BOLI – Executive Benefits – Fee Income Strategies
Stay Informed with IZALE Financial Group
1st Quarter 2021 eNews | Issue No. 24
Greetings!

Spring is here and after 30+ inches of snow that hung around a little too long it’s refreshing to see green shoots everywhere. I’ve started garden seedlings and am excited about getting in the garden in a month or so. By mid-summer we will be harvesting fresh vegetables!  
 
[Strained segue alert…] We’ve planted seeds with many of you over the years, whether it’s about BOLI as an asset or a way to retain and reward your key people or a sustainable fee income program. Let’s “harvest” those and continue conversations in the coming weeks.
 
While we need to remain vigilant in protecting ourselves and those around us from the coronavirus, it’s encouraging to see vaccinations increase and society opening up a little. (I for one am looking forward to safely having a meal in a restaurant, if for no other reason than I’m tired of cleaning up after myself!) We look forward to seeing you – in person, at an event, or if necessary on a video conference. 

Enjoy this month’s newsletter.

Scott & Your Friends at IZALE

Scott Richardson, Brenda Haag, Bruce Barge, Chris Richardson, Deb Hardimon, Fannie Mae Pantaleon, Jeff Prescher, Ken Smith, Joe Tripalin, Patrick Costello and Phil Aderton  
IZALE's Latest Professional Endorsement Announced!
CBSC, the business services subsidiary of CBAI, announced it has entered into a strategic partnership with IZALE, as a premier provider of executive and director benefits plans, as its exclusive Preferred Partner for bank-owned life insurance (BOLI) and executive and director non-qualified benefit plans. CBAI member banks are entitled to a free review! For more information, please email Phil Aderton.

Credit Unions don't miss our insightful webinar on Executive Benefits
Tuesday, April 6th at 1 pm CDT! Click here to register!
10 Year BOLI Interest Rate Comparison
Are Deposits Outpacing Loan Demand and You’re Searching for Earnings?
Given the uncertainty of just how long deposits will stick around, we’re helping clients with an alternative to typical investments; a “funding agreement.”
 
What is it and how does it work?
A Funding Agreement is an uninsured deposit contract offered by an insurance carrier: you choose the term (or terms if laddered) and the carrier offers a guaranteed rate for that term or terms. Interest is generally accrued and paid at maturity, but if you want it paid out periodically that’s an option.
 
Rates:
Here are the Funding Agreement rates from March 30:
(rates can change daily, contact us for the latest rates)
 
1-year = .57%
2-year = .79%
 
With the typical 1-year alternative currently at 0-15bps, your institution can earn $4,000+ additional income this year for each $1M put into a Funding Agreement. Other rates and terms available.
 
Contact us by email and use “funding agreement” in the subject line to schedule a call to discuss them in more detail.

For more strategies from IZALE, visit our website!
Whole Life or Indexed Universal Life for Split Dollar Loan?
by Scott Richardson, President & CEO of IZALE
Split-dollar loan (SDL) remains a popular form of executive benefit, driven by more favorable financial impact on the CU vs. other benefit forms as well as the potential for income-tax-free benefits for the executive.

Split-dollar loan uses a life insurance policy owned by the executive and paid for by the CU. The CU’s payments are treated as a loan under IRS regulations (hence the name), and if the CU is to be repaid premiums plus interest at the IRS-determined Applicable Federal Rate (AFR), there is favorable tax treatment.

Simply put, SDL captures the spread between policy performance (which varies) and the AFR (which is fixed for each CU advance). While actual spread matters the projected spread has far more influence on expected benefits. Therefore, the projection rate you use is crucial to designing and monitoring SDL. Insurance illustration rules limit the maximum projection rate, however, prudent design demands a planning rate below that maximum.

For Full Article, click to visit our IZALE Blog!
IZALE Webinar W.O.W.S. Anytime!
Have you visted our online learning Video Library? We created a place for you to go 24/7 to discover more about the expert services we provide at IZALE. Current titles include:  The Art & Science of Executive Benefits, Demystifying BOLI, and Split Dollar Loans.

Visit our website for updates to our calendar!

5/3  CBAI Group 10 Meeting  Annbriar Golf Course, Waterloo, IL

5/4   CBAI Group 12 Meeting    Franklin County Golf Course, West Frankfort, IL

5/5-7    Mountain West Credit Union Association     Scottsdale, AZ
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Securities offered through Lion Street Financial, LLC., Member FINRA & SIPC.