. Financial terms of the acquisition were not disclosed. BancorpSouth Bank is a wholly-owned subsidiary of BancorpSouth, Inc., a financial services company with approximately $13.2 billion in assets that ranked 13th among banks in insurance in the 2007 edition of Who’s Who in Bank Insurance. BancorpSouth Bank operates approximately 290 commercial banking, mortgage, insurance, trust and broker/dealer locations in Alabama, Arkansas, Florida, Louisiana, Mississippi, Missouri, Tennessee and Texas. (February 4, 2008). *** BB&T to acquire reinsurer AmRisc LP, a subsidiary of Branch Banking and Trust Company (Winston Salem, NC) plans to purchase reinsurance broker Savannah Reinsurance Underwriting Management LLC (Savannah Re) of Stamford, Connecticut. Savannah Re provides property facultative reinsurance underwriting and related risk transfer services, including catastrophe modeling and claims management. It is owned by Glencoe U.S. Holdings Inc., an indirect wholly owned subsidiary of RenaissanceRe Holding Ltd. The acquisition is expected to close in early February. Terms were not disclosed. Branch Banking and Trust Company is the principal subsidiary of BB&T Corporation, the nation’s third largest bank insurance operation, according to the 2007 edition of Who’s Who in Bank Insurance. "This acquisition allows us to expand our underwriting capabilities to include facultative reinsurance risk in addition to our commercial property underwriting in the excess and surplus lines segment of the wholesale insurance market," said AmRisc Chief Executive Officer Dan Peed. Houston-based AmRisc was created in 2002 as part of BB&T's wholesale insurance business. It underwrites middle-market commercial policies for insurers such as Lloyd's of London, Berkshire Hathaway Inc. and Renaissance Re, which pay the unit a fee and assume the risk. AmRisc also operates offices in Birmingham, Ala., and Morehead City, N.C. Savannah Re covers a broad range of property risks, including earthquake, flood, windstorm and surplus lines. Insurance companies buy reinsurance for their own protection to share the risk of unexpectedly high claims. Reinsurance enables an insurance company to expand capacity; stabilize underwriting results; finance its expanding volume; secure catastrophe protection against losses; or withdraw from a line of business or geographical area within a specified period of time. (January 18, 2008) *** ![[Click here for more information on Activity
Updates]](http://www.bisanet.org/bism/images/activity_updates_brokerage2.gif) Bank of America Leader In 2008 Brokerage Income, BIMRG Reports Bank of America was again the leader in investment income, or “income from the sale and servicing of mutual funds and annuities,” with $1,792.9 million in 2008, according to the Bank Insurance Market Research Group. This marks a 15 percent decline from BofA’s leading $2,107.5 million in 2007—not surprising, perhaps, in a year when the Dow Jones Industrial Index plummeted 34 percent (its worst annual decline since 1931) and the Standard & Poor's 500 Index fell even more—39 percent. Bank of America (NC) was followed by Wells Fargo Bank, JPMorgan Chase Bank, U.S. Bank NA, and PNC Bank, NA. For more complete data on the top five banks go to http://singerpubs.com/html/databaseproducts.html. More than 1,800 operating banks and thrifts reported some investment income in 2008. Collectively, they accounted for $4,860.5 million in revenues, down 24 percent from $6,391.3 million in 2007. This marks the steepest decline in bank investment income since BIMRG began tracking this metric in 1994. Sovereign Bank (PA) was the leading thrift institution with $50.48 million in investment income, up 1 percent from 2007. In previous years Washington Mutual was the top thrift institution. Wamu, however, was seized by the government in 2008 and is now a part of JPMorgan Chase. The 100th ranked bank, TierOne Bank (NE), reported investment income of $2.64 million in 2008. In 2007, by comparison, the 100th ranked bank, Community Bank NA (NY), reported $3.0 million. This represents a decline of 12 percent from 2007. More detailed information will be available in upcoming issues of Singer’s Annuity and Funds Report. (March 26, 2009) *** Bank Brokerage Index Declines 10 Percent in 4th Quarter The BISA-Singer’s Bank Brokerage Index declined 10 percent in the fourth quarter of 2008. The Index is an average based on quarterly brokerage revenues at 20 operating banks (see table below) with established retail investments programs. It sets 2007 1st quarter as a baseline (100). The index declined from 119 in the 3rd quarter of 2008 to 108 in the fourth quarter. Aggregate brokerage revenue of the 20 banks covered fell 8 percent (see table below)—from $188.95 million to $174.17 million
*** Thrift Retail Investments Index Plunges in the 4th Quarter The BISA-Singer’s Thrift Investments Index plunged 12 percent in the final quarter of 2008. “In the fourth quarter, the Index fell for the first time below the baseline that was established in the first quarter of 2007,” said Heywood Sloane, Managing Director of the Bank Insurance and Securities Association. “Thrift brokerage programs are clearly feeling the effects of the recession.” The Index is an average based on the change in quarterly investments income at 10 thrift institutions (see table below) with mature retail investments programs. It sets 2007 1st quarter as a baseline (100). The Index declined from 113 in the 3rd quarter of 2008 to 99 in the fourth quarter. Aggregate investment revenue of the 10 thrifts covered (see below) fell more precipitously—25 percent—from $46.8 million to $35.1 million. Another thrift index, Singer’s ‘125’ Thrift Investments Index, which tracks 126 OTS-reporting thrift institutions, also declined in the 4th quarter, although not as dramatically: It fell from 106 to 99. Significantly, however, it too dropped below the baseline for the first time.
Investment revenues are defined as income from “the sale and servicing of mutual funds and annuities” as reported each quarter to the Office of Thrift Supervision (OTS). These packaged investment products comprise the vast majority of revenues in thrift retail brokerage programs, often more than 90 percent. The Index is produced jointly by BISA and Singer’s Annuity & Funds Report, who also generate the BISA-Singer’s Bank Brokerage Index, which tracks bank annuity and securities revenues in commercial banks. Commercial banks have yet to report 4th quarter brokerage revenues.
(February 23, 2009) Bank Brokerage Index Drops 1 Percent in 3rd Quarter The BISA-Singer’s Bank Brokerage Index declined 1 percent in the third quarter of 2008. The Index is an average based on quarterly brokerage revenues at 20 operating banks (see table below) with established retail investments programs. It sets 2007 1st quarter as a baseline (100). The index declined from 120 in the 2nd quarter of 2008 to 119 in the third quarter.
Brokerage revenues are comprised of two groups: annuities (“fees and commissions from sales of annuities”) and securities (“fees and commissions from securities brokerage activities”) as reported to the FDIC.
Here are the 20 operating banks that make up the Index, all with well established retail brokerage programs:
*** Daggs to Head Wells Bank Brokerage Unit InvestmentNews has reported that Wells Fargo’s Chuck Daggs would head the bank’s combined bank brokerage operations (as opposed to non-bank brokerage operations like Wachovia Securities.) These were formerly known as Wells Fargo Investments LLC at Wells and as Investment Services Group at Wachovia. Daggs will also continue to run Well’s high-net-worth banking businesses in the Western U.S. Wachovia’s Stan Gregor will run that area in the Eastern U.S., InvestmentNews reported. (January 13, 2009) *** Welker to Head Well Fargo’s Merged Wealth Management Unit Wells Fargo & Co. has named Jay Welker to run its wealth-management group following its merger with Wachovia Corporation. Welker had been running Wells Fargo’s wealth division and now will be president of the combined group. Welker reports to David Carroll, recently named head of Wells Fargo's wealth, brokerage and retirement-services group. According to the Winston-Salem Journal, of the top five officials reporting to Carroll, three are from Wells Fargo and two from Wachovia—John Papadopulos, named as the president of the retirement-services group, and Danny Ludeman, chosen as the president of the brokerage group. “Looks like Wachovia got brokerage, one of the crown jewels here, and retirement services, a big move up in the corporate hierarchy,” Tony Plath, a finance professor at University of North Carolina Charlotte, told the paper. “Wells Fargo is taking wealth, the other crown jewel. As expected, Wells Fargo is taking business services, which I suspect is the back-office-support side of the wealth-management unit,” Plath said. According to the Journal, which is based in Wachovia’s home state, “Wells Fargo's plans for wealth management have received considerable scrutiny from some analysts who consider Wachovia's platform as better overall.” (December 13, 2008) *** Bank Fixed Annuity Sales Gain 4 percent in the 3rd Quarter U.S. bank sales of fixed annuities were an estimated $9.2 billion in third quarter, 2008, according to new data from the Beacon Research Fixed Annuity Premium Study.[1] The quarter’s sales were 80 percent above third quarter, 2007, and up 4 percent from the prior quarter. On a year-to-date basis, estimated sales were $24.9 billion, 90 percent ahead of results in the first three quarters of 2007.[2] AEGON/Transamerica Companies led in the bank channel for the first time in the study’s six-year history. Third quarter results for the top ten Study participants were as follows:
Bank Channel Sales (in thousands) [1] This category includes credit unions and savings and loan institutions. *** New Wealth Management Chief at Whitney National Bank Whitney National Bank (New Orleans) announced in late October the hiring of Mark Duthu as Executive Vice President, Wealth Management. Duthu will oversee the expansion of Whitney's Trust, Brokerage and Investment Management resources, and its integration within Private Banking. He will report to Robert C. Baird Jr., Executive Vice President of Banking Services. Most recently, Duthu was the Regional Managing Director of Wachovia's Trust offices in Alabama and Texas. Prior to Wachovia, he was also the Executive Vice President of SouthTrust Bank's Trust division and a Senior Vice President with Bank One's Trust and Investments division. Whitney National is a subsidiary of Whitney Holding Corporation. The company reported $12.97 million in trust revenues in 2007, 70th among bank holding companies according to Who’s Who in Bank Wealth Management (2007 Edition) (October 28, 2008) *** TCF Throttles Back Its Annuities Program TCF Financial Corp. (Wayzata, MN) said that it will eliminate some jobs because of cutbacks in the bank's annuity business. It is no longer taking on annuity accounts, but will continue to service its current accounts. A TCF spokesman said the move will allow TCF to focus on its core services of deposits and loans “and just be a real bank,” Minnesota’s Star Tribune reported. In the first half of 2008, TCF, a bank pioneer in the sale of annuities through the retail branch system, reported $4.49 million in fees and commissions from annuities, according to Singer’s Annuity & Funds Report. (October 10, 2008) *** Thain Will Head Wealth Management at Bank of America John Thain, chairman and chief executive of Merrill Lynch & Co., will become president of global banking, securities and wealth management at Bank of America Corp. Charlotte, N.C.-based BofA agreed to buy Merrill Lynch on September 15 for about $50 billion. Thain’s banking responsibilities will include oversight of BofA’s corporate and investment banks. Brian Moynihan will continue as president of global corporate and investment banking at BofA. (October 2, 2007) *** Hochstetler named to oversee wealth management at Univest Univest Corporation (Souderton, PA) has named Kenneth D. Hochstetler senior executive vice president of the corporation responsible for overseeing the Wealth Management and Trust Group of Univest National Bank and Trust Co. Hochstetler also is president of Univest Insurance, Inc., and Univest Investments, Inc. titles he will continue to hold. “Univest’s diversification into nontraditional businesses, including insurance and investments, has broadened the platform of financial solutions we provide and has strengthened our company,” said William S. Aichele, chairman, president and chief executive officer of Univest Corporation and chairman of Univest National Bank and Trust Co. “Ken has played an important role in the success of these subsidiaries, and I’m confident his leadership will help us continue to outperform more traditional financial institutions, particularly in this challenging economy.” In 2007, Univest Corporation reported $5.92 million in trust revenues, 110th among bank holding companies, according to Who’s Who in Bank Wealth Management. Univest National Bank and Trust Co. operates 33 financial service centers and 12 retirement financial services centers in Pennsylvania. (September 16, 2008) *** Bank Fixed-Annuity Sales Boomed In The 2nd Quarter of 2008 U.S. banks reported strong fixed annuity sales in the second quarter of 2008, according to Beacon Research’s (Evanston, IL) Fixed Annuity Premium Study. The quarter’s sales of $7 billion were 81.1 percent above the second quarter of 2007 and 25.8 percent ahead of the previous quarter. Reported year-to-date sales of $12.6 billion were up 79.9 percent from the first half of 2007. AIG Annuity led in the bank channel for the seventh straight quarter. Second quarter results for the top ten Study participants were as follows: Bank Channel Sales (in thousands)
AIG Annuity Insurance Co. $1,968,152 Source: Beacon Research (Evanston, IL) Book value annuities continued to dominate with sales of $6 billion—up 86.0 percent from the second quarter of 2007 and 19.1 percent quarter-to-quarter. But participants’ sales of the other product types also grew in double-digit percentages relative to both periods. Their sales of market value-adjusted (MVA) annuities were $552 million, indexed —$323 million, and immediate —$156 million. (The bank category includes credit unions and savings and loan institutions. Sales figures do not include structured settlements.) (Book value fixed annuities pay a declared rate of interest for a specified period. A market value adjustment (MVA) is not imposed if the holder withdraws assets before the end of the contract term. MVA products also pay a declared rate of interest for a specified period, and do impose such an adjustment.) Lincoln Financial Group’s New Directions was the only indexed annuity among second quarter’s top ten bank channel products. Predictably, all the rest were book value annuities. Second quarter results include sales of some 126 products sold in financial institutions. Top 10 Fixed Annuities Sold in Banks: 1. New York Life —NYL Enhanced Fixed Annuity Book Value 2 AIG Annuity — Proprietary Bank Product C Book Value 3 New York Life —NYL Preferred Fixed Annuity Book Value 4 AEGON/Transamerica—Transamerica Capital Builder 2007 Book Value 5 AIG Annuity — Flex 5 Book Value 6 Allstate Financial — Allstate Preferred Performance Book Value 7 AIG Annuity — Flex 7 Book Value 8 Western-Southern Life — MultiRate Annuity Book Value 9 Lincoln Financial Group — New Directions Indexed 10 AEGON/Transamerica—Proprietary Bank Product 7 Book Value Source: Beacon Research (Evanston, IL) “Though the spread between one- and ten-year Treasuries narrowed over the quarter, the yield curve remained positive. This gave fixed rate annuities a continued advantage over bank certificates of deposit. In addition, fixed annuity rates were higher in the second quarter,” said Jeremy Alexander, CEO of Beacon Research. “Larger indexed annuity cap rates and immediate annuity payouts helped increase bank sales of these products as well. We expect growth to continue in third quarter, but at a slower rate.” Beacon Research is an independent research organization founded in 1997. Its quarterly Fixed Annuity Premium Study claims to be “the first and only source to track and analyze product-level fixed annuity sales on an ongoing basis.” (August 26, 2008) *** UMB’s Asset Management Chief Named To Head UMB Bank St. Louis UMB Financial Corporation (Kansas City, MO) announced the promotion of its current President of UMB Asset Management, W. Thomas Chulick, to chairman and chief executive officer of UMB Bank St. Louis. Chulick will continue to lead UMB Asset Management, overseeing private banking and personal trust services for the St. Louis region. He will assume a leadership role on the company's corporate management committee. Chulick, who will report to Peter deSilva, UMB Financial Corp. president and chief operating officer, joined UMB in July 2007 and has 25 years of banking and wealth management experience. The announcement comes a little more than a year after UMB announced a St. Louis leadership succession plan that brought Chulick to UMB to manage its asset management operations. UMB’s banking subsidiaries operate 135 banking centers throughout Missouri, Illinois, Colorado, Kansas, Oklahoma, Nebraska and Arizona. UMB ranked 23rd among bank holding companies in wealth management according to the 2008 edition of Who’s Who in Bank Wealth Management. (August 28, 2008). *** ‘Wealth Management’ Banks Had Higher Net Earnings In 2007 Banks with a ‘wealth management’ bent were more profitable in 2006 and 2007. That’s one conclusion from an examination of FDIC call report data by the Bank Insurance Market Research Group. The analysis found that banks with above average wealth management (WM) activity* were 77 percent more profitable in 2007 and 68 percent more profitable in 2006 than the average bank. Moreover, this trend toward higher (median) net income persisted in all asset-size groups. Among banks with $10 billion or more in assets, for instance, institutions with ‘above-average WM activity’ (i.e., trust, brokerage and insurance revenues above the median) in 2007 scored 130 percent higher in (median) net income (see table below).
A 'WM (wealth management) bank' is defined as one that was in the upper half of its peer group in combined revenues from trust, retail brokerage
('income from the sale and servicing of mutual funds and annuities'), and insurance brokerage as reported to the FDIC. Fee-based businesses like wealth management can help smooth out earnings when loan income suffers—as happened in 2007. While overall (median) net income at FDIC-reporting banks dropped 10 percent between 2006 and 2007, net income at ‘WM banks’ declined only 6 percent. Overall, the median net income figure at 7,704 operating banks and savings banks was $1,075,000 in 2007. The median at ‘WM banks’ was $1,900,000—77 percent higher. In 2006, median net income at 7,832 FDIC-reporting banks was $1,201,000. At ‘WM banks,’ however, the median was $2,014,000, 68 percent higher In a related development, the Bank Insurance Market Research Group announced this week the publication of Who’s Who in Bank Wealth Management (2008 Edition), its study of the top 60 banking companies in wealth management. * Wealth Management is defined here as the sum of three fields reported to the FDIC: trust, retail brokerage (‘income from the sale and servicing of mutual funds and annuities’), and insurance brokerage. (July 10, 2008) *** LIMRA Names Scott Stathis to Head Kehrer-LIMRA LIMRA International (Windsor, CT) announced that Scott Stathis has been named to the position of managing director and COO of Kehrer-LIMRA, the bank brokerage research and consulting subsidiary of LIMRA. Stathis will have total oversight of Kehrer-LIMRA, including research, consulting and the ongoing industry round tables that are an important feature of the business. He will also be responsible for generating new growth for Kehrer-LIMRA. Stathis is president of E-Lancers, a strategic consulting and project management company he founded in 1998. E -Lancers will continue to operate as an affiliate of Kehrer-LIMRA. (July 14, 2008). *** First Tennessee Launches New Unified Managed Accounts (UMAs) First Tennessee Bank (Memphis), a subsidiary of First Horizon National Corporation, has announced the launch of three new products on its managed account platform. The launch is in partnership with FundQuest Incorporated, a provider of managed account services. The Horizon Account platform now offers: index enhanced mutual fund portfolios, unified managed accounts (UMA) , and exchange-traded funds (ETF). First Tennessee’s expanded offering now includes eight different types of managed accounts. Existing products include, two mutual fund portfolio solutions, an advisor choice product, and two separately managed account products. According to Rhomes Aur, First Tennessee Director of Wealth Management, “The new products complement our current offering to deliver a comprehensive and highly competitive platform. These important new capabilities will enhance our advisors ability to address the specific needs of each investor client.” Assets in Unified Managed Accounts have seen rapid growth across the industry because of the benefits of combining multiple products including mutual funds, ETFs and separately managed accounts into a single client account. (June 19, 2008) *** Capital One chooses EAI Information Systems to support mutual fund and annuity sales programs Capital One Investments, LLC has selected EAI Information Systems to enhance the efficiency and profitability of its retail investments program. The subsidiary of Capital One, N.A. has licensed EAI’s integrated transaction processing, compliance surveillance, sales management and electronic workflow technology tools. “EAI has enjoyed long-standing relationships with two organizations that were acquired by Capital One – Hibernia National Bank and North Fork Bancorporation,” said Matt Essieh, chief executive officer of EAI. “We appreciate their continued vote of confidence in our technology, our team, the quality of our service and our ability to tailor and expand our system to support their continued growth.” Founded in 1989, EAI (Portland, OR) provides technology solutions for bank retail investment programs and broker-dealers. (June 18, 2008). *** Gempler Joins Symetra’s Financial Institutions Distribution Channel Symetra Financial (Bellevue, WA) announced today that Brenda Gempler will be joining the Financial Institutions Distribution channel as the new Managing Director of Key Accounts. Gempler will direct relationship management for the company’s financial institution partners nationwide. Gempler brings more than 20 years experience in the financial institutions arena to Symetra. Most recently she worked as managing director of the Bank Channel for Transamerica Capital, where she sold more than $1.3 billion in fixed annuities through banks, wire houses and financial planners. Gempler has also held positions as relationship manager and wholesaler working with key accounts such as US Bank and Bank One. Gempler, who will be based out of her hometown of Minneapolis, Minn., has a degree in business/marketing from the University of St. Thomas. She is a Certified Financial Planner and holds a Minnesota Life/Health Insurance License, as well as Series 7, 63 and 24 securities licenses. (June 5, 2008). *** Prudential Annuities Appoints Michael Gillespie to Manage Bank Sales Prudential Annuities (Newark, NJ), the domestic annuity business for Prudential Financial, Inc., announced today (June 5) the appointment of Michael Gillespie as National Sales Manager for its Financial Institutions Team, formerly called the bank channel. Gillespie, a 21-year industry veteran, joins Prudential Annuities from Hartford’s Planco Financial Services, where he served as Vice President of the Mid-Atlantic Division managing the wirehouse, banks and independent channel sales teams. “Mike comes to us to with a solid reputation for results,” notes Rick Singmaster, vice president and director, National Sales for Prudential Annuities. “He possesses a wealth of experience, including valuable experience as a wholesaler. We are thrilled to be able to benefit from that expertise as he leads the Financial Institutions sales team in his new role.” Prudential Financial, Inc., with approximately $631 billion of assets under management as of March 31, 2008, has operations in the United States, Asia, Europe, and Latin America. (June 5, 2008). *** Kevin Crowe Joins MetLife Investors’ Bank Channel Team MetLife Investors Distribution Company (MetLife Investors) today announced that Kevin E. Crowe joined the team as managing director for the annuity bank channel. Crowe reports to Paul Sylvester, national sales manager of the Annuities and Long-Term Care Division. He joins MetLife Investors from John Hancock, where he was most recently John Hancock’s bank channel chairman. “Kevin’s experience, knowledge and leadership will be instrumental as MetLife Investors continues to focus on our bank channel growth,” said Sylvester. “He is a great addition to our team and will help us as we build on our momentum in this area.” Crowe has more than 40 years of experience in the financial services industry and has been a leader in the expansion of selling insurance products through banks. In 1981, he founded Essex Corp., an annuity and insurance marketing company. Essex Corp.’s sales grew significantly over the next 23 years as the company became the largest third-party marketing firm in the United States, with overall annuity sales of $70 billion during this time period. In 2000, John Hancock purchased Essex Corp. Crowe was one of the founding directors of the Bank Insurance and Securities Association. In 1999, he received the Raiken-Sender Award from the Financial Institutions Insurance Association (FIIA), honoring his outstanding contributions to the bank and insurance industry. He earned his M.B.A. degree from the Wharton School of Business at the University of Pennsylvania and bachelor of arts degree from Penn State University. (March 20, 2008) *** WACHOVIA, JPMORGAN, BANK OF AMERICA TOP BANK ANNUITY LIST IN 2007 Wachovia Corporation earned more commissions from annuity sales than any U.S. bank holding company (BHC) in 2007. The North Carolina bank reported $483.00 million in fees and commissions from annuity sales. It was followed by JPMorgan Chase & Co. ($163.00 million), Bank of America Corp. ($125.53 million), Wells Fargo & Company ($116.00 million), and Suntrust Banks, Inc. ($114.90 million), the Bank Insurance Market Research Group reported today (see table).
Source: Singer’s Annuity & Funds Report This is the first year that bank holding companies and operating banks have reported annuity fees and commissions to the government. Nearly 400 BHCs reported some annuity income. The rankings here are based on an examination of recent Federal Reserve Board Y-9 filings. (One BHC likely to be included in the top ten, HSBC North America, had not yet filed its report.) A more comprehensive list will appear in an upcoming issue of Singer’s Annuity & Funds Report. (February 19, 2008) *** Bank of America names Athanasia to head Premier Banking unit Bank of America Corp. named Dean Athanasia president of Premier Banking and Investments, a part of the bank’s global wealth and investment management division. Athanasia, named in March, replaces Pat Phillips, who retired from Charlotte-based BofA in the spring. Athanasia most recently was BofA’s northeast division executive for Premier Banking and Investments. Premier Banking and Investments comprises BofA’s retail investment and mass affluent sectors. Premier Banking & Investments had revenues of $3,751 million in 2007, up from $3,455 million in 2006, according to Who’s Who in Bank Wealth Management. It reported net income of $1,275 million, an increase of 8 percent from $1,186 million in 2006. *** Fixed Annuity Sales Fell in 2007 Estimated sales of fixed annuities totaled $65.1 billion for the 2007 calendar year, a 9 percent drop from 2006, according to Beacon Research Inc.’s quarterly Fixed Annuity Premium Study. Allianz Life led all insurers with $1.6 billion in fixed annuity sales, followed by AIG Annuity Insurance Co. and New York Life with $1.37 billion and $1.2 billion in sales, respectively. *** BISA Announces 2007 Awards of Excellence Winners At its 2008 Annual Convention Awards ceremony in Florida in early March, the Bank Insurance & Securities Association announced the winners of its annual BISA Awards of Excellence in 2007. The 2007 Award for the best Large Institution Program was won by Compass Brokerage, a perennial top performing bank securities program. The Award was accepted on behalf of the firm by Noah Zecher, the brokerage unit’s CEO. First Citizens (NC) was named Regional Institution Program of the Year. Ramsey Jones, EVP, Wealth Management Services, accepted the award on behalf of the firm. The Community Based Institution Program of the Year was Pennsylvania State Employees Credit Union, which was applauded for its “‘can do’ approach to creatively evolving ways to provide face-to-face services in an investment program that is embedded within a credit union that provides virtually branchless delivery of traditional deposit and loan services.” Steve Franke, Program Manager, accepted the Award. Rob Comfort, President of Huntington Investment Co., was named “Executive of the Year,” cited “for instilling a culture and assembling a team of executives and advisors who have been able to deliver superior growth for his institution, as well as for the energy and leadership he continually provides not only for his firm, but for the entire industry.” *** John Hancock’s Variable Annuity Sales Rose 41 percent in 2007 in the Bank Channel John Hancock Financial said that its full year sales of variable annuities in the bank channel reached $1.4 billion in 2007, up from $1.0 billion in 2006. This full year increase of 41 percent marked the fifth consecutive year John Hancock achieved record bank sales of variable annuities. “In 2007 we finished the first full year of our successful relationship with JP Morgan Chase, and our sales through Bank of America were also strong, nearly doubling levels from 2006,” said Fred Nicholas, President, John Hancock Bank Annuities Channel. “Bank channel sales accounted for nearly 16 percent of our total VA sales and it’s certainly become a big growth driver for our overall sales. Continuing to add new distribution partners and broadening existing relationships is a priority for us.” *** Wells Fargo debuts service for the ultra-rich In late March, Wells Fargo Bank introduced its Family Wealth Group, a multi-family office serving families with $50 million or more in assets, which the bank notes is “the fastest growing wealth segment today.” Headed by Michael Cole, the group currently has $7 billion under management. It is part of Wells Fargo’s Private Bank. *** Mutual funds up, fixed annuities down at TCF Financial Bank annuity and mutual fund results for 2007 are beginning to trickle in. At TCF Financial Corporation, the $16 billion (assets) Minnesota-based banking company, annuity and mutual fund sales volume totaled $222.6 million for the year, up from $203.7 million in 2006. The increase was primarily on the mutual funds side, due to more marketing focus and better market conditions, said the company. By comparison, “sales of fixed annuity products slightly declined during 2007 as a result of lower interest rates offered by carriers.” Overall, revenue from investments and insurance declined for the year to $10.32 million from $10.70 million in 2006—which isn’t so surprising given that annuity sales are generally more profitable for banks than mutual funds—i.e., the commission rates are typically higher. (February 18, 2008). *** MetLife Investors Adds to Its Bank Channel Team MetLife Investors Distribution Company announced two new additions its bank channel team John D. Wilson was named regional vice president for North and South Carolina, and Joe Wambach was named regional vice president for the Georgia, Alabama and Florida markets. Both will report to Patti Hausherr, eastern divisional sales manager. Wilson is a 15-year veteran of the financial services industry. Most recently, he worked as a senior vice president and group sales manager for investments at SunTrust Investment Services. Wambach joins MetLife from John Hancock, where he supported leading advisers with planning strategies incorporating variable annuities, fixed annuities and 529 plans. (February 21, 2008) *** JPMORGAn Chase is Bank Leader in Proprietary Funds JPMorgan Chase remains the leader among bank holding companies in proprietary mutual funds and annuities, according to third quarter 2007 government data, the most recent quarter available. The New York bank reported $589.1 billion in “assets under the reporting bank’s management in proprietary mutual funds and annuities,” according to the Bank Insurance Market Research Group (BIMRG), which analyzes the government bank data (see table below). JPMorgan was followed by Bank of America Corp., Bank of New York Mellon, Wells Fargo & Company, and Citigroup Inc.. A more detailed analysis will appear in BIMRG’s upcoming Who’s Who in Bank Wealth Management, published in Spring 2008 (January 24, 2008).
Dollars in Millions. Deposits are domestic, interest-bearing deposits only. Trust revenues are for 1st nine months in 2007.. *** KeyCorp Names Grebenc EVP for Wealth Management Jane Grebenc has joined KeyCorp (Cleveland, OH) as executive vice president, leading Key's Wealth Management group. She was previously at National City Corporation, where most recently she served as executive vice president, Private Client Group. In her new role, Grebenc will oversee the Key business groups that provide investment, banking, insurance, and trust services to affluent individuals and families as part of the broader Key Community Banking organization. The two principal business groups that comprise Wealth Management are Key PrivateBank and Key Wealth Management. (January 23, 2007). *** Flagstar Bank signs Essex National Securities as broker/dealer Flagstar Bank (Troy, MI), a subsidiary of Flagstar Bancorp, Inc., has signed an agreement with Essex National Securities, Inc. (ENSI), whereby ENSI will serve as the bank’s broker-dealer in its retail investment programs. Flagstar Bancorp, with $16.6 billion in total assets at September 30, 2007, is the largest publicly held savings bank headquartered in the Midwest. It operates 164 banking centers in Michigan, Indiana and Georgia, and 151 home loan centers in 29 states. According to Singer’s Annuity & Funds Report, Flagstar Bank reported no investment income (‘income from the sale and servicing of mutual funds and annuities’) in the third quarter of 2007, the most recent quarter for which government data is available. “We are excited to be working with ENSI on the expansion of our retail program,” said Sandro DiNello, Executive Vice President, Retail Banking at Flagstar. ENSI will provide Flagstar with systems, compliance support, training, sales and marketing support, and field resources to the dedicated brokers and licensed bankers who sell investments in the banks’ retail branch system. (January 16, 2008). *** Wachovia Leads Banking Companies in 3rd Quarter Annuity Production Wachovia Corporation was again the dominant bank holding company (BHC) in annuity production in the third quarter of 2007. Indeed, for the first three quarters of 2007, it had more than three times the production of the second-ranking BHC, JPMorgan Chase. Wachovia generated $328.00 million in fees and commissions from annuity sales over the first nine months, JPMorgan Chase only $99.00 million. (JPMorgan Chase is not included in the table below because we could not generate an accurate “quarter only” number based on the bank’s FRB Y-9 filings on which these rankings are based.) Following Wachovia and JPMorgan on the year-to-date annuity board were Bank of America Corp. ($86.81 million), Citigroup Inc. ($85.00 million), and Wells Fargo & Company ($85.00 million). Leading operating banks, which report to the FDIC, were included on last week’s table (below). (January 10, 2008)
Dollars in Millions.. *** CitiBank Edges BofA in Annuity Commissions in 3rd Quarter among operating banks Citibank NA was the leader in annuity fees and commissions in the 3rd quarter of 2007, edging out Bank of America, leader in the previous quarter, among the 953 operating banks that reported annuity activity, according to Singer’s Annuity & Funds Report. The top ten are listed in the table below Six operating banks had $30 million or more in annuity fees and commissions in the first nine months of 2007. These were Bank of America NA ($86.81 million), Citibank NA ($85.00 million), Fifth Third Bank ($33.26 million), KeyBank NA ($32.23 million), Branch Banking & Trust ($31.46 million), and PNC Bank NA ($31.28 million). Bank holding companies will be reported in this space next week. (Bank holding companies report annuity production to the Federal Reserve Board; operating commercial banks and savings banks--but not thrifts--report to the FDIC.) They will include some additional institutions, including Wachovia, Wells Fargo, SunTrust, and US Bancorp.
(January 3, 2008).
Dollars in Millions.. *** The BIMRG/BISA Insurance and Brokerage Activity Updates page is edited by Andrew Singer. He can be contacted at a.singer@singerpubs.com © 2009 Bank Insurance MArket Research Group, All rights reserved. | |||||||||
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