2023 was an unprecedented year in banking with a sharp increase in interest rates being the lead story. Banks faced new dynamics in navigating the spreads between pricing loans and deposits, as well as dealing with liquidity challenges. With all of the changes in interest rates, it is a good time to review the impact… Read more »
BOLI with Tight Liquidity
In this high interest rate environment, the yields on Bank Owned Life Insurance (BOLI) are still attractive. BOLI continues to be desirable and has remained competitive to other bank investments due to the tax-free build up of BOLI earnings. With tight liquidity, banks are purchasing BOLI for the following reasons: Helps to offset the costs… Read more »
Safety and Soundness Review on BOLI
It is imperative that banks periodically conduct a thorough review of their Bank Owned Life Insurance (BOLI) holdings beyond the information typically provided in an Annual Review by an existing BOLI vendor. The IRC Section 7702 enacted on January 1, 2021 makes this review especially critical as permanent life insurance policies have become more efficient. … Read more »
VIDEO: Are BOLI Yields Competitive?
David/Pat, BOLI Yields (canva.com) BOLI yields have remained competitive to other bank investments partly due to the tax-free build-up of BOLI earnings. The yields on BOLI products have been attractive, and has sustained their competitiveness during the low interest rate environment we’ve experienced for the last several years. Learn more in our video!
Why Own Bank Owned Life Insurance (BOLI)?
Each year, there is an increasing amount of Bank Owned Life Insurance (BOLI) purchased in the United States. BOLI is life insurance owned by the bank and issued on the lives of bank employees and directors. According to the FDIC, in 2021, 66% of all US banks owned BOLI. Listed below are the primary reasons… Read more »
The Scoop on Section 7702 & How it Affects Life Insurance Values Going Forward
Internal Revenue Code (IRC) Section 7702 was implemented in 1984, Section 7702A in 1988, and up until recently had remained untouched. Section 7702 defines the requirements that must be met for an insurance contract to qualify as a life insurance contract for federal income tax purposes. Under Section 7022 a life insurance contract must comply… Read more »
2021 COLA Numbers
The 2021 Cost of Living Adjustments for various qualified retirement plans and other amounts have recently been released by the Internal Revenue Service. The numbers have been updated based on IRS Notice (2020-79). The change in the employee benefit plan limitations is due to an increase in the Cost of Living Index meeting the statutory thresholds…. Read more »
The Why for Business Life Insurance
How Life Insurance and Business Succession Go Hand in Hand Life insurance plays a significant part in an individual’s future and financial plan. Personal life insurance planning protects a family from the unknowns in life. Along with personal planning, insurance can be critical in business succession to ensure a business’ financial security and longevity. As… Read more »
Whitepaper: Short-Term & Long-Term Incentive Plans
Nonqualified benefit plans are implemented to recruit, retain and reward key employees. Properly implemented plans motivate and reward employees to work towards common company goals while retaining employees with a long-term outlook. These plans enable companies to provide appropriate retirement benefits with a more targeted and efficient use of benefit dollars. There are a few… Read more »
EBN Highlights Issues to Address in Succession Planning
Considerations in Succession Planning EBN was recently featured in the May/June Issue of Indiana Bankers Association’s magazine, Hoosier Banker, with an article on Succession Planning and the Important Issues to Address. We are happy to support and be a part of such a great Association. Read the entire article here!