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Portfolio > Investment VIPs

Studies Examine Community Bank Investment Sales

By Staff Writer

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Small banks reported strong brokerage results in August.

The Kehrer-LIMRA Index of Community Bank Brokerage Revenue climbed to 150 in August, up from 114 in August 2006, according to Kehrer-LIMRA, a division of LIMRA International, Windsor, Conn.

Kenneth Kehrer set the index at 100 in 2002.

The small bank survey covers banks and credit unions with less than $4 billion in assets.

Including trailer and advisory fees, gross revenue per advisor rose to an average of $24,363 in August, up from $17,415 in August 2006.

Excluding trailer and advisory fees, gross revenue rose to an average of $20,032 per producer, up from $14,877.

Michael White Associates, Radnor, Pa., another firm, says community banks with under $4 billion in assets produced a total of $248 million in commissions and fee income in the first half of 2007, or 6.4% of all banks’ total investment program revenue of $3.9 billion.

Community banks earned $490 in investment revenue for each $1 million in retail deposits, Michael White says.

At bigger banks, revenue penetration averages $740 per $1 million in deposits.

Annuity sales generated 31% of investment revenue at the community banks and 11% of investment revenue at the bigger banks.

Because Michael White has just started conducting its community bank survey this year, comparable figures from 2006 are not available.

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