Joe is CEO of Main Street Community Bank. Joe’s board of directors is unhappy with Main Street’s loss of Bill. They hired, trained and groomed Bill into a top performing senior lender.

Bill likes the company, he likes the people, and he certainly likes this community. But Bill is going to work at a large money center bank based in Chicago. Main Street does not offer the same total compensation package the larger bank has offered him. And Bill needs to look out for his family.

Frustrated, Joe decides to go for a run to blow off some steam. He sees somebody running with a logo on his shirt. He tries to catch the incredibly fast runner. He recognizes him. It is Kelly Coughlin who is CEO of BankBosun. He listens to Kelly’s biweekly podcasts, BankBosun – which helps bank officers navigate risk and discover reward.

Kelly helps banks achieve their key financial goals, manage benefit liabilities and enhance shareholder value through customized executive benefit plan design and bank owned life insurance solutions.

Kelly mentions there are strategies and tactics banks can utilize that allow them to offer attractive benefits to their key employees or prospective hires that can be afforded by the bank, when the costs are offset with an informal funding mechanism like bank owned life insurance.

Joe likes what he is hearing. He really likes what it does…or… doesn’t do…to the bank’s financial statement on an overall basis when utilizing bank owned life insurance.

Joe and his CFO make a presentation to Main Street’s Board of Directors. They love it. Joe is a hero. They now know they need to keep Joe happy and committed to Main Street. And the Board decides that Joe should be the first key executive to get a MainStreet Bank Nonqualified Benefit compensation package. And they tell the CFO to go fund it with bank owned life insurance.

Joe contacts Bill. Offers him a nonqualified benefit package. And he decides to return to Main Street Bank. Now Joe and his family are happy. And Bill and his family are happy. And Big Bank in Chicago is sad.

Kelly Coughlin, CPA, is the CEO of BankBosun. He is the program host of the syndicated audio podcast, helping bank C-Suite Officers navigate risk and discover reward in the banking ecosystem. Kelly specializes in helping community bank manage three Rs: Risk, Revenue and Regulatory challenges.

Contact Kelly Coughlin at: kellycoughlin[at]bankbosun[dot]com or 646-494-[five-four-one-two]

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