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BOLI: An Effective Financing Strategy for Banking Institutions

FNC helps bank clients choose those investment products that meet their needs. FNC can help banks effectively integrate Bank-Owned Life Insurance (BOLI) into a comprehensive investment and benefit-funding strategy.

Bank-Owned Life Insurance, or BOLI, is an effective financing strategy that has been used by banks for two decades to offset the expenses of benefit plans. BOLI offers Banks the ability to attract and retain key employees by offering superior benefits at reasonable costs. At the same time, a diversified BOLI portfolio can help balance liquidity and risk factors and serve as a hedge against interest rate volatility. As a result, BOLI is an efficient asset/liability management tool that can provide balance sheet advantages and potentially enhance earnings per share.

Some of the advantages of integrating BOLI into your benefit planning strategy:

• Improved book income that can be used to indirectly offset the costs associated with employer-sponsored benefit plans
• Tax deferred earnings increase income in current and future years
• Additional non-interest income
• An investment whose yield will reset at least annually
• An improved interest rate risk profile
• Investment portfolio diversification
• Investment grade credit risk
• Supplemental life insurance benefits for key executives

We invite you to contact FNC to request a free brochure and learn how BOLI can help your bank meet important goals.

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