Bank BOLI Assets Exceed $120 Billion in 2007 According to a Report Issued by Michael White and MullinTBG


RADNOR, PA, and LOS ANGELES, CA--(Marketwire - May 13, 2008) - Large bank holding companies (BHCs) and stand-alone banks reported bank-owned life insurance (BOLI) assets of $120.4 billion in 2007, reflecting a 15.9% increase from $103.9 billion in 2006, according to the 2008 edition of the Michael White-MullinTBG BOLI Holdings Report™. BOLI is used to recover the cost of supplemental employee health insurance benefits and to offset the liabilities of retirement benefits.

Compiled by Michael White Associates, LLC (MWA) and sponsored by MullinTBG, the Michael White-MullinTBG BOLI Holdings Report™ measures and benchmarks the cash surrender values (CSV) of life insurance held by BHCs and banks and the ratios of CSV to capital. Federal banking regulators require all top-tier BHCs with assets greater than $500 million and all banks to report their BOLI assets. The data are reported by 857 of these large BHCs and over 7,700 commercial banks and FDIC-supervised savings banks operating on December 31, 2007. Among the study's most significant findings are these:

--  Large top-tier BHCs increased their 2007 BOLI holdings by 16.4% from
    $101.0 billion in 2006 to $117.5 billion in 2007.  (See Table 1.)
    
--  Another 56 BHCs with assets between $300 million and $500 million
    reported $340.8 million in BOLI assets.
    
--  Stand-alone banks, those without BHCs, recorded an added $2.5 billion
    in BOLI holdings.
    
--  The industry total of BOLI holdings increased 15.9% from $103.9
    billion in 2006 to $120.4 billion in 2007.
    
--  Of the 857 large top-tier BHCs (assets greater than $500 million), 696
    or 81.2% reported holding BOLI assets in 2007, representing a 1.3% increase
    from the 687 in 2006.  (See Table 2.)
    
--  BHCs with assets between $1 billion and $10 billion reported the
    highest incidence of BOLI ownership, as 315 of 375 BHCs, or 84.0%, reported
    having BOLI assets.  (See Table 2.)
    
--  The largest BHCs, those over $10 billion in assets, accounted for the
    largest dollar and percentage increase -- $16 billion or 18.1% -- in their
    combined BOLI assets.  (See Table 1.)
    
--  BHCs with assets between $500 million to $1 billion registered the
    second largest percentage increase in total BOLI assets, rising 4.5% from
    $2.86 billion in 2006 to $3.03 billion in 2007.  (See Table 1.)
    
--  The largest by-category increase in BHCs reporting BOLI assets
    occurred among BHCs with $1 billion to $10 billion in assets.  Their number
    increased by 9 from 306 BHCs in 2006 to 315 in 2007.  (See Table 2.)
    
--  According to the Federal Reserve, it is generally not prudent for a
    BHC to hold BOLI assets with an aggregate cash surrender value (CSV) that
    exceeds 25 percent of the sum of the institution's Tier 1 capital and the
    allowance for loan and lease losses.  The largest BHCs, those over $10
    billion in assets, recorded the highest mean BOLI assets as a percent
    (16.6%) of total capital in 2007.  (See Table 3.)
    
--  Nationally, mean BOLI assets as a percent of total capital increased
    from 13.3% in 2006 to 13.7% in 2007.  (See Table 3.)
    

            Table 1. Total BOLI Assets (in billions)
             Held by Bank Holding Companies in 2007

                                                      Percent
Large BHCs by Asset Size         2007       2006       Change
                               ---------- ---------- ---------
Over $10 billion               $   104.63 $    88.59      18.1%
                               ---------- ---------- ---------
$1 billion - $10 billion       $     9.89 $     9.55       3.6%
                               ---------- ---------- ---------
$500 million - $1 billion      $     3.03 $     2.86       4.5%
                               ---------- ---------- ---------

                               ---------- ---------- ---------
All                            $   117.55 $   101.00      16.4%
                               ---------- ---------- ---------

Source: Michael White-MullinTBG BOLI Holdings Report - 2008 edition



      Table 2. Number of Large Bank Holding Companies
             Reporting BOLI Assets in 2007
                                                      Percent
Large BHCs by Asset-Size         2007       2006       Change
                               ---------- ---------- ---------
Over $10 billion                       59         63      -9.5%
                               ---------- ---------- ---------
$1 billion - $10 billion              315        306       2.9%
                               ---------- ---------- ---------
$500 million - $1 billion             322        318       1.3%
                               ---------- ---------- ---------

                               ---------- ---------- ---------
All                                   696        687       1.3%
                               ---------- ---------- ---------

Source: Michael White-MullinTBG BOLI Holdings Report - 2008 edition



      Table 3. Mean BOLI Assets as a Percentage of
the Sum of Tier 1 Capital + Allowance for Loan & Lease Losses

                                                      Percent
Large BHCs by Asset Size         2007       2006       Change
                               ---------  ---------  ---------
Over $10 billion                   16.55%     15.32%       8.0%
                               ---------  ---------  ---------
$1 billion - $10 billion           13.39%     12.77%       4.9%
                               ---------  ---------  ---------
$500 million - $1 billion          13.57%     13.37%       1.5%
                               ---------  ---------  ---------

                               ---------  ---------  ---------
All                                13.74%     13.28%       3.5%
                               ---------  ---------  ---------

Source: Michael White-MullinTBG BOLI Holdings Report - 2008 edition

About the Michael White-MullinTBG BOLI Holdings Report™

The Michael White-MullinTBG BOLI Holdings Report™ measures and benchmarks the cash surrender values (CSV) of life insurance held by bank holding companies and banks and their ratios of CSV to capital. It is one of several reports dealing with bank fee income activities published by Michael White Associates, LLC (MWA), a bank insurance consulting firm headquartered in Radnor, PA. Another report, the MWA BOLI Capital Concentration Report™, meets the regulatory requirement that each banking company must conduct a peer analysis of their BOLI holdings relative to capital and statistically assess whether its BOLI program is an outlier. All reports may be purchased online at www.BankInsurance.com or by mail.

MullinTBG is the exclusive sponsor of the Michael White-MullinTBG BOLI Holdings Report™. MullinTBG is one of the nation's largest providers of nonqualified executive benefits, with more than 650 customized plans and $21 billion in total assets (as of March 31, 2008) representing over 57,000 corporate executives. The firm is headquartered in Los Angeles and has regional offices in Baltimore, Boston, Chicago, Dallas, New York and Newport Beach. For more information, please visit www.MullinTBG.com.

Contact Information: For additional information contact: Michael D. White, Ph.D., CLU, ChFC President Michael White Associates, LLC 823 King of Prussia Road Radnor, PA 19087 Phone: (610) 254-0440 Email: Pattiann Firmiss Executive Vice President & Chief Marketing Officer MullinTBG 520 Lake Cook Road, Suite 520 Deerfield, IL 60015 Phone: (847) 444-2123 Email: