Wishing you good cheer in this season and the New Year!
4rd Quarter

No. 16

  IZALE Financial Group eNews
O ur wish and hope for you and yours, during this time of the year is health and happiness. IZALE was founded to help financial institutions value the people they serve and their employees that work for those customers first because we value you!   
This eNews we are sharing a message from our CEO and Founder, Scott Richardson on one example of how we help our clients with Executive Disability Programs. Our strategic partner Jeff Sondgroth from Bank Advisors, Ltd.  shares why outsourcing for underwriters is one success strategy that we want our clients to know.    
We also send our gratitude to you for your loyalty and trust in us! 
Happy Holidays, Scott & Your Friends at IZALE 
Scott Richardson, Brenda Haag, Bruce Barge, Chris Richardson, Deb Hardimon, Fannie Mae Pantaleon, Gary Wilberg, Jeff Prescher, Joe Tripalin, Patrick Costello and Phil Aderton
Value People. Improve Earnings. Protect Assets.

That's been our mission since I started IZALE almost a decade ago and became our tagline along the way. It sums up the challenges that clients have asked us to solve for them.

For example, your people are the most valuable asset your institution has. Their knowledge, skills, relationships, and efforts are critical to your success, and how well you provide a total compensation and benefits package that meets their needs goes to the heart of attracting and retaining them.

The best total compensation packages provide market-based cash payments like base salary and bonus, as well as wealth accumulation tools like 401(k), profit sharing and deferred compensation. And they also include a variety of "risk management" benefits that help your people prepare and protect against risks that can stop salary and wealth accumulation goals in their tracks.

Let's focus today on just one of the risk management benefits you should offer - disability insurance. The risk of someone having a disability before age 65 is over 25% greater than of someone dying. After 30+ years in this business, I've helped clients with almost twice as many disability claims as death claims and have seen up close how a disability impacts people. Sure, accidents happen and someone may end up a paraplegic; frankly, that's the exception. Far more common are muscular or coronary or neurological conditions.

Group long-term disability or LTD is a strong foundational benefit that every employer should offer. (If you don't - please call us today. Adding this benefit is easy and costs less than you think.) The out-of-the-box group LTD plan usually covers 60% of base salary after 90 or 180 days of disability, up to a maximum benefit of $6,000. Simple math shows that this covers $100,000 of base salary. For most of your employees, group LTD is enough.

For your executives and even some officers, however, group LTD nearly always leaves a gaping hole in coverage. Salary above the maximum - not covered. Bonuses - not covered. Retirement plan contributions - not covered. When you take out what's not covered, we frequently see the protection fall to 40% or less of total compensation. And that's just not acceptable.

What can you do? First, we can help you redesign the group LTD and cover more compensation. With some clients, that's all we needed to do. If that's not enough, however, we can show you how employer-sponsored individual LTD coverage can ensure that your highest paid employees have the same coverage as your newest, entry-level hires.

Given the risk of disability, don't delay on fixing the shortfall in what you offer. Call us today.

Scott Richardson, Founder & CEO
click to meet Jeff
Where are all the Credit Analysts?
Industry Wisdom from Bank Advisors Ltd
We all remember the "good ol' days" when the task of staffing a community bank's credit department was challenging but predictable. The regional and money center banks turned out scores of capable, formally trained credit analysts that would make their way to the community banks. However, the "downturn" changed the supply and demand dynamics of the credit analyst position. 
Let's first talk about demand. The number of formal credit training programs now is greatly reduced in response to bank consolidation, a steep decline in new lending transactions, and the prioritization of loan work-out and portfolio management needs. Although both the economy and lending opportunities have since improved, the training programs have not recovered.   
When asked about the lack of analyst candidates, one hiring manager put it frankly, "Kids coming out of college just don't want to work for banks".  Withholding judgement, the reasons are clear:  1) A perceived instability of banking careers as a result of the "downturn"; 2) A perception of lower earning potential in banking than in other finance and business-related careers; 3) Inflexible work hours and a lack of other "modern" workplace accommodations.     
The result of these supply/demand inefficiencies result in talent deterioration and higher salary demands, a bad combination. Therefore, banks have naturally taken a more cautious approach to hiring and have opted to stretch existing resources. Given heightened regulatory expectations and the previously exposed risks of lax credit administration practices, the cautious approach is not optimal.   
Others have taken a more nuanced approach, seeking outsourced credit analysis solutions as is commonly accepted with internal audit, compliance support, and loan review functions. Although it may seem daunting to entrust the credit analysis function to an outside firm, these banks have identified arguable advantages. These advisory firms tend to staff professionals with a higher level of experience than is typically available to banks for similar positions. Also, the higher per/hour cost is typically offset by the "on demand" nature of the service.   
The banking environment has seemingly changed more over the past decade than in the prior century. Yet, the community bank's importance in the vitality of our economy is unarguable. As with all other aspects banking, community banks must identify prudent ways to "change with the times", all while maintaining their identity. 
Jeff Sondgeroth, Bank Advisors Ltd.
Jeff is the Managing Director of Bank Advisors Ltd and has over 25 years of banking experience.  Bank Advisors is a boutique advisory firm with an overall mission of contributing to the success of community financial institutions
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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 with separate video tutorials for Banks and Credit Unions, and Split Dollar Loans.
Thanks for your time & attention. We understand the value of both! ~ Your Friends at IZALE Financial Group
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