INSURANCE & SECURITIES BROKERAGE DOWN AT HEARTLAND FINANCIAL

Dubuque, IA-based, $3.9 billion-asset Heartland Financial USA reported third-quarter brokerage and insurance commissions fell 12.5% to $824,000, down from $942,000 in third quarter 2008, while trust fees decreased 5.8% to $1.95 million, down from $2.07 million. Income from bank-owned life insurance (BOLI) reversed its $247,000 loss a year ago and generated $297,000 in earnings in the quarter. Trust fees, brokerage and insurance commissions, and BOLI earnings comprised, respectively, 6.9%, 16.4%, and 2.5% of noninterest income, which climbed 51.1% to $11.91 million, up from $7.88 million, helped by $1.21 million in securities gains and $998,000 tied to the company’s FDIC-sponsored acquisition of Elizabeth, IL-based The Elizabeth State Bank. Net interest income on a 4.06% net interest margin slipped 0.5% to $22.69 million, down from $22.81 million, as loan loss provisions increased by $4.8 million to $11.9 million. Net income grew 20.7% to $3.5 million, up from $2.9 million a year ago, and Heartland Chairman, President and CEO Lynn Fuller said, “Third quarter results reflect very solid core earnings, aided by an exceptional net interest margin of 4.06%.” In 2008, Heartland Financial USA reported $753,000 in insurance brokerage income and $2.35 million in securities brokerage income, which comprised, respectively, 2.5% and 8.1% of its noninterest income. The company ranked 88th in insurance brokerage earnings and 33rd in securities brokerage income among U.S. bank holding companies (BHCs) with assets between $1 billion and $10 billion, according to the Michael White-Prudential Bank Insurance Fee Income Report.

INVESTOR GROUPS MANEUVER TO ACQUIRE AIG’S TAIWANESE LIFE INSURER & DEVELOP BANCASSURANCE BUSINESS

Hong Kong-based China Strategic Holdings (China Strategic) has agreed to sell a 30% stake in Hong Kong-based Nan Shan Life Insurance to Taipei, Taiwan-based Chinatrust Financial Holding Company (Chinatrust) for NT$21.2 billion ($656.9 million), and Chinatrust has agreed to sell a 9.95% stake in itself through a private placement to China Strategic. After three years, the companies agreed that Chinatrust may increase its stake in Nan Shan, and China Strategic may increase its stake in Chinatrust. Chinatrust said it agreed to the deals “for the development of the bancassurance business.” These deals and the deal to sell AIG subsidiary Nan Shan Life Insurance Co. to the Hong Kong-based consortium led by Primus Financial Holdings and China Strategic (consortium) are now on hold. Taiwan’s Ministry of Economic Affairs Investment Commission said the consortium must submit more documents, and Taiwan’s Financial Supervisory Commission said Nan Shan’s buyers must show consistency related to long-term commitments to the Taiwanese market, BestWire reports

JPMORGAN CHASE TO TOTALLY OWN J.P. MORGAN CAZENOVE

New York City-based, $2 trillion-asset JPMorgan Chase & Co. has agreed to acquire the 49.99% stake in London-based J.P. Morgan Cazenove that it does not already own. J.P. Morgan Cazenove’s executives will remain in their key positions and continue to operate under the J.P. Morgan Cazenove name as a unit of J.P. Morgan Investment Bank, adding J.P. Morgan’s Cash Equities and Research operations in Europe, the Middle East and Africa to the business. The stock and cash deal valued at £1 billion ($1.67 billion) is expected to close in early 2010, pending Cazenove shareholder approval. In 2008, Cazenove reported £48.5 million ($80.4 million) in net income, and in the first nine months of 2009 had already surpassed that income by 34.8%, earning £65.4 million ($108.4 million).

BANCORP BANK PARTNERS TO OFFER INSURCARD TO FRANKLIN MUTUAL CLAIMANTS

Wilmington, DE-based, $1.7 billion-asset The Bancorp Bank subsidiary The Bancorp Bank Payment Solutions Group is partnering with InsurCard, a subsidiary of Service Network Design, to provide Branchville, NJ-based Franklin Mutual Insurance with the InsurCard Visa Prepaid Card (InsurCard). The InsurCard enables claims adjusters to make initial claims valuations and load that dollar amount via phone or Internet to InsurCard. InsurCard then activates a card with that value, and the claims adjuster gives the insured the debit card on the spot. Franklin Mutual said, “InsurCard enables access to critical needs such as food, shelter, and emergency repairs. As the recovery process continues, the card can be reloaded.” The Bancorp Bank Senior Vice President John Barbella said, “We believe that prepaid cards will revolutionize the way insurers make payments as insurers look for ways to control payments and drive cost savings while providing enhanced customer care.”

FINRA FINES METLIFE BROKER UNITS

The Financial Industry Regulatory Authority (FINRA) has fined New York City-based MetLife Securities and its New York City-based affiliates New England Securities Corp., Walnut Street Securities and Tower Square Securities $1.2 million for failing to establish an adequate supervisory system to review brokers’ email correspondence with the public, and for failing to establish adequate supervisory procedures to monitor brokers’ outside business activities and private securities transactions. Because of these failures, FINRA said, one broker stole nearly $6 million from his customers through private securities transactions. FINRA Executive Vice President Susan Merrill said, “Relying on brokers to provide copies of their own emails for supervisors to review is hardly an effective means to detect such misconduct.”

NY LIFE REPORTS LIFE INSURANCE SALES UP 8%

New York City-based New York Life Insurance announced that sales of its permanent and term life insurance products drove the company’s total life insurance sales up 8% in the first nine months over year ago numbers to their highest levels on record for the period. New York Life Executive Vice President Mark Pfaff said, “Having the best year on record is strong evidence that consumers want the comfort of guarantees from financially strong insurers… Last year, when the stock market declined 37% and real estate plunged over 11%, the cash value of whole life insurance from New York Life increased in value, as it has over the past 155 years. Americans increasingly value and appreciate this safety, security and stability.”

FINANCIALLY SECURE AMERICANS CONSERVATIVE & MODERATE RISK TAKERS

Almost half (49%) of working Americans with at least $500,000 in investable assets describe themselves as tentative or reluctant to invest in the stock market, while 6% characterized themselves as enthusiastic about investing, according to a September survey conducted by PNC Wealth Management, a unit of Pittsburgh, PA-based PNC Financial Services Group. One-third (34%) say they are more conservative, and 59% describe themselves as balanced or moderate risk takers. PNC Wealth Management Vice President Thomas Melcher said, “The survey results validate the value of an integrated wealth management model – one that combines estate, financial and tax planning with investment management.”