look at this one ---mbhc---
Shares Outstanding: 37,000,000
52 Week Range: .05 - .60
Public Float: Aprox. 28,210,155
Recent Price: .25
As a result of the Great Depression and a chaotic banking system, the 1933 Glass Steagall Act was passed to
separate banks from insurance companies and investment firms. Nearly seventy years later, on October 22,
1999, "Congress reached agreement to radically overhaul the nation's banking laws so that banks, securities
firms and insurance companies can move into one another's lines of business . . . . This compromise will repeal
the 1933 Glass Steagall Act" (Stockwire.com, October 25, 1999). With this recent legislation, banks and
insurers may expand their business environment without restriction and the National Institute Companies of
America, Inc. (NICA) paves the way.
On November 1, 1999, Mortgage Bankers Holding Corp. (OTCBB: MBHC) announced they will change their
name to National Institute Companies of America, Inc. (NICA) in the first quarter of 2000. According to Kevin
Maloney, president of MBHC and NICA, "Our timing could not be more impeccable considering the notice . . .
that there will be a repeal of the 1933 Glass Steagall Act. This new legislation could create tremendous
opportunities for the company to expand, merge or possibly be acquired by a strategic partner."
What Is NICA?
NICA was acquired in January 1999 by MBHC, along with its wholly owned subsidiaries?the National
Institute for Estate Planning, Inc. (NIEP), the National Institute for Retirement Planning, Inc. (NIRP), the
National Institute for Financial Services, Inc. (NIFS), and the National Institute for Employee Benefits, Inc.
(NIEB).
NICA was one of the largest individually owned estate and financial planning organizations in the United
States. The company was founded on the strategy of maximizing revenues for community banks to achieve
equal, if not superior, performance to the largest banks in the nation. Today, NICA is an endorsed provider
for estate and financial planning with multiple community and independent banker's associations.
NICA seeks to provide a sole-source "turn-key" solution to community banks and financial institutions for
estate and financial planning products and services. In particular, NICA is structured to assist banks, bank
holding companies, and other financial institutions, such as broker/dealers, S&Ls, and accounting firms, in
the planning, design, and implementation of an insurance marketing program and financial planning profit
center within the bank or entity. NICA provides evaluation of the insurance industry climate, and consults on
the alternatives and opportunities for banks and institutions to more fully utilize and expand their customer
base.
To capitalize fully on the opportunities before NICA and its customers, NICA has gathered a meticulously
chosen group of professionals from accounting, estate planning, insurance, investment banking, and law
fields. NICA professionals devote their talents to serve the industry sector (community banks) that has
historically been underserved and that desires to have the following advantages and capabilities: multiple
carriers and products in a non-partisan environment; maximum available compensation without individual
carrier production requirements; centralized data information and management systems for sales and
marketing, commissions payable and receivable, cross-selling and referrals, revenue splits, client tracking,
product records, and information data management systems; a system for ongoing promotion, support, and
continuing education; and professional, cost-effective distribution systems.
NICA Services
National Institute for Estate Planning, Inc. (NIEP)
The NIEP is a national organization that develops and presents seminars on estate planning to high-net-worth
individuals; through their local bank. In addition, the organization prepares estate plans for customers
providing an opportunity to save an average of $400,000 per family. NICA's seminar programs are built on
the four cornerstones of education, individualism, conservatism, and a team concept. NIEP has already
delivered over 1,650 educational seminars on estate planning to over 32,500 attendees.
The estate planning program averages 12- to 18-weeks beginning with initial meetings between NICA and
bank officers. After these meetings, the bank will select its top customers and an attorney for the seminar. At
the seminar, NIEP will provide an overview of estate distribution problems, sample plans, recent changes in
tax laws, the value of trusts, and will introduce a local attorney/CPA/trust officer. The seminar team introduces
proven estate planning techniques and alerts the attendees to common mistakes in estate planning, followed
by a question and answer period.
Follow-up customer/estate planner meetings are held in the banks. These meetings will include a
complimentary initial consultation, current estate analysis review, and a review of techniques.
For interested customers, an analysis of the estate is made, a preliminary plan is presented, and within a few
weeks, the final estate plan is completed. The planner will then accompany the customer as they meet with an
attorney/trust officer to implement the plan. At this time, fee income is paid and dispersed to the bank.
The earned fee income is one reason why a bank would implement a NIEP program. Additionally, the NIEP
process provides customer service and contact, along with creative customer relationship marketing that
works to create a competitive edge for participating banks as well as encourage cross-utilization of existing
bank services. The program also encourages banks to develop a referral system to generate future customers.
National Institute for Retirement Planning, Inc. (NIRP)
The NIRP is a seminar program that will fulfill the needs of a significant number of the bank's clients, for it
considers personal and financial concerns that many people are confronting today in preparing for retirement.
NIRP will not only address retirement funding under current tax laws, but it will also suggest reasonable and
obtainable solutions to help attendees achieve financial independence.
The seminar also details some special concerns of widows and widowers. NIRP seminars have already been
used by many large corporations.
National Institute for Financial Services, Inc. (NIFS)
NIFS is designed to help plan for the future, for they understand that every person's situation is unique and
will require a unique plan. NIFS utilizes the most current financial planning, portfolio simulation programs, and
database availability for up-to-date information. The seminar also presents the opinions of industry
knowledge analysts, asset value and growth, generation marketability and perpetuity, and tax planning
strategies.
Other seminar programs include: the Charitable Giving Seminar, meeting the needs of banks whose customers
are involved in charitable organizations or customers who have an interest in charitable giving; the Business
Owner Seminar, which is designed to acquaint the bank's commercial depositors with the information they
need to stay competitive in the business marketplace; the Physician's Seminar, which offers topics of major
concern for medical practitioners; and other similar seminars.
Market Opportunities
The bank insurance and financial planning market is growing at an astonishing rate, as evidenced by the
following statistics:
Within five years, some banks will derive half of their income from insurance sales (Flowers, Robert D.,
American Banker).
30% to 50% of consumers show an interest in dealing through their bank for insurance over an
independent agent or stockbroker (Fact Book, Association of Banks-in-Insurance).
Financial institutions could account for 23% of the total insurance distribution by the year 2001, up
from the current 7% level (Data Monitor, Association of Banks-in-Insurance).
Almost 700,000 households would purchase life insurance through banks based on current purchase
patterns. This represents $57 billion of life insurance purchases (Fact Book, Association of
Banks-in-Insurance).
If banks could achieve as much as 25% of all life insurance purchases, bank premiums would be
approximately $3.3 billion and bank revenues would equal $1.6 billion (Fact Book, Association of
Banks-in-Insurance).
As a result of Congress's actions to reverse the 1933 Glass Steagall Act, there is no required separation of
banks, securities firms, and insurance companies. A bank, for example, if it chooses, can now move into the
insurance business. This is good for banks that have a foundation upon which to build lasting programs.
Consumers have indicated a willingness to buy financial products through their local bank. NICA's services
have been designed to encourage such cross-selling of existing bank services.
Growth Objectives
NICA has 14 years of proven success in selling financial products and offering estate and financial planning
seminars to the banks and their customers. In addition, NICA has been presented in each state to its bar
association, state banking commission, and state insurance commission for approval. Each state has also
been notified of NICA's practice in their state in order to comply with practical law.
Currently, NICA is the endorsed provider of estate and financial planning services for the Independent
Bankers Association of Texas, the Independent Bankers of Colorado, the Community Bankers Association of
Illinois, the Community Bankers of California, the Community Bankers of Kentucky, the Community Bankers
of Wisconsin, the Oklahoma Bankers Association, and the Texas Funeral Directors Association. NICA has
also worked with extension services of five major universities, including Colorado State University, Texas
A&M University, Washington State University, the University of Arizona, and the University of New
Hampshire.
Focusing on NICA's strength, markets, and customer profiles, management's short-term objective and
long-term goal will be to increasing NICA's production capacity by methodically growing its respective
strategic alliances and joint ventures, thereby increase overall value. Specifically, the company's main
objectives are: to significantly increase efforts in asset gathering, management, and services; to expand
additional distribution with a national distribution organization; to secure additional banking endorsements;
to increase overall revenues through existing client banks and new banks; to develop proprietary products
with various product providers; and to expand market share through internal growth and strategic
transactions. |
