-- Large top-tier bank holding companies increased their BOLI holdings by
11.8% from $94.4 billion in first half 2006 to $105.6 billion in first half
2007. (See Table 1.)
-- Stand-alone banks, those without bank holding companies, recorded an
added $2.58 billion in BOLI holdings. Another 66 BHCs with assets between
$300 million and $500 million reported $382.9 million in BOLI assets.
Including these additional sources, the industry total of reported BOLI
holdings increased 11.1% from $97.64 billion in first half 2006 to $108.57
billion in first half 2007.
-- Total industry BOLI holdings increased 4.5% from $103.90 billion at
year-end 2006 to $108.57 billion year-to-date on June 30, 2007.
-- Of 863 large BHCs with assets greater than $500 million, 689 or 79.8%
reported holding BOLI assets in first half 2007. That represented an
increase of 4.2% from 661 BHCs reporting BOLI in the comparable period of
2006. (See Table 2.)
-- BHCs with assets between $1 billion and $10 billion had the highest
rate of reporting BOLI assets, as 306 of 365 BHCs, or 83.8%, reported
having BOLI assets in the first six months of 2007.
-- The largest bank holding companies, those over $10 billion in assets,
accounted for the largest dollar and percentage increase -- $10.1 billion
or 12.2% -- in their combined BOLI assets. BHCs with assets between $1
billion and $10 billion registered the second largest percentage increase
in total BOLI assets, rising 11.0% from $8.89 billion in the first half of
2006 to $9.87 billion in first half 2007. (See Table 1.)
-- The largest increase in the number of BHCs reporting BOLI assets
occurred among BHCs with $1 billion to $10 billion in assets. Their number
increased by 21 from 285 BHCs in first half 2006 to 306 in first half 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
(16.36%) of total capital at mid-year 2007. (See Table 3.)
-- Nationally, mean BOLI assets as a percent of total capital increased
from 13.23% in first half 2006 to 13.55% in first half 2007. (See Table
3.) However, this ratio was considerably lower than year-end 2005, when it
reached 20.1%. The significant decrease in this ratio since 2005 was due to
a reporting requirement change. The former requirement was that BOLI
assets only be reported when they reached a threshold of 25% of certain
"other assets" on the balance sheet. The new requirement in 2006 was that
BHCs with assets greater than $500 million and all banks report all their
BOLI assets. For these additional BHCs, the ratio of BOLI assets to
capital was typically lower and, therefore, helped to decrease the mean
ratio.
Table 1. Total BOLI Assets (in billions)
Held by Bank Holding Companies in First Half 2007
1st half 1st Half Percent
Large BHCs by Asset Size 2007 2006 Change
---------- ---------- ---------
Over $10 billion $ 92.75 $ 82.66 12.2%
---------- ---------- ---------
$1 billion - $10 billion $ 9.87 $ 8.89 11.0%
---------- ---------- ---------
$500 million - $1 billion $ 2.99 $ 2.86 4.3%
---------- ---------- ---------
---------- ---------- ---------
All $ 105.61 $ 94.42 11.8%
---------- ---------- ---------
Source: Michael White-MullinTBG BOLI Holdings Report - 2007
Table 2. Number of Large Bank Holding Companies
Reporting BOLI Assets in First Half 2007
1st half 1st Half Percent
Large BHCs by Asset Size 2007 2006 Change
---------- ---------- ---------
Over $10 billion 61 60 1.7%
---------- ---------- ---------
$1 billion - $10 billion 306 285 7.4%
---------- ---------- ---------
$500 million - $1 billion 322 316 1.9%
---------- ---------- ---------
---------- ---------- ---------
All 689 661 4.2%
---------- ---------- ---------
Source: Michael White-MullinTBG BOLI Holdings Report - 2007
Table 3. Mean BOLI Assets as a Percentage of
the Sum of Tier 1 Capital + Allowance for Loan & Lease Losses
in First Half 2007
1st half 1st Half Percent
Large BHCs by Asset Size 2007 2006 Change
--------- --------- ---------
Over $10 billion 16.36% 15.94% 2.6%
--------- --------- ---------
$1 billion - $10 billion 13.10% 12.43% 5.4%
--------- --------- ---------
$500 million - $1 billion 13.45% 13.44% 0.1%
--------- --------- ---------
--------- --------- ---------
All 13.55% 13.23% 2.4%
--------- --------- ---------
Source: Michael White-MullinTBG BOLI Holdings Report - 2007
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 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 600 customized plans and
$21 billion in total assets (as of September 30, 2007) representing over
50,000 corporate executives. The firm operates two client service centers,
one from its Los Angeles headquarters and one from Chicago, and has
regional offices in Baltimore, Boston, 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: