Survey: Bank-owned life insurance assets hit $126B in ’08

Bank-owned life insurance assets ballooned to $126.1 billion last year, up 5% from $120.1 billion in 2007, according to recent research from Michael White Associates LLC. The Radnor, Pa.-based firm surveyed yearend 2008 data from 880 top-tier bank holding companies with more than $500 million in assets and 7,495 commercial and savings banks supervised by the Federal Deposit Insurance Corp. Of the 880 bank holding companies, 712 reported BOLI assets in 2008, up from 696 in the prior year. Bank-owned life insurance is the life coverage that banks hold on their directors, officers and employees — with the institutions as both owner and beneficiary of the policies. These policies are intended to recover the costs behind the bank’s employee compensation and benefit programs. Of the 880 large bank holding companies reviewed, those with more than $10 billion in assets had the highest incidence of BOLI ownership, with 61 of the 72 biggest having such assets. Bank holding companies with more than $10 billion in assets also accounted for the lion’s share of BOLI assets, holding some $110.2 billion in these assets for 2008, up 5.29% from 2007. In total, large bank holding companies with at least $500 million in assets made up $123.7 billion in BOLI assets, up 5.21% from 2007. Out of 1,526 stand-alone banks — those without bank holding companies — some 436 reported $2.38 billion in BOLI holdings, down 5.3% from 2007.