Ramsey Partners, LLC - Advocates for Community Banks

Congress & Banking Regulators Impose Far-Reaching New Requirements

Congress & Banking Regulators Impose Far-Reaching New Requirements

Dodd-Frank Wall Street Reform and Consumer Protection Act Signed into Law July 21st

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Banking Agencies Issue Final Guidance on Incentive Compensation Practices June 25th

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Source:
Pearl Meyer & Partners, LLC.
www.pearlmeyer.com

BOLI Market Analysis: Study of Failed Banks & TARP Recipients

• From 01/01/2001 to 12/31/2007, 25 banks had failed and were taken over by the FDIC. In 2008 alone, 26 banks failed and in 2009, 140 banks failed.
• Of banks that had BOLI holdings, only 3 banks failed between 2001 and 2007, 9 banks in 2008, and 66 banks in 2009.
• 35% of all banks that failed in 2008 had BOLI holdings, 47% of all banks that failed in 2009 had BOLI holdings.
• In 2009, Georgia accounted for the greatest number of bank failings (18%), followed by
  Illinois (15%), California (12%), and Florida (10%).
• In 2009, failed banks in Georgia with BOLI accounted for almost a quarter of all failed banks with BOLI (21%), followed by
  California (15%), Illinois (12%), and Florida (6%).
• The value of the BOLI holdings of the banks that failed since 2001 was $6.4 billion. The bank with the largest BOLI holdings to fail was Washington Mutual. It failed on 09/28/2008 and as of 12/31/2007, it’s BOLI holdings were $4.9b.
• The current cost to the FDIC to take over the 166 banks that have failed since 2008 is $47.4b.
• Most banks were acquired by other banks. Only 8 banks had no successor (6%). 3 of the failed banks without a successor had BOLI holdings totaling $30m as of 12/31/2008.
• It appears that most of the banks with BOLI holdings that failed had the BOLI liquidated. In 2009, 69 banks took over failed banks thathad BOLI holdings. Only 4 banks acquired the failed bank’s total or a portion of the BOLI holdings equal to $136m of BOLI.
• The original amount of TARP funds given to banks was $205b. As of 12/31/2009, $146.1b (71%) has been paid back to the Treasury. There are still 663 banks with TARP funds equaling $58.6b that have not paid back the Treasury.
• 2 banks have failed that had received TARP funds. Pacific Coast National Bank (CA) received $4.1m in January 2009 and the FDIC closed it’s doors on November 13, 2009. United Commercial Bank (CA) (UCBH Holdings) received $299m in February and the FDIC closed it’s doors on November 6, 2009. United Commercial Bank had BOLI Holdings of $13.3m.
• 1 bank holding company went into bankruptcy and came out of Chapter 11 with the TARP debt wiped off its books. CIT Group Inc. (NY) received $2.3b in TARP funds.
• Many of the 663 banks that still have TARP funds are still in financial trouble. The FDIC issued a Issuance of Consent Order to Central Pacific Bank (HI) on December 11, 2009. The Bank is required to do a financial overhaul to avoid being taken over by the FDIC. The bank took $135m of TARP funds. Many banks are missing the quarterly dividend payments. In December 2009, 56 banks missed the payments, up from 33 in August 2009.
• 33% of the banks that have been missing the quarterly dividend payments are in California.
• On December 31, 2009, the Treasury announced that it was ending it’s TARP program to banks. TARP funds will now be made available to small businesses.

Source
BOLI Market Analysis: Study of Failed Banks & TARP Recipients
The Pangburn Group - Visit www.pangburngroup.com

Evans Bancorp Reports Fourth Quarter Earnings Growth of 172%

Evans Bancorp Reports Fourth Quarter Earnings Growth of 172%

Non-interest income, which represented 32.8% of total revenue in both the 2009 and 2008 fourth quarters, increased 22.5%, or $0.5 million, to $3.0 million, when compared with the fourth quarter of 2008. The increase was primarily a result of increased bank-owned life insurance revenue (”BOLI”), higher insurance service and fee revenue and a $0.2 million increase in other non-interest income. The increase in other non-interest income was mostly due to revenue generated by the Company’s subsidiary, Suchak Data Systems, Inc. (”SDS”). SDS is a data processing company acquired by the Company in December 2008 after serving as the Company’s outsourced data center for over 20 years. Insurance service and fee revenue was up 9.7% to $1.5 million for the fourth quarter of 2009 when compared with the 2008 fourth quarter.
Non-interest income was $14.1 million for the year, up $2.4 million from 2008. Non-interest income in 2009 was positively impacted by the bargain purchase gain of $0.7 million from the WVB acquisition. An additional increase in non-interest income of $0.8 million was due to revenue generated by SDS. Also BOLI income increased $0.5 million in 2009 due to the lack of negative market fluctuation which occurred in 2008. Insurance revenue increased $0.3 million to $7.2 million as the insurance business benefited from one acquisition in late 2008. These increases were somewhat offset by a one-time pension curtailment gain recognized in 2008.

12.22.09 Season Greetings

Seasons greetings from the entire staff of Ramsey Partners!

11.01.09 Ramsey Partners Annual Study Group Meeting

Ramsey Partners, in conjunction with our carrier partners, held its 5th Annual BOLI Study Group Meeting in New Orleans on October 21st to 23rd.  We are happy to host this industry meeting to foster education and communications in the industry.

Executive Compensation Webcast from Pearl Meyer & Partners

NACD Compensation Series Webcast
May 7, 2009

Responsible Risk: Effective Incentive Rewards in Turbulent Times
Senior consultants from PM&P will discuss best practices for incentive plan design and will provide a framework to ensure programs do not motivate “unnecessary or excessive risk taking”. Fill out our contact form for webcast instructions.

5th Annual Study Group Meeting

Ramsey Partners announces 5th Annual Study Group Meeting to be held in September. Location to be announced.

Client Alert - Treasury’s Executive Pay Restrictions

Pearl Meyer & Partners release Client Alert regarding Treasury’s New Executive Pay Restrictions.  Link here:  http://www.pearlmeyer.com/knowledgecenter/alerts/ClientAlert%20_020609.pdf

Ramsey Partners & JHFN offer joint BOLI venture

Ramsey Partners, LLC and John Hancock Financial Network (JHFN) announce joint venture allowing 1,850 representatives to offer BOLI through Ramsey Partners.