Bank Insurance Fee Income Off Slightly Through Third Quarter 2003
Bank insurance fee income fell slightly through the third quarter of 2003 compared to the same period in 2002, due to a decrease in insurance fee income among big banks with over $10 billion in assets.
The data, compiled from all banks year-to-date filings as of Sept. 30, 2003, are analyzed in my Bank Insurance and Investment Fee Income Report.
Bank Insurance Fee Income. Bank insurance fee income decreased 1.1% in the first 9 months of 2003, as banks reported $2.64 billion in insurance fee income, down from $2.66 billion earned in the first 3 quarters of 2002.
Of 8,301 commercial and federally insured savings banks, 3,991 or 48.1% participated in insurance activities in the first 9 months of 2003. Compared to the same period in 2002, there were 131 fewer banks in existence and 207 fewer that recorded insurance income by the end of September 2003.
Insurance Fee Income by Bank Asset Class. The largest banks–those over $10 billion in assets–had the highest participation rate (74.7%) in insurance and produced $1.87 billion or 71.1% of all bank insurance fee income earned in the first 9 months of 2003. But, their production was 3.9% less than the $1.95 billion recorded in the first 3 quarters of 2002, which accounted for the overall decline in the banking industrys insurance fee income. Big banks lost more than 200 basis points from their 9-month 2002 bank-market share.
All other bank asset classes registered higher insurance fee income and achieved a collective 6.5% increase over the previous years first 9 months. Banks under $10 billion in assets earned $762 million or 28.9% of all bank insurance income.
Banks with assets between $1 billion and $10 billion generated insurance fee income of $465.8 million, up 2.7% from $453.6 million in the first 9 months of 2002.
Banks under $1 billion in assets accounted for $296.2 million in insurance income, an increase of 13.2% over the $261.6 million earned YTD in 2002. Of these, banks with assets between $500 million and $1 billion saw their insurance fee income increase the most, 28.9% compared to the same period in 2002.
Each of the 3 smallest classes of community banks, those between $300 million and $500 million in assets, those between $100 million and $300 million in assets, and those under $100 million in assets, also experienced increases (17.9%, 3%, and 5.4%, respectively) in insurance income in the first 9 months of 2003.