Greetings!
I hope that you will find this newsletter informative and timely. Let us know if you have any questions. |
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Minnesota Banking Results Second Quarter 2010
The numbers below indicate that the free fall is over for now, but we are not close to being out of the woods.
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In Millions |
6/30/2010 |
12/31/2009 |
12/31/2008 |
12/31/2007 | |
Banks Reporting |
406 |
415 |
431 |
443 | |
Equity Capital |
6,260 |
7,429 |
7,706 |
8,809 | |
OREO |
1,075 |
943 |
586 |
261 | |
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% Unprofitable |
20.69% |
27% |
17% |
13% | |
% w/Earnings Gain |
50.74% |
31% |
33% |
43% | |
Pre Tax ROA |
.43% |
.35% |
.76% |
1.78% | |
Net Charg-offs to Loans & Leases |
1.07% |
1.35% |
.76% |
.30% | |
Non Perf Loans to Loans & Leases |
4.17 |
3.44% |
2.73% |
1.21% |
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BEWARE of Spooky renewals  |
- Some insurance carriers are reducing their exposure through policy endorsements. Make sure all endorsements are thoroughly explained to you before you renew.
- "Separate" limits are quietly being changed to "Shared" limits, which can dramatically reduce your coverage.
- Be on alert for the dreaded "Cancellation Clause" which may allow the insurers to cancel your insurance coverage when you need it most.
- Don't risk losing the interest of your best potential carriers because your bank's story was not properly presented to insurers. Without "the rest of the story", many insurance underwriters will make a quick assessment of your bank based on your most recent call report.
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How Much Insurance Does the FDIC Require? |
| This is a common question that does not have a simple answer. There is not a regulatory standard or FDIC produced grid that provides guidance. The following quotes come from section 4.4 of the FDIC's Risk Management Manual of Examination Policies: "The maintenance of appropriate levels of necessary insurance coverage is a key aspect in the risk management process". "Any material inadequacies of insurance coverage should be directed to management's attention. Lack of any significant coverage, board of director approval and review, or deficiencies in a bank's loss prevention program should be appropriately commented upon in the Report of Examination."
The bank needs to be thorough in analyzing their key areas of risk and the controls they have in place to mitigate the risk. The senior officers and the board should be prepared to defend their risk analysis, risk controls and risk treatment (insurance). A recognized bank insurance expert can play an important role in maintaining a risk management program that will hold up well under an exam. |
Free Employee Handbook Seminar
Updating or Creating An Effective Employee Handbook |
| In this 2-hour workshop, you'll learn how to:
Clearly communicate company expectations
Create an affirmative defense against litigation
Ensure compliance with State & Federal requirement
Wednesday, September 29 9 am - 11 am
Continental Breakfast & Registration 8:30 am
Crown Plaza Hotel
2200 Freeway Boulevard, Brooklyn Center, MN 55430
Presented by Associated Insurance Agents, Inc.
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