Bank Insurance Brokerage Fee Income Up 7.5% in 2005 1Q

June 21, 2005

Bank insurance brokerage fee income was up 7.5 percent year-to-date through March 31, 2005, compared to the same period in 2004, according to Michael White’s Bank Insurance & Investment Fee Income Reports.

Among the report’s most significant findings are these:

– Total insurance brokerage fee income in the first three months of 2005 was $921.1 million, up 7.5 percent from $857.1 million in the first quarter of 2004. One-fourth of the way through the year, 3,215 banks reported earning insurance brokerage fee income, constituting 39.9 percent of all 8,050 commercial and savings banks.

– Banks over $10 billion in assets had the highest rate of participation (72.7 percent) in insurance brokerage activities and produced $686.8 million in insurance brokerage fee income in first-quarter 2005, 9.1 percent more than the $629.5 million they produced in first-quarter 2004. These large banks accounted for 74.6 percent of all bank insurance brokerage fee income earned in first-quarter 2005.

– Banks under $10 billion in assets recorded $234.3 million or 25.4 percent of all bank insurance brokerage fee income. Three of the five bank-asset classes under $10 billion experienced increases of 4.0 percent to 6.8 percent. Two asset-classes, banks with assets between $300 million and $500 million and banks with assets between $100 million and $300 million, recorded decreases (respectively, -0.9 percent and -4.0 percent) in insurance brokerage fee income.

– Nationally, the ratio of mean insurance brokerage fee income to noninterest income continued to increase to 6.9 percent. Eight of the top 15 banks exceeded that mean ratio. Four of them reported insurance brokerage fee income representing more than 30 percent of their noninterest income. Six of the top 15 banks had a ratio of 18.3 percent or greater.

– Citibank, N.A. reported YTD insurance brokerage earnings of $155.0 million as of March 31, 2005, putting it in first place. That represented a decrease of 8.8 percent from $170.0 million in first-quarter 2004.

– Branch Banking and Trust (BB&T) Company ranked second nationally with $145.1 million in insurance brokerage fee income, up 24.0 percent from $117.0 million in first-quarter 2004. Its ratio of insurance brokerage fee income to noninterest income was 34.3 percent.

The report, co-sponsored by MetLife Investors; Symetra Financial, and Keyosk, A Newtek Insurance Agency; is based on data reported by all 8,050 U.S. commercial and federally insured savings banks. The report measures and benchmarks the banking industry’s performance in generating insurance, mutual fund and annuity, and investment fee income.

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