Bank Insurance First-Quarter Brokerage Income Off 5.7 %

NU Online News Service, Aug. 4, 2:36 p.m. EDT

Bank holding company first-quarter insurance brokerage income declined by 5.7 percent to $3.03 billion, compared with last year's record $3.21 billion for the period, a consulting firm reported.

The numbers were contained in the Michael White-Prudential Bank Insurance Fee Income Report, which noted the first quarter was a 15 percent improvement when compared with the $2.63 billion brokerage income figure for the 2008 fourth quarter, its lowest point since 2005.

Wells Fargo & Co. was put in first place among 12 listed bank institutions with first-quarter year-to-date brokerage income at $483 million compared with $443 million for last year's fourth quarter.

The report said that so far this year, 59.9 percent of bank holding companies engaged in insurance brokerage activities.

Compiled by Radnor, Pa.-based Michael White Associates and sponsored this quarter by Prudential's Individual Life Insurance business, the report's results are based on data from all 7,447 commercial and FDIC-supervised savings banks and 940 large top-tier bank holding companies operating on March 31, 2008.

Bank holding company insurance brokerage fee income consists of commissions and fees earned by a bank holding company or its subsidiary from insurance product sales and referrals of credit, life, health, property, casualty and title insurance.

The report said that among companies with significant banking activities Citigroup Inc. ranked second nationally with $250 million in insurance brokerage fee income.

BB&T Corporation, which owns more agencies than any other financial holding company, ranked third with $226.8 million in insurance brokerage revenue in first-quarter 2009.

Bank holding companies with over $10 billion in assets continued to have the highest participation at 90.8 percent in insurance brokerage activities. These companies produced $2.82 billion in insurance fee income in first-quarter 2009, 6.4 percent less than the $3.02 billion they produced in first-quarter 2008.

Large bank holding companies accounted for 93.2 percent of all bank holding company insurance brokerage fee income earned in first-quarter 2009, according to the report.

Joan H. Cleveland, senior vice president, Business Development with Prudential's Individual Life Insurance business, said, "While the economy has had a negative impact on sales of insurance through banks, it's important to note that insurance brokerage income was up substantially for first-quarter 2009 and not far off from record highs in the first and second quarters of 2008."

Among bank holding companies with between $1 billion and $10 billion in assets, leaders in insurance brokerage income in first-quarter 2009 included Eastern Bank Corporation (MA), Old National Bancorp (IN), Trustmark Corporation (MS) and Johnson Financial Group Inc. (WI). Bank holding companies of this size registered a 7.8 percent increase in insurance brokerage income to $167.7 million in first-quarter 2009, up from $155.5 million in first-quarter 2008.

Among bank holding companies with assets between $500 million and $1 billion, leaders were 473 Broadway Holding Corporation, Texas Independent Bancshares and First Manitowoc Bancorp Inc.

The smallest community banks, those with assets less than $500 million, were used as "proxies" for the smallest bank holding companies, which are not required to report insurance brokerage income.

Leaders among bank proxies for small bank holding companies were Soy Capital Bank and Trust Company (IL), Spirit of America National Bank (OH) and Hoosac Bank (MA).

The issuers of the report said it did not include MetLife Inc. in the list of financial holding companies because it did not engage in significant banking activities.

Michael White Associates reports can be ordered by calling (610) 254-0440, or online at www.BankInsurance.com.