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MBHC, Mortgage Bankers Holding Company (MBHC OTCBB)
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.
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.
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.
Short term target $.75, mid term $2-$3.
PC STAFF
Safe Harbor Statement under the Private Securities Litigation Reform Act
of 1995: The statements which are not historical facts contained in this
press release are forward-looking statements that involve certain risks
and uncertainties including but not limited to risks associated with the
uncertainty of future financial results, regulatory approval processes,
the impact of competitive products or other uncertainties detailed in the
Company's filings with the Securities and Exchange Commission.
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