Hi :

In this issue:
Save the Date - ITA Annual Conference
Networking with Seniors
What is a Refinancing
Trustcompare.com
ITA Newsletter Subscription

Save the Date - ITA Annual Conference

The Iowa Trust Association Annual Conference will be October 18-19 at the Marriott Hotel in West Des Moines. This year's event will be two days and will feature sessions on top trust issues. Exhibitors will also be on hand to display and discuss their products and services for trust departments. Gain the knowledge you need to remain a leader in the trust profession. With changing regulations, an unsure economy and the increasing need to stay current, the Iowa Trust Association is proud to offer the 2006 Annual Conference. Sessions include portfolio construction and management; Roth 401(k)s; an update on federal issues; trust ethics; growing the next wave of talent for trust departments; and the Iowa Prudent Investor Statute. There is also special sessions on Oct. 18 for Operations personnel. Encourage your operations staff to attend! The ITA Conference has been approved for 6.5 hours on CLE hours and there is 1 hour of ethics CLE pending. See the ITA website for complete information and registration materials.

Back to top

Networking with Seniors

By: James R. Tiedje, Vice President and Business Development Officer, Quad City Bank & Trust

I have been in the trust business now for over 20 years. Guess you might call me an "old-timer". Like most good trust officers should, I try to help clients with a variety of life's needs and not just with financial matters. Healthcare decisions, finding service providers for repairs, family matters, selling their homes, and the list goes on and on. Most who are reading this newsletter know what it's all about.

In hopes of serving my clients better and seeking new business opportunities, I have concentrated my efforts these last few years on becoming more involved in the seniors' community. I started by attending a CSA (Society of Certified Senior Advisors) training course and earned that designation. It has been a real eye-opener for me as I have learned so much about the aging of America and what the elderly really need and want. Take heed trust professionals, as financial planners in great numbers are seeking this designation in hopes of luring our clients away. As an outgrowth of my newfound expertise, I discovered and joined a local group called Quad City Elder Care Network and joined. It is a volunteer organization made up of partners from local businesses and not for profits with leaders from their respective elder care service field. We meet quarterly to share ideas and information about services and trends in the seniors' arena. We work together to offer seminars and participate in seniors' forums, such as the upcoming 'Senior Seminar and Social'. Occasionally we are even seeing referrals exchanged between our members. As an extension of the network, there has even been a hotline established for people who are seeking guidance in issues related to elder care needs. For more information, go online to www.qceldercare.com. I am also actively participating as a volunteer at the Center for Active Seniors in Iowa and attend a monthly "Breakfast Club" meeting at CASI with members and other service provider professionals.

So much is written today about population trends and what the baby-boomers are going to expect as they approach their maturing years. Sometimes it becomes overwhelming trying to keep up with it all. Through my efforts to network with other professionals serving the seniors' community, I believe am better able to keep up with things and serve my clients.

Back to top

What is a Refinancing

by Peter G. Weinstock
The largest pools of trust preferred securities, by dollar amount, occurred quarterly starting with September 2001 and going through December 2003. Thus, the most significant refinancings will occur from September of this year through December of 2008.

For bank holding companies of under $500 million in assets, trust preferred securities issued prior to December 31, 2005 are not considered debt for purposes of the debt-to-equity calculation. This grandfathering expires as of January 1, 2011. This grandfathering also goes away in the event a company were to issue additional trust preferred securities. There is an exception for a refinancing of an existing trust preferred securities issuance.

Accordingly, whether an issuance of trust preferred securities would be deemed to be a refinancing is significant.
We have had conversations with several Federal Reserve Banks regarding this matter. It is our understanding that the Federal Reserve Board Staff is preparing a financial institutions letter on this point. Set forth below is what we have been advised the FIL will say.

Under any circumstances, there is a gap in time between when a bank holding company receives the proceeds of a trust preferred securities issuance and when it pays off an older issuance. The Federal Reserve Board is expected to say that if that gap in time is six months or fewer, and certain other conditions are met, then an issuance of trust preferred securities will be deemed to be a refinancing. If this gap is six to twelve months, then it may be a refinancing subject to discussions with the appropriate Federal Reserve Bank. If the gap is more than twelve months, then it will not be deemed to be a refinancing.

To be a refinancing, in addition to the time period discussed above, the bank holding company is limited in how it can invest the proceeds until the refinancing occurs. In addition, bank holding companies will be required to represent that they have not increased the amount of trust preferred securities that they have issued and that they are issuing trust preferred securities for the purpose of a redemption. They will also be expected to covenant that they will redeem the earlier issuance of trust preferred securities as soon as they can.

In short, it is significant whether a new trust preferred securities issuance is deemed to be a refinancing or not. The Federal Reserve Board is expected to police this issue because of its effect on bank holding company debt-to-equity ratios. Issuers must be mindful of the impact of these rules. As always, please do not hesitate to contact me if I can be of any help in answering any questions that arise.

On a different note, we have noted that many bank holding companies have not updated their dividend policies to reflect the change in capital rules for those with assets of $150-$500 million or more. We advise you to reconsider the language of your policies because they may no longer be current.
Peter G. Weinstock is the Practice Group Leader of the Financial Institutions Section of Jenkens & Gilchrist, P.C. in Dallas, Texas. He may be reached at (214) 855-4746 or pweinstock@jenkens.com.

Back to top

Trustcompare.com

Trustcompare provides valuable information ranging from broad references to industry standards to specific detail of your strengths and weaknesses. From data submitted by each organization regarding assets, income, expenses and profits, Trustcompare analyzes performance from several perspectives. Trustcompare allows you to compare your trust department performance with that of similar organizations. As a member of the Iowa Trust Association, you will receive 10% off the price. Visit Trustcompare at www.trustcompare.com.

Back to top

ITA Newsletter Subscription

If this message was forwarded to you and you would like to receive the ITA Newsletter, click here to subscribe. iba_ednews_subscribe@iowabankers.com

Back to top