Valhalla Business Advisors brings expertise to community banks throughout the United States. Our team’s experience working with financial institutions over 20+ years enables Valhalla to differentiate for its banking clientele, including FDIC-insured community banks and regional credit unions.

Solutions for banks and credit unions

Valhalla Business Advisors is a consultancy that focuses upon employee benefits advisory and brokerage services; We operate in a fiduciary capacity for our clients. We want our clients to “have their cake, and eat it, too,” where clients receive unconflicted advice and superior value from our platform.

Our principals, Stuart and Jens, also have extensive business experience and training; Our team is open to additional scope for community banking clients as a means to build relationships and extend our network; Discussions we have had with banks over the past year include support of bank-owned insurance agencies, transaction diligence services, and strategies for divestitures of real estate.

More than any other item listed above, though, is this focus: Community banks without insurance agencies need help optimizing employee benefits and BOLI programs; Our team has this expertise.

Market Research

Valhalla Business Advisors has invested into proprietary analytics to inform discussions with community banks across the United States. There is quite a bit of variation across the 4,664 banks included in our data set!

This is a snippet from a brief analysis of banks at a state-by-state level, including 3/31/23 ROE measures, per state, at the 25th, 50th, and 75th percentile:

There are a handfuls of banks that continue to run substantial insurance agencies. In our experience, these data can be “noisy” but, according to the 12/31/2022 FDIC call report, these are the largest bank owned insurance agencies for 2022.

Consolidation continues in the insurance distribution sector — the consequences of these transactions are, in part, one thesis for the formation of Valhalla — and we continue to monitor these trends. Here are some notable bank transactions from the past few years, (not including the 2022 sale of M&T agency to Arthur J. Gallagher & Co.):

The trends towards bank divestitures of insurance agencies is an ongoing trend. As reported on BankDirector.com in August 2023, “[f]or the first time in nearly two decades, announced divestitures of bank-owned insurance brokerages have outpaced announced acquisitions.”

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Through July 2023 there have been nine announced insurance brokerage transactions involving banks. Of those, five were bank divestitures:

In February, Charlotte, North Carolina-based Truist Financial Corp. announced a deal to sell a 20% stake of its insurance unit to private equity firm Stone Point Capital.

In March, Southern Pines, North Carolina-based First Bancorp announced a deal to divest its Arkansas-based BHC Insurance business to employee shareholders.

In April, Lubbock, Texas-based South Plains Financial, parent company to City Bank, announced the sale of City Bank’s wholly owned subsidiary Windmark Insurance Agency to Alliant Insurance Services.

In June, Racine, Wisconsin-based Johnson Financial Group divested its Johnson Insurance Services subsidiary to Risk Strategies. MarshBerry served as the financial advisor to Johnson Financial Group.

In June, Defiance, Ohio-based Premier Financial Corp. sold First Insurance Group to Risk Strategies. MarshBerry served as the financial advisor to Premier Financial.

SOURCE on 8/18/2023:  https://www.bankdirector.com/issues/bank-ma/why-banks-are-divesting-insurance-brokerages/

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Valhalla Business Advisors is pleased to support community bank clients with insights about their employee benefit programs within the context of their bank’s financial performance; We are also pleased to support our clients with bespoke analytics and market analysis to benchmark their organization on multiple dimensions. Here are a few samples of benchmarking results that stand out beyond typical employee benefit analysis:

Valhalla is uniquely positioned to deliver insights and value to clients. Our success transitioning from operating from local databases to interfacing with the FDIC API means we can help our bank clients in a manner that is different and better than competing employee benefit brokers!

The Valhalla advantage

Valhalla Business Advisors is extremely proud to bring boutique insights to clients; As a banker, it is likely you haven’t seen the level of insight that Valhalla is positioned to bring to your organization; Community banks without insurance agencies need help optimizing employee benefits and BOLI programs; Our team has this expertise. Feel free to reach out to Stuart or Jens to discuss further!

Case Studies

Case study #1:

Fact Pattern: An employer group (multidisciplinary healthcare provider practice) of ~300 employees engaged Valhalla to manage the group’s employee benefits. Valhalla  immediately identified as potential opportunity for savings. 

• Primary objective: Determine whether the pharmacy benefit configuration was optimal and develop a renewal strategy informed by the program review  
• Secondary objective: Capture short-term savings

Outcome: Identification of excessive TPA profit, negotiation, and associated immediate corrective action yielded an annualized savings of ~$100k. — The strategic direction for the 2024 plan year was finalized.

Case Study #2

Fact Pattern: An employer grew from 48 employees to 65 employees during the course of the year. This growth moved them to a new rating methodology, which contemplated risk differently. The consequence was an 80% increase (> $500K) in annual premium. Valhalla was engaged to help cope with the increase. 

• Primary objective: Reduce the premium increase
• Secondary objective: Maintain a reasonable level of benefits for employees while considering the ongoing risk in the context of any proposed solution

Outcome: An Individual Health Care Reimbursement Arrangement (ICHRA) was identified as best course of action. When implemented, this strategy yielded over $500,000 in savings, all employees were able to maintain benefit levels comparable to the previous plan year, and rating impacts of ongoing risk were minimized (by virtue of individual market rating methodology).

Sample Scope of Work