Community bank investment programs appear to be fully recovered from the fallout the 2008 financial crisis.
The programs generated a generous $521.6 million in income for the banks in 2012, the most they have ever produced in the five years that such data has been collected, according to a new report from consulting and research firm Michael White Associates.
Securities brokerage generated the bulk of the income, bringing in $385.0 million. Annuity fees produced the remaining $136.7 million. Both securities brokerage fee income and annuity commissions saw gains from 2011, with increases of 11.9% and 11.5%, respectively.
Total revenues of community bank investment programs rose to their highest level since 2007, when we were first able to measure them. Better still, hundreds of bank programs have been growing as they begin to put some distance between them and the recession of the last four years, Michael Anderson, first vice president of Financial Institutions/Mergers & Acquisitions at Securities America, said in a statement. Securities America, an independent broker-dealer, sponsored the report.
A total of 1,501 community bank participated in investment program activities, up 2.5% from 2011, according to the report. Of those, 614 earned minimum revenues of $150,000, with 61.4% of them experiencing growth in their investment programs. About two in five (41.0%) achieved growth rates of 10% or more.
In 2012, the investment programs generated an average of $347,528 in fee income and produced an average of $2,400 per bank employee, both five-year highs.
CenterState Bank of Florida was the biggest producer of investment program fee income in 2012, generating $36.96 million in revenue. The other top producers were North Shore Community Bank & Trust Company in Illinois ($17.50 million) and TIB The Independent Bankersbank in Texas ($12.97 million).
Among the top generators of annuity fee income, CenterState Bank of Florida again the led the charge, followed by Wisconsins Bank Mutual and AnchorBank fsb, which produced $2.12 million, $2.11 million, and $2.04 million, respectively.
The report, titled Michael White-Securities America Report: Community Bank Investment Programs, examines data from 6,881 community banks with less than $4 billion in assets as of December 31, 2012.