Bank holding companies earned a record $2.26 billion from the sale of annuities in the first three quarters of 2011, up from $1.84 billion, or 22.6%, from the year-ago period, according to the recent annual report from consulting firm Michael White Associates and the American Bankers Insurance Association. 

In the third quarter, bank holding companies generated $731.5 million in annuity commissions, up 17.7% from $621.3 million earned in the third quarter of 2010. 

The report incorporates data from 927 bank holding companies with assets greater than $500 million, which are required to report annuity fee income, said Michael White, president of Michael White Associates, in an interview.  In addition, the report gathers data from 6,740 commercial and FDIC-supervised savings banks. 

Of the 927 bank holding companies, 387, or 41.8%, sold annuities during the first three quarters of 2011. Those with more than $10 billion in assets generated the lion’s share of the annuity income, earning $2.15 billion in commissions, up 23.7% from the year-ago period. Smaller institutions, those with assets between $1 billion and $10 billion, recorded $95 million in annuity fee income, up 3.8% from the previous year. The smallest institutions, those with $500 million to $1 billion in assets, earned $17.9 million, a 5.6% increase from the first three quarters of 2010. 

The bank holding companies leading the pack in year-to-date annuity commission income were Wells Fargo, Morgan Stanley, JP Morgan Chase, Bank of America and Regions Financial, the American Bankers Association said in a press release.

Commercial and savings banks that are not part of a bank-holding company had a much lower participation rate in annuity sales. Of the 6,740 banks, 901 – or 13.4% -- sold annuities during the first three quarters of 2011, generating $588.9 million in annuity commissions, a 5% increase from the $560.9 million in the first three quarters of 2010.

Margarida Correia writes for Bank Investment Consultant.