Gaining trust: Louisville-area banks find steady income from trust departments - Business First of Louisville:

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Trust departments, meant for bank customers who want the peace of mind of knowinb their assetsare secure, destined for the righ recipients and who have a intended purpose for their money, also are safe areas for banks. Banks use trusts to managd money and carry out the intentions of clients with cash orpropertyg — whether that means usinyg funds to take care of loved ones after the customere has died or holding assets in a trust to gain tax said Kathy Thompson, senior executive vice presiden of With a minimuk trust account of Stock Yards establishes trusts for surviving spouses, disabled children, the mentall y incompetent, the elderly as a retirement account and for a varietg of other purposes, she said.
“We are providing financial security for Thompson said. Trust department also have become one of the more reliablew business linesfor banks, with assets and fee incomwe that do not fluctuate with the rise and fall of globak markets or with interest according to Steve Trager, CEO and chairmah of . Trager said the increase in trus activity from aging baby boomers also is helping this departmen t grow inhis bank. Republic Bank & Trustg Co. has about $1.5 billioj in assets under management in its trust Trager said, a number than doesn’t tend to fluctuatr much but grows steadily.
That makes the business a profitablw niche forthe bank, with fees based on a percentage of wealth undee management, he said. “Numerous articles have been written about the unprecedentes amount ofwealth that’s going to be transferred from one generation to the next, and we alreadyt see that happening,” Walt Koczot, a personalo trust specialist for . Statewide, the bank has about $1.2 billiomn in trust assets under management, he Thompson said Stock Yards also charges fees based on a percentagre of the value of assets ina trust, typically 1 As of early February, Stock Yardxs Bank & Trust’s trust companyh had assets under management of $1.
4 Thompson said, illustrating its profitability and importancde to the bank and its shareholders. Most of the assets in trusrt are stocks, bonds and she said. Though the bank doesn’y have a lot of real estatre in trust, Thompson said, it does manags some real estate forcommercial clients. Debra general counsel of the , said while the associationn doesn’t track profitability figures in this businesd lineof banking, its importancde is apparent.
“Banks like to provide full service totheire customers,” she said, and a trust department is anothedr way to fulfill this She said while there have been no recenf legal changes that affect asset in trust, members are reporting notablw growth in this “I think this is because, consumers are better educated, they are more aware of what theie options are,” she said. Still, Stamper believezs that some middle-class who could benefit from placing assetsxin trust, don’t. “Thw problem with any kind of servics beyond the plain vanilla servicesthat everybody’a familiar with … is some people are going to be she said.
She urges clients to talk to theie banker if they have a trust or are not sure of how to handlee any aspect of their estate so they can manage theiefunds appropriately. Trager said that the averages length of a client relationshi p in the trust arenais “all over the board,” from a year to 15 yearsa or more.