Banks increased their mutual fund and annuity fee income by 7.2% to $5.38 billion in 2006, up from $5.02 billion in 2005, according to a report from research firm Michael White Associates LLC, Radnor, Pa.
Bank of America N.A., Charlotte, N.C., led all U.S. banks with almost $1.8 billion in annuity and mutual fund fees in 2006, up 13% from around $1.6 billion in 2005, according to the 2007 Michael White-Symetra Bank Fee Income Report.
Wachovia Bank N.A., Charlotte, N.C., was a distant second, with $581 million in fees from sales of the 2 financial products, up 4% from $558 million the year before. JP Morgan Chase Bank N.A., New York, was third with $526 million in fees, up 22% from $430 million in 2005.
The report revealed that 24.3% of banks in the U.S. earned revenue from mutual funds or annuities. The largest banks were by far the most active in selling and servicing these products.
Around 73% of banks with over $10 billion in assets sold mutual funds and annuities last year, producing a total of $4.8 billion in fee income from the products, $327 million more than in 2005. These big banks accounted for over 89% of all bank mutual fund and annuity fee income, the study shows.
Banks with under $10 billion in assets recorded $570.4 million, accounting for around 11% of all bank mutual fund and annuity fee income.
Leaders in this group included Silicon Valley Bank, Santa Clara, Calif., with $30.3 million; Mercantile-Safe Deposit and Trust Company, Baltimore, Md. (now part of PNC Financial Services Group Inc., Pittsburgh), with $20 million; the Washington Trust Company of Westerly (R.I.). with $10.8 million; MB Financial Bank N.A., Chicago, with $9.4 million; and UMB Bank N.A., Kansas City, Mo., with $9 million.
Banks under $1 billion in assets accounted for 4%, or $222.9 million, of bank mutual fund and annuity fee income in 2006, up 8% from $206 million in 2005.
The top 5 institutions in the under-$1-billion-asset category were Essex Savings Bank, Essex, Conn., which collected $4.6 million in fees; Fiduciary Trust Company International, New York, $4.3 million; Northeast Bank, Lewiston, Maine, $1.9 million; Country Club Bank N.A., Kansas City, Kans., $1.7 million; and First Citizens National Bank, Dyersburg, Tenn., $1.4 million.