Bank Insurance Brokerage Second-Quarter Income Drops Nearly 7%

According to the report, 62.1 percent of large top-tier BHCs engaged in insurance brokerage activities in the first half of 2009.

Among the top-12 listed bank institutions, Calif.-based Wells Fargo & Company led the way with respect to first-half year-to-date income at $995,000, up nearly 7 percent from its 2008 first-half income of $931,000.

New York-based Citigroup Inc. was second in 2009 first-half income with $505,000, although it experienced a 45.6 percent decrease from its 2008 first-half income of $928,000.

North Carolina-based BB&T Corporation was third with $478,743 in 2009 first-half income, up 14.4 percent from 2008 first-half income of $418,349.

BHC 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.

BHCs with over $10 billion in assets had the highest participation in insurance brokerage activities at 90.7 percent, the report stated. These BHCs produced $5.66 billion in insurance fee income in the first half of 2009, down 6.7 percent from the $6.06 billion they produced in first-half 2008.

These large bank holding companies accounted for 93.5 percent of all BHC insurance brokerage fee income earned in the 2009 first half, the report said.

For BHCs with assets between $1 billion and $10 billion, leaders in insurance brokerage income in the 2009 first half included Eastern Bank Corporation, Old National Bancorp, Trustmark Corporation and Johnson Financial Group Inc.

BHCs of this size registered a 4.8 percent increase in insurance brokerage income to $319.7 million in the 2009 first half, compared to $305.2 million in the 2008 first half.

Among BHCs with assets between $500 million and $1 billion, leaders were 473 Broadway Holding Corporation, Texas Independent Bancshares and First Manitowoc Bancorp Inc. These BHCs experienced 10.5 percent growth year-over-year in their insurance brokerage income, stated the report.

The smallest community banks, with assets less than $500 million, were used as "proxies" for the smallest BHCs, which are not required to report insurance brokerage income, the report noted. Leaders among bank proxies for small BHCs were Ill.-based Soy Capital Bank and Trust Company, Ohio-based Spirit of America National Bank, and Mass.-based Hoosac Bank.

MetLife Inc. was not listed in the report since it did not engage in significant banking activities.

Joan H. Cleveland, senior vice president, business development with Prudential's Individual Life Insurance business, said, "With the exception of several BHCs that experienced large declines in their insurance brokerage income, the industry as a whole would have attained new record incomes.

"Excluding newly minted BHCs, six of the top eight registered increases, and BHCs with assets less than $10 billion increased their insurance brokerage income by 5.8 percent in first-half 2009."