ABA Banking Journal - September 2014 - (Page 16)

community banking BANKS IN INSURANCE Sales of insurance pay off Small banks find insurance a good fit, but not a simple one BY ASHLEY BRAY, CONTRIBUTING EDITOR 16 | ABA BANKING JOURNAL | SEPTEMBER 2014 Deanne Marino, executive director of ABIA, also has noticed an uptick in interest from community banks: "We continue to get a lot more questions about bank insurance as banks overall are looking for other ways to enhance their noninterest income." ABIA offers a number of resources to help banks considering insurance, including education, advocacy, and networking opportunities. "[Insurance is] a proven model for community banks," says Campbell. "There are plenty of community banks out there that are gaining significant noninterest income from insurance brokerage." Growth by acquisition How a bank determines its approach to the insurance market depends on its goals, objectives, and time frames. More often than not, however, the reason for getting into insurance is noninterest income. "The question is what level of noninterest income do they need to achieve through insurance, and what's their time frame for doing it?" says PHOTOS: SHUTTERSTOCK.COM F rom a macro point of view, the bank-insurance market appears to be stalled-participation and revenue generation have not changed. But just under the surface, community banks are stirring up quite a bit of activity. "There's a growing group of banks that are having a lot of success in insurance and are deriving some meaningful financial impact from it, and they're virtually all community banks," says Jim Campbell, partner at Reagan Consulting and leader of the firm's Bank Consulting Group. "I would say that the interest level among community banks is probably as high as we've seen it." According to Bank Insurance Fee Income Report, of the 50 bank holding companies that generated the highest percentage of their noninterest income from insurance revenue last year, 44 have less than $3 billion in assets. Of those 50 banks, the median contribution to noninterest income from insurance was 38.3%. (The report, by analyst Michael White, will appear in the 2014 American Bankers Insurance Association Study of Banks in Insurance.) http://www.SHUTTERSTOCK.COM

Table of Contents for the Digital Edition of ABA Banking Journal - September 2014

Chairman's View
Editor's Column
The Economy
Bank Notes
Picture This
Sales of insurance pay off
Pass the Aspirin
Payment trends: Threat or opportunity?
Working together to protect against identity theft
Tech Topics
Compliance Inbox
Around the ABA
First Person

ABA Banking Journal - September 2014

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