Today, we are having an eight-part Debate in Rome between the honorable Marcus Tullius Cicero, Doctor of Law versus the brilliant business man, Kelly Coughlin, chief executive of BankBosun. They will compare and contrast the features and benefits of municipal bonds (herewith, referred to as “Munis”) versus bank owned life insurance (herewith referred to as “BOLI”).

The debate will be judged by a select group of ten banking senators located in throughout the Roman Empire including Kansas, Nebraska, Missouri, Massachusetts and New York. Cicero will advocate for municipal bonds; Coughlin will advocate for BOLI.

The Senate would accept concise oral arguments from each advocate in four key areas. Each of you will have an opportunity to introduce your argument in no more than two sentences. You can use your two sentences to either introduce a new position or rebut an opponent’s position. After each point, the senate by a show of hands will indicate the winner of the argument and be awarded one point.

Senators, please indicate by a show of hands your understanding of the rules.

Advocates, please indicate by a show of hands your understanding of the rules [pause]. Very well gentlemen, let the debate begin.

And now we begin Part One of Debate in Rome. The subject today is Diversification, Cicero versus Coughlin, Munis versus BOLI. On the topic of Diversification. Cicero, the floor is yours.

Diversification: There are over 1 million municipal securities outstanding representing about $ 4 trillion. It is very easy for a bank to get adequate diversification in the market and to state otherwise is ridiculous.

Diversification: While it is true, as Cicero says, there are over 1 million different municipal securities available, most community banks do not have enough capital to purchase enough of them to fully diversify credit risk, duration risk, and interest rate risk. An asset allocation into bank owned life insurance (BOLI) provides instant diversification with tax benefits similar to a municipal bond fund, but it is wrapped in an insurance policy, which is a permitted investment up to 25% of tier one capital.

On the subject of Diversification, by a show of hands who thinks Municipal bonds are better?

Who thinks Bank Owned Life Insurance is better? BOLI wins diversification test. BOLI wins one full point.

That is it for Part One of Debate in Rome. The subject was Diversification: Munis vs Boli, Cicero vs Coughlin. Coughlin and BOLI win. In Part Two, they will debate Balance Sheet Risk: Munis vs BOLI, Cicero vs Coughlin.